Chapter 12 Case Study: The Realco Breadmaster

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Case Study 12 and 13
Introduction
The business landscape has changed dramatically over the past few years. As a supply chain manager, it is essential to accommodate different needs from customers, retailers, distributors, manufacturers, and suppliers. The supply chain process depends on a wide array of stakeholders, which increases the chance the problems can arise during the process. The paper will focus on the case study in chapter 12, “The Realco Breadmaster,” and the case study in chapter 13, “Supply Chain Challenges in Post-Earthquake Japan.” The first case study involves a breadmaker who has been a very competitive company in the United States since it offers a cheaper product. The second case consists of the supply chain issues that Japanese automakers were facing after a natural disaster. This paper will respond to questions about the case studies.
Chapter 12 Case Study: The Realco Breadmaster
Question 1The projected ending inventory formula is:
EIt = EIt-1 + MPSt – maximum (Ft, OBt) (Pitari, 2020).
The available-to-promise numbers formula is:
ATPt=EIt-1+MPSt-i=tz-1OBi
In this regard, the master production schedule is presented in the table 1.
Week

1

2

3

4

5

6

7

8

Forecasted Demand

20000

20000

20000

20000

20000

20000

20000

20000

Booked Orders

23500

23000

21500

15050

13600

11500

5400

1200

Projected Ending Inventory

-16500

500

-21000

-1000

-21000

-1000

-21000

-1000

Master Production Schedule

0

40000


40000


40000


40000

Available-to-Promise

-16500

-4500


11350


23100


38200

Table 1: Realco Breadmaster’s master production schedule
The table above shows the numbers of the available-to-promise and projected ending inventory for the organization. The master production schedule reveals that the firm has overpromised its clients on the second week. The inventory was not sufficient to meet the demands, and this means the organization has to improve its forecasting approaches so that the customers are consistently satisfied (Magdalena & Suli, 2019). The company is currently producing a surplus since the forecasts are low. As a result, the company is currently undergoing an overproduction phase, which negatively impacts even though it must find a balance between supply and demand during the production stage. For example, an issue is that the inventory requires a considerable amount of time to manufacture, yet the products’ demand is deficient. The overproduction will then result in excess inventory, which will mean that the company will suffer losses.
The best way for Realco Breadmaster to avoid excess inventory is by adopting several strategies. A good approach is training the staff so that they are knowledgeable in the recent inventory management approaches. This is critical to ensure that the staff is prepared to maintain accurate records and that the inventory is correct. The inventory is a variable that determines the production schedule. The organization needs to use valid inventory data when making decisions. The company must adjust its forecasts so that it is updated, which will ensure that Realco Breadmasters will meet its customers’ needs. If the production team relies on accurate data, several issues such as wastage will be reduced, and the process will be more efficient since it will not waste any resources. The company will have to consider several approaches, such as the lean principle when making predictions about the inventory and market demands. This is important since it ensures the company will not suffer from losses since it operates efficiently.
Question 2
Jack’s approach to order promising has several advantages and disadvantages. One of the benefits is that Jack depends on his experience when making decisions. Since he is already aware of the trends in the past regarding the demand, he can easily make decisions about the production. Since Jack makes the decisions, it means that the company reduces the costs, which can arise if it wanted an expert to use scheduling tools. Furthermore, the company also gains since the decisions are made quickly based on the employee’s perspective rather than the market forces. However, his approach is very informal, which means that he can easily make mistakes, which leads to overproduction. Additionally, it is also hard for Jack to meet emergency orders when customers want the product quickly. This can be attributed to the lack of a plan to deal with such occurrences.
The process can be improved using a formal master scheduling process. The approach has many benefits. First, the master plan is useful when determining the required output, which is critical to prevent overproduction or delays in the product. Secondly, the plan is also applicable, particularly during an emergency. The scheduling process provides a way to make adjustments when necessary quickly (Magdalena & Suli, 2019). Third, the plan is also a useful method for the company to reduce its costs. In the current case, the company is making bread, yet it does not have the customers to purchase it, which leads to losses and high production costs. When using the plan, the company can ensure that it can forecast the demand and meet customer needs. Fourth, the plan can also help the company to eliminate any wastes in the production process. This is critical since it ensures that excess resources are put into good use. Finally, the schedule ensures that Realco can avoid shortages like what occurred during the second week.
Question 3
The worst decision that a company can make is promising to deliver a customer’s order, but they fail to deliver. A company should not accept an order, and it would be more ethical to decline it if the company does not have any units available. If a company fails to deliver, it tends to get a negative reputation among customers, and they would not be willing to work with the company. However, if the clients are informed about the shortage up front, then there is a higher chance that they would trust the company. It is vital to build and maintain the customer’s trust to be loyal to the company, and they can also refer it to their friends and peers. In the current case, the breadmaker already has many competitors. If it fails to deliver based on customer demands, these customers would easily purchase a product or service from a rival company. Customers prioritize honesty, and if a company is not straightforward, then the customers will be suspicious about conducting any business with it. If the company fails to deliver, it will also destroy its brand image. An established brand tends to be an essential factor that attracts customers to specific businesses. However, if the customers have a negative view of the brand, it can lead to losses.
Master scheduling implies that it will be useful in determining if the company can deliver the required product. For example, the master schedule can show the number of products that have been booked by clients and what the organization can make based on the current inputs. The schedule is also a guide that outlines the time-frame of any anticipated production. It also provides essential information about the inventory, which allows the company to either order or reject it.
Question 4In case Realco decides to reduce its production to 20,000 from 40,000, it will have to maintain an inventory of about 7,000 breadmakers. The inventory should be smaller in comparison to the master schedule. A negative effect of a small inventory is that it would be challenging to meet customer needs, which is attributed to its simplicity. The personnel might not be able to comprehend the market changes quickly. Despite this, a small inventory also has advantages. It avoids wastes that can arise from costs and time due to the overproduction.
Chapter 13 Case Study: Supply-Chain Challenges in Post-Earthquake Japan
Question 1The supply chain approach used in the Japanese before the earthquake and tsun...