Midterms in Operations Management (MSC535M) :

Montezuma Confectionary Company

Submitted by: Justine Denise F. Tinio
I.STATEMENT OF THE PROBLEM
How can the VP of Montezuma Company improve production output and labor
productivity while addressing operation variations, minimize scraps and increase profit?
II.OBJECTIVES
1. Evaluate the efficiency and productivity in each section
2. Address bottleneck production issues and provide a course of action that can
increase profitability
III.AREAS OF CONSIDERATION
SWOT Analysis

Midterms in Operations Management (MSC535M) :

Montezuma Confectionary Company
Submitted by: Justine Denise F. Tinio
IV.THEORETICAL FRAMEWORK
The VP wants to maintain production efficiency by checking the associated costs,
quality of products and labor force in the entire manufacturing process hence the
KAIZEN and Total Quality Management framework will be used to identify if its effective
for the plant.

Kaizen is used to regularly evaluate an employees work and thinks of ways to improve.
People see that everything can and should be improved hence they apply crossfunctional systematic and collaborative approach which can help address issues in
scheduling and manpower development.

Midterms in Operations Management (MSC535M) :

Montezuma Confectionary Company
Submitted by: Justine Denise F. Tinio

TQM describes the culture of a company that strives to provide their customers with
products they need. It requires quality in all aspects of the organizations operations with
the involvement of everyone towards the continuous improvement of services while
reducing losses from unnecessary practices.

V.ALTERNATIVE COURSES OF ACTION (ACAs)

1. Status Quo - Maintain the current operations, labor force and practice

2. Maximize utilization of operation capacity and opt local substitutes for raw materials

3. Upgrade equipment and redesign plant layout

Midterms in Operations Management (MSC535M) :

Montezuma Confectionary Company
Submitted by: Justine Denise F. Tinio

VI.ANALYSIS
See appendix.

VII.EVALUATION AND RECOMMENDATION

As per appendix, the candy making section and the packaging section has output
variances during 1983. With a difference of 25%, the outputs of both sections are not
matched hence bottleneck issues arise. Moreover, unequal output resulted as the
packaging team required more shifts/time compared to the candy making section which
probably is the reason for the drop in sales. I have chosen ACA #2 to address the
production bottleneck issues, lessen scrap and to improve the plant capacity. Through
the use of TQM, workforce becomes motivated as employees realize their full potential
and theres improvement in product quality. There will also be a leap in productivity as
the experienced employees will be able to use their time efficiently. By opting for local
raw material supplier, the lead time will be decreased and theres a smaller chance of
delays due to fortuitous events.
One of the strengths of the company is their highly experienced workers. Management
should utilize this by improving employee morale, assure their quality consciousness

Midterms in Operations Management (MSC535M) :

Montezuma Confectionary Company
Submitted by: Justine Denise F. Tinio
and develop workflow. With the use of TQM and Kaizen, the third shift can already be
eliminated as it can be combined to the other shifts. The VP was correct when he
thought of Japanese management practices such as Kaizen and TQM as these can
lessen waste from unwanted resources and improve forecasting methods. We can
predict that if the company used these practices for the month of December 1983, there
would be boost in sales and productivity, given that this is a season of gift giving. Who
doesnt love sweets during this time of the year?

References:
http://www.1000ventures.com/business_guide/mgmt_kaizen_tqc_main.html