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BA 105 Case Meeting

February 13, 2018

Dynamic Packaging Company (B)

Problems Identified:
1. Over supply, little demand
a. Large stock in advanced -------> high holding costs
2. Underutilized facility (currently at 70%)
B. how to achieve that missing 30%?
3. Poor Plant layout

SWOT
S- Short lead time (typically it’s 1 week but they provide goods in 2 days), diverse products and
different services
W- poor demand projection
O-
T-

Assumptions
70% enough to cater the needs of the market

What we want is to increase production rather than just slowing it down or simply fitting with the
needs of customers

Some Solutions that we are able to come up with


1. Diversification
2. Tie up with food

Operational Solutions
1. Scheduling
2. Fix plant layout (we found one in the internet, will paste here later)

Otherssss
- Improve the process flow (add additional quality control test)
- Dec 2004 data in exhibit 1 is projection, according to Ma’am
- Plant layout should be fixed, proper order according to process flow to make it more
organized and to make the overall operations more efficient; the space is not maximized
2nd Meeting
February 19, 2018

Pros and Cons


Marketing
Innovation
Product supervisor (meron na sila 1 na production supervisor, may hr pa)
10 employees? assumption ; add workers
Training sa lahat ng employees

Agenda
● Division

Case background
- History
- Line of business

Problem Analysis
Inventory Mismanagement
- 75% of plant holds inventory
- Poor forecasting (external reliance, variability of order from the customers) that results to
continuous production
- Option: Fixed contract

Result
- 60 day level of RM, 2 weeks of FG
- lesser freshness for FG perishables (check compared to industry standard)

Underutilization of Plant Capacity


Situation: currently operating at 70% capacity

-
- Lack of Manpower
- Lack of factory supplies
- Lack of demand
- Standardized process & human errors
- Plant space might be too big, hindi naman magagamit lahat
-

PROBLEM Statement
How can the Dynamic Packaging Company address their problems of inventory
mismanagement, and employee and plant underutilization? What operational and business
strategies they can employ to solve these main issues?

SWOT
S: Short lead time (typically it’s 1 week but they provide goods in 2 days), diverse products,
different services, well equipped (equipment),
W: inventory mismanagement, production based solely on customer orders, poor demand
projection, lack of manpower, lower inventory turnover, office supplies stockouts, some
manually operated machine, poor plant layout
O: production of non-food items, ISO and e-commerce system, customer profile, real time
reports, upgrade of equipments
T: obsolescence of equipment, ceasing orders (customers packaging their own products),
increasing Rm and labor, competition

Areas for consideration (PESTLE)

Alternatives
Inventory Mismanagement
Poor forecasting of demand, unsystematic production schedule

Solution:
Contracts
Scheduling
Forecasting- customer profile, use real time reports, look for companies who are doing the same

Plant Underutilization
Equipment not used because low demand, low workforce
Hindi sulit yung rent expense
Inventory mismanagement
Lack of manpower, stockout of supplies, poor plant layout

Solution:
More manpower and enough supplies
Mixer operator
Permanent employee to fix and maintain machines and equipment
Standardized the process
Alter plant layout
A
Immediate Solution (demand-supply matching)
-utilize e commerce, reports, full customer profiles which will be used to create systematic
production schedule
- ensure good level of supplies - inventory/office supplies custodian

C
Tech
Automate -long-term
Standardized products - long tern
Product diversification: venture into non-food businesses

B
Human
Reduce human error by training (by how) them, training on other roles (suggestion: rotation)
Employ additional people
Appoint product supervisor (meron na 1 production supervisor + hr) (more to control) - short
term
Address absenteeism problem (internal policies, employees must inform the company
beforehand if they are planning to take a leave , dayoffs)
marketing

D
Plant layout
- Restrooms away from work area, RM storage near line 1 and near receiving
- Additional quality control for FG (dito ichecheck
- Liitin ng kaunti yung admin office
- Maintain mezzanine for mess hall/canteen
- More quality control system
- Good na may CR: for hygiene purposes

Should also consider if kailangan talaga ng ganung space, basta tatangalin yung malaking
space na dati for unneeded inventories: conduct cost benefit analysis is yung space leased ay
beneficial (proove na hindi, pero now pwede maghanap, or irent na lang yung portion; dapat
directly proportional yung operations sa working space at facility na meron ka, )

Recommendation:
A, B for short run; C, D for long run

Step by step implementation


1. Demand-Supply matching
a. Utilize real time reports, company/customer profiles to create a more systematic
forecasting systems
a. Coordinate with companies who are in need of packaging services
b. Establish more contracts, to ensure assurance in product orders
c. Increase marketing efforts
2. Train and orient employees
a. On their positions, other positions
b. Internal policies on absence
c. Incentive system for employees
d. Hire/promote product and supply supervisors
3. Automation & Innovation
a. Identify and upgrade machines that are critical in the production
b. Adopt a more standardized process of production
c. Search and implement effective industry practices
d. Product diversification plan
4. Redesign plant layout

Timelines, KPIs per period:


A
3-4 months
organizational changes
orientations

met demands
lower holding costs
good level of inventory

B
2-3 months
organizational changes
seminars, manual creation

employee and management satisfaction


fewer operational disruptions

C
2-3 years
capital intensive
technology

more efficient process


wider market share (due to diversified products)

D
2-3 years
Capital intensive

more efficient operations


higher plant capacity utilization

Conclusions
To be top player, consider fixing yung existing, innovate in the long run. Highlight the
importance of inventory management,

Insights
- Employee Management
- Importance of a good forecasting system

Color: Black, white


Powerpoint: Danielle

Divisions
Alson (4)
Jim (4)
Ferdi (3)
Danielle (6)
Andrei (5)
EJ (1)
Roan (5)
Ashley (2)

1. Case Background (1)


2. Problem Analysis & Statement (1)
3. SWOT & PESTLE (1)
4. Alternative courses of action (2)
5. Recommendation, Implementation (2)
6. Timeline, KPIs, Learnings and insight (1)