Case study on Wilkins, A Zurn

Company : APP
Presented By,
GROUP 9
GRINTU DEVASSY 1527112
ROSHAN RAJU GEORGE 1527127
DARSHANAA M 1527142
NANDA SATHYAN 1527149
SURAJ VARMA S 1527234
LAKSHNA M 1527250

WILKINS, A ZURN COMPANY:

AGGREGATE PRODUCTION PLANNING
Chris Connors- GM in Wilkins plant in Paso Robbles,
California
Sales increased by 20%
Zurn industries acquired Wilkins in 1971
Deal with full line of HQ water control products.
Merged with US industries Bath and Plumbing
Products Co in 2003 => Jacuzzi Brand
.

PLANT DETAILS
Plant consists of manufacturing operations,
engineering lab, marketing, sales operations, office
for 12 managers+ 33 non production employees
Outside sales force = 70 manufacturing sales rep., 52
licensed service centre
Mission: Develop great brands and great products so
that they were the company of choice to drive
customers success.
12 product lines and 25 product families.

MAIN PRODUCTS
Back flow prevention and water pressure reduction
products( 60% of company sales)
Pressure reducing valves(25% of company sales)
Pressure Vacuum Breakers- seasonal MTS
Fire Valves customized (*seasonal) during new
building construction-MTO.

PROBLEM STATEMENT
Reduce inventory by 30%
Level Production vs Chase Production
A possible adjustment in their workforce and a
complete revamp of their forecasting methods.

Aggregate Production Planning (APP)

It is an operational activity that does an aggregate plan for
the production process
Its done in advance of 6 to 18 months
It gives an idea to management about what quantity of
materials and other resources are to be procured and when
Its done so that total cost of operations of the organization
is kept to the minimum over that period.

Goals of APP
To minimize the investments in the various inventories.
To minimize the total cost over the planning horizon.
To maximize the customer service.
To minimize the changes in the workforce levels.
To minimize the changes in the production rates.
To maximize the utilization of the plant and the various
equipment.

BENEFITS OF APP
Optimises the resources to meet the expected
demand.
Minimizes the cost.
Ensure sufficient customer service level.

RISKS OF APP
The staffs might be resistant to change the
normal system.
High logistic costs.
The outcome may not be as predicted .

MOST CRUCIAL CONSTRAINTS

Inventory
Workforce
Production process
Internal company policies
customer service level
efficient utilization
fluctuations

Developing APP for different

strategies

Saftey stock = z*std t*std l

Q1 =1715 units
Q2 =3072 units
Q3 =3520 units
Q4 =7452 units
Initial inventory = inventory value/production value
=1523789/25.65 = 59407 units
Holding cost = 20 % 25.65 = 5.13/unit/year/4quarter =1.2825/unit/quarter
Production rate = 100 units/day/employee *5/days/week*13weeks/quarter =6500
Labour usage = 82.4%,
Production rate = 6500*.824 = 5382/unit/employee/quarter

FORCAST
(units/week)

4120

FORCAST(units/quar 53560
ter)

7480

9341

5983

97240

121433

77779

Quarter weeks = 13
Production cost/unit = 25.65
Production rate(units/emp/Qtr) = 5382
Initial No. of employees = 6
Holding cost/unit = 1.2825
Hiring cost/emp = 580
Initial inventory (units) = 59407

LEVEL STRATEGY
LEVEL STRATEGY
STRATEGIC PLAN

0Q1

Forcast(units/week
Forcast(units/quarter)
ss
Regular production
Ending inventory
No. of employees
New labour
Holding cost
Cost of regular production
Holding cost
Total cost(oer quater
Total cost for the p;an

59407
6

Q2

Q3

Q4

4120

7480

9341

5983

53560

97240

1214333

77779

1715

3072

3520

7452

74515
80362
14

74515
57637
14

74515
10719
14

74515
7455
14

4550

1911309.8

1911309.8

1911309.8

1911309.8

103064.27

73919.45313747. 118

2018924.2

1985229.2
7850081.103

1925056.9

9561.0375
1920870.8

Advantages
Feasible solution
Can continue the no lay off policy
Disadvantages
Demands Fluctuate
Inventory levels are high
Expensive strategy
Cost of materials may go down

CHASE STRATEGY

CHASE STRATEGY
strategic plan

Q1

Forcast(units/week
Forcast(units/quarter)
ss
Regular production
Ending inventory

59407

No. of employees
New labour
cost of hiring
Cost of regular production
Holding cost
Total cost(oer quater
Total cost for the p;an

Q2

Q3

Q4

4120

7480

9341

5983

53560

97240

1214333

77779

1715

3072

3520

7452

0
5847

94465
3072

121881
3520

81711
7452

18

23

15

-6
0

18
10180.175

5
2954.5299

-8
0

2423027.3

3126247.7

2095887

7498.775

3939.84

4514.4

9557.19

2437147.3 3121333716
7683806.962

2105444.3

7498.775

MIXED STRATEGY
MIXED STRATEGY
STRATEGIC PLAN

Q1

Forcast(units/week

9341

5983

53560

97240

1214333

77779

1715

3072

3520

7452

59407
6

0
5847
0

94465
3072
18

121881
3520
23

81711
7452
15

-6
0

18
10180.175

5
2954.5299

-8
0

2423027.3

3126247.7

2095887

7498.775

3939.84

4514.4

9557.19

2437147.3 3121333716
7683806.962

2105444.3

Regular production

New labour
Cost of regular production
Holding cost
Total cost(oer quater
Total cost for the p;an

Q4

7480

ss

cost of hiring

Q3

4120

Forcast(units/quarter)

Ending inventory
No. of employees

Q2

7498.775

Advantages
Reduces the inventory
Most responsive strategy to the changes in the customer
demands
Lowest Cost
Almost equal to the safety stock inventory
Disadvantages
No lay off policy has to be removed
Low inventory problems may rise
Current PVB cell cannot adjust to this strategy
Challenge of meeting customer demands

If to implement APP, then which

strategy is to be adopted and why?
Chase strategy would be recommended.
Because there is a high need to cut down the
inventory level by taking into consideration the
overtime, subcontract and other alternatives.
Lowest cost.
Inventory almost same as safety stock.
This would be more responsive to the customer
demands.

If not to implement APP, then give

suggestions to tackle the problem?
VMI (Vendor Management Inventory) system can be
used to manage the inventory.
Invest more in planning and estimating forecasts,
instead of using sales history alone.
Develop an inventory tracking system and maintain
good relation with the suppliers and distributors.
Provide training to staffs on how the changes may
benefit them.

THANK
YOU