Franklin Fan Company – MRP and MRP Explosion

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Description
1. Read the case study “Franklin Fan MRP” and all materials/tables attached for reference.

2. Complete the Critical Thinking Form

3. Complete the MRP Explosion Spreadsheet

4. Write a detailed one-page analysis incorporating the following:

Business Brief header – The first half of opening paragraph is to provide a synopsis of the current MRP system. The second half of the opening paragraph is state the problem (From Step 1 of the model).
Analysis header – The analytical section should be based on your personal assessment of the information you obtained from Steps 2 and 3 of the model. Provide only key relevant information and logical discussion in support of your findings.
Conclusion header – This section should state your recommendation based on your analysis of the case information and situation outcome.

Derived from the Flashy Flashers Case; Chapter 16; Page 582; Operations Management by Krajewski, Ritzman, & Malhotra
(10th) 2013 Page 1
Week 6 MRP Case
Franklin Fan Company (Cont’d)
Based on the Flashy Flashers Case in Operations Management by Krajewski, Ritzman, & Malhotra (10th) 2013
Materials Requirements Planning (MRP)
Franklin Fan’s two most profitable products are the ceiling fan (CF151) and the personal fan (PF032). With the rising popularity in home remodeling and personal comfort Franklin Fan has enjoyed substantial demand for these two products.
Last year, Kathryn Marley, the vice president of operations and supply chain management approved the installation of a new MRP system. It is a first important step toward the eventual goal of a full-fledged ERP system. Marley worked closely with the task force that was created to bring MRP online. She frequently attended training sessions for selected employees, emphasizing how MRP should help Franklin Fan secure a better competitive edge.
A year later, the MRP system is working fairly well. However, Marley believes that there is always a better way and seeks to continuously improve the company’s processes. To get a better sense of potential improvements, she met with the materials manager (Sue McCaskey), the production manager (Phil Stanton), and the purchasing manager (Joe Donnell). Here are some of their observations.
Materials Manager – Sue McCaskey
Inventory records and BOM files are accurate and well maintained. Inventory transactions are faithfully made when inventory is replenished or removed from the stockroom so current on-hand balances are credible. There is an MRP explosion each week, which gives the company the new material requirements plan. It provides information that helps identify when new orders need to be launched. Information can also be searched to help identify which scheduled receipts need to be expedited and which ones can be delayed by assigning them a later due date, thereby making room for more urgent jobs.
One planner suggested that the MRP outputs should be extended to provide priority and capacity reports, with pointers as to which items need their attention. The original plan was to get the order-launching capability implemented first. However, there is no formal system of priority planning, other than the initial due date assigned to each scheduled receipt when it is released, transforming it from a planned order release into a scheduled receipt. The due dates do not get updated later even when there are unexpected scrap losses, capacity shortages, short shipments,
Derived from the Flashy Flashers Case; Chapter 16; Page 582; Operations Management by Krajewski, Ritzman, & Malhotra
(10th) 2013 Page 2
or last minute changes in the MPS (responding to requests from favorite customers). Jobs are
scheduled on the shop floor and by suppliers according to the EDD rule, based on their due
dates. If due dates assigned to scheduled receipts were updated, it might help get open orders
done when they are really needed. Furthermore, planned order releases in the action bucket are
translated into scheduled receipts (using inventory transactions), after checking that its
components are available. The current system does not consider capacity problems when
releasing new orders.
Production Manager – Phil Stanton
His primary complaint is that the shop workloads are anything but level. One week, they hardly
have any work, and the supervisor overproduces (more than called for by the scheduled receipts)
just to keep everyone busy. The next week can be just the opposite – so many new orders with
short fuses that almost everyone needed to work overtime or else scheduled receipt quantities are
reduced to cover immediate needs. It is feast or famine, unless they make things work on the
shop floor! They do make inventory transactions to report deviations from plan for scheduled
receipts, but these “overrides” make the scheduled receipt information in the MRP records more
uncertain for the planners. A particular concern is to make sure that the bottleneck workstations
are kept busy.
Purchasing Manager – Joe Donnell
Buyers are putting out to many fires, leaving little time for creative buying. In such cases, their
time is spent following up on orders that are required in the very near future or that are even late.
Sometimes, the MRP plan shows planned order releases for purchased items that are needed
almost immediately, not allowing for the planned lead time. In checking the MRP records, the
planned lead times are realistic and what suppliers expect. Last week, things were fine for an
item, and this week a rush order needs to be placed. What is the problem?
Marley tried to assimilate all this information. She decided to collect all the required information
about the ceiling fan and personal fan (shown in the Table 1 through Table 4 and in Figure 1) to
gain further insight into possible problems and identify areas for improvement.
Your Assignment
Put yourself in Marley’s place and prepare a report on your findings. Specifically, you are
required to do a manual explosion for the ceiling fan and the personal fan for the next 6 weeks
(beginning with the current week). Assume that it is now the start of week 1. Complete the MRP
Derived from the Flashy Flashers Case; Chapter 16; Page 582; Operations Management by Krajewski, Ritzman, & Malhotra
(10th) 2013 Page 3
records for each item in the BOMs on the Excel spreadsheet that will be provided by the
professor.
Figure 1
Figure 2
CF151
42″ Ceiling Fan
2012000 Sub-Assy (1)
4013000
Electric Mtr (1)
3013003
Housing (1)
4014000
HDPE (8 oz.)
4010000
Adhesive (.25 oz)
3020003
Blades (5)
4014000 HDPE (16 oz.)
4012000
Box (1)
4015000
Screws (10)
PF032
6″ Personal Fan
2012001 Sub-Assy (1)
4013002
Electric Mtr (1)
3013004
Housing (1)
4014000
HDPE (6 oz.)
4010000
Adhesive (.25 oz)
3020007
Blades (4)
4014000 HDPE (2 oz.)
4012001
Box (1)
4015000
Screws (10)
Derived from the Flashy Flashers Case; Chapter 16; Page 582; Operations Management by Krajewski, Ritzman, & Malhotra
(10th) 2013 Page 4
Table 2
Replacement Part Demand
Item Description & Pt. # Qty. Date
Blades (30200007) 100 Week 3
Blades (30200007) 50 Week 6
Table 1
Part Numbers & Descriptions
Part Number Description Source
(A) CF151 42” Ceiling Fan Manufactured
(B) PF032 6” Personal Fan Manufactured
(C) 2012000 Ceiling Fan subassembly Manufactured
(D) 3020003 Ceiling Fan blades Manufactured
(E) 4012000 Ceiling Fan box Purchased
(F) 4015000 Screws Purchased
(G) 4013000 Electric Motor Purchased
(H) 3013003 Housing Manufactured
(I) 4010000 Adhesive Purchased
(J) 4014000 HDPE (High Density Polyethylene) Purchased
(K) 2012001 Personal Fan subassembly Manufactured
(L) 3020007 Personal Fan blades Manufactured
(M) 4012001 Personal Fan box Purchased
(N) 4013002 Electric Motor Purchased
(O) 3013004 Housing Manufactured

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