Problem Solution - Kuiper Leda

Problem Solution: Kuiper Leda

Kuiper Leda, Inc. (Kuiper Leda) has been in operation over the past 10 years and specializes in production of Electronic Control Units (ECUs) and microchip sensors for the automotive industry. Recently, Kuiper Leda has entered into the production of Radio Frequency Identification Devices (RFIDs) and has a new RFID line that has been in operation for the past six months. Kuiper Leda has just received a large order for ECUs and RFIDs from Midland Motors, a major player in the automotive industry. In order to meet the demand for the 250,000 ECUs and 35,000 RFIDs (both respectively are an annual order amounts) that Midland has ordered Kuiper Leda must find away to handle the urgent order and maintain current customer orders. This will require Kuiper Leda to manufacture and supply a higher volume than its current capacity will handle. By taking on this new client the issues and challenges have become more apparent for Kuiper Leda. (University of Phoenix, 2007)

Situation Analysis

Issue and Opportunity Identification

There are several issues and challenges facing Kuiper Leda and for each issue and challenge there is an equal opportunity. Each opportunity that Kuiper Leda faces can be used as a bridge in the growth of the organization. Identifying the issues and opportunities for Kuiper Leda will help in the creation of the end-state vision.

The issue being faced by Kuiper Leda is whether to be manufacturing both products in-house or to outsource the products completely or partially without jeopardizing their high standard of quality. Kuiper Leda has an opportunity to choose outsourcing one part and manufacturing the other in-house at a quality and cost savings. The work load can affect the quality of the goods if production exceeds quality. "Quality at the source is frequently discussed in the context of conformance quality. This means that the person who does the work takes responsibility for making sure that his or her output meets specifications." (Chase, Jacobs, & Aquilano 2006)

Another issue is the decision of which inventory system to use for the organization. The opportunity for Kuiper Leda is choosing the best cost affective inventory system. "If there were no costs or loss of time in changing from one product to another, many small lots would be produced. This would reduce inventory levels, with a resulting savings in cost. One challenge today is to try to reduce these setup costs to permit smaller lot sizes." (Chase, Jacobs, & Aquilano 2006)

Kuiper Leda has an issue with bottlenecks in the inventory management portion for Kuiper Leda. Having the capacity to deliver the products in a timely manner is an opportunity for Kuiper Leda. Decisions must be made on how to control the work flow to find the balance between capacity and bottlenecking. A bottleneck is defined as any resource whose capacity is less than the demand placed upon it. A bottleneck is a constraint within the system that limits throughput. Throughput is that point in the manufacturing process where flow thins to a narrow stream. A bottleneck may be a machine, scarce or highly skilled labor, or a specialized tool. (Chase, Jacobs, & Aquilano 2006)

Controlling demand is an issue for Kuiper, how product is to be distributed and the storing for these products. Kuiper Leda has the opportunity to control the flow of demand for their products by having a solid demand management plan in affect. "The purpose of demand management is to coordinate and control all sources of demand so the productive system can be used efficiently and the product delivered on time." (Chase, Jacobs, & Aquilano 2006)

The issue of, "Can Kuiper maintain its high level of quality and reliable delivery of their products", is an important challenge for Kuiper Leda. The opportunity to create a Total Quality Management (TQM) plan that will ensure the continued success of their high standards is evident to the organization. "Total quality management may be defined as "managing the entire organization so that it excels on all dimensions of products and services that are important to the customer. TQM has two fundamental operational goals, namely: Careful design of the product or service and Ensuring that the organization's systems can consistently produce the design." (Chase, Jacobs, & Aquilano 2006)

Stakeholder Perspectives/Ethical Dilemmas

The main stakeholders involved in the inventory management of Kuiper Leda would be Midland Motors, Kuiper Leda's suppliers, Kuiper Leda's employees, and the shareholders of the company. Every stakeholder has their own vision of what concerns they have about Kuiper Leda and their inventory management.

Midland Motor has placed a large order, which was accepted by Kuiper Leda with the understanding Kuiper Leda has the capacity to handle the order and deliver high quality in a timely manner. With the strain this has put on Kuiper Leda to meet the demand, Midland Motors may have reason to worry when it comes to Kuiper meeting its deadlines.

Kuiper Leda will be pushing its suppliers to meet demand as it attempts to meet the deadlines for the large Midland Motors order. The suppliers will have to work harder than normal to meet Kuiper Leda's needs during this time span. Kuiper Leda may consider alternative purchasing agents for the components and whole parts of their products.

Kuiper Leda's shareholders have a large financial gain or loss riding on this. An order this big represents a large opportunity for profit and Kuiper Leda has a big responsibility to make this a positive experience and achieve the maximum profitability for its shareholders.

The company's employees will have a great deal of pressure on them as the project proceeds forward throughout the future. Kuiper Leda will expect more from its employees and cannot afford to have delays due to employee matters or miscommunication. The question remains, will the employees step-up to the plate?

Problem Statement

After understanding the issues and challenges that are being faced by Kuiper Leda, a problem statement can be formulated to achieve the end-state vision for the supply chain management of the organization. The problem statement can be stated as follows. Kuiper Leda will use the opportunity to successfully create and implement manufacturing plans to meet the demand for high capacity orders by configuring the best alternatives for increasing capacity while keeping production costs low.

End-State Vision

After evaluating the issues and opportunities for Kuiper Leda, an