Kami Corporation: A Case Analysis
...dilemmas. Still, the group suggests that Mr. Olano undergoes an intensive orientation/training on Kami・s production so that he could understand the entire manufacturing process and fully grasp the technicalities of the assembly line. Only with sufficient understanding will he be able to suggest truly knowledgeable solutions to production problems. If the production managers see that Mr. Olano really understands the manufacturing details, then they would respect his opinions and heed his advices/suggested solutions. Also, Mrs. Lee should personally visit the plant at CSEZ to formally introduce Mr. Olano to the rest of the company. During this gathering, she should highlight Mr. Olano・s skills and capabilities and explain thoroughly why she thinks he is competent enough to direct the company. She should do this not in a way that is insulting to the more experienced production managers but in a manner that would help the latter respect Mr. Olano・s competence and her decision to hire him. Moreover, employees, especially production managers, should undergo a team-building activity/seminar wherein the roles and importance of each department in achieving the company・s target production would be explained. This would help each employee appreciate the interrelation and interdependence of their separate departments and urge them to coordinate their activities so as to attain efficiency and profitability. Fun activities should also be organized to foster camaraderie and unity among employees. The objective of this team-building activity/seminar is to inculcate goal congruency. Performance appraisals should also be done so as to properly evaluate each worker・s efficiency and work ethics. Performance appraisals would help pinpoint weak workers who need to undergo more training. Lastly, Kami Corporation should hire additional employees with backgrounds in procurement. The group believes that it is necessary for Kami to have its in-house sourcing and purchasing department so as to minimize delays and ensure availability of resources. Purchasing Mega Corporation, the mother company, should let Kami Corporation handle its own sourcing and procurement system since it is stated in the contract with Aiwa that Kami would be the one responsible for supplier identification, development, and management. Mega should transfer existing information on suppliers of components to enable Kami to place orders and coordinate the delivery of materials with the suppliers on its own. Since HR would be hiring additional employees to fill the procurement staff, there would be adequate personnel to handle the order placing, paperwork for customs clearance, and follow up of deliveries. Although this means incurring additional salary expenses, the decentralization of the procurement system would lead to a more efficient purchasing and supplier management. Efficiency in purchasing could even decrease total operating costs since there would be less delays and mix ups in ordering. Supplier review should also be done to filter see who among the suppliers have the most competitive offers in terms of quality and price. To ensure that the production department has adequate raw materials, the company should implement MRP (Material Requirements Planning). Based on a MRS (Master Production Schedule), a MRP system creates a schedule identifying the specific parts and materials required to produce TV units, determines the exact numbers needed, and ascertains the dates when orders for these materials should be released, based on lead time. The use of MRP would require technology, which probably would cost a lot during the mid-90s. However, the company could still make use of MRP even without computers through manual and systematic planning. It is thus important for the newly established purchasing department to coordinate with the production and warehousing functions. Top managers of each department should meet monthly to encourage communication, information sharing, planning, and collaboration of tasks. Production The group assumes that the 200 workers are enough to support three assembly lines and that the reason why the third line is not yet operational is because of setup delay. To reduce backlogs and delays, there should proper and stricter scheduling of production. As stated, production should coordinate with the purchasing department to ensure that they have adequate components to work with. Also, TQM (Total Quality Management) should be practiced by having quality checks/inspections at critical points to minimize rejects. Once delay is minimized or eliminated through the new purchasing and inventory system, Kami should push for the opening of the third assembly line. Warehousing and Inventory Management The warehouse should be organized in such a way that finished goods inventory will be identified from the rejects and the raw materials/components. There should be assigned locations and codes for each type of inventory. It is also beneficial for Kami if it fully utilizes its warehouse capacity. Maximization of the warehouse could be achieved by the use of new equipment to lift and haul inventory even to and from the topmost area. Proper organization would also clear up space and allow additional inventory to be stored. Proper handling of inventory should also be o...