Reference no: EM13391089

Introduction:

Zephtrex Fabric is a specialized product made by Ellison textiles and used exclusively by the CMX Corp. The current demand is just 1/3 of Ellison's manufacturing capacity but the business is expected to grow substantially over the next year.

Order Entry process:

CMX sends and order to Ellison textiles 15 business days before CMX needs delivery. However CMX would like to shrink this to 10 days. As a CMX manager noted; "Fifteen days does not give us the flexibility we need to respond to changes in the marketplace Sure, we could hold extra inventory here, but I am not sure that is necessary given the capacity situation at Ellison"

CMX sends the order to the Ellison rep via email. That rep supports multiple plants and generally checks his emails twice a day. However if he is travelling and does not have access to the internet it may take 24 hours to respond to the order. The rep then passes these orders onto the production planner at the next production planning and status meeting which occurs every Tuesday and Friday morning at 7 AM via conference call.

Production Planning Process:

During the semi-weekly planning and status meetings new orders are scheduled from production. On average it takes 4 days to actually produce an order Orders are scheduled in weekly "time buckets". Meaning that all orders are scheduled to start on Monday and finish on Friday Therefore and order received on Thursday will not be scheduled and completed by the prior Friday. Similarly a customer order that came in on Tiesday would not start until the following Monday

A) Map out the order entry and production planning processes. How long do these processes take? How much of that time is "value added"? What is the percent value added time? What accounts for the remainder of the time?

B) Will Ellison be able to Meet CMX's lead time requirements under the current process? What changes would you propose?