1)      The Realco Breadmaster

a)      Develop a master production schedule for the bread-maker. What do the projected ending inventory and available-to-promise numbers look like? Has Realco overpromised? In your view, should Realco update either the forecast or the production numbers?

A Master Production Schedule or MPS is the plan that an organization has developed for inventory, production, staffing, etc. It provides the quantities of each end item to be finished in every week of a restricted planning perspective. A Master Production Schedule is the master of all agendas. It is a map for future production of end products. It is a mere translation of the business plan that is largely guided by the factors that control effectiveness in an organization. The outputs arrived at using a variety of inputs are fundamental in the decision making process of the organization.










Sales Forecasts









Sales Orders









Inventory 7000


















The projected ending inventory is generally low while the available-to-promise values are relatively low in the first five weeks as opposed to the last three weeks of production. It is evident that Realco has overpromised in the last three weeks. This is because there are no products available to meet the demand. This means that they would end up disappointing some of their customers.

I think that Realco ought to adjust either its forecast or its production numbers. This will ensure that it avoids disappointing its esteemed consumers. In every organization, the optimum goal is to meet the consumer needs. Businesses have the tendency of implementing systems that enhance communication within the organization in order to clearly understand the requirements of the customer. As an effect, the management is able to conform to the consumers’ needs and, hence, increasing the consumer satisfaction levels. This is all made possible by using social networking as a marketing strategy. Enhanced consumer satisfaction implies that the consumers are likely to be loyal to the organization. Eventually, the organization will be able to have its own pool of customers and, therefore, a large market share.

Therefore, it is extremely crucial that Realco conforms to the needs of its consumers. This can only be made possible through ensuring that it adjusts its forecasts or its production levels so as to match those of the consumers. This will enhance consumer loyalty, and increased revenues.

b)      Comment on Jacks approach to order promising. What are the advantages? The disadvantages? How would formal master scheduling improve this process? What organizational changes would be required?

Jack’s approach of promising consumers is highly strategic. This is because it taps the market through ensuring that the consumers do not seek to get their products from their competitors. Also, the allowance of a week in case anything comes up and disrupts the processing of the promised orders ensures that consumers are not disappointed. The advantages of this strategy include consumer loyalty. The consumers may end up feeling obligated to fulfill their purchase only in Realco. This is beneficial for the company. These customers are also highly likely to pull their friends and family to Realco due to the fulfillment of the promised products. This places Realco ahead of the competition in terms of the capability of tapping the market, and increased revenues. Increased revenues imply that the company would enjoy higher profits.

There also the advantages accrued to the certainty of selling while producing. This implies that the cost incurred is redeemed in a short time. This means that there is increased value of the money streaming in and out of the company due to the increased velocity of money. Therefore, an amount of cash is able to carry out more transactions and, hence, increase the returns expected within the company.

However, Jack’s approach could be disadvantageous if everything does not unfold as planned. Precisely, if the consumer fails to gets his order, this could be lad to losses in terms of the products produced. This is because it could lead to a situation of overproduction such that the company is not able to make sales of all the ordered products. This implies that the company would end up incurring losses. Also, given the fact that it’s an order, it could be disastrous if the consumer is not pleased with the end product that he or she receives. This could lead to dissatisfaction of the consumer. If they go ahead and spread this news to other prospective consumers, it is likely that the company’s sales could be largely affected. This could reduce the market divide, and, therefore, the proceeds of the company.

Encompassing formal master scheduling in the company would solve this problem. This is because the forecasts and the actual production would match the consumer needs in the market. This implies that instance of losses would be eliminated. It also implies that orders would be accepted on the basis of the products available-to-promise. This means that customers who place orders would be certain of receiving their orders as requested. This would work positively towards ensuring that the company’s reputation remains intact. This would also imply that consumer loyalty would be built, driving the company to higher profit levels.

In order to ensure that this strategy works, some organizational changes would have to be effected. For instance, the bass of production would not be based on experience but on consumer prerequisites orders. This means that sort of management implemented in the company would be based on reviewing consumer requirements rather that purely on the basis of past experience.

c)      Following up on Question 2, which do you think is worse, refusing a customer’s order upfront because you don’t have the units available or accepting the order and then failing to deliver? What are the implications for master scheduling?

Accepting a customer’s order then refusing or failing to deliver is the worst decision within a company. This is because the utmost goals in any organization ought to be to meet consumer needs. Telling them upfront of the incapability to meet the required order ensures that the organization does not inconvenience the consumers. This is because there is the possibility that they would have had the order placed with another company. In the end, the consumer need would be met. The customer would appreciate this honesty and would feel that his needs are taken into consideration.

Master scheduling helps the organization to be able to differentiate and actually predict whether or not it is able to meet a particular order. The MPS also helps in protecting lead time and in booking future deliveries. This is because there is a clear record indicating the same. This helps in making the choice of whether or not to seize a customer’s order. The schedule also helps in predetermining market demand and being able to come up with ways of dealing with it. This helps in the planning of the production levels. It helps the management in the decision making process based on the available data. This helps in making the decision to turn down a customer’s order in advance instead of taking it, and being unable to fulfill it when they are expecting it. It is also a communication tool in the company among the individuals involved in the production process. It prevents the possibility of contradictory information as the figures are clear by themselves. Therefore, this helps in ensuring that the goals of consumer satisfaction and meeting of consumer’s needs is achieved.

d)      Suppose Realco produces 20,000 breadmakers every week, rather than 40,000 every other week. According to the master schedule record, what impact would this have on average inventory levels?

If the production levels of Realco were to be reduced by half to 20000 per week, this would mean that the company would not be able to meet most of the orders. This is because the orders placed would at times even exceed the available products. This could also mean that the inventory levels would reduce. This is because the orders would exhaust the available products and there would be hardly any products left for the inventory. The goods available to promise would also reduce markedly. This is because the master schedule usually helps in stabilization of production.

2)      A Bumpy Road For Toyota

a)      Is Toyotas focus on quality consistent with the Lean philosophy? Can a firm actually follow the Lean philosophy without having a strong quality focus? Explain.

Toyota is an automaker company that was founded in 1937 by Kiichiro Toyoda. Its headquarters is at Aichi in Japan. Currently, Toyota is the largest manufacturers by production and sales worldwide. TMC has branches worldwide and have over 314,730 employees. In 2005, Toyota was ranked the 8th leading company in the world on Forbes 2000. TMC has been in business for over 70 years now, and they have still managed to be on top. The vision of Toyota is take advantage of technology, to create more comfortable vehicles, and more advanced to the environment.

Lean production has been there for some time, and the system has brought immense progress in the automobile world. Toyota Automakers are now appreciated and are considered to be among the companies that make massive profits annually. The Lean philosophy seeks to enhance sales and consumer loyalty. These philosophies are consistent with quality though not probably as it is expected to be. This is mainly due to the tremendous technological advancements that have merged over time. This technology is the basis on which the bullet proof of reliability reputation of Toyota was derived. These philosophies ensured that efficiency and quality were merged to the automobile industry.

It would be difficult for any firm to follow the lean philosophy if it is not focused on quality. This is because it is the basis on which the philosophy came about. In order to achieve good results, the focus on quality ensured that consumers are pleased with the end product. It also goes hand in hand with efficiency. This is because the lean philosophies are also at the upfront in enhancing efficient production and quality products.

b)      Who are the coordinators referred to in the article? What role have they played in educating Toyotas workforce in promoting the TPS (Toyota Production System) philosophy? Why are they so hard to replicate?

Kiichiro Toyoda was the founding father of Toyota and Taiichi Ohno was the Toyota engineer who was responsible for the implementation of just-in-time delivery that he had witnessed drive a supermarket to great heights. They were the founding fathers and individuals who came up with the principles of lead production. They played a huge role in ensuring that the work force at Toyota became well equipped in regards to the specifications of the philosophies which was later named Toyota Production System (TPS). Precisely, Ohno was responsible for training recruits at the Toyotas elite Operations Management Consulting Division. He took ample time to ensure that all the trainees were will equip with the lean philosophies. It would take an employee as long as a day to be able to meet the expectations of Ohno. This is a clear indication that he was determined to ensure that the trainees became well equipped with TPS. His efforts drove Toyota towards high productivity levels.

Given the fact that these fathers of Toyota ere mainly Japanese, and only spoke Japanese, this created a language barrier in communicating the skills. The cultural and language barriers were a major step back since most of the trainees spoke English. As a result, it became difficult to completely be able to replicate these fore fathers as some issues were not well communicated. Since these employees did not understand Japanese, this made communication quite difficult.

Successful communication between the various departments of an organization is crucial.  The reason behind this is that they work in the same environment and lack of good communication between team members could lead to lack of fulfillment of the set goals and objectives. Therefore, it is extremely vital that effective communication exists within the internal environment of the organization. This means that there should be effective communication between the juniors and seniors. Essential communication between the two ensures clearing out any misunderstandings that may exist between the two.

c)      According to Hajime Oba, what is wrong with Detroit’s approach to Lean? Based on your understanding of American auto manufacturers, do you agree or disagree?

Hajime Oba believes that Detroit’s approach to lean production is wrong. This is for the reason that he is of the view that they do not understand the innermost values of the philosophies. Given the fact that the philosophies have been the basis upon which Toyota has blossomed over the years, it is a clear indication that one would need to form the basis surrounding the philosophies in order to be able to implement it. Oba believes that one would need to be attached to the motives of the founders in order to understand the lean production. Specifically, the founders were driven by the urge and desire to produce quality automobiles in an efficient manner. Emulating competitors without having all the necessary information seems to be what Detroit is doing.

In the past few years, there has been stiff competition in automakers companies.  I, therefore, agree with the notion of Hajime Oba that Detroit approach to Lean production is wrong. Toyota, therefore, need to start concentrating on their supplies with a view to changing its position and increasing the customer base. This means that the division has to, establish product innovation, introduction of new products, customization to satisfy the customer’s needs and reduce the operational costs. Customization means that the company listens to the customer and makes products and processes that enhance the relationship. It is evident that in the next few years, that Toyota will create models that fit with the environment.

d)      There is an old saying, Haste makes waste. How does this apply to what is happening in the Georgetown plant? What is Toyota doing about it?

Georgetown was one of the best automakers in the late 1980s and the early 1990s. This performance has slowly dwindled and the flourish at Georgetown has been lost. This was partly due to the fact the automaker was faced with cultural and language barriers since the leaders were Japanese while most of the employees spoke English. However, that is not the only problem. The demand was too high and in a bid to keep up, the auto maker lost the essence of quality and was more focused on quantity. While doing that, the Georgetown plant slowly went down. Also, the plant faced problems due to the scarcity in the TPS coordinators from Japan. It has also lost some of the masters of the lean production philosophies to competition and old age. This resulted in non-standardized work processes in the plant.

In order to get Georgetown back on track, Toyota launched an emergency 18-month project that sought to build back up for managers who were at the front-line of the plant. Mr. Oba has also been recruited on a project basis in Georgetown in order to bring the automaker back on track. They have since been able to establish that the problem lay in the fact that shop-floor leaders were spending too much time in the offices. They have since dragged out about 70 middle-level managers by involving them in projects. This ensured that they were able to learn more about TPS. Results have been noted with reduced customer complaints.

Toyota develops new strategies after every 4 years in order to keep improving their competitiveness. In 2008, they had a new strategy that will utilize the rise of technology.   The main reason is to meet the 2008 strategy goals, but it is a long-term shift in strategy. This means that the organizational structure has to adjust in such a manner that it allows for dynamic growth. All this must happen in such a way that it does not lose focus on the product centric nature. As much as it is essential to shift to the new strategy, it is also noteworthy that the products still remain top-notch and high quality. Outsourcing sales is a brilliant idea, it will not do any good for the company’s name. It might enhance the efficiency of getting the products to the customer, but in line with being more consumers centric, it will become another layer between the company and the consumer. The challenges that come with growth in size, including a bigger monolith of an organization structure, must be anticipated in the division’s new structure.

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