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MT435 Operations Management. Toney L Ferguson M.B.A., M.P.M. Albatross Anchor Case Study. Albatross Anchor is a small family owned business that began in 1976 with four family members. Albatross anchor has grown exponentially and now

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mt435 operations management

MT435 Operations Management

Toney L Ferguson M.B.A., M.P.M

albatross anchor case study
Albatross Anchor Case Study

Albatross Anchor is a small family owned business that began in 1976 with

four family members. Albatross anchor has grown exponentially and now

employs one hundred and thirty people. Their one location/facility is situated

on twelve acres of land located in a rural suburb of Smalltown, USA. The

manufacturing plant and the main office are located in the same building

with the manufacturing. The administrative offices are in the front of the

building and the manufacturing area is in the back of the building. The

manufacturing part of the building is antiquated, worn, dirty, technology

deprived and it no longer meets all US safety and environmental standards

and the administrative offices are shabby and inefficient.

The owners of this small business have added on various processes as

needed within the limited space provided within the plant. When Albatross

Anchor first opened its doors their expertise laid in the manufacture of the

bell/mushroom anchor (using a foundry process). Because of international

competition in 1989 the owners of Albatross Anchor made the decision to

expand their product line to include fabricated snag hook anchors.

albatross anchor case study1
Albatross Anchor Case Study


The bell anchor is used primarily by fresh water marine craft. They are

manufactured primarily through a foundry process in which ore is

transformed into a liquid state and poured into molds for production.

The snag hook anchor is used primarily for small to medium sized saltwater

marine craft. The snag hook anchor is fabricated through the bending and

welding of iron rods and flat iron into a hook design so that bedrock and

seaweed can be snagged to hold the marine craft at anchor.

Each anchor is produced in multiple sizes to accommodate the type of craft

requiring the anchor.

albatross anchor case study2
Albatross Anchor Case Study


Each anchor type requires its own unique equipment and manufacturing

process. Both manufacturing areas share the same shipping and receiving

area, the warehouse area and administration. The manufacturing area of the

plant has had to change to accommodate the manufacture of the two

separate types of anchors. As each anchor requires its own manufacturing

challenges the manufacturing line must be completely changed over each

time the anchor type is changed. The time to switch over from one

manufacturing process/operation to the other manufacturing

process/operation is 36 hours.

The plant space is at a premium and warehousing space for raw materials

and finished product is limited and located at the far south end of the


Plant antiquation and safety issues result in small batch production only. As

a result lead time for large bulk orders is three to four weeks.

albatross anchor case study3
Albatross Anchor Case Study

Costs and shipping challenges

Current manufacturing costs are $12.00 per pound for mushroom/bell

anchors and $6.00 per pound for snag hook anchors. While Albatross Anchor

charges the same per unit as their competitors their profit margin is as much

as 30% less due to operations inefficiencies.

Product size, bulk and weight (either anchor) requires shipment by rail and

by specialized ground transportation (large trucks). Domestic orders are

shipped by truck and international orders are shipped by rail and then by

large freighter. These are the only two methods of shipment of product to


Receipt of raw materials is by rail. Prior to the sale of anchors into the

international market all shipments of finished product went out completely

by truck and therefore all shipping activities were limited to the east side of

the building. Now, because of the limitation of shipping product into the

international marketplace all product shipments for international delivery go

out of the receiving dock for shipment for transportation by rail and then by

large freighter. Whereas prior to expansion into the international

marketplace shipping had been limited to the shipping department and

receiving was limited to the receiving area, now the receiving area must do

double duty – shipping of international orders and receipt of all raw


Please view the below representation of the current building/facility set up.

unit 8 written assignment
Unit 8 Written Assignment

Question One

Select three items (as listed below) and explain for each of your three

selections how it will help Albatross Anchor to improve job retention,

employee morale, and employee dedication.

(a) Work design

(b) Cross training

(c) Gainsharing and profit sharing

(d) Job design

(e) Task analysis

(f) Worker analysis

(g) Environmental analysis

(h) Ergonomics

(i) Technology and automation

(j) Job analysis

unit 8 written assignment1
Unit 8 Written Assignment

Question Two

Based on the scenario given in unit three and the information given in this

case study make recommendations to Albatross Anchor for at least three of

the following challenges:

(a) Time management

(b) Cost management

(c) Quality management

(d) Performance management

(e) Enterprise project management

(f) Technology adoption

(g) Supply chain management

(h) Distribution management

unit 8 written assignment2
Unit 8 Written Assignment

Question Three

As the consultant for KU Consulting, you have been authorized to change the

existing facility (limited construction budget) and/or refine the process flow

of the manufacturing area. All changes must be completed within a 60 day

window with the majority of the changes happening at night when the plant

is idle.

(a) List and detail the proposed changes and/or alterations. Please explain

why you chose what you chose, give the rationale behind your choices and

finally, substantiate your work.

(b) List and detail two implications and two complications that may occur as

a result of the recommended changes. Remember activities in one area of

the facility may have an impact on other areas of the facility.

(c) Create a Gantt chart showing a timeline for when the different changes

proposed should be made, detailing which changes may overlap and showing

how long each change will take to institute. Provide information to support

your decisions and to explain your choices as shown in the Gantt chart.