Module: Engineering Management Systems (MOD003628)
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Submission Date: 17th April 2026 |
Weighting: 90% of Module assessment Grading of the Assignment:
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Part |
Requirement |
Marks |
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Part 1. APL Ltd Exercise |
APL Ltd MRP |
20 |
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Part 2. Murray Rock Drilling Ltd Case Study |
1. Identify |
15 |
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2. Discuss the actions you would propose |
20 |
|
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3. Build a Witness model of the (Please look at the |
25 |
|
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4. With the world’s |
|
|
|
|
how Murray Rock Drilling Ltd could bring |
10 |
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Parts 1 & 2 |
Structure and presentation of report |
10 |
Any work extracted from texts must be clearly annotated as must all figures and diagrams. The work must be referenced and be divided into suitable sections.
The typed report should be around 2,500 words (excluding tables).
Part 1: APL Ltd Exercise (20 marks)
APL has a demand of a total of 3,300 lamps to be delivered within the coming six months as in the following table. Additionally, 1200 spare parts of Shell (item 219) are ordered for week 21. Determine the planned order releases of the tube (item 186) and base insulator (item 222) showing all the steps. Table 1: lamps orders to be delivered by APL in the next 6 months
|
Week |
14 |
15 |
16 |
17 |
18 |
19 |
20 |
21 |
22 |
23 |
24 |
25 |
26 |
|
Due Quantity |
|
500 |
300 |
500 |
|
300 |
500 |
|
|
500 |
|
300 |
500 |
Table 2: Starting inventories and data for APL lamp production
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Item (Item No.) |
Opening Inventory |
Lot Size |
Safety Stock |
Lead time (weeks) |
|
Lamp (314) |
0 |
Lot |
– |
1 |
|
Socket Assembly (418) |
700 |
1200 |
. |
1 |
|
Shell (219) |
2,800 |
4,000 |
. |
2 |
|
Purchased tube (186) in ft. |
3,000 |
12,000 |
3,000 |
8 |
|
Shell Insulation (220) |
800 |
1,000 |
300 |
3 |
|
All other items (respective |
1000 |
1,000 |
5,000 |
1 |
Figure 1: APL lamp Bill of Materials
Part 2: The Murray Rock Drilling Ltd case study (80 marks)
The Murray Rock Drilling Ltd case study is attached. You are requested to read it, analyse it and respond to the following requirements.
INTRODUCTION
Murray Rock Drilling Ltd is a subdivision of the Murray Engineering Group, part of the large conglomerate PH Holdings PLC. Murray manufactures a range of machined steel products, designed to drill rock for mining semi-precious ores and general quarrying. Murray shares certain functions with other parts of the group, but it has its own production engineering, purchasing and production control functions. Murray’s Production Manager accepts sales orders from Quick Tools Ltd, the direct sales arm of Murray’s, and from two main customer s, Kerhandt (a German company, also a member of PH Holdings) and Barstrom (a large international manufacturing and distribution group). Barstrom is Murray ‘s principal customer and comprises 80 per cent of sales by volume.
The Murray manufacturing group has two production units located adjacent to one another. The main unit produces around 90 per cent of output, concentrating on catalogue items with batch sizes of ten units or more. The smaller unit concentrates on ‘specials’, bespoke tools and volumes of nine units or less. The current lead time from order receipt to dispatch is in excess of twelve weeks. Management believes this to be unacceptably high; a figure of six weeks should be achievable. One of the main areas o! concern is the amount of time spent setting up the various machines between batches. Management believe that this is primarily due to the wide range of products manufacture and the consequent small average batch size. The Managing Director, Sid Beckett, feels that the introduction of group technology methods may help.
THE PRODUCT
The product range is basically a drill bit, usually called a tool, plus a range of drill rods, couplings, adaptors, etc. The drill bits, shown generally in the Appendix, have two main features, a head and a shank and without exception the tools are produced from steel bars and then turned/milled and heat-treated after which carbide inserts are added to give the finished product. The carbide inserts may be of rectangular section, which are brazed into position, or they may be small and cylindrical, which are inserted into circular holes and retained by the interference fit between hole and carbide. Where rectangular type inserts are used only two or four per tool are fitted, but where the cylindrical type are used the number may vary from 10 on a 50mm diameter tool to 120 on a 200-mm diameter tool. This latter type of bit accounts for 70 per cent of production and is called a button bit whilst the other is called a cross bit and is a more traditional design.
The product range, whilst limited in its geometric variations Is very large with some 1,000 catalogue items to which must be added a wide variety of specials to suit particular needs. The grade of carbide, number and pattern of buttons, design of flushing hole, etc. are all varied to enable the tool to perform better in varying geological conditions. Thus, in reality the product range consists of 2,000 to 3,000 items.
The variations are:
• Shank types:
o Splined: 4 types; Head diameter range 115-200 mm o Threaded: 6 types; Head diameter range 46-100 mm
• Head diameters: Range 38-200 mm; Number of diameters 42
• Carbide grades: 4 ;
• Steel types: 1
THE MANUFACTURING PROCESS
The process is predominantly a flow batch process. The vast majority of the product range, tools, follow virtually identical routes (see Appendix). Set-up time accounts for approximately 26 per cent of capacity of the machines. Keeping set-ups to a minimum is currently achieved by both grouping identical product orders together to form larger batch sizes and using the current set-up on any machine as a sequencing guide, that is do all the jobs that require the same setting first and then change the setting.
MANUFACTURING FACILITIES
Murray recently purchased most of the machines from Barstrom’s old plant in Bristol. The transfer of the machines took three months. Some machines are still not in their final positions, and a number are still giving problems – one grinding machine has never run properly. This resulted in a substantial increase in the number of employees, the number of machines to be operated, the volume of the material to be processed and the complexity of the whole operation. The layout of the machines is consistent with the stages of the manufacturing process. Infrastructure, such as industrial engineers, maintenance, plant engineers, accounts, etc. is shared with other parts of the group.
MANUFACTURING STRATEGY
Murray believes that their competitive advantage in tool-bit manufacturing lies in the price at which they can provide a wide range of tool-bit products. Their strategy is to use economies of ·scale to achieve lower costs. To this end, they have created a small plant within plant to produce low volume items (less than ten off), allowing the main plant to concentrate on the higher volume orders. Hard state operations, however, were all grouped together.
BARSTROM AGREEMENT
Barstrom used to have their own production facility in Bristol but closed it in favour of a sole supplier agreement with Murray for a substantial discount on list price. The agreement on order quantities is that the minimum order quantity should be thirty units, unless annual demand is less than thirty, in which case the minimum quantity is twelve units. Approximately 40 per cent of orders are for the minimum quantity of twelve. However, there are many instances where a series of orders for twelve off have been placed in consecutive months for the same product. Therefore, there is room for improvement at Barstrom. Orders are processed on a make-to- order basis and usually go into stock at Barstrom.
QUICK TOOLS LTD
Although part of Murray Group, Quick Tools Ltd is run as a separate company. Order intake at Quick Tools is handled separately and delivery dates are quoted by Quick Tools salesmen without reference to Murray where the parts are manufactured.
The standard lead time for Quick Tools orders is only eight weeks, because work pack drawings and route cards are put together by Quick Tools and are ready for loading at Murray.
INVESTIGATION OF LEAD TIME
The Managing Director
‘Our biggest problem here is the amount of time spent setting up.’ complained Sid Beckett, the new MD of Murray. ‘Our average batch size is only thirty bodies. If only we could reduce the set-up times and introduce cellular manufacturing, the released capacity could be used to shift all this inventory faster and bring our lead times down.’ Commenting on the high level of WIP, Beckett stated that the latest report suggested around 10,000 bodies and added, ‘We’ve not been reaching our output targets recently. We were aiming for 1,000bodies per week but only seem to be managing around 700. You should have seen the WIP inventory earlier in the year, we were up to our waists in the stuff!’ Asked if sales had been bit by the recession yet, Beckett commented that Murray sales this month were down on the previous months, but it was difficult to say whether or not this was due to the recession. Commenting on the twelve weeks quoted lead time, Beckett informed: ‘Some jobs are still here after four or five months but, usually, they are non- urgent jobs. We can push a job through in just over a week when we have to. But, in general, most jobs are going through in twelve weeks, two to three weeks in the office and nine to ten weeks on the shop floor.’ ‘We use a standard costing system, so we do not really know what each item costs because we do not have a standard set-up time. Standards are only calculated for run times. We are having our costing system looked at by our accountant$. They are due to report in a couple of months. ‘Lost time can be determined from the operators’ time sheets. Scrap and rework are recorded each day in the Inspection logbook. Inspection also log the work going to and from subcontractors and into stores.
The Production and Materials Controller
The WIP report produced on the computer system was out of date and not regarded as reliable by any of the staff, including Fred Pearse, the Production and Materials Controller (PMC): ‘Many of the entries for batches of one and two units are items which have been scrapped but not yet taken off the system. Also, some of the items on the list have been dispatched but the records have not worked their way through the system yet.’ Overall, the computer report overestimates WIP by about 10 %.
The report was produced weekly and comprised a list of part numbers with quantities sorted by due date and then by location. For example:
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Due Date |
Location |
Part No. |
Description |
Quantity |
|
Week 17 |
Off Soft State |
972364222 |
150 DTH Spline |
2 |
It was normally only printed out for due dates which had already passed. It was, therefore, being produced to monitor arrears rather than to monitor material flow through the plant. Maintaining delivery performance proved to be a difficult task, which required a special exercise to be carried out. When asked about a record of lost time, Pearse replied that the Senior Foreman kept the operator time sheets and that they would contain that sort of data but that he did not monitor lost time: ‘The Industrial Engineers occasionally monitor it. As for scrap and rework, that is monitored. Speak to Phil Johnson, the Production Manager, he has the figures.
The Production Manager
On receipt of order enquiries from Barstrom, Kenhandt or Quick Tools, a ‘due date’ would be issued in line with capacity and the order entered into a register by due date. Over a period of three to four weeks, the register would be checked for orders of identical part numbers and, where found, a single larger batch created. This would then be issued to the shop floor.
‘lt would probably take about forty-eight hours to machine an average tool, if you include set-ups, but that would be for an average batch, which is around thirty bodies,’ commented Phil Johnson, the Production Manager. Asked about capacity calculations, Johnson said: ‘From our dispatch figures, it would appear that our capacity is around 800bodies per week at present. Prior to the Barstrom deal, we were making around 700 per week. We should be capable of reaching 1,000 per week but some of the foremen aren’t pulling their weight and some of the new machines aren’t capable of producing what Barstrom said they would.
“We’ve had a lot of trouble with the machines we bought from Barstrom. They have been breaking down a lot and we have been unable to reach the output levels we expected. Also, we are short of setter operators, so some of the younger lads have to wait for a setter operator before they can proceed with their set-up. A ·few months ago, we also had a problem with a shortage of inspectors, but we have solved this by reducing the amount of inspection required. During the early months of the year, when we were installing the new machines, we had higher than usual scrap and rework levels, but this is now under control”.
Capacity Calculation
It was possible to analyse the output history of both of the main sections of the plant (Soft State and Hard State). The Inspection Logbook logged jobs out of Soft State to heat treatment and shotblast, and they were also logged out of Hard State to Inspection and then to Stores. The average through-put for Hard State, that is logged to Stores, was around 700 bodies per week – less than the figure of 800 quoted by Phil Johnson. At no point had output reached 1,000 bodies per week. Appendix 3 was prepared to show the machine hours needed for an average batch size of twenty-six in soft machining and an average batch size of twentythree in hard machining. These were based on an analysis of the route cards of the most common products, covering 80 per cent of the previous eight months’ output and some supporting data.
The average batch size in Hard State is lower, due to the inclusion of the small batches from the low volume plant.
Shop floor scheduling
Shop floor scheduling was carried out by looking first at the set-up of a particular machine and then at the requirements of the various jobs in the queue. If there was a job with similar set-up requirements close to the front of the queue, it would be pulled forward. If not, the next job in sequence was loaded and the machine re-set. The due dates on the route card were often no help to the foremen, since they had often expired. In the foremen’s office was a large board with ‘T’-cards slotted into it for each batch going through the plant. These cards were inserted under the particular machine heading at the top of the board and had the dispatch date for the batch marked on the card.
The foremen had no information on what works orders were going to be released next and only the ‘T’-card board information on which jobs were waiting upstream of Hard State. The sequence of work the foremen had given to the machine operators was frequently changed by instructions given by the MD and Production Manager. These instructions were usually issued in response to calls from customers trying to expedite overdue orders.
Asked about the lack of Information, the foremen agreed the system was chaotic, but what could they do? The Hard State Foreman mentioned that previously they used a report which listed the complete WIP inventory. by plant section, subcontracted activities, etc. but had stopped using it because it was so unreliable, and anyway priorities were always being altered. So now they just planned from day to day using due dates as a basis and tried to reduce the number of set-ups where they could.
Sales discipline
Sales were received in two ways. First, Barstrom would send an order to the Production Manager each week. He would allocate a date by which the work could be completed. ln theory, this was based on a twelve-week lead time plus or minus a few weeks, depending on the quantity of tool-holders due for delivery at that time. The same approach was used for Kerhandt orders. Second, Quick Tools would top up the Barstrom orders if they could or raise an additional order for those products not ordered by Barstrom. Quick Tools were supposed to be supplying their customers from stock, but this was often not possible because of shortages. Thus, many of the Quick Tools orders were required by customers as soon as possible. lf a competitive delivery time could not be given, the customer would often phone around for a faster delivery
This prompted the salesmen to quote unrealistic delivery dates in the hope that Production would rush them through: ‘Oh, but we can’t turn down £6,000s’ worth of business because they wanted delivery in four weeks. I know that is less than the normal lead time, but if we push it through, we can make the due date. Anyway, we can’t afford to refuse important customers. If we don’t have the stock, we have to rush it through.’ Phil Johnson often accepted this situation, and this resulted in orders going through with due dates that were impossible to achieve or had even passed.
An analysis of orders received against bodies logged to stores (the nearest measurement available to orders dispatched) showed that there was virtually no correlation between the two, even allowing for a twelve-week or longer lead time. By physically counting the WIP on the shop floor and extrapolating the order input/output data back to the beginning of the year, historical WIP inventory and order backlog could be plotted (see figure below). (Due to the lack of any records of works order releases to the shopfloor, Soft State WlP inventory cannot be separated from the order backlog.)
Lead time
With a measure of capacity and WIP Inventory, it was now possible to make an estimate of manufacturing lead time. By making a rough assumption that the through-put of 800 bodies per week was the same for each machining stage in Soft State and 700 per week for each Hard State stage, the lead time broke down to roughly four weeks’ administrative lead time (office processing and hatching up) plus nine weeks’ manufacturing lead time. Eighty per cent of the manufacturing lead time was due to queueing and 75 per cent of the administrative lead time due to the practice of delaying works order releases in the hope of creating larger batches.
Final assembly
Another area where lead time was increased was in final assembly. Finished bodies were often delayed due to the lack of carbide inserts and packaging materials. The system employed was for the PMC to order the bought-in parts when ordering· the raw material for the bodies and to place works orders for any inhouse components at the same time as placing the works order for the bodies themselves. Often the quantities were small and therefore the placement of the orders would be delayed to increase the order size – and occasionally forgotten or lost. The same often applied to in-house· works orders.
The information system
Information was gathered and passed on by several individuals: the Managing Director, the Production Manager, the PMC and the Senior Foreman. All did so separately, on hand-written sheets of paper which they used at progress meetings. The PMC used computer system reports, but system data were not kept up to date. No one had definitive information and even when the Managing Director passed photocopies of his sheets round, no sooner where they Issued than they were changed. In effect, Murray had no single systematic method of processing the information necessary to run the factory effectively.
Figure 2: BareStrom Late Deliveries Distribution
Figure 3: Alternative shank styles for rock drills
Table 3: set-up times, run times, manning levels and machine hours
Notes: Table 3 uses the available data for set-up times, run times, manning levels and machine hours, available to calculate the machine loading factors at each stage of the process. The average through-put of the Hard State is around 700 bodies/week, significantly lower than the 1,000 bodies/week the company would like to achieve. Weighted average run times were averaged from product route cards weighted in accordance with the volumes produced of each product over the previous eight months. A day or night shift is thirty-nine hours per week. Overtime amounted to four hours per week.
Figure 4: Manufacturing Process flow for Button and Taper Socket rock drills
Assumptions and considerations for Modelling of the Murray System
Please read the following assumptions before you attempt to model the process of this case study.
Main Assumptions:
1. Simulation is to consider only the “Splined type” and the “Threaded type” drills;
2. There are only a total of 4 milling machines and 4 turning machines. The quantity of other machines is to be reasonably selected based on this.
3. For the original model, the lot sizes of both soft state and hard state are 26. The current output as per the company data is around 700 bodies/ week but Murray would like to raise the output to 1000/week with minimal cost.
4. The original setting follows a functional (process) layout as it is a batch process. Similar machines are positioned together as a centre (such as a milling centre). Same machine types will only be split if similar consecutive operations must be done by the same type of machine. For example, the turning machines could be split into two adjacent stations of 2 lathes each to accommodate the consecutive ”Turn” operations at the beginning of the process.
5. You can add buffers of capacity up to 7 between stations, as appropriate.
Note: where there are cyclic flows of parts (returning parts) remember to give priority to the more advanced parts. This helps to avoid clogging.
The first step on this project would be to produce a diagram with a functional layout showing the flow of parts clearly.