Professional Documents
Culture Documents
DR Marten
DR Marten
(BMPJ 6603)
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EXECUTIVE SUMMARY
The story is about an organisation named R Griggs & Company Limited which has been
contracted by Dr Klaus Maertens to produce the “Dr Martens Air Cushion soles for the
international market. The product is a top seller in the comfort shoes market in Germany.
Griggs, coincidently, is a manufacturer of army and workwear boots with a bias towards
comfort. It went on to make footwear with the Dr Martens sole, branded AirWair and it went
on to become a success leading to the organisation being licensed to make the sole to the rest
of the world.
The aim of this study is to analyse the strategies employed by R Griggs and Company Limited
as a result of a major restructuring made earlier. The restructuring was made to improve control
over its operational and selling activities across the world. However, problems occurred which
required drastic action to be taken so as to avoid losses.
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Table of Contents
EXECUTIVE SUMMARY
REFERENCES
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1.0 INTRODUCTION
When we look at the situation concerning R Griggs and Company Limited, it actually
concerns the major restructuring they made to improve control over its operational and
selling activities. This re-organisation resulted in the consolidation of all manufacturing
companies under the name of R Griggs & Company Limited with all the sales and
distribution being controlled by Airwair Limited.
This case study focuses on the follow-up for this major upheaval. An operational review
made several months after the launching of the restructure which revealed considerable
confusion concerning key issues such as:-
The operational review showed serious problems within the business process at
operational levels, such as adverse effects on customer service, staff morale and general
management control.
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2.1 THE PROBLEM STATEMENT
The move for centralisation made staff morale low as there s a feeling of low
customer contact and self-determination. The workforce felt that management
would just hand out workloads as well as delivery schedules that are
unachievable.
Local management teams also have to focus upon issues such as meeting
delivery schedules and stock/inventory control.
The Griggs Group need to identify ways in responding to fashion products with
short product life cycles so as to avoid large stocks of finished goods
Some distributors felt that the number of orders completed on time was
unsatisfactory. They also felt that Griggs could not be relied on to discuss on
problems relating to capacity, what could be made and for when.
There are several fundamental flaws in Griggs current system. Production
schedules were not put into place until materials have been received, Orders
were difficult to trace once production has started.
Griggs is in dire need of a planning or scheduling system, as without it
production planning would be impossible. Staff were often losing customers
order and occasionally urgent deliveries were
2.2 FINDINGS
Based on the case study, the company was facing difficulties on their
manufacturing capabilities. This concerns capacity planning and the company
needed to have strategies that can be used to increase capacity.
The organisation is also concerned with late delivery. This is considered crucial
in meeting deadlines and orders of a company. Therefore, the concept of JIT
(Just n Time) is needed to be implemented in managing the issue of late delivery
and fulfilling customer orders.
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2.3 LITERATURE REVIEW
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capacity, sustainable capacity and effective capacity.
Design capacity is the maximum output possible as
indicated by equipment manufacturer under ideal
working condition.
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Advantage of lead strategy: First, it ensures that the
organization has adequate capacity to meet all demand,
even during periods of high growth. This is especially
important when the availability of a product or service
is crucial, as in the case of emergency care or hot new
product. For many new products, being late to market
can mean the difference between success and failure.
Another advantage of a lead capacity strategy is that it
can be used to pre-empt competitors who might be
planning to expand their own capacity. Being the first in
an area to open a large grocery or home improvement
store gives a retailer a define edge. Finally, many
businesses find that overbuilding in anticipation of
increased usage is cheaper and less disruptive than
constantly making small increases in capacity. Of
course, a lead capacity strategy can be very risky,
particularly if demand is unpredictable or technology is
evolving rapidly.
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For example, a call centre with 10 staff that doesn't hire
more employees until everyone is working overtime.
This may serve to boost efficiency and productivity as
current resources are heavily utilized. It tends to result
in poor performance such as slow response or quality
failures.
JIT production system identifies the hidden problems in the value chain
and reduces the production waste of the system while increasing the
throughout (Sales-Raw Material Cost). Even though the JIT system
seems to be interesting and less complicated, it requires lot of
coordination with supply chain to avoid delays in the production
schedule.
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Less space needed
Waste reduction
Smaller investments
Harley Davidson
Harley Davidson’s use of JIT is mostly characterized by its
transformation in the late World War 2 era from an inefficient
manufacturer that solved all of its problems with extra inventory
to a nimble manufacturer able to meet demand and provide short
lead times.
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2.3.3 Lean Operation
Lean over the years has become a “buzz” word. Started with lean manufacturing
in the late 80s (rebranding the Toyota Production System) [1], and nowadays
the term “Lean” can be found almost everywhere, just to offer some examples:
lean services, lean entrepreneurship, lean software development, lean product
development, lean accounting, lean startups and the list goes on and on. The
underlying concept though is the same; maximize the customer value with
minimum waste, i.e. “manufacturing / delivering more with less”.(7)
So how does lean operation assist Griggs compete in the marketplace and
achieve competitive advantage?
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time. A reduction in lead-time improves customer service, which can give a
company a competitive advantage in the market.
3) Quality Improvement
Lean manufacturing systems focus on making small quality improvements
in company processes to improve the overall quality of the product.
Improving the quality of the product and the process improves reliability
and customer satisfaction. In a lean manufacturing system, employees have
the power to make improvements at any stage in the process. For example,
employees at each workstation must ensure the product meets quality
standards before moving it on to the next workstation. Workers can send a
product back to the previous station if it does not meet specifications. The
system builds quality checks and inspections into the process instead of
inspecting the product at the end of the line.
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Inventory reduction and Kanban
Under lean production practices, inventory levels are strictly regulated,
often using a system called Kanban. With a Kanban system, essential
inventory is replaced only when an employee takes a small “Kanban
card” to a supervisor; inventory is then procured or replaced strictly as
needed. Inventory is kept with corresponding Kanban cards on a
centrally located Kanban rack.
Employee training
Employees should be trained not only on lean principles, but on the
specific lean methods and processes to be utilized moving forward. (8)
As of 2012, the Malaysian Federal Government has announced that by the year
2020, all Government Owned Agencies will have to be self-funded. LGM
Properties Corporation, being a subsidiary of the Malaysian Rubber Board
(MRB), has been instructed to increase its productivity and efficiency to
generate income for the MRB. It was forecasted that LGMPC is expected to
contribute at least 40% of MRB’s financial requirement.
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Notwithstanding the issue above, LGMPC was also affected by several issues
on its operation activities, which is as follows.
In order to generate more income, the Plantation and Properties Division came
up with income generating ideas. Efforts were also made to push the marketing
of other assets.
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d) To implement a successful control system
e) To further improve LGMPC’s operation process
f) To further improve staff skills and welfare
g) To uncover other income generating sources
The Plantation Division has implemented the following strategies for the
following years.
Fertilizer Control
c) Made subsoil fertilizing for hilly areas to reduce fertilizing rounds and
lessen down leaching
Pest Control
a) Usage of owls for rodent control (1 nest: 10 ha). The current rate
is 1:30ha and installation of mobile nests has been implemented. It
was completed in 2013 and aimed at reducing the purchase of
rodent baits.
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Replanting and Rehabilitation
a) The density for newly rubber planted areas is 500 trees per hectare
for flat grounds and 450-480 trees per ha for hilly areas. These
areas are planted with new trees and all works were completed in
2013.
In order to generate more income, the Properties Division has come up with
several strategies.as follows:-
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To demand for the development activity to be returned to LGMPC as it has an
existing team of highly skilled and experienced staff to plan and ensure
completion.
LGMPC’s Properties Division would look into prospective joint venture with
reputable parties to develop MRB’s properties with commercial values
(Source: LGMPC)9
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4.0 CONCLUSION AND RECOMMENDATION
Rubber
Production 1,034,560 713,730 78,849 258,857 232,525
(kg)
Oil Palm
Production 15,497 20,972 22,981 20,757 23,859
(tons)
(Source: LGMPC) 9
Occupancy
85% 86.5% 85% 90% 92.5%
Rate (%)
(Source: LGMPC) 9
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CITATIONS AND REFERENCES
6) Alfasi, N., & Portugali, J. (2004). Planning Just-in-Time versus planning Just-in-Case.
Cities.
8) Holm, M. (2010). Leadership for Lean Operations. In Leadership for Lean Operations.
9) Interview with LGMPC Senior Manager (Properties) & Senior Manager (Plantations)
11) Gilson, Stuart C. (August 02,2011) “How To Make Restructuring Work for Your
Company." Retrieved from http://hbswk.hbs.edu/item/2476.html. .
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