INDIVIDUAL CASE AND ACTIVITY: FACILITIES AND PRODUCTION PLANNING -- GLITTER SLIME

The Glitter Slime company makes play slime-like material that is moldable and tactile, as well as visually appealing, similar to products sold at popular retailers.

Background

You just became the new operations manager. Mary, the production supervisor for the past 10 years brings to your attention that the main costs for the production process are cleanup. She describes that the company uses the services of a cleaning company charging a per hour rate. The cleaning company’s invoices show that more hours have been billed for cleaning and therefore, the costs of cleaning have increased. Mary tells you that the company has enjoyed strong demand and therefore made more product, which may be leading to an increase in cleanup costs. She shows you a spreadsheet tracking the product volume for the past 24 months, as follows:

1. Do you notice any consistent growth in production? What percentage growth do you notice? 
2. What is your planned production for the next 4 months? Please explain. 

Costs

You ask Mary for the cleaning company invoices and you collect the last 24 months data in this table: 

1. Do you notice any consistent growth in cleanup costs? What percentage growth do you notice? 
2. What do you budget for cleanup costs for the next 4 months? Please explain. 

Staffing

During lunchtime, you run into Edith, the personnel manager. She mentions that she received many complains about lack of training of the new temporary employees the company hired to replace a number of long term employees who retired. Edith also tells you that if the training and production management is not organized better, the company may come under OSHA investigation as two of the employees have slipped on the slime on the factory floor and injured themselves. Edith says that having more temporary employees on the production floor is a hazard and created more mess. You start to wonder if the cleanup costs may be due to this situation. You ask Edith for a list of production staffing numbers for the past 24 months, and she provides the following- she says that the numbers include hourly employees as well as full time employees: 

Planning

1. Do the employee numbers match the production volumes? Why or why not? 
2. What do you plan as number of employees for the next four months? Do you tie it to the anticipated production volumes or to a possible trend in employee numbers? Do you hire more full time or part time employees?

Matthew, the facilities manager asks for a meeting with you. He describes that he is aware of the waste and the mess on the floors. Matthew says that the factory tried a number of production layouts and hired a consultant that suggested a ‘U’ shaped layout. Before that, the company used a linear production design that seemed to have worked well and had less waste accumulated around the production employees. He suggests that a switch back to the previous layout may be the solution to the waste and the high cleanup costs. Matthew says that the switch in layout design has occurred exactly a year ago. You promise to take into consideration. 

On your way back to the office, you see Jamie, one of the best performing production staff. Jamie states that he is very frustrated with the new, cheaper supplies, which he connects with high waste and describes as “very messy”. Jamie tells you that, every time the company has to use these supplies there are cost savings but the cleanup costs are high. The company sometimes switches their suppliers when their first tier suppliers are tied up with other orders. Jamie says that the key to fixing the waste, the safety issues and the high cleanup costs is to always use tier 1 suppliers, and emails you a list of the supply costs (lower costs are associated with the cheaper supplies). 

Decisions

Having cleanup costs as a large portion of the production costs concerns you, not to mention the mess and the safety issues. You decide to find answers. 

1. Use regression analysis to analyze the data you have to find the factors that affect cleanup costs. Do all the aspects mentioned to you impact cleanup costs?
2. Is there a factor that has higher or predominant impact? 
3. Are there other reasons for the high proportion of cleanup costs? What might they be? 
4. What decisions do you make based on your findings?

Student Characteristics

• Graduate or undergraduate business students, proficient with using spreadsheets.

Advice I Gave My Students to be Successful

• Don't worry about finding the exact "solution" and use your creativity!

About the Instructor

• Roxana Wright, Doctor of Business Administration
• Dr. Roxana Wright is Professor of Management and currently teaches undergraduate and Master of Business Administration courses in strategy and operations management, as well as doctoral courses for the Doctor of Education program. She has authored publications and conference presentations focused on firm performance, supply chain management, and strategies of multinational enterprises. Dr. Wright has published multiple articles focused on the practitioner application of business development concepts.

Affordability Considerations

Affordability

• Any spreadsheet or statistical analysis package can be used to analyze the data, including Excel, Jamovi, JASP, JMP.