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Submitted By shtora
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2. A description of the main issues raised in the case from the point of view of logistics management

This report outlines issues Hammond Manufacturing’s Transformer group faced in cooperation within the entire Hammond Group. The main issue was described by Hammond’s management as late delivery from the cabinetry plant to the Guelph plant what displeased customers and caused numerous delays on production site.
All problems can be divided in 5 general groups and will be described in detail further:
1. Forecasting Issues
2. Production Scheduling Issues
3. Organizational Issues
4. Process Strategy Issues
5. New Demand Management Issues
2.1. Forecasting Issues
The sales team created forecasts in October for the following calendar year by product lines for all products, based on this forecast the both plants planned their productions and orders accordingly. The company revised its forecasts on a quarterly basis. Production planners reviewed performance monthly and weekly then changed the production schedule when its original forecast proved inaccurate. But frequent changes in customer demand and design caused serious production disorder and delays in orders fulfilment.
Creating a new production schedule on a monthly basis did not help as the supply chain had been already filled in based on the old one. Moreover, forecasting inaccuracy resulted in too little or too much inventory, which was not enough to fulfil unexpected sales demands.
2.2. Production Scheduling Issues
Production scheduling issues were mainly caused by lack of production capacity for customized products on cabinetry plant as well as by delays, shutdowns and unneeded changeovers.
2.3. Organizational Issues
The cabinetry plant treated the transformer plant as an internal customer giving it lower priority in comparison to the external customers. Both companies had completely different…...

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