Proposed change of work in process (WIP) inventory for the polishing department at APN, Incorporated

Abstract

The purpose of the study is to research new and effective methods of changing WIP inventories with the objective to provide a competitive advantage in improving manufacturing lead times for APN, Incorporated. Currently APN is using a batch processing system where product is transformed into finished goods dependent on customer requirements. Product is also made to stock, or finished goods inventory to accommodate customers requiring quick deliveries. Due to increased global competition, customers are requiring increasingly short lead times for these products. Current lead times at APN are at times longer than is acceptable to the customer. As a result, customers sometimes decide to choose from competitors of APN. In addition to lead-time requirements, some competitors of APN are capable of lowering their prices on products due to lower operating expenses, mainly in labor cost reductions. APN carries inventory in finished goods in efforts to provide the company flexibility in delivery. A study will be conducted comparing both conventional and experimental methods by changing WIP inventory quantities. Further, the study will determine whether a change in WIP inventory will be beneficial to the performance of APN. Depending on the outcome of the study, a particular training program will be developed for the APN management team that will provide polishing operators hands on experience that can stimulate employee involvement and innovation. Results of conventional and experimental methods will determine methods of training. Results will focus mainly on lead time changes to finished goods.