Topic 5,
Background
Although the company no longer creates gas-powered vehicles, some of its models are still in use as rentals.
Current Environment
Employee teams
* A. Datum Corporation has four key teams of employees:
o Procurement: A team of buyers who source raw materials for the production of the golf carts.
o Engineering: A team of engineering designers who continuously modify and improve the bill of materials (BOM) for the golf carts.
o Production: A team of production employees, including quality assurance (QA), who manages the BOM costs and work on the shop floor to produce the golf carts o Asset Management: A team that manages the golf cart assets, including maintenance and repairs.
* The company has strict controls and uses engineering change management within its end-to-end operations.
Golf cart models
* All new golf carts are rechargeable electric models.
* The company has three primary golf cart models:
o ModelA is manufactured for commercial customers, such as golf courses. Those golf courses rent ModelA for a fixed period of time.
o ModelA contains subassemblies that are produced by A. Datum Corporation and stored in the warehouse until required for production.
o ModelB is manufactured for consumers and can be rented by vacationers, typically for a weekend.
o ModelB must include turn signals and brake lights to ensure that it is legal to drive on city streets.
o ModelB golf carts are typically stored in a rented parking lot during peak vacation season.
o During the off-season, ModelB is stored in A. Datum Corporation's headquarters warehouse o ModelT units are gas-powered units that have been discontinued for production, however, existing assets are available for rent.
* All models are considered low-speed vehicles and must not exceed 25 mph.
* All golf cart models are owned by A. Datum Corporation. None are owned by commercial customers.
Requirements
Engineering
* The engineering manager plans to phase out production of the current steel frames and replace them with aluminum frames.
* Innovation engineers observe an increase in consumer requests for lifted-style golf carts. ModelB will be used to create a prototype of a newer version.
Production
* Golf cart frames for all models must be configured as subassemblies.
* The engineering team plans for the lift kit shocks and struts to be assembled for the prototype as a single production order for the lift kit finished good. The lift kit will remain at the end of the assembly line for the prototype.
* The QA team must conduct a rigorous set of mandatory tests for the ModelB prototype. Only certified QA team members can complete the checklists. The item will not be available for production until the prototype passes testing.
* The lithium batteries must be installed by a certified technician during production.
* The raw materials used in the prototype model are also sold directly as spare parts.
* The controller requires raw material consumption to be posted in the ledger separately for the prototype production orders.
* The warehouse manager requires that ModelA subassemblies must have putaway work created for the warehouse workers. All other subassemblies and finished goods will not require warehouse work. The lift kit subassembly must have a new standard cost created o Cost Requirement 1: The costs for existing materials are frozen for a period. The incremental costs must be calculated without impacting current frozen costs, o Cost Requirement 2: The incremental cost for the subassembly must be determined based on the raw material purchased parts before it is available as a price.
Asset management
* All electric models can be serviced on a quarterly schedule, which is less frequent than the bimonthly gas-powered models.
* The controller requires ModelB to be repotted separately from other models, and the location of the assets updated at each peak travel season.
* Maintenance technicians run a lean schedule and are fully booked out in advance.
Issues Procurement.
* Buyer 1 leports that the master planning process generated planned purchase orders for steel frame subassemblies. Return orders weie created for the steel frames, which should not have been ordered.
Production
* The production manager reports that the lithium battery installation step is creating a production backup because of two issues:
o Issue 1: Technicians who are not certified are assigned to the battery installation step.
o Issue 2: One certified technician is always on site at the production facility; the other certified technician is on call for repairs to rentals and is only substitutes for other technicians occasionally for production.
Asset management
* A golf course manager reports that multiple ModelT units are frequently slow to start. The golf course manager requests monthly inspections for ModelT units, but the ModelA units can keep their current schedule.
* After the ModelT unit issue was addressed, the golf course manager reports that one of the ModelA units stopped charging. The golf course manager requests a priority repair to be scheduled for the next morning.