OPS 330 Week 1 Strategic Operations and Process Analysis Example

Trailers Built to Order, Delivered Too Late: Operations Strategy and a Process Analysis for an Oklahoma Livestock Trailer Maker

[Student Name]

University of Phoenix

OPS/330: Strategic Operations and Logistics

Week 1 Assignment

[Instructor Name]

[Date]

Red Dirt Trailer Works, its plant, volumes and figures are composites written for a model paper.

Red Dirt Trailer Works is a composite manufacturer in Ada, Oklahoma, that builds aluminum livestock and horse trailers to order for about 90 dealers in the southern plains. It employs 140 people and builds about 22 trailers a week, each configured by the customer: length, dividers, tack room, living quarters options and paint. Over the past year, dealers have complained that quoted delivery dates of six weeks routinely stretch to nine or ten, and two large dealers have shifted some orders to a competitor. The owners asked for an analysis of the plant's operations. This paper sets out the company's operations strategy and analyzes its build process.

Competitive Priorities

Operations strategy starts with how a company chooses to compete. Common competitive priorities are cost, quality, speed, flexibility and dependability. Ward et al. (1998) described these priorities as the dimensions on which a firm's operations function decides to excel and noted that firms emphasize different combinations depending on their environment. Red Dirt cannot win on cost against two national builders with larger plants. Its dealers and their customers choose it for customization, the ability to specify almost any layout, and for durability, since its trailers are known to last decades on ranch roads. Interviews with twelve dealers added a third priority that has become urgent: dependable delivery. Ranchers buying a trailer before the spring calving or fall shipping season need it when promised.

Trade-Offs and Cumulative Capabilities

Priorities can conflict. Customization adds engineering and setup work that can make delivery less predictable. Boyer and Lewis (2002) surveyed manufacturing plants and concluded that having to choose among priorities had not disappeared, especially when plants faced capacity limits, even as some firms built several capabilities together. The sand cone model (Ferdows & De Meyer, 1990) holds that lasting improvement comes from building capabilities one on top of another, quality at the base, dependability laid over it, speed above that and cost reduction last. For Red Dirt, that sequence suggests protecting quality while making dependability the next capability to build, before trying to cut lead times or costs.

The Build-to-Order Process

The process has seven steps:

Order entry and engineering: dealer orders are checked, priced and turned into a build sheet and cut list.

Cutting: aluminum extrusions and sheets are cut on two saws and a router table.

Welding: frames, floors and walls are welded in four bays.

Floor and wall assembly: floors, walls and roofs are joined into a body.

Paint and finish: bodies are cleaned, primed where required and finished.

Final assembly: axles, lights, wiring, doors, dividers and options are installed.

Inspection and delivery: each trailer is inspected, road tested and scheduled for pickup.

Measuring the Process

Over two weeks, the team recorded capacity, cycle time per trailer and work in process at each step. Weekly capacity, in trailers, was about 30 for order entry, 34 for cutting, 22 for welding, 27 for assembly, 30 for paint, 26 for final assembly and 32 for inspection. Welding, at 22 trailers a week, matches current output exactly and is the lowest. It also held the largest queue: on average 31 trailers' worth of cut parts were waiting at the welding bays, while other steps held between two and six trailers.

Welding is not the busiest place in the plant; it is the place every trailer waits.

Why the Quotes Slip

Total work in process across the plant averaged about 58 trailers. With throughput of 22 a week, the queuing rule that Little (1961) proved for stable systems, flow time equals work in process divided by throughput, gives an average of about 58 divided by 22, or 2.6 weeks in the plant. Add the order backlog waiting before cutting, about 95 orders or 4.3 weeks, and the average time from order to finished trailer is about 6.9 weeks, before the delivery scheduling step. The sales team quotes six weeks based on build time alone, ignoring the backlog, and the backlog grows each spring when orders rise above 22 a week. Because welding cannot go faster, every order taken above its capacity simply joins the queue.

What the Workers Said

Numbers explained where the queue was; the people in each bay explained why. Welders said they lost about forty minutes a shift looking for the right extrusion lengths, because cut parts arrived in mixed bundles rather than as kits for one trailer. They also said that customized dividers and tack rooms required them to stop and read the build sheet carefully, often calling engineering with questions, which a clearer drawing would avoid. Cutting operators, meanwhile, said they often ran ahead of welding because they were measured on pieces cut, not trailers completed. Those observations shaped the recommendations: kitting at cutting, clearer build sheets and a change in how cutting is measured.

Recommendations

Protect the bottleneck: assign a cutting worker to pre-stage parts kits at each welding bay so welders never wait for parts, and stagger breaks so bays do not stand idle; together these are expected to raise welding output to about 24 trailers a week.

Add capacity where it matters: train two assembly workers as certified aluminum welders and open a fifth bay on the second shift two days a week, raising capacity to about 26.

Quote from the real system: base dealer quotes on the backlog plus build time, updated weekly, and release orders to cutting only at the rate welding can absorb.

Leave non-constraints alone: no new investment in paint or inspection, which have spare capacity.

Connecting to Strategy

These changes serve dependable delivery without sacrificing customization or durability. Quoting from the real queue gives dealers dates they can trust, and raising welding capacity shortens the queue in the spring peak.

Conclusion

Red Dirt competes on customization and durability, and its dealers now add dependable delivery. Process analysis shows that welding limits the whole plant, that work piles up in front of it and that quotes ignore the order backlog. Protecting and expanding the bottleneck, and quoting from the real system, align operations with the priorities that win the company's customers.

References

Boyer, K. K., & Lewis, M. W. (2002). Competitive priorities: Investigating the need for trade-offs in operations strategy. Production and Operations Management, 11(1), 9-20. https://doi.org/10.1111/j.1937-5956.2002.tb00181.x

Ferdows, K., & De Meyer, A. (1990). Lasting improvements in manufacturing performance: In search of a new theory. Journal of Operations Management, 9(2), 168-184. https://doi.org/10.1016/0272-6963(90)90094-T

Little, J. D. C. (1961). A proof for the queuing formula: L = λW. Operations Research, 9(3), 383-387. https://doi.org/10.1287/opre.9.3.383

Ward, P. T., McCreery, J. K., Ritzman, L. P., & Sharma, D. (1998). Competitive priorities in operations management. Decision Sciences, 29(4), 1035-1046. https://doi.org/10.1111/j.1540-5915.1998.tb00886.x