THE IMPACT OF EFFICIENT MATERIALS HANDLING IN A MANUFACTURING ORGANIZATION (A CASE STUDY OF AWOMMA PLC ENUGU, ENUGU STATE.)

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THE IMPACT OF EFFICIENT MATERIALS HANDLING IN A MANUFACTURING ORGANIZATION (A CASE STUDY OF AWOMMA PLC ENUGU, ENUGU STATE.)

CHAPTER ONE

  • INTRODUCTION

1.1    BACKGROUND OF THE STUDY

There is a strong concern to adjust the supply system in a company (Machline, 2008) to achieve a higher service lev­el internally and to the outside customers. This brings to a higher operational level and even a possible differential when compared with the other competitors (Milan, Paiva & Pretto, 2006; Paiva, Carvalho Jr. & Fensterseifer, 2004).

Materials handling management is among many factors that contribute to improve a company’s performance. The Materials Handling Industry of America [MHIA] defines materials handling man­agement as “Material Handling is the movement, storage, control and protection of material, goods, and products throughout the process of manufac­turing, distribution, consumption and disposal. The focus is on the methods, mechanical equip­ment, systems and related controls used to achieve these functions” (mhia.org/learning/glossary). Then it is observed that handling is broader than simple materials movement, although both terms are sometimes used as synonyms. The relevance of materials handling stems from the intrinsic relationship that it has with production flow. When it presents an imbalance, there is forma­tion of extra stock or rupture in supply. When the flow does not have enough velocity, transit time is long and the system is not capable of serving the customers when they need it.

It is well understood that material handling im­provement may have positive effects over produc­tion. However, it is not only production, but the way the employees see the new situation. When the per­ception is favorable, the benefits are possible; if not, behavioral issues can emerge. Evaluations are im­portant when interventions into the work environ­ment are implemented. The present work is specifi­cally related to materials handling management. By means of effective materials handling management, the company’s operational performance may im­prove (Chopra & Meindl, 2001; Rosenbloom, 2003) aiming to satisfy the customers or meet their expec­tations in terms of their needs, desires and demands (Oliver, 2010; Stock & Lambert, 2001).

The case study related in this work was performed in an automotive industry located in the northeast­ern part of Rio Grande do Sul State of Brazil. It was founded more than 50 years ago and is classified as a large-sized company since it has more than 2000 employees. This region contains a cluster of indus­tries of metal-mechanic, automotive and metallurgi­cal sectors that in its majority belong to production chains which demand a high internal performance level from their partners.

The company in question, after analyzing produc­tion flow as a whole, identified that among other measures it would be necessary to improve mate­rials handling management in the manufacturing process. This was motivated by the observed de­lay in forklifts service and their high maintenance cost. Forklifts were used both for parts handling and transportation and to assist in tooling changes, which many times resulted in excessive setup time leading to production delays. Changes were made in the materials handling process to address these concerns.

The main objective of this case study was to evalu­ate internal customers’ satisfaction levels after the change. In order to do this, it was necessary to iden­tify the factors that explain overall satisfaction; to do it, open-ended questionnaires were applied. The re­spondents – 26 people directly linked to daily mate­rials flow – were requested to identify the attributes and unfold them into sub-factors which represented the internal process in more details. The identified attributes were cost, safety in service, service reli­ability and agility. After this step, a second question­naire with close-ended questions was applied to the same respondents in order to evaluate performance satisfaction at each factor and sub-factor and also overall satisfaction. The questions requested the re­spondent perception about the improvement – per­ceived or not – after the interventions.

The collected data were analyzed with multiple re­gressions. Data analysis indicated that the factors agility, service reliability and cost are able to explain overall satisfaction. In addition to that the satisfac­tion level of most of internal customers with the new materials handling management system is equal or even superior when compared to the previous one.

1.2    STATEMENT OF THE PROBLEM

The first sub-section describes the situation prior to the intervention, identifying the problems that were found. The second describes the factors that moti­vated the change. The third describes the changes and the situation after its completion. Besides vari­ables and sub-variables, customers’ overall satisfac­tion regarding the implemented changes was also evaluated.

1.3 SITUATION PRIOR TO THE INTERVENTION

This study was conducted in the manufacturing sec­tor of an automotive company. The manufacturing sector is responsible for almost all of the supply of assembly lines, including the components that go through a pre-assembly process before proceeding to final product assembly. In this sector are concen­trated cutting and bending tools and dies required for components manufacturing to assembly lines. The whole process runs with the aid of forklifts. Of­ten, the setup time is equal to or higher than the time needed for parts manufacturing. This situation, cou­pled with the cost of downtime, demonstrates the importance of the tooling exchange process.

Besides helping in the execution of setups and carry­ing out internal transport managed by an electronic scoreboard installed in the factory roof, forklifts also performed activities for transporting materials be­tween pavilions. When executing this last activity, the forklifts often travelled on uneven roads, which caused great bouncing, burdening maintenance cost for equipment wear or premature breakage.

Often, when a forklift leaves its workplace to transport a container between pavilions, delays in machines’ setups are generated, causing unnecessary costs and stress on the forklift operator. The operator could do little besides feel forced to increase the speed during the route, creating risks of accidents with personal in­jury and / or materials damage. This activity as well as the studied process relate to Goldratt’s Theory of Constraints (TOC) to seek bottlenecks and reduce or eliminate them (Goldratt; Cox, 2004).

Although there were enough forklifts to meet the demand from the manufacturing sector, many times it was not possible to meet immediately the manu­facturing needs due to reasons like long distances to travel and frequent maintenance due to excessive use of the equipment. This directly affected internal customers’ satisfaction.

The presented problem was: how to increase inter­nal customer satisfaction, while stabilizing or de­creasing forklifts’ maintenance cost?

 

1.4 CHANGE MOTIVATORS

Due to development of new markets, manufacturing demands for a large variety of components and final product assemblies increased. This demand growth led to speed increases and changes in how materials and tools were being handled and transported in or­der to monitor manufacturing requirements.

With these changes and demands for manufacturing to attain the company’s goals, there was also pres­sure for growth and lack of tolerance with forklift operators, since the work did not always run quickly and with quality. Additionally, forklift maintenance costs were increasing, demanding sometimes exces­sive spending that jeopardized the budget. The dis­satisfaction and demotivation of forklift operators was notorious, and an increase was also noticed in the number of collisions between the equipments. Finally, boxes and containers were unsatisfactorily stored in the hallways together with the machines to attempt to reduce production interruptions.

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THE IMPACT OF EFFICIENT MATERIALS HANDLING IN A MANUFACTURING ORGANIZATION (A CASE STUDY OF AWOMMA PLC ENUGU, ENUGU STATE.)

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