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Tactical planning efficiency : how to improve the medium-term planning of Grolsch?

Vromans, R. (2011) Tactical planning efficiency : how to improve the medium-term planning of Grolsch?

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Abstract:Tactical Planning of Grolsch is responsible for the medium to long-term planning of the filling department. Two problems with Tactical Planning were identified by the supply chain planning (SCP) department: the expected filling line efficiency of the planning is lower than the target for the actual efficiency and the Tactical Planning is very sensitive to changes. Therefore, the main question of this research is: Which factors influence the medium-term planning and how can Grolsch optimize the tactical planning strategy for the efficiency of production? We identify 20 factors that influence the planned efficiency of production. From interviews with planners, we determine that the forecast accuracy, demand volatility, and filling performance are the main factors having a negative influence on the planned efficiency. Based on the description of Tactical Planning, we find that Tactical Planning only influences the actual efficiency by the determination of the number of setups per year in the Tactical Planning strategy. Then we review scientific literature on improvement options and decide to calculate the impact on cost that Tactical Planning has, through a cost calculation model. The cost calculation model determines the lowest total costs of setups and holding stock per product family per filling line, taking into account: demand, MTO/MTF products, safety stock, forecast accuracy, holding costs, setup costs, minimum batch size, shelf life, and lead times. Finally we perform an experiment for the entire filling department in which we compare the current strategy and actual number of setups to the strategy for the lowest cost level. Contrary to expectations, the outcome of this experiment shows that optimization for production efficiency through decreasing the number of setups has no advantage at all because of the interaction between the production and warehousing departments. By decreasing production efficiency and increasing setups, Grolsch can either save money or redirect working capital. We recommend Grolsch to focus more on the interaction between departments. SCP should refine its knowledge of setup and holding costs and take these costs into consideration in its decision making processes. First, in the decision to make a product on an MTO or MTF basis, we advise to aim for more MTO products to reduce holdings costs. Second, the current planning strategy has proven to be near to the optimal strategy. However, the belief that production efficiency improves the total cost currently drives SCP to deviate from the Tactical Planning strategy. Because these deviations have a negative impact on total costs, we strongly advise SCP to follow the Tactical Planning strategy more strictly. This thesis was limited to the production and warehousing departments only. Due to the unexpected results of this research, we recommend SCP to further investigate the interaction between and variable costs of these departments and eventually include the brewing department into the analysis, to improve stability and costs of the total process.
Item Type:Essay (Bachelor)
Clients:
Grolsche Bierbrouwerij Nederland B.V., Enschede, Nederland
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration BSc (56834)
Link to this item:http://purl.utwente.nl/essays/62223
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