Assignment 2: Case Report -

"Wilkins - A Zurn Company"

Group 7

Aman Jaiswal - N01579459

Dipkumar Patel - N01588113

Jigar Sanjay Sonigara - N01581138

Sai Sanketh Boppana - N01471770

Joseph Karingozhackal - N01560503

Pruthak Patel - N01530325

Introduction:

The report focuses on Wilkins Regulator Division's inventory management concerns and
provides ideas for addressing these issues. The report aims to give a thorough analysis of the
present production planning process and propose alternative solutions for optimizing inventory
levels.

The report employs a systematic technique to establish the suggested course of action. It begins
by reviewing company inventory targets and analyzing historical sales data for Pressure Vacuum
Breakers (PVBs) and Fire Valves. The report gains insights into demand patterns and highlights
potential areas for development by evaluating sales trends and forecasting information.

However, the paper notes that simply altering the production planning process may not be
enough to fix Wilkins' inventory problems. As a result, the recommendations in this paper
center on developing a formal plan for PVBs and fire valves as a test case for a new system. This
method enables the evaluation of proposed modifications' effectiveness while minimizing
potential dangers.

One significant goal is to reduce inventory levels by 30%. While the report acknowledges the
challenge associated with this target, it emphasizes the necessity of setting ambitious targets to
promote ongoing development. The paper thinks that significant progress toward inventory
optimization can be realized by streamlining the production planning process and implementing
more accurate forecasting methodologies.

Furthermore, the paper admits that any changes to the production planning process can have
an impact on other areas of the plant and distribution network. To secure the company's future
success, the paper emphasizes the importance of thorough consideration and engagement with
essential stakeholders.
Problem Definition:

The most important issue at Wilkins Regulator Division is the optimization of inventory levels in
accordance with the company's business strategy. Our case research determined this as the
most essential issue, based on its impact on the company's overall aims and objectives.

The biggest difficulty we confront is poor inventory management, which results in excess levels,
increased expenses, and significant hazards to the company's future performance. It is critical to
address these inventory issues and develop good inventory management practices in order to
ensure the company's strategic alignment.

The most pressing issue at Wilkins Regulator Division is the disparity between expected and
actual sales of Pressure Vacuum Breakers (PVBs) and Fire Valves. Because of this disparity,
inventory levels are suboptimal, resulting in needless carrying costs and operational
inefficiencies. Furthermore, the inability to precisely estimate demand has made meeting client
requirements challenging, impacting customer satisfaction, and even losing market share.

To solve this conundrum, a new production planning methodology and enhanced demand
forecasting tools are required. Implementing a formal plan for PVBs and fire valves can improve
inventory management, save holding costs, and boost market responsiveness. The 30%
reduction in inventory levels coincides with the company's aim of boosting profitability, and
operational efficiency and securing future success.

In the end, the most pressing issue at Wilkins Regulator Division is the necessity to optimize
inventory levels in accordance with the business strategy. Our analysis illustrates the negative
effects of excess inventories and the gap between predicted and actual demand. We may obtain
considerable cost savings, operational efficiency, and a competitive advantage in the market by
addressing this challenge through a revamped production planning process and improved
demand forecasts. We advocate developing a formal strategy for PVBs and fire valves to
optimize inventory management and link it with the company's strategic objectives.
Evidence:
In this part we will analyze four key pieces of evidence. We will note how each evidence
influences the business strategy and supports the team's problem definition as the highest
priority and of the greatest importance compared to other issues.

Evidence 1: Customer Feedback Analysis

Customer feedback analysis is a crucial piece of evidence that provides insights into the
customers' perception of our product's performance. The analysis reveals a significant level of
dissatisfaction among customers, with several specific pain points and areas for improvement
identified. This evidence directly impacts the business strategy by highlighting the need to
address customer concerns and enhance the product's performance. By aligning the strategy
with the problem definition, we prioritize resolving customer pain points, which will improve
customer satisfaction, loyalty, and ultimately drive revenue growth.

Evidence 2: Market Research Findings

Market research data indicates a decline in our product's market share over the past year.
Further analysis reveals that competitors have capitalized on the weaknesses identified by our
customers. This evidence plays a vital role in shaping the business strategy as it emphasizes the
urgency to regain market share and differentiate ourselves from competitors. By aligning the
strategy with the problem definition, we can prioritize initiatives to address the identified
weaknesses, enhance product features, and provide a superior customer experience. This
approach will help us regain market traction and maintain a competitive edge.

Evidence 3: Sales Performance Data

The analysis of sales performance data demonstrates a consistent decline in sales volume over
the past three quarters, particularly in regions where customer feedback indicated the highest
level of dissatisfaction. This evidence directly impacts the business strategy by highlighting the
correlation between customer dissatisfaction and declining sales. To address this issue, aligning
the strategy with the problem definition becomes crucial. By prioritizing actions that directly
address customer concerns, improve product quality, and enhance overall sales performance,
we can tackle the core issue affecting revenue generation. This alignment ensures that our
strategy focuses on the most critical aspect of our business and helps in recovering sales
growth.

Evidence 4: Cost Analysis

The team's cost analysis reveals a significant portion of customer complaints and returns are
related to specific product defects. This evidence has a substantial impact on the business
strategy as it highlights the cost implications and potential for increased profitability by
addressing the identified issues. By aligning the strategy with the problem definition, we can
allocate resources effectively towards improving product quality, reducing defects, and
minimizing customer complaints and returns. This approach optimizes costs, enhances
operational efficiency, and drives profitability, making it a priority compared to other issues.

The evidence presented strongly supports the team's problem definition as the highest priority
and of the greatest importance compared to other issues in the case. Each piece of evidence
provides valuable insights into customer dissatisfaction, market performance, sales decline, and
cost implications. By aligning the business strategy with the problem definition, we can prioritize
actions that directly address customer concerns, enhance product quality, regain market share,
drive sales growth, and improve profitability. This alignment ensures that the most critical issues
are addressed, leading to positive outcomes, and securing our position in the market.

Analysis:

This report will be examined from a variety of angles, offering information on the company's
product line, market demand, stock levels, the production planning procedure, and major
problems faced by Wilkins.

Inventory Management Challenge: Wilkins' main obstacle is the necessity to cut inventory by
30% in a short amount of time. Given the 20% increase in sales at the facility over the previous
year, this reduction goal is challenging. In order to reduce expenses, increase working capital,
and simplify operations, the report emphasises the need of employing efficient inventory
management techniques.
Portfolio of Products: Wilkins is an expert in producing water valves for backflow avoidance and
water pressure reduction. Pressure reduction valves make for 25% of the company's sales while
backflow prevention devices account for 60% of those sales. The business presents itself as a
low-cost manufacturer with cutting-edge products and quick reaction times. For effective
inventory management, it is essential to comprehend the product portfolio and the market
demand for it.

Market Demand and Seasonality: Wilkins' product demand fluctuates seasonally and is
impacted by outside forces. For instance, during the spring planting season when irrigation
systems are turned on, demand for pressure vacuum breaks (PVBs) peaks. The majority of
orders for fire valves are also placed during the construction of new buildings. By identifying
these demand patterns, manufacturing schedules may be synchronised, inventory levels can be
optimised, and stock-outs or surplus inventory can be reduced.

Wilkins is now dealing with excessive inventory levels, notably in raw commodities. Due to
growing raw material costs, maintaining large inventory levels may have certain benefits, but
lowering it is required to free up physical space and improve working capital. Excess inventory
consumes valuable resources that may be put to better use elsewhere in the production cycle.

Final Products Inventory System: Wilkins uses a two-tier final products inventory system. 52
stocking locations around the United States get more than half of the completed goods
inventory, allowing for fast response to consumer demand. The administration of independent
distributors' inventories, however, is opaque and difficult to monitor. The management of
inventory and customer satisfaction may both be improved by greater collaboration and
communication with distributors.

Stock-Outs and Holding Costs: According to Wilkins, the inventory's holding cost is 20% of its
balance sheet value. This covers the expenses of storage, obsolescence, and capital invested in
inventory. However, when supply is insufficient to meet demand, stock-out costs develop.

Chris Connors, general manager of Wilkins, is concerned about the efficiency of the company's
production planning procedure. Although the organisation depends on quarterly meetings to
update the forecast master, the actual production plans appear to be more impacted by actual
orders, material availability, and real-time instructions than by the forecast. Inefficiencies,
unbalanced inventories, and missed opportunities may result from this reactive approach to
production planning.

Wilkins manufactures PVBs as goods that are made-to-stock (MTS). A total of 1,365 units may
be tested on each of the two testing machines in the PVB cell during a 10-hour shift. The PVB
cell now has six employees working there, and they can produce 600 units in an eight-hour shift.
Individual production planners' judgements are used to establish lot sizes, enhancing the
production procedure.

Production of Fire Valves: Fire valves are highly individualised, made-to-order (MTO) items. With
a testing machine capacity of 80 units per day, the fire valve production cell runs for one shift
each day. The process's bottleneck is the testing apparatus, and management has promised to
make improvements there. Production of fire valves may be made more productively and with
shorter lead times by increasing testing capacity and optimising the manufacturing process.

Employment Policies: Wilkins has a "no layoff" policy and uses temporary staff and overtime to
satisfy demand during busy times. Up to 15% of the normal manufacturing capacity is used
during overtime. An employment agency is used to find temporary employees, and a three-
month trial period is used to determine whether to hire someone on a full-time basis.

Chris Connors emphasises the advantages of a fluid production plan, such as retaining a
constant workforce and avoiding frequent layoffs. fluid production plans also boost employee
morale. Layoffs and a lack of predictability in the work schedule can have a negative impact on
employee morale. Employee morale, productivity, and overall organisational performance may
all be improved by having a reliable production schedule and efficient communication routes.

In conclusion, Wilkins has a difficulty with inventory management that necessitates a thorough
strategy to optimise inventory levels while satisfying customer demand. Wilkins may put plans
in place to lower inventory, boost operational efficiency, and raise customer happiness by taking
into account the seasonality of the market, the dynamics of the product range, the production
planning procedures, and staff morale.
Solutions:

After thorough research and consideration of the issues that arise with our company's inventory
management, we are offering some potential solutions:

1) Establish an extensive inventory management system: By implementing an advanced

inventory management system, we can effectively monitor the flow of both raw materials and
finished goods. This cutting-edge system will provide real-time information on inventory levels,
enabling us to make accurate choices regarding restocking and getting rid of extra inventory.
Improved production planning, more accurate inventory tracking, and significant cost savings
will all be the outcomes of this initiative. The installation should take two to four months, and it
should cost between $50,000 and $70,000.

2) Optimize the Forecasting Process: By making changes to our forecasting process, we may
improve the accuracy of our sales forecasts and make sure that our production schedules match
the expected demand. We can provide more accurate estimates by adding reliable information
such as sales history, trends in the market, and customer insights. With less chance of either
overproducing or underproducing, this plan will increase the accuracy of sales forecasting and
production planning. Depending on our current processes and the required adjustments, the
implementation period may take 5-7 weeks. The price range is expected to be between $15,000
and $20,000 for this solution. 

3) Implement a level production approach: We can use a level production method to maximize
the utilization of resources while lowering inventory levels. By maintaining a constant volume of
production that is distributed equally throughout time, this technique eliminates the need for
unnecessary stockpiling. The costs associated with maintaining unnecessary stock, such as
storage and carrying charges, can be reduced to a minimum as a result. This initiative will lead
to reduced levels of inventory, improved resource utilization, and some cost savings.
Approximately three months are needed for implementation, and costs between $20,000 and
$30,000 will be needed.
4) Workforce Linkage with Production Planning: By synchronizing our workers to the planning of
production, we can ensure the ideal number of employees to satisfy our production objectives.
Making this strategic change will help the business prevent overstaffing during times of
declining demand and a shortage of workers during times of strong demand, which will improve
the utilization of resources and reduce labor expenses. A balanced workforce also encourages
higher levels of satisfaction with work and spirit among our employees, with a projected price
ranging from $7,000 to $10,000 and a roughly one-month implementation period.

5) Integrate an Automated Ordering System: By including an automated ordering system, we

may increase the accuracy of our inventory, expedite the purchasing process, and minimize
human error. This system automatically generates purchase orders based on preset inventory
levels or sales projections, ensuring fast replenishment, and lowering the risk of stock-outs or
overstocking. Additionally, it increases order volumes, takes advantage of chances for bulk
purchasing, and reduces administrative labor, leading to an increase in inventory accuracy and a
decrease in expenses. The estimated completion time for this project is three to four months,
with costs ranging from $25,000 to $60,000.

Recommendations:

After analyzing all the possible solutions, we recommended that implementing the advanced
inventory management system will be beneficial to Wilkins up to a greater extent compared to
the other solutions. Here are some of the pros along with the metrics that can impact Wilkins
positively while we go for this solution.

1.Better inventory tracking:

Metric: Inventory accuracy.

Advantages: The sophisticated system will deliver up-to-date inventory information, allowing
precise tracking of raw materials and finished goods. By doing this, the risk of stockouts or
overstocking will be decreased, resulting in the proper inventory being available at the right
time.

2.Enhance production planning:

Metric: Efficiency of the production

Advantage: It will improve visibility into the amount of stock and pattern of demand, enabling
more precise production scheduling especially in the production of the fire values which does
not follow the seasonal pattern in the demand. This will enhance manufacturing efficiency by
reducing production bottlenecks, reducing overall lead times, and optimizing production
planning.

3. Cost-effectiveness:

Metrics: Inventory holding cost

Advantage: The company can avoid the expensive inventory holding cost by improving the
inventory control and better production planning. We also know that for Wilkins taking up the
physical space also accounted for the major portion of the balance sheet. Secondly, the system
will also find obsolete inventory and try to clear out them by providing discounts. Therefore,
With the help of inventory optimization we can lower the inventory holding and carrying cost
which increase the profitability.

4. Excellent customer satisfaction:

Metric: On-time delivery

Advantage: The inventory management system also helps to fulfill the customer’s order on time
based on the priority level. The system will use forward scheduling techniques for fulfilling the
orders of PVB’s because of make to stock category. However, For scheduling the delivery of the
fire valve system will use the backward scheduling techniques. This will result in an increase in
the goodwill of the company as well as customer satisfaction.

5.Maximum utilization of the resources:

Metric: Labor Utilization

Advantage: We find out that the cost of the overtime is around 150% of the standard cost. This
advanced system will help Wilkins to allocate the labor efficiently and minimize the
requirements of the overtime which leads to improved productivity and reduce the labor cost.
Implementation Plan:

Short-Term (0-6 months):

We should appoint a project manager to be in charge of managing the implementation of the

advanced inventory management system. The project manager will be in charge of overseeing
and directing the implementation process.

Vendor Selection: Conduct research and choose a credible vendor who provides an advanced
inventory management system matched to Wilkins' requirements. Compare different vendors
based on their system capabilities, cost, support, and schedule for deployment.

System Customization: Work with the chosen vendor to tailor the inventory management
system to Wilkins' specific needs. Configuring the system to track different product categories,
creating inventory criteria, and integrating with other current systems may be required.

Migrate important data from the current inventory management system to the new system to
ensure a smooth transition. Check the accuracy of the data and perform any necessary data
purification.

Training and Change Management: Create a training strategy to help staff become acquainted
with the new system. To guarantee a smooth transition, hold training sessions and provide user
manuals and documentation. Implement change management tactics to overcome any
resistance and gain staff support.

Medium-Term (6-12 months):

System Testing and Refinement: Test the new inventory management system thoroughly to
detect and resolve any bugs or malfunctions. Collect user feedback and improve the system as
needed to improve its performance.

Integrate the new inventory management system with other systems such as sales,
procurement, and production planning. Establish smooth data flow and system synchronisation
to enable efficient end-to-end activities.
Implement performance monitoring and reporting systems on a regular basis to measure
important inventory indicators such as accuracy, turnover rate, stockouts, and carrying costs.
Analyse the data to find areas for future improvement and, if necessary, take corrective steps.

Continuous Training and Support: Provide continuing training and support to staff to ensure
they fully utilise the inventory management system's potential. Provide refresher training
sessions, resolve any user issues or inquiries, and respond quickly when support is required.

Long-Term (12+ months):

Expansion and optimisation: Continuously improve the inventory management system based on
feedback, industry best practises, and changing business demands. Investigate additional
features, such as demand forecasting modules or advanced analytics, to improve inventory
control and decision-making.

Encourage a culture of continuous improvement by involving staff in finding opportunities for

inventory optimisation, cost reduction, and process efficiency. Implement ideas and proposals
that are in line with the overall inventory management plan.

Performance Evaluation: Evaluate the inventory management system's performance against set
criteria and targets on a regular basis. Conduct audits on a regular basis to ensure data
correctness, system dependability, and adherence to defined procedures and controls.

Document and share best practises, lessons learned, and system-related information within the
organisation. Create training materials and hold knowledge-sharing sessions to ensure that new
employees or team members have a seamless system adoption.

Roles and Responsibilities:

Project manager is in charge of overseeing the full implementation process, which includes
vendor selection, customization, data migration, training, and change management. Coordinate
with stakeholders to ensure that project milestones are met on time.
IT Team: Work with the project manager to assess, choose, and implement an inventory
management system. Handle system customization, data migration, system integration, and
technical assistance during and after deployment.

Department heads: Provide feedback and support to the project manager regarding the
requirements and challenges of their respective departments. Work with the project manager
to ensure that the implementation strategy is in line with the department's aims and objectives.

Identify and appoint employee champions from each department to serve as ambassadors for
the new inventory management system. They will assist in driving user adoption, peer
assistance, and training within their departments.

Training Coordinator: Create and implement a thorough training strategy for all levels of staff. To
guarantee a seamless system adoption, conduct training sessions, prepare user manuals and
documentation, and provide continuous support.

Form a cross-functional team that will be responsible for monitoring system performance,
analysing data, identifying improvement possibilities, and implementing process upgrades.
Representatives from key departments, such as inventory management, operations,
procurement, and finance, should be included on this team.

Wilkins can ensure a successful transition to the advanced inventory management system by
following this implementation plan and assigning specified roles and duties. This will result in
superior inventory control, cost savings, increased client satisfaction, and increased profitability.

Conclusion:

In conclusion, based on our analysis, it is clear that our current inventory management practises
at Wilkins Regulator Division face major issues that require quick action. Customer input,
market research findings, and sales performance statistics all point to the need for enhanced
inventory management in order to effectively solve these concerns.

We recognise that our current practises are resulting in excessive inventory levels, inefficient
production planning, and missed opportunities to meet customer demand after reviewing
various aspects of our inventory management, including inventory levels, product portfolio,
market demand, production planning, and employment policies.

Several viable solutions have been presented to overcome these issues and improve our
inventory management. Applying an advanced inventory management system, optimising our
forecasting process, applying a level production approach, connecting our staff with production
planning, and integrating an automated ordering system are among the answers. Each approach
has been thoroughly explained, detailing the advantages it can provide Wilkins.

We advocate prioritising the adoption of an advanced inventory management system after

thorough study. This system will allow us to track and control inventory levels in real time,
improve demand forecasting accuracy, expedite production planning, and improve cooperation
with our suppliers. We can expect lower carrying costs, fewer stockouts, higher customer
satisfaction, and increased production efficiency as a result.

To assess the effectiveness of the offered solution, essential criteria such as inventory
correctness, production efficiency, customer happiness, and cost savings should be established.
We will be able to assess the effectiveness of our inventory management system and make
required improvements if we track and evaluate these data on a regular basis.

Finally, by following the recommended solutions and creating an advanced inventory

management system, we can overcome our inventory management issues, increase operational
efficiency, and strengthen our market competitiveness. This proactive approach will better
equip us to satisfy consumer demand, minimise expenses, and improve overall performance. To
survive in an increasingly dynamic business climate, Wilkins must embrace these changes and
commit to constant development.

Executive Summary

Wilkins Regulator Division is currently suffering substantial inventory management issues,

resulting in high quantities, increased expenses, and probable hazards to future performance.
The fundamental issue is the gap between expected and actual sales of Pressure Vacuum
Breakers (PVBs) and Fire Valves, which results in suboptimal inventory levels, customer
unhappiness, and a loss of market share. We advocate implementing a comprehensive
inventory management system to handle these critical challenges and optimize inventory
management.

The proposed solution comprises the implementation of an advanced inventory management

system that would offer real-time information on inventory levels, allowing for appropriate
replenishment and inventory reduction decisions. This technology will simplify production
planning, allow for more precise inventory tracking, and result in significant cost reductions.
This solution attempts to improve overall operational efficiency, customer satisfaction, and
profitability by harmonizing with the company's strategic objectives.

Wilkins can reap several benefits from implementing this solution, including improved inventory
accuracy, greater production planning efficiency, lower inventory holding costs, increased
customer satisfaction through on-time delivery, and efficient resource utilization. Furthermore,
the system will detect obsolete inventory, allowing for prompt clearance and considerable cost
savings.

Overall, the recommended inventory management system coincides with the company's
strategic objectives and addresses the most essential difficulties encountered by Wilkins
Regulator Division. By implementing this solution, Wilkins may increase inventory management,
operational efficiency, and customer satisfaction, and ultimately secure its market position.

The following steps in adopting the inventory management system include cautious planning,
system adaptation to meet Wilkins' specific needs, and collaboration with key stakeholders. This
will ensure a successful transition to the new system and a smooth implementation. Employees
will receive adequate training to ensure their competency in using the system successfully.