assignmnet 3 Process Reengineering at FACAssignment

1. How is OTD different to BTS?
Answer: - Order-To-Delivery (OTD) is different from Built-To-Stock (BTS) in following
ways: I.
It would reduce the huge stock pile which is common in BTS model.
It would enable FAC to produce according to dealer’s order and not marketing forecast
as marketing forecast can be bit non accurate some times and dealers order would be
what consumer enquired for and show interest in.
We can consider OTD in FAC as JIT in supply chain, more over it will give a better
cost saving and will save space as well in storing cars at FAC.
OTD would improve schedule stability.
OTD would impart discipline which very important to supplier’s capacity planning and
dealer’s ordering pattern.
OTD would improve ordering system as in BTS system ordering system was kind of
abrupt i.e. the dealers orders as and when needed but then also they did make lots of
sudden changes, this led to stockpile of cars.
Demand did not always meet the forecast and vice versa.
2. What are the advantages of OTD from a production planning point of view?
Answers: - Advantages of OTD from a production planning point of view: I.
As told in Answer 1 there was a mismatch in production and demand which resulted in
yard full of cars “unsold” in BTS model so OTD would resolve this issue.
Manual planning which allowed last minute changes in production schedule created
pressure and issue on dealer and top management and implementing OTD would
hopefully resolve this issue as well.
Above issue mostly of the time disrupted the supplier production plan and
implementing OTD would save them from this hazel and they can plan and produce
Just-in-time so that there is no stock piling in supplier warehouse as well.
As already told in Answer 1 about schedule stability which was disrupted would be
improved by implementing OTD.
Although given that the low volume disruption could be managed but imaging when FAC’s
model-i car would be in production phase as i-model car had 56 variants it would be huge and
if they still follow BTS they would be sitting on stockpile model-i car’s unsold variants alone.
3. Who are the main benefactors of OTD?
Answer: - As Model-i was to target high volume segment, the old model (BTS model) and
manual planning would not work very well and senior management felt for this very reason
that model-i was the perfect candidate for implementation of OTD model, Model-i had nigh
number of total variants, totaling to 56 variants and if someone take abs and other addon safety
features the variant would further increase. Therefore, this increasing number of variants made
it virtually impossible to do things on spreadsheet manually and of course not to mention other
difficulty in doing things manually which was the case in BTS model.
Then there was “A For C” model which was simple and in conjunction to OTD, it said if a
product is to be delivered in month C then it should be put on order in month A that mean one
whole month for preparation and production, this would benefit all three supplier, dealer and
producer, in this way supplier would also have JIT concept and sufficient time for procurement
the production planning their plant as well and then deliver part to production unit so no
stocking of both parties and then finished good would be on their way to showroom who would
need it for that particular month sales so no stock pile there as well. By doing so there were no
further disruptions in the supply chain.