Albatross Anchor Case Study on Operations Management

Albatross Anchor Case Study on Operations Management

Albatross Anchor has been in operation since 1976 and being a small family owned business; it has exponentially grown over the past few years, and it now employs approximately 130 employees. Although the company is showing some signs of growth, it is enduring numerous challenges. Due to the challenges the company is experiencing, the results of its operations are less productive. The paper will provide recommendations to the challenges Albatross Anchors is experiencing that include technology adoption, time management, performance management and distribution management. Similarly, the paper will provide detailed explanations of the proposed changes to the existing facility and the implications and complications the company may experience because of the changes. Finally, the paper will provide a Gantt chart that will provide details of the proposed changes

First, Albatross Anchor is facing the challenge of technology adoption. The current technology employed by the company is outdated; hence, it slows down the effectiveness of the various operations. I would recommend Albatross Anchor to upgrade its technology so that the company could handle large tasks at the shortest time possible. Currently, customers are impatient with the order delays they keep on experiencing, and this makes the company not attractive anymore. Similarly, with the manual manufacturing process, it would be difficult to meet the requirements of the customers (Barnes, 2008). Therefore, it would be appropriate if the company switch to an advanced and computerized system. On the same note, the company should employ new and sophisticated technologies that can support the manufacturing of both Bell anchor and Snag Hook anchor. Implementing a technologically advanced manufacturing process would be a significant move that the management of the company should consider and prioritize.

Second, the company is experiencing the challenge of cost management. There is increased costs of production, materials and finished goods that sit idle in the warehouse. With the company’s inability to eliminate its operational inefficiencies, it finds itself in a cost-disadvantaged situation compared to the competitors. The company’s profit margin has decreased by 35% although it charges the same price per unit as their competitors. I would recommend the company to reduce inventory-carrying cost. Materials and finished goods that stay idle in the warehouse for an extended period come at a cost. The company should consider the cost of storage and maintenance of product inventory. In addition, the company should optimize its workforce (Chary, 2009). By employing a demand driven versus capacity utilization approach when making its decision, Albatross Anchor will improve its workforce requirements and optimize labor costs. Similarly, it will benefit from reduced overtime expense. Lastly, the company should consider expanding the manufacturing section to accommodate the second product because such inefficiencies that allow raw materials and finished goods to sit idle increases cost.

Third, Albatross Anchor is enduring the challenge of time management. The company has limited space to store both the materials and finished goods, and this has increased the company’s lead-time. The company’s level of inventory depends on its speed of production; however, the company takes a considerably 36 hours to switch from one manufacturing process to the other. If the company can maintain both the manufacturing processes for two types of anchors, and eliminate the time of switching machines, it will result in a continuous flow of materials and products. The current layout of the facility allows the location of the finished products and raw materials to be far from the entire facility. In such situation, workers in the company waste time shipping finished products from their storage location. Similarly, it takes a lot of time to transport raw materials from the receiving section to the warehouse. For the company to eliminate the challenge, it should reduce the time workers waste on transporting materials and finished products from the receiving and shipping sections respectively. The warehouse should be close to the receiving and shipping sections (Chary, 2009).

Fourth, the company is experiencing the challenge of quality management. Customers all over the world will be motivated to buy a product if the quality is outstanding. Although Albatross is driven by the motive to provide its customer with quality anchors, it experiences to maintain and implement quality in its operations. With the worn-out plant and outdated technology, it was difficult for the company to meet the U.S safety and environmental standards. Similarly, it is difficult for the company to implement quality management with disorganized administrative offices that operate inefficiently. The organization should have equipment improvement team that will ensure the provision of unique equipment that will increase the reliability and performance of the machines (Mahadevan, 2010). Moreover, I will recommend the company to establish an organizational understanding of the cost of quality. It is important for the organization to understand that it is cheaper to fix the defect of the problem at the source than when it reaches the customer.

The existing facility of Albatross Anchor needs to undergo changes that will include limited construction budget. The first change the company should make is to separate the administrative office from the foundry. With the plant and offices joined, the organization is in a state where it experiences minimal room for operation. The facility set up does not allow the company to execute a proper workflow. Similarly, if the organization separates the offices from the foundry, it will attain higher operational standards that will allow the employees to work efficiently. Second, the company needs to move the storage area closer to the production section. The storage area for raw materials and finished products are located at the far south end, and this makes it inconvenient for workers to move around with the products. When the warehouse is closer to the production section, workers will save less time and resources when transporting products within the facility (Mahadevan, 2010). Third, the organization should expand the warehousing space for raw materials and finished products. The company manufactures two products, and the existing facility is unable to accommodate raw materials and finished products. Expanding the storage facility will allow the company to store enough raw materials and finished products hence increasing the lead-time.

The implications because of the proposed changes include the following. First, Albatross Anchors will manage its operations efficiently. Separating the administrative offices from the Foundry and moving the warehouse closer to the production area will ensure a free and smooth flow of operations. Second, time management is a critical issue, and since the company would like to minimize time wastage, it was ideal to move the storage area closer to the production section. The company will use fewer resources and time to transport finished goods to the warehouse and raw materials to the production area (Jones, 2014). Third, expanding the warehouse is essential since it will allow the company to accommodate the two line of products and expand the number of customers.

On the other hand, the company might experience the following complications because of the proposed changes to the existing facility. The first complication is the implementation of new production technique. Separating the offices from the foundry section will entail making some changes to the previous connections between the two facilities. Second, the company might experience delays or technical problem in beginning production at the new facility, and this will result in lost revenue due to order cancellations. Third, after expanding the existing warehouse, the company might experience complications in trying to attain full production from the manufacturing process. With a Large warehouse, the organization might endure problems in attaining acceptable yields (Barnes, 2008).

The Gantt chart for the proposed changes on the existing facility is created on the excel sheet attached. The chart indicates the starting date for the tasks that is 1st June and the completion date is 31st July. The changes that might overlap are separating administrative offices from the foundry and moving storage area closer to the production section. The timeline has been compressed to the extent that some tasks overlap one another to suit the completion window set forth.

In conclusion, the company needs to overcome its challenges that include technology adoption, time, cost and quality management by ensuring efficient operations. With an upgraded technology, Albatross Anchors will save time and resources when undertaking its activities. For the company to function well and increase its production, some changes to the existing facility need to occur. The company should expand the warehouse and move it closer to the production section. Also, the office should be separated from the foundry. Lastly, the Gantt chart provides details that include the tasks, starting and completion date of the proposed changes.



Barnes, D. (2008). Operations management: An international perspective. London: Thomson.

Chary, S. N. (2009). Production and operations management. New Delhi: Tata McGraw-Hill.

Jones, E. (2014). Quality Management for Organizations Using Lean Six Sigma Techniques. CRC Press.

Mahadevan, B. (2010). Operations management: Theory and practice. Upper Saddle River: Pearson.




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