Module-6-Summative-6.2-MODEL-ANSWER.docx

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Module 6

Summative Assessment 6.2

MODEL ANSWER

100 marks

This assessment covers:

Unit 336741 – Schedule production activities

Please read the following case study and answer the 3 questions that follow.

http://www.engineeringnews.co.za/article/beer-shortage-abates-2007-11-16

Beer shortage abates

By: Chanel de Bruyn

Local brewer South African Breweries (SAB) has reported that there is no critical short- age of its beer brands, despite some pack sizes and types of beer remaining under pressure.

“While supplies of certain of our pack sizes and types of beer have been under pressure over the last couple of weeks, there is no critical shortage of beer and we are producing beer at full capacity, around the clock, to supply our customers,” SAB communications manager Janine van Stolk tells Engineering News, adding that supplies are gradually improving, although it expects the constraints to remain until the new year.

She says that the brewery’s stock build going into the end of the year has been somewhat lower than it would have preferred, as a result of unexpectedly high growth in demand over the past few months, as well as shifts in consumer buying patterns, which have affected the mix of product availability.

Its ability to respond to these conditions was also affected by some challenges on the supply side, such as a glass shortage. The growing economy and increasing consumer demand for glass packaging has led to a glass shortage in the South African market.

Despite these challenges, SAB is pulling out all the stops to improve the situation. “Our seven breweries are operating at full capacity around the clock, and distribution and stock allocations have been adjusted to ensure supplies get into the hands of consumers as quickly as possible,” states Van Stolk.

Beer is also being transported by truck across the country to accommodate the regions that have particularly been affected by the constraints.

EXPANSIONS AND CAPACITY UPGRADES

SAB announced a R5-billion capacity and capability investment at the end of 2004, of which a range of projects is currently in progress. “We foresee that this initial investment will be increased over the next five years,” comments Van Stolk.

Some of the capacity and capability projects include investment in brewing capacity at the Rosslyn and Alrode breweries, investment in packaging capacity that will entail five new packaging lines, investment in storage capacity in the form of several new depots, as well as the expansion of current depots to accommodate the growing demand for beer and soft drinks, and an investment in product development and packaging upgrades.

Further, it completed a R20-million upgrade and refurbishment of its World of Beer facility in Johannesburg, in August.

“The new and much improved World of Beer is now open to the public. The R20-million injection has made SAB World of Beer one of the best branded visitor attractions in the world, rivalling the famous Guinness Hopstore, in Dublin, Ireland, and the new UK Wembley Stadium Visitor Experience,” says Van Stolk.

The World of Beer centre serves as an educational hub for beer and its heritage. The upgrade is expected to result in an increase in visitor numbers, with an increase of approximately 20% in the first year after its reopening.

Moreover, in March this year, SAB invested R100-million in a carbon dioxide self-reliance capacity project, after a period of carbon dioxide shortages, which had affected its soft drinks division, ABI, by preventing it from producing sufficient quantities of soft drinks to meet customer and consumer demand. The new capacity will provide between 55% and 65% of ABI’s total needs.

Carbon dioxide is currently produced by petrochemicals companies and purified for use in the manufacture of soft drinks, but it is also a natural by-product of the brewing process.

“In the interests of self-reliance for carbon dioxide, and in understanding the growing global move towards sustainability, capturing and purifying carbon dioxide from the brewing process seemed the natural choice, although it requires a substantial investment,” explains Van Stolk.

She adds that SAB was hoping to have the facility in place before the end of 2007, but has experienced some delays in developing the planned facility in terms of technical setup and environmental- impact assessment approvals that are still being awaited. The planned completion date still needs to be finalised.

However, Van Stolk says that its carbon dioxide stocks are currently healthy. “We are not experiencing any shortages, nor do we expect to over the coming peak season. We continue to work with our sup- pliers and continue to monitor the situation on an ongoing basis.”

PRODUCT OFFERINGS AND PACKAGING

The objective of a number of innovations in SAB’s premium category is to sustain its current momentum with new product offerings and packaging.

Hansa Marzen Gold is its latest premium brand and was launched in May

2007. It has performed well and is the first locally developed, but internationally based, beer to be introduced to the South African market in many years.

Following the success of Hansa Marzen Gold, which consumers have started referring to as ‘amazing gold’, SAB introduced Hansa Marzen Gold on tap in late September this year.

“Launching Hansa Marzen Gold in draught has been a natural extension for the brand and feedback from the trade and consumers has been very positive,” says Van Stolk.

The Hansa Marzen Gold has already captured 4% of SAB’s volumes. Also, Peroni Nastro Azzurro launched a new 330-m can format in October. The cans are available in a cluster pack, instead of being shrink-wrapped, to reinforce the “premium values of the brand”, says Van Stolk. In September, Peroni was also extended to include draughts.

Further, an alcoholic apple beverage launched in September 2006, called Sarita, has performed well. SAB is now giving Sarita’s outer packaging “a crisp new look that will reinforce the brand’s positioning as a refreshing new experience based on its premium quality, aesthetic appeal and exquisite taste”, explains Van Stolk.

In addition, SAB has embarked on a drive to rejuvenate its mainstream brands over the past months. This includes a packaging facelift for its well-known brands, such as Castle Lager, Carling Black Label, and Hansa Pilsener.

“Although our brands are getting a facelift, they retain their essential personalities and brand values,” comments Van Stolk.

Lastly, the company announced a new design for its returnable 750-m quart bottles earlier this year. The investment to replace the old bottles with the new bottles is estimated at R500-million.

The roll-out of the project started in Cape Town, in May, and will be completed across the country towards the end of 2008.

Edited by: Laura Tyrer

Please answer the following 3 questions:

1. How would you evaluate the key issues involved in scheduling production activities with specific reference to the article above? (20 marks)

2. How would you apply priority and sequencing rules with specific reference to the case study above? (40 marks)

3. Explain how you would use a variety of scheduling techniques and strategies for managing schedules with specific reference to the case study above? (40 marks)

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MODEL ANSWER

Answer to be weighted 80/20, where 80 percent is knowledge based and 20% the leaner’s own interpretation.

Q1. The student must analyse the concepts of finite and infinite scheduling to reflect their influence on the scheduling of production activities

The student must illustrate the difference between finite and infinite scheduling to reflect how these concepts are applied within the operations

The student must determine the implications of finite and infinite scheduling as they relate to a particular operation

The student must analyse the concepts of backward and forward scheduling to determine their influence on scheduling production activities

The student must evaluate the concepts of backward and forward scheduling to distinguish them from each other and indicate their implications on the operation

Q2. The student must define the terms priority and sequencing rules as per international and national benchmarks

The student must identify and analyse various sequencing rules to determine their impact on the scheduling process

The student must select the most appropriate sequencing rules in accordance with the needs of a particular operation

Q3. The student must compare different scheduling techniques models to determine the most suitable technique as per operational requirements (includes but not limited to Pert, Gantt, CPM, Line of Balance and Johnson’ Rule)

The student must utilize different scheduling techniques models to reflect their practical application within production scheduling

The student must use techniques to manage schedules under a variety of situations