Scheduling Decisions at Western Film Custom Case Solution & Analysis

Evidence Brief: Western Film Production Data

Financial Metrics

Machine Operating Costs: Machine 1 operates at a higher fixed cost per hour compared to Machine 2, though specific hourly rates are tied to utility and labor allocations.
Changeover Costs: Resin and color changes incur costs ranging from 200 to 500 dollars per hour in lost production time and wasted material.
Inventory Holding Cost: Annual carrying cost is estimated at 25 percent of the product value.
Late Penalties: While no direct cash penalty is stated, the cost of lost future business and expedited shipping significantly impacts the bottom line.

Operational Facts

Machine 1 Specifications: High-capacity unit capable of processing 1,500 pounds per hour. Best suited for long-run standard film grades.
Machine 2 Specifications: Lower-capacity unit processing 800 pounds per hour. Offers higher flexibility for rapid changeovers and specialty orders.
Current Backlog: The facility faces a backlog of 42,000 pounds of film, representing approximately 35 to 40 hours of combined machine time without accounting for setups.
Setup Durations: Major resin changes require 6 to 8 hours on Machine 1 and 3 to 4 hours on Machine 2. Minor color changes require 1 to 2 hours.

Stakeholder Positions

Production Scheduler: Focused on minimizing setup times to meet weekly tonnage targets.
Sales Department: Pressuring for immediate fulfillment of small, custom orders to appease key accounts.
Plant Manager: Concerned with overall equipment effectiveness and reducing the 25 percent inventory carrying cost.

Information Gaps

Specific Labor Constraints: The case does not specify if setup crews are shared between machines or if they can operate simultaneously.
Customer Tiering: No data exists on which late orders belong to high-margin or strategic clients versus one-time buyers.
Raw Material Availability: The schedule assumes all required resins are currently in stock.

Strategic Analysis

Core Strategic Question

Western Film must decide whether to optimize for machine throughput to reduce unit costs or prioritize schedule flexibility to clear the backlog and restore customer trust.

Structural Analysis

Applying the Product-Process Matrix reveals a misalignment. Western Film attempts to run low-volume, high-variety orders through a high-volume, low-variety process (Machine 1). This creates a bottleneck where setup times cannibalize effective capacity. The current scheduling logic treats both machines as interchangeable, which ignores the comparative advantage of Machine 2 in handling complexity.

Strategic Options

Option 1: Machine Specialization (Recommended)

Rationale: Dedicate Machine 1 to high-volume, standard resin runs (Contract A and B) and Machine 2 to small-batch, custom, or urgent orders.
Trade-offs: Increases the unit cost of small batches but protects the efficiency of the primary production engine.
Resource Requirements: Requires a revised scheduling algorithm and potentially a dedicated setup crew for Machine 2.

Option 2: Strict Batch Sequencing

Rationale: Sequence all orders strictly by resin type and then by color (light to dark) to minimize total weekly setup time.
Trade-offs: Maximizes tonnage but ignores order urgency, likely leading to further customer churn.
Resource Requirements: Minimal; requires adherence to a rigid calendar.

Preliminary Recommendation

Western Film should adopt Option 1. By segmenting the workflow, the plant can stabilize its primary output on Machine 1 while using Machine 2 as a buffer to address the 42,000-pound backlog. This approach balances the need for low unit costs with the necessity of market responsiveness.

Implementation Roadmap

Critical Path

Phase 1 (Week 1): Audit the current 42,000-pound backlog. Categorize orders by resin type and customer priority.
Phase 2 (Week 1-2): Reallocate all orders under 2,000 pounds and all specialty resins to Machine 2. Shift long-run standard orders to Machine 1.
Phase 3 (Week 3): Implement a light-to-dark color sequencing rule for both machines to capture incremental setup savings.

Key Constraints

Labor Flexibility: Success depends on the ability of operators to switch between machines or the availability of a secondary setup team to reduce downtime.
Technical Compatibility: Certain high-gauge films may only be producible on Machine 1, limiting the ability to offload all small batches to Machine 2.

Risk-Adjusted Implementation Strategy

The plan assumes a 15 percent buffer for Machine 2 to account for emergency orders. If Machine 1 experiences downtime, the schedule must prioritize the highest-margin standard runs to maintain cash flow. Contingency involves cross-training Machine 2 operators on Machine 1 protocols to ensure 24/7 coverage during the backlog clearance phase.

Executive Review and BLUF

BLUF

Western Film is failing because it treats two distinct production assets as a single pool of capacity. The current backlog of 42,000 pounds is a symptom of setup-heavy scheduling. The company must immediately segregate production: Machine 1 for high-volume efficiency and Machine 2 for high-variety agility. This move will stabilize the core business while providing the flexibility needed to stop customer churn. Proceed with the specialization strategy immediately.

Dangerous Assumption

The analysis assumes that Machine 2 has the technical capability to run any product in the current backlog. If Machine 2 lacks the cooling capacity or die-width for specific high-margin films, the specialization strategy will fail, and the bottleneck will remain on Machine 1.

Unaddressed Risks

Labor Burnout: Transitioning to an aggressive backlog-clearance schedule may increase turnover among skilled setup technicians. (Probability: High; Consequence: Moderate)
Resin Price Volatility: Holding larger batches of standard film to optimize Machine 1 increases exposure to raw material price drops. (Probability: Moderate; Consequence: Low)

Unconsidered Alternative

The team did not evaluate outsourcing the 42,000-pound backlog to a competitor or a third-party toller. While this would sacrifice margin in the short term, it would immediately reset the internal schedule and allow the plant to start from a clean state without the pressure of overdue orders.