Advanced Additives

Download Full Case Description in PDF format

Date approved for distribution: December 15, 2004

Author:

Endri Lilaj
Senior Undergraduate Student
Grado Department of Industrial and Systems Engineering
250 Durham Hall (0118)
Virginia Tech
Blacksburg, VA 24061

Russell D. Meller, Ph.D.
Hefley Professor of Logistics and Entrepreneurship
Director of the NSF Center for Engineering Logistics and Distribution
Department of Industrial Engineering
4207 Bell Engineering Center
University of Arkansas
Fayetteville, AR 72701

Warning:

Keywords:

Facility Layout
Material Handling
Production/Manufacturing
Product Flow Analysis
Bottleneck Identification
Capacity Analysis
Warehousing Systems

Abstract: Advanced Additives is a manufacturer and distributor of liquid and powdered products. They ship to contractors, distributors and hardware stores. Due to the current growth in the construction industry, the company needs to increase its production capabilities. A planned addition of two production lines will cause the company to look at new methods of receiving and shipping, feeding and removing products from the lines and storing raw materials and finished product. The current building cannot be expanded or replaced. Advanced Additives currently operates its manufacturing and shipping staff on a two shift schedule. Receiving is performed on the first shift.

Advanced Additives® wishes to improve the layout design of their facility. The company has provided all the current production, inventory and sales data for this facility. The company anticipates an overall growth of approximately 8%. They wish to develop the best material handling, storage and product flow for this facility including the manufacturing space. Their desire is to remain in this facility for an additional 5 years.

Learning Objectives: Given the concepts that are presented in this case study and their depth, it is best for this case to be used in a junior- or senior-level facility design, material handling, or production & operations management class. The learning objectives are:

to analyze a real material handling design problem similar to ones found in practice;
to make reasonable assumptions related to given data sets, and make reasonable engineering decisions;
to learn how to estimate material flow, inventory, and space requirements;
to analyze and improve a production system through bottleneck identification and capacity analysis;
to analyze and compare material handling equipment; and
to conduct a complete economic analysis for a design problem.

Completion Time: If the case is worked in teams of 3-5 students, it is realistic to expect about four weeks for students to develop and justify a reasonable solution, to write a formal report, and to make a presentation of relevant findings.

Skills Required: The case is designed to test concepts that are associated with a manufacturing and distribution environment. It requires students to develop the best material handling, storage and product flow for the Advance Additives facility, including their yard operations, manufacturing area, and distribution center. It also expects students to perform relevant data analysis on limited data sets; make appropriate assumptions and develop a reasonable solution for the immediate needs and the long term commitments for a company that is experiencing market changes and has significant constraints inherent in the design and the location of its facility. As designed, the case expects students to be able to perform basic data analysis using spreadsheets and to be familiar with a variety of material handling equipment (such as lift trucks, conveyers, pallets, totes, static racks and flow rack). The students are also expected to perform basic calculations and conversions (volume-weight, units-weight), perform simple volume-distance analyses, and compare different design alternatives. Also, in order to be able to complete all the requirements of the case, students must be able to perform analysis on manufacturing production lines. In particular, the students must be able to examine a manufacturing production line to identify the bottleneck operation so as to determine the current capacity of the line and to make suggestions for improvement.

The students will need to have knowledge of production and warehouse control systems, and to make receiving and shipping recommendations in order to improve yard operations. Since the case is designed to make students economically justify all recommendations, it is expected that students have knowledge of basics engineering economics (the time value of money, Net Present Worth, and Internal Rate of Return).

Classroom Testing: The case was originally developed from a study conducted by Gross and Associates. Therefore, with it being a real world problem, there should be expected some data inconsistencies and/or incomplete data sets. Students are expected to use their best judgment and use their engineering perception in making sound and reasonable assumptions. For that matter, the Advance Additives case does not provide every single detail need to develop an exact and unique solution.

The case was used as a basis for the 2004-2005 Material Handling Student Design Competition sponsored by the College Industry Council for Material Handling Education, along with Gross & Associates and Modern Materials Handling. Therefore, it has been classroom tested by the authors and the many other instructors and student teams at other institutions that participated in the 2004-2005 competition.

Send mail to CICMHE@mhia.org with questions or comments about this web site.