Case Study: Supply Chain Analysis at American Heat & Air

This case study analyzes the supply chain of American Heat & Air, a company specializing in HVAC repair services. The central issue revolves around whether to shift from emergency repairs to maintenance services. The analysis highlights the current centralized warehousing system with independent depots and the use of an 800 number for customer service. The study argues against abandoning emergency repairs and advocates for implementing lean techniques to improve service delivery and reduce errors. These techniques include Kaizen for process improvement, Poka-Yoke for error reduction in billing, 5S for organizing activities and reducing lead time, Kanban for scheduling and inventory minimization, Just in Time for inventory management through local vendors, and Jidoka to prevent production line problems. The study concludes by emphasizing the importance of process improvement rather than abandoning emergency services to enhance customer satisfaction and operational efficiency.

Case Study on Supply Chain Analysis
Introduction
The case study pertains to American Heat & Air company and is engaged in the business of
repair heating, ventilation, and air conditioning (HVAC) systems. The company has generally
two types of calls emergency and non-emergency calls. The company has also entered into
contracts for maintenance services with its clients for annual fixed services.
Case Issue
The issue under case study relates to evaluation of whether or not the business should shift
away from emergency repairs towards maintenance services only.
Analysis
In the current case, the company has a centralised system of warehousing with independent
depots to cater the needs of clients. The depots are independently managed and the company
has installed an 800 number to ensure customer interaction and timely service. Further, 30%
of the repairs carried out by the company are emergency repairs.
The proposal to forego the 30% of the business is not a viable option as company should
focus on lean techniques of management to improve the process of services delivered and
reduce mistakes. The following are the lean techniques which can be adopted by the company
to improve the process and reduce the defects and errors in the current process:
(a) Lean Technique 1: Kaizen: The company should try to improve the current process
through reducing the lead time, shifting depots, communication among depots etc.
which will ensure quick and timely delivery of services. Further, the company should
distinguish between the emergency call and non-emergency calls by charging higher
prices for emergency calls so as to reduce the fake emergency;
(b) Lean Technique 2: Poka-Yoke: This technique shall be applied to reduce defect in
billing and occurrence of further mistakes in the billing;
(c) Lean Technique 3: 5S- Company should step up in organising activities in a manner so
as to reduce the lead time in services. Further, steps shall be taken by the company to
ensure that depots are not far flung and major time shall not be wasted in too and fro
movement. Further, procurement of goods from warehouse should be further
streamlined and time taken shall be reduced. The 5 s i.e. Sort, Set-in- Order, Shine,
Standardize and Sustain.
(d) Lean Technique 4: Kanban: The fourth step is key to success in business. The company
should schedule the process of servicing and minimise work in process while
encouraging improvement across various sections. Further, steps shall be taken to
minimise inventory by inter depot communication and advance estimation of probable
demand using artificial intelligence techniques. (MAster of Project Academy, 2020)
(e) Lean Technique 5: Just in Time: The steps may be taken to enter into contract with
local vendors to maintain inventory on behalf of the company so as to reduce the
inventory holding cost of the company;
(f) Lean Technique 6: Jidoka: The purpose of Jidoka is to prevent problems on one station
of a production line from building inventory and also to create urgency to find

permanent solutions. This will help company to reduce customer loss and efficient
utilisation of technicians.
Thus, company should not give its emergency service rather steps shall be taken by
management to improve production process.
References
MAster of Project Academy. (2020, January 20). The 8 Essential LEAN Techniques You Need to Know.
Retrieved from blog.masterofproject.com: https://blog.masterofproject.com/8-lean-
techniques/