Donner Company Example
The following sample essay on Donner Company Example tells about production techniques.
The company has specialized in making circuit boards for experimental devices and for pilot production runs. The basic work process can be divided into three important stages – preparation, image transfer and fabrication. The company’s president – Edward Plumper believes that the company is more adept than its competitors at anticipating and resolving problems inherent in new designs and prototype production techniques due to highly skillful employees with substantial experience that the company has employed.
It supplies the ‘schoolmarm over bare copper’ (SMOOCH) boards under the made-to-order setup, resulting in high variety but low volume and the company charging a premium on its boards. However, this competitive edge has been compromised due to problems being faced in terms of productivity (caused bottlenecks, shifting bottlenecks and improper utilization of labor), quality of the product being manufactured (high rate of product return has been a major problem), and problems associated with the delivery of the final order (most of the shipments are dispatched towards the end of the month).
These problems have begun to hamper the overall performance of the firm, and the management has started evaluating the company’s position and different strategic policies to overcome those problems. Process Flower process comprises of 3 distinct stages: Preparation of image, Image transfer on the laminate panel and Fabrication into desired “profile” (size and shape). At the end of the fabrication stage, the circuit boards are inspected, checked and packed, and stored for dispatch in racks of 20 panels.
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Although some operations are modified for several orders each week depending on customer requirements, a typical work cycle is shown below. Donned had invested $80,000 in buying a technologically advanced CNN machine to perform the drilling and router functions. These processes can also be performed annually, hence, it becomes extremely important to decide when to use the machine and when to perform the action manually. During the drilling step of “Image Transfer” stage, the standard process involves the use of either automated CNN Drill or Manual drill to complete this step.
Both these drills differ in terms of their setup and run times. For the profiling step of “Fabrication”, either Punch Press or automated CNN Router can be deployed for the process depending on the number of circuit boards in the order. We have done the breakable point analysis to decide the objective criteria for the use of the drills as well as profilers. Breakable point analysis Table 1 : Image Transfer stage: Drilling (CNN Drill vs.. Manual drill) CNN Drill Manual Drill Set up time for 1 order 240 15 Run time per hole (1 circuit board has 500 drilled holes) 0. 04 0. 08 Number of circuit boards N N Total time (setup time + Run time) 1 Breakable point: 240 + = 1 5 + N = 5. 92-6 Hence, we conclude that for orders with 6 or lesser units of circuit boards, there is no need to use the CNN machine for drilling purpose: Manual drilling will suffice. For orders above 6 units, the use of CNN drill will reduce the processing time as compared to manual drilling. Hence, in such a scenario it makes more sense to employ CNN machine in the drilling process. Table 2 : Fabrication stage: Profiling (CNN Router vs..
Punch Press) CNN Router Punch Press Set up time for 1 order 150 50 Run time per circuit board 0. 5 1 Number of circuit boards N N Total time (Setup time + Run time) 150+0. 5*N 50+1 *N 200 Breakable point: 150+ 0. 5*N = 50+ As can be observed from the calculation above, the CNN Router should be put into use when the number of circuit boards is greater than 200 whereas Manual Drilling should be employed when the order size involves lesser than 200 circuit boards orders. This decision will prove economical for Donned both in terms of costs and processing times.
However, we loosely analyze Exhibit 2 (mentioned in the case), to calculate the implied utilization of the CNN machine for drilling. Stage Demand (in hrs) Capacity (in hrs) Implied Utilization CNN Drill, Image Transfer 196 20*8 = 160 196/160 = 122. 5 % Assuming, no. Of working days in a month = 20; No. Of working hours per day = 8 Table 4 This utilization of CNN drill (>100%) for orders of circuit boards more than 100 shows that it will not be feasible to use it for smaller orders (greater than 6) Bottleneck Analysis We analyses the Dry Film Photocopies operation to identify the bottleneck in the recess.
It is very important to understand the true capacity of any process in order to prevent bottlenecks and enable uniform distribution of work load across stages. If we assume that the maximum number of circuit boards that the photocopies area can accommodate is only 50, Donned should ensure that no more than 50 units reach it from the drilling stage. Orders with more than 50 units will result in creation of a bottleneck at the Photocopies stage and the efficiency of the entire manufacturing process stands to be compromised because of the pile up of the work.
Because of the existence of multiple steps during this stage (with separate set up and run times), it is critical to analyses each step in detail to identify the creation of bottleneck. In Appendix B, we calculate the capacity of each stage for 8, 80, 800 circuit boards. No. Of boards 8 80 800 panel prep 738. 46 5485. 71 15360 Laminate and Expose 174. 54 960 1745. 45 Develop 190. 099 1745. 45 9600 Table 5 We can see from the above table that the capacity of the ‘laminate and expose’ operation is varying depending on the number of circuit boards in the order size.
This is creating inconsistency in identifying bottle neck in the process. Productivity It is difficult to evaluate the shop productivity precisely, the production bottleneck shifted daily from one operation to another – resulting from differences in order size, from orders bypassing some operations , due the differences in circuit designs and the four-day rush orders (3 such orders per week). Thus, a number of machines were idle more often than expected (they ran at low capacity), pointing to process design inefficiency.
Some of the major issues identified are: Time spend in reworking parts that failed inspection or were returned was not included The time squired for moving the boards between operations was also not reflected in the cycle time – this resulted from the current layout of the operations in the plant Due to huge uncertainty, it is difficult to predict productivity precisely. Several machines were idle more often than expected and the time schedule did not include time spent reworking parts which failed inspection and returned by customers.
The Job methods used for production have a scope of improvement and time standards are not feasible for any Job on the shop. The machining operations are kept isolated and separate from etching, plating and imaging. This is because the plating and etching processes release acid vapors, which may lead to corrosion of machine tools. Similarly, the machining operations create dust and affect the other processes. Due to such isolation, time taken between these processes/ stages is high.
The operation is sequential in nature. However, for drilling operations, the management hasn’t done a breakable analysis to choose between manual labor or to use the CNN machine for the same purpose. No effective Job improvements and constant shifting of workers from Job to Job and other immediate problems. Raw materials are currently simmered’ for fulfilling expedited orders. This may lead to an order remaining as a Work in Progress (WIPE) order, in the firm’s manufacturing stream for longer duration than necessary.
This is further delayed as it requires another shipment that is now consumed by rush orders. Recommendations: The distance between the Machining and Plating divisions should be minimized as a lot of in-process time goes in between. However, in order to ensure that the other processes are not affected by acid vapors and dust, physical barriers such as partitions or vapor resistant screens can be used. This will serve the purpose, and at the same time will reduce the time spent in between. Donned Company should focus on completing small orders for Smocks.
This will help enhance productivity gains, optimum labor utilization and improved quality assurance as the firm possesses both the experience and confidence to assure a high degree of success. Small orders do not require frequent changes in design and hence can thoroughly reduce the Work in Progress. Focusing on only small-volume orders would require the firm to increase their raw material inventory levels and well-planned and timely acquiring, but would also decrease the inefficiency of the raw material ‘simmering process from hampering the entire process altogether.
The idle time of labor can also be reduced as such orders will utilize the high skill-sets of the Donned employees. Moreover, by making such uniform order types will make it much more sustainable for the firm to plan resources and share information. Quality This factor was critical to increase the sales volume and recently the company has faced failures in maintaining the quality standards. Some of the major issues identified are: Customer returns increased from 1% to 3%, nine-tenths of which was because of failure to complete mom of the required operations.
Failure to formally define quality from the customers end – this resulted in sometimes bad shipments being accepted and the good ones being rejected 7% of the boards were rejected at the pre-shipment inspection stage (as of September), 6% of which were because of incomplete operations and then reworked. Recommendations: No formal inspection standard was available: A standard order with design specifications like tolerance etc. Must be taken from the customer during order placement. These order instructions must be followed unanimously across the production line by different workers.
This will reduce the loss of one tenth of boards that had been returned because they were out of tolerance. 6% of 7% boards returned because Donned had missed or failed to complete one or two of the required operations: This is due to lack of information coordination between different workers handling various operations. Currently at Donned, until a Job was shipped, the factory order and blueprint were kept by Flattery who gave them to any worker requiring information. This may lead to loss of vital information among workers regarding the order process.
Hence, a structured process flow consisting all operations must be communicated by David Flattery to the four assistant supervisors who spent about 10% of their time instructing the workers. These assistant supervisors must ensure that this process flow is maintained and all operations are performed. The inspection at the last stage must ensure all the specifications mentioned by the customer in the order manual are satisfied. Delivery The company promised to deliver boards order within 3 weeks and orders greater than 1000 circuit boards within 5 weeks of placing the order.
But the orders were being delayed by more than a week because of some of the issues identified low: The current shipping policy of the company emphasized on clearing all the work out of the shop prior to the end of each month and thus the shipments were mostly done in the second half of each month No inventory was kept by the company, thus for each new order that was logged in searching for the raw material took 2 days and procurement of the same took 4 days.
Small interruptions with regular operations were created by the 4-day rush orders and the small orders (8 circuit boards or less) being routed through Arthur Defied 25% of the delays due to design re- specification / hold Recommendations Shipping policy existent exerts pressure on quality delivered: Current shipping policy of Donned is heavily loaded in the last week of a month. Since the new orders are typically taken in the start of the month with a promise of three week delivery and 6% out of 7% rejected products are shipped again within two-three days, most of the shipping happens in the last week of the month.
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