1. Introduction to BAYONNE PACKAGING, Inc
BAYONNE PACKAGING, Inc is a $43 million printer and paper converter company that produces customized paper-based packaging, for industrial customers, for promotional materials software, luxury beverages, gift good and gift candy. Presently, the business is leaded by Dave Rand and the board of the company is constituted by family members, a local banker and outside counsel. This company is implemented in the paper packaging industry that was featured by the quickly growth between 1980´s and early 1990´s. Due to organizations that chase the desire to make a greater impact with their promotional materials or moved their promotional budget from print media and broadcast forms to the package itself at the moment of purchase. From the combination of this growth and Bayonne´s aspiration to improve, the company is divided in six major stages: Composition, Sheeting, Printing, Die-Cut, Fold&Glue, Finishing and Shipping dock. In the first one, the goal is to develop the printing and the package design, printing plates are made and die-cutting dies are ordered. Then in the Sheet Department, the paper is sheeted from the roll stock and stacked on skids to be printed. The following one is the Printing department that is where the artwork is printed on 4- and 6-colour presses. In the Die-Cut department, the sheets are printed into “blanks”1. After that, the Fold&Glue department consists in turning the die-cut blanks into the finished product. Here there are two options, if it is a large order it goes to the “Royal/Queen” which is an high speed machine. If it is a low volume order is goes to “Staudes” machines. After this, a selection is made to decide which products are sent to the 3A machines2. According to the analysis of this company, there are three major problems that have a huge impact on the way the organization functions which are: quality, delivery time and cost of the final product. Taking to account the quality control problems we realized that the main issue was concentrated in Fold & Glue department where there was either a lack in the glue lines or excess of glue. Consequently, 6% of products were defective and more than 1% of final product were rejected by the customers, for example boxes popping open because it with not enough glue or no glue at all. Besides the quality control problems, there is a significant inefficiency concerning delivery on time of the customized packages- they were late more than 20% of the time. Initially, customers learned not to entirely trust in the delivery time of the product. They also realized that some other component of the marketing project might become available earlier than anticipated and this gave a sense of hope that all would be delivered on time to both of the parties. In addition, customers often were demanded by their own clients to anticipated the due date scheduled by the marketing project, but on the other hand Bayonne did not have the means to respond promptly. Therefore, they want to “move up” or expedite a due date to receive product sooner than they had originally been promised.
2. Capacity utilization in work centers
Machine/Work Center| Total hours per machine| Capacity utilization| Composition| 255| 73,50%|
Jagenburg sheeter| 279| 80,40%|
Heidelberg press| 348| 100%|
Bobst die-cut| 272| 78,39%|
Int.Royal/Queen F&G| 156| 44,96%|
Int.Staude F&G| 179| 51,59%|
Int.3A window/patch| 145| 41,79%|
In order to organize the information provided, we built a capacity utilization´s table of each work center where we, according to the provided data and by calculating capacity utilization of each work center, we measure how much the process actually does produce relative to how much it can produce if it were running at full speed (Process Capacity).
Capacity Utilization = Flow rateCapacity
Given the information in Exhibit...