Case Analysis for Eiic and Donner Company

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Group Work:

The Morrison Company
MBA513 Operations Management

Team 2
Chong Zhu, Ziqing Lin, Zifei Wang, Xiawei Yang, Hugang Guo

Part 1 Analysis of Donner Company:
The Donner Company manufactured printed circuit boards to the specifications of a variety of electronics manufacturers. It was a production line. Even though in the first stage of manufacturing process, the artworks were provided by customers and the company would configure the boards according to customer specifications, the company would then produce the boards on a large scale. The company was a factory because it manufactured a large quantity of circuit boards. It was also in batch flow because the stages of manufacturing process were discrete. (shown in Exhibit 1) The Donner Company now had problems in productivity, quality and delivery. First, the production bottleneck was very perplexing because it shifted almost daily from one operation to another without pattern. The cause was differences in order size, design and operations. The shop supervisor Flaherty didn’t when work would pile up or run out. Second, the standard labor hour didn’t include time which was spent reworking parts which failed inspection or were returned by customers and time which was required to move boards from one operation to another. In addition, the standard didn’t reflect improvements which could be made in the shop. While the president Plummer could not change the standard for now because he was afraid that new problems would be created. Third, the qualities of boards decreased. The main cause were incomplete operations and subsequently reworking. In addition, actual deliveries in August, September and October had averaged ten, eight and nine days late. According to the problems below, I have five suggestions for Mr. Plummer: First, the Donner Company can provide several template boards for customers. Because in 1987 the technology of drawing and designing was far behind, it would take a long time for people to design a picture of artwork. In addition, not everyone was good at designing and drawing. If Donner Company could prepare some templates in advance and give customers the chance to choose one which they thought was the best, it would save a lot of time. If customers had some specific requirements, they could just make some changes based on the template. Second, the company could divide the work shop into two parts. One part was responsible for small order sizes( fewer than 100), the other was responsible for large order sizes( more than or equal to 100). In addition, assign every worker’s own task. One could not be responsible for two order sizes at the same time. When there was rush order, select some workers and ask them to only work for the rush order. Third, change the standard labor hours. The new standard should include lost time in reworking parts and returning from customers. Finally, unify the quality standard. Unless customers had specific requirements about the qualities, the company should complete the operations very carefully and avoid returned boards. Part 2 Analysis of EIIC

EIIC inspected and insured a wide range of industrial equipment, ranging from small compressed air tanks to large steam turbines. In the U.S. boiler and machinery industry, 80% of the total annual premiums were accounted for by the top five companies. The competition was very fierce while EIIC was able to build its premium income to over $65 million a year. EIIC provided inspection and insurance services for its customers. EIIC was a job shop and service operation. Job shops are typically small manufacturing businesses that handle job production, that is, custom manufacturing processes such as small to medium size customer orders or batch jobs. EIIC now faced many problems:

First, problems caused by industry trends.
1 There had been increasing trend towards consolidation among agents. So if one policy was delayed, the agent could not wrap it up with other coverage. EIIC...
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