* Customers: Electronics manufacturers; IBM, AT&T, Digital Equipment are customers for large orders of simple boards or small orders of prototype boards: Specializes in making circuit boards for experimental devices and pilot production runs * Costs:
* Variable costs: raw materials, direct labor, selling expense * Fixed Costs: manufacturing overhead, indirect labor, administrative expense * Competition:
* 750 printed circuit board manufacturers in U.S.
* Classified as captive or contract manufacturers
* Context: Circuit board industry growth parallels computer, telecom & defense industry growth rates * Key Success Factors:
1. Increase manufacturing productivity
2. Improve product quality
3. Determine actual manufacturing time by tracking boards through production system * Hope to better predict production time so delivery dates can be accurately estimated and met 4. Price orders by required delivery date (charge premium for rush orders) II. People
* Edward Plummer – President – intimate understanding of production process (helped create it); believes in superiority of the company’s designs and production processes * Bruce Altmeyer – Design Engineer – also very knowledgable of production process; also in charge of locating design errors, preparing CNC equipment, identifying & solving production problems * Diane Schnabs – Expediter – tracks orders, investigates production problems * David Flaherty – Supervisor – in charge of manufacturing from order until shipment; supervisers 22 production employees (large responsibility) * Shop Employees – qualified (often in 1+ areas), experienced, must exercise skill & care * Managers & Engineers have ample experience & intelligence in electronics industry III. Deal:
* Donner needs to better determine its production process in terms of standard production times required and should focus on improving the quality of its products to avoid returns and to improve customer satisfaction. * Donner should try to incorporate more standardization into its production process so that it can group smaller orders together in the production process in order to increase productivity and profits * Donner should focus on attracting customers who order in large quantities, because this will increase productivity and profitability IV. Systems
* Track board throughput time in the production at regularly to measure increases in productivity * Compare product return rates over time to measure improvements in product quality * Measure and improve direct labor utilization rate
The normal process flow for the production of printed circuit boards at Donner Company consists of three distinct stages: preparation, image transfer, and fabrication. Each stage is comprised of several steps of operations that require standard production in terms of setup and run times. Because Donner company’s intricate manufacturing process is a collection of numerous tasks and operations that can be best described with the use of a process flow diagram. Exhibit 1 displays a distinct process flow diagram for Donner Company’s printed circuit board production process, including stages, operations, and production times. Question 2
Although Donner Company has computer numerically controlled (CNC) drilling and routing machines, it has not set a formal standard for the productive use of these machines based upon size of an order. Minimum order sizes required for the use of these CNC machines can be determined via a breakeven analysis comparing the CNC method with the manual method for both image transfer and profiling. Standard production times for the alternative methods for both of...