Eastern Gear
Summary
The purpose of this report is to assist the production process of Eastern Gear, Inc. and increase the profitability of the company. Immediately after picking up large orders, Eastern Gear doubled their profit in the last quarter. However, there are some negative implications of this change in their strategy and it has caused their business to suffer. There has been some degradation in their production process, including increased production time and poor production quality. According to the survey, reducing the delivery lead time by 1-2 weeks would expand their profit by an additional10%. Currently, the major problem is not having an efficient production line. After consideration of several alternatives, we have made some suggestions to set up a highly efficient supply chain, reduce production lead time, avoid defective products, improve customer satisfaction, and ultimately, increase revenue.
Central Issues and Problem Statement
The current production process is inefficient and disorganized. Below are some issues: * Increased production time
Production time increased from 3-4 weeks to 5-6 weeks, decreasing the capability to handle more orders. * Policies not being agreed upon with customers ahead of time
Any changes after production time results in a waste of the previous efforts and raw materials, and has caused an increase in non-value added cost. In addition, agreements should be made with customers to make sure their prints have the tolerances or finishes required by Eastern Gear’s machining. * Bottlenecks in the production process make it difficult to get orders out on time
Too much time is spent in the production process waiting for a machine to become available. * Poor layout results in a jumbled flow of production through the shop
Tools are not centralized and equipments are organized by type instead of being placed in proper production order. * Poor production quality
6% of the
The purpose of this report is to assist the production process of Eastern Gear, Inc. and increase the profitability of the company. Immediately after picking up large orders, Eastern Gear doubled their profit in the last quarter. However, there are some negative implications of this change in their strategy and it has caused their business to suffer. There has been some degradation in their production process, including increased production time and poor production quality. According to the survey, reducing the delivery lead time by 1-2 weeks would expand their profit by an additional10%. Currently, the major problem is not having an efficient production line. After consideration of several alternatives, we have made some suggestions to set up a highly efficient supply chain, reduce production lead time, avoid defective products, improve customer satisfaction, and ultimately, increase revenue.
Central Issues and Problem Statement
The current production process is inefficient and disorganized. Below are some issues: * Increased production time
Production time increased from 3-4 weeks to 5-6 weeks, decreasing the capability to handle more orders. * Policies not being agreed upon with customers ahead of time
Any changes after production time results in a waste of the previous efforts and raw materials, and has caused an increase in non-value added cost. In addition, agreements should be made with customers to make sure their prints have the tolerances or finishes required by Eastern Gear’s machining. * Bottlenecks in the production process make it difficult to get orders out on time
Too much time is spent in the production process waiting for a machine to become available. * Poor layout results in a jumbled flow of production through the shop
Tools are not centralized and equipments are organized by type instead of being placed in proper production order. * Poor production quality
6% of the