7-2 Case study Five Star Tools
FIVE STAR TOOLS
Executive Summary
Five Star Tools, a tools manufacturer is faced with production constraints.
Overview of the Situation
• Focuses on various ways to loosen constraints
• Demonstrates how to identify which products are most profitable and which products are less profitable when confronted with constraints
• Makes the point that large profits that may be lost if a company does not adequately deal with constraints
Issues Addressed
1. What is the situation facing Five Star Tools?
2. What steps can be taken to loosen the constraint in coating and sharpening?
3. Which product should be emphasized (C210 Chisel or D400 Chisel) given the constraint in coating and sharpening?
4. Focusing only on the Model C210 and Model D400 chisels, what would be the benefit of gaining one more hour of production time in coating and sharpening?
5. What would be the incremental profit associated with adding an inspection station before coating and sharpening?
Suggested Resolution
What is the decision facing Five Star Tools? Five Star Tools has a bottleneck in its coating and sharpening operation leading to missed deadlines on orders from important customers.
What steps can be taken to loosen the constraint in coasting and sharpening? A number of alternatives exist, they may include:
• Cross training workers in other departments so they can help out in coating and sharpening
• Adding an inspection station before coating and sharpening so valuable time is not wasted working on defective units
• Outsourcing some of the work that would normally be performed internally by coating and sharpening
• Putting buffer inventory before coating and sharpening to make sure the department does not run out of items to work on
• Reengineering the coating and sharpening operation to make it more efficient
- Purchase additional equipment for the coating and sharpening operation
- Hire additional workers for the coating and sharpening operation
- Train the workers in the
Executive Summary
Five Star Tools, a tools manufacturer is faced with production constraints.
Overview of the Situation
• Focuses on various ways to loosen constraints
• Demonstrates how to identify which products are most profitable and which products are less profitable when confronted with constraints
• Makes the point that large profits that may be lost if a company does not adequately deal with constraints
Issues Addressed
1. What is the situation facing Five Star Tools?
2. What steps can be taken to loosen the constraint in coating and sharpening?
3. Which product should be emphasized (C210 Chisel or D400 Chisel) given the constraint in coating and sharpening?
4. Focusing only on the Model C210 and Model D400 chisels, what would be the benefit of gaining one more hour of production time in coating and sharpening?
5. What would be the incremental profit associated with adding an inspection station before coating and sharpening?
Suggested Resolution
What is the decision facing Five Star Tools? Five Star Tools has a bottleneck in its coating and sharpening operation leading to missed deadlines on orders from important customers.
What steps can be taken to loosen the constraint in coasting and sharpening? A number of alternatives exist, they may include:
• Cross training workers in other departments so they can help out in coating and sharpening
• Adding an inspection station before coating and sharpening so valuable time is not wasted working on defective units
• Outsourcing some of the work that would normally be performed internally by coating and sharpening
• Putting buffer inventory before coating and sharpening to make sure the department does not run out of items to work on
• Reengineering the coating and sharpening operation to make it more efficient
- Purchase additional equipment for the coating and sharpening operation
- Hire additional workers for the coating and sharpening operation
- Train the workers in the