1.1 INTRODUCTION AND COMPANY BACKGROUND
Custom Gear Inc., in Philadelphia, Pa., is a manufacturer of custom made gears ranging in weight from a few ounces to over 50 pounds. The gears are made of different metals depending on the customer’s requirements. Over the past year 40 different types of steel and brass alloys have been used as raw materials. Custom Gear sells its products primarily to engineering research and development laboratories or very small manufacturers. Recently the president of Custom Gear decided to accept a few larger orders for more than 100 gears. Although lower prices were accepted on these orders, they helped pay the overhead. It was found that the large orders caused many of the small orders to wait for a long time before being processed. As a result some deliveries of small orders were late. This report will write on the major problems that arises from the Custom Gear operation, the potential solutions, theories that can be applied in the case study and lastly but not least the conclusion. 2.1 PROBLEMS
The root cause lies within the company’s policy. The company allowed the customer to change their design even after the production process has already started. This has contributed to the delay of the production. Other than that, the operation layout was designed ineffectively and inefficiently leading to an increase in their lead-time. Several major problems are identified from the root cause such as lack of processing policy flow, lack of order policy, and ineffective and inefficient layout as well as increase rate of return due to defective product. 2.1 Lack of Processing Policy Flow
Lack of processing policy become a burden to Custom Gear where it allow the customer to changes their design even after the production process started. When the customer change the whole blue print, the production of that product will have to stop and wait for new design and raw materials to be clarified and arrived which delay the whole production process.
Send Copy to Controller
Purchase Raw Material
Raw Materials Arrive
Review the Raw Material By Production Supervisor
Finishing & Grinding Centre
Shipping & Finished Goods Storage
Figure 2.0: Operation Process Flow
The process in Figure 2.0 started when a customer wishes to order a gear, the order is taken by sales manager and marketing vice president (James Lord). The customer will specifies the type of gear, quality and raw materials desired by submitting a blue print. Once the order are received, 1 copy is sent to the production supervisor (Joe Irvine), and 1 copy is sent to the controller (Sam Smith). The controller will purchase the order for the raw materials required. These materials often take from 1 to 2 weeks to arrive, depending on the supplier and the type of material ordered.
After receiving the raw materials, the supervisor reviews the order received before the starting the milling machine. The raw material, a gear blank, is sent to the Milling Work Centre. In the Milling Work Centre the teeth are cut into the edge of the gear according to the customers specifications. After that, the gear blanks are sent to the Drilling Works Centre, where one or more holes may be drilled in the gear. Then the gear will sent to the Grinding Centre which the gear will do the finishing by put on the gear teeth and the surface of the gear. Next, the gear may be sent to Heat Treating if this operation is required by the customer. After the batch of gears is completed, they are inspected by the next available worker and shipped to the customer.
Change in Design & Repurchase Raw Material
Order in & Purchase Raw Material
Figure 2.1: Process Flow by week
References: (2014), Operations Management, Putra Business School.
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