Eastern Gear Case Study
Eastern gear is suffering from many deficiencies. The company operates as a job shop style and this is inefficient to begin with. There are too many desks to cross to get material ordered and products rushed. There is a lot of wasted time with WIP sitting at work stations. The process design of the shop is inefficient. They also are lacking an organized quality control program. This has resulted in the doubling of production times and a six percent return rate on orders. Rhodes has many actions to take. He needs to realize that he now has too many products to produce with the wrong kind of setup. He could turn part of his shop into a focus factory to put the rush orders and the large orders that are helping business. Rhodes also needs to address the amount of labor he has. There is way too much to justify the amount of downtime in between running machines. It also appears that Eastern Gear could reduce costs and setup time and improve production by only accepting orders that are greater than 10, this way the shop won’t be constantly retooling machines and they will have less WIP. The loss in sales will be made up with the ability to accept more orders 10 and above. The eastern gear case shows how operations strategy and process design affect constraints within an organization. The operations turn to increased attention to priority orders and the addition of a new position to accomplish this in the organizations hierarchy. The process design is a job shop and needs to change to reduce the amount of excess inventory, increase quality control and overall flow of the shop.
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