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Donner Company

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Introduction: Donner Company is a contract manufacturing company. It is into the business of production of printed circuit boards. The company basically has two kinds of orders: 1. Standard PCB's: These orders have same kind of large number of PCB's. 2. Specialized circuit boards for experimental designs and for pilot production runs: These have lesser number of PCB's per order. However, Donner charges a high premium on these orders. The market is very competitive with number of companies operating in the same field. Donner enjoys the reputation of producing highly complex and quality PCB's. The Company has quality overall manpower. Also Donner has a MLT of approximately 4 weeks on special orders, which sets it apart from its competitors. The specialization for Donner was to produce circuit boards for experimental devices and for pilot production runs. The president and the design engineer at Donner believed that "Donner was more adept then its competitors at anticipating and resolving the problems inherent in new designs and prototype production techniques." We could imply the above statement as the major competitive advantage of Donner Company. Despite the competitive advantage that Donner had, the company was facing with operating problems concerned with three aspects of its operation: productivity, quality, and delivery. These problems resulted in unstable gross profit in percentage as seen in exhibit 1 "Donner Company Summary of Profit and Loss" in the original case. ...read more.


* Purchase manager is not in the current organization structure which itself is a big fault. Every production/manufacturing company needs specialized purchase department so that the production people can focus on their job. Purchase is a very important part of the organization and people in this department needs special skill set. Company with proper purchase department can save huge amount by planning the purchases they require in advance and one need a person with the knowledge of market and should have good relations building skills. So we think that company should have one purchase manager who concentrates on purchase, so design engineer can pass on the required martial list and focus on production planning. By this way logical flow will be created in the organization. * The new structure should have the president and all the managers below the managers, there is a need for Production manager, Purchase Manger and sales/marketing manager. Under each manger there will be respective supervisor and under supervisor there will be workers and material handlers. * The fluctuation in order size and batch size also caused the idle time for workers since the workers in other departments had to wait for the work from Drilling department when the more Manual work had to be done. This is not the efficient use of the manpower available. This reflects that Donner doesn't have sound management team as management is making the max possible form the available resources which we don't think Donner does. ...read more.


Should also use the checks and balances and internal marks developed by the supervisors to ensure that the product passes through every stage before it takes the form of final product. 8. The Financial figures show that the company is doing well in terms of sales increase and gross profits. Net Sales have drastically increased from 1985 to 1987 by about 270%. As compared to this the gross profit increased by nearly 308%. We suggest that company should plan to quickly expand its capacity and cater other markets, if necessary should hire and outside financial consultant or an experienced financial manager. The company should focus on the smaller orders as it has been noticed that company get more profit on the smaller orders than that of larger ones. Recommendations: We as a group suggest that Donner should make changes in the organization structure and hire a specialized Purchase manger by doing this the company will not only save on purchasing cost but will also allow design engineer to focus on his jog=b and duplication of job will be reduced. We also think that if company is doing well and have money to invest Installation of ERP system will be a good idea by this company will save a lot on man power and the change of error will also drastically go down, but as we all know that change in the most difficult part in any organization, it will face difficulties in changing from traditional method to the electronic method. (Exhibit 4). ?? ?? ?? ?? ...read more.

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