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Donner Company is a Service oriented Manufacturing Company that makes printed circuit boards as per the specifications of its customers.The scope of this document is restricted is to a study and analysis of the operations of the company.

Extracts from this document...

Introduction

Donner Company - Case Analysis PGSEM 2008 Prepared By Parag Biswas (2008135) Pradeep Sundaram (2008136) Sivasubramanian MC (2008137) Sivakumar S (2008138) Sowmya K (2008139) Swetha Jayakumar (2008061) Table of Contents 1. INTRODUCTION 3 1.1 DOCUMENT SCOPE 3 2. PROCESS FLOW 3 3. FINANCIAL STATEMENT ANALYSIS 7 4. LABOUR HOURS DISTRIBUTION ANALYSIS 8 5. CNC DRILL AND CNC ROUTER - OPTIMIZATION 10 6. ORDER SIZE ANALYSIS 12 7. CAPACITY ANALYSIS 13 8. SEPTEMBER - ORDER PROFILE ANALYSIS 16 9. SEPTEMBER - LOAD ANALYSIS 17 10. SEPTEMBER - INVENTORY & FLOW-TIME ANALYSIS 20 11. SUMMARY OF PROBLEMS FACED 22 12. RECOMMENDATIONS 24 12.1 ORGANIZATIONAL POLICY 24 12.2 PRODUCTION LAYOUT (JOB SHOP AND FLOW SHOP) 24 12.3 PRODUCTIVITY IMPROVEMENT 26 12.4 QUALITY IMPROVEMENT 26 12.5 DELIVERY TIME IMPROVEMENT 27 12.6 PROCUREMENT 27 12.7 JOB SCHEDULING 27 12.8 PROCESS BOTTLENECKS 27 12.9 SALES CYCLE & FUTURE READINESS 28 1. Introduction Donner Company is a Service oriented Manufacturing Company that makes printed circuit boards as per the specifications of its customers. Its customers are a variety of electronic manufacturers who need these custom-made printed circuit boards as a part of their supply chain. Their specialization was in making circuit boards for experimental devices and for pilot production runs. The business model hence is characterized by a need for handling Low-Volume, High-Customization products. This necessitates high degree of flexibility within its Design and Manufacturing processes and Technological superiority. The president and the Chief Design engineer were veterans from the industry with patents on the applications, processes and modifications to the commercial industry. 1.1 Document Scope The scope of this document is restricted is to a study and analysis of the operations of the company. The other aspects of the business model including Marketing, Market Research, Sales, R&D and Customer service have not been considered in the analysis report. 2. Process Flow The High Level pictorial flow diagram of the process flow of the company is depicted in figure (see Page 4 - Process Flow). ...read more.

Middle

* Field rejections of the orders made in August were received in September. They had to be reworked and delivered back quickly to the customer. This reject rate was 10%. o Using the Ratio of the Material Cost US$ ratios between August and September we can estimate the number of boards delivered in August. * When Small Rush orders arrive, Arthur Dief personally took care of these orders and fast-tracked these orders to completion within the short delivery times. Because of this prioritization, several other staff working on jobs had to be moved / kept idle. o The Number of orders was 4 per week, or 12 in total in September. * Customer Engineers telephoned he Labour staff and they had to spend time talking to them. Roughly 1/4th of the jobs were delayed. Assuming 5 minutes per phone call, the labour hours lost on telephone can be estimated. * Movement between machines by walking across the factory layout, Idle-time caused due to bottle-necks in the system, prioritization, deprioritization issues and poor scheduling contributed to the balance. Based on this, the AS-IS and TO-BE models are calculated as follows:- From the Above Table the following key inferences can be made:- * By following the September order profile - even if rest of the overhead losses - was roughly the same (worst case), just by optimally using the CNC machines, a productivity gain equalling to freeing up 20% of the available capacity can be made. * This 20% spare capacity can be used to handle 'extra load' that is projected to be received in the subsequent months. 10. September - Inventory & Flow-time Analysis Let us look at the Sales Volumes between August and September. The future projected Sales Volume (if flow time can be improved) is 3M US$ annually or 250K US$ per month. Now, the Opening Stock Inventory on Sep 1st can be approximated to the Average Inventory that would have prevailed in August. ...read more.

Conclusion

model. 12.7 Job Scheduling * The changes listed in previous sections should take care of uneven workload across the month, handling job delays etc. * The Flow-shop will have staff mostly (not 100%) dedicated to the various departments or machines and will be able to do mass production with good quality. * The revised Procurement Policy around Raw Material Inventory will enable the Production Manager to quickly commence production / schedule the order - much quicker than current timelines. This will reduce the over-all delivery time as well. 12.8 Process Bottlenecks * Donner has made a decision to live with Drilling as their bottle neck process. Because the order-size will now form the key of whether the order goes to Job shop or Process Shop, it mitigates the risk of the bottleneck. Also, the optimum usage of CNC drill and Manual drill should reduce the risk at this bottleneck. * The Company has a limitation on the number of racks. It does not seem to be an item which needs to be a bottleneck. The company should stock sufficient volumes of this racks - so that it does not remain a bottleneck. As the company's sales increases, the average Inventory is expected to release (refer Section-11) and hence there is a need to have sufficient number of racks. 12.9 Sales Cycle & Future Readiness * As explained in Section-11 of the document, the Flow-time based on the Order-size and the Cost per board are now available as a mathematical model. They should setup a process to review and revise these numbers from time to time. This will serve as an input to their Sales Process to be able to quote competitively and win new deals. * As explained in Section-11 they are already ready to handle the load of 250K US$ sales per month. The productivity gains made in other areas have freed up available capacity to take up this additional work. ?? ?? ?? ?? 1 Operations Management - Donner Company - Case Analysis PGSEM2008 - Iimb.ernet.in Team - C1 Page 11 ...read more.

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