The Technical Director, Mike Childwall, and his team are responsible for developing new DBP. For the aftermarket, the dimensions of the backplate and friction pad are taken from the equivalent OE component and then modified slightly to avoid patent infringement, though all mounting points must remain the same. A suitable friction material is formulated using an amalgam of science, heuristics and experience. Brake test rigs and a small dynamometer are available for development of new DBP. Design of new press tooling is carried out by an engineer in the technical department though all tool manufacture is done by a local specialist firm that has worked with Halton since the company’s early days. All new ingredients and all materials from new suppliers are tested by the technical department
For OE products, the dimensions of the DBP would be specified as would be the intended braking performance but the company would be expected to design and develop its own pad to meet, or ideally beat, the specification.
Aftermarket DBP do not need the motorcycle or brake system manufacturers’ approval but Two-Stop’s position in the market relies on a quality image built up over the last 20 years. The threat of legal action in the event of product failure also ensures that product quality, both in design and manufacture is taken very seriously by the company. In addition to SPC controls on the factory floor, samples of finished DBP are tested on the rigs and dynamometer in technical department.
The Business Process
Customer orders are received by the order processing clerks in sales department and inputted into the recently purchased AllianceMFG® small business MRPII system. This system is intended to form the backbone of the company’s organisation and planning and has been installed with terminals in all major departments. The MRPII system is updated at the end of each day and generates new manufacturing orders where needed, based on batch size and minimum stock level rules held by the system. These rules were devised by Rainford Singh, the Planning Controller, based on current operating practice and in agreement with the sales department. The system also calculates new material requirements and purchasing department can convert these requirements into purchase orders directly on-screen. However, the system is not web-enabled and purchase orders are posted or faxed to suppliers, usually as confirmation of a telephone order. Frank Knowsley, the Senior Buyer, does not consider the lack of web capability a problem:
“It is a step too far, not only for us but for most of our suppliers who are also small companies. I would much rather deal with a person than a machine.”
Nearly all their suppliers are UK based though some specialist ingredients are sourced overseas; safety stocks are held of any material where delivery lead time is more than one week. Fine-blanked backplates are sourced from two UK suppliers that Halton Materials have used for many years. Though very reliable in terms of quality and delivery, the backplate suppliers’ minimum order quantity is 1,000, much larger than the normal production batch size of 300. As a small company, Halton Materials has had little success in persuading suppliers to deliver Just-In-Time.
Raw material and finished product stock records are held by the computer system and all stock movements into and out of the factory are recorded. WIP records are available as in-process works orders, though the level of progress of a current works order is not recorded. No use is made, as yet, of the capacity planning features of the MRPII system. All transactions are copied each evening into the Sage® accounting package to update financial ledgers and payroll information.
The Manufacturing Process
Factory operations are the responsibility of David Whiston, the Manufacturing Director, who has recently joined the company from a large international auto-components group. Though nominally the superior of Bob Cronton, the Works Manager, they will actually work very much in partnership until Bob’s retirement at the end of 2006. Bob has many years’ experience at Halton Materials and is very capable of running the current operation effectively. David’s major task is to bring modern management techniques to the operation.
“Bob is a good old-fashioned production supervisor and knows all the tricks needed to make this place work. However, he is not comfortable with change and, even without the possibility of OE manufacture, there are many things that need doing here. I am the first qualified and experienced manufacturing engineer that the company has employed and I am going to be kept very busy!”
The factory and offices are situated on an industrial estate in Lutterworth, a small former market town in the East Midlands. There is a tradition of manufacturing work in the area and much larger pools of skilled labour exist in the nearby cities of Leicester and Coventry; there is very little unemployment in the area and wages need to be competitive to attract good employees. The area is attractive, with a lot of new house building having taken place and a new leisure centre is under construction. Travel by car is easy but there is little public transport. The town is situated at the junction of the M1 and M6 motorways, making the location very convenient for transport of goods and materials; also, it is only 10 miles from the UK’s only significant motorcycle manufacturer. Space for expansion is available within the existing building.
The manufacturing process is shown schematically below:
Pressing Team Finishing Team
The Pressing Team
The first stage in the process is to draw the materials from the stores, weigh out the required quantity for the mix to be made and then add the ingredients in a pre-set order to the mixer. There may also be a specified rate for addition of some ingredients. Though the mix formulation tries to work in whole package sizes, this is not always possible and part packs of unused raw materials are stored in the mixing area; the mixing operator must remember to use these materials first. There are three mixers; two produce a batch that will make approx. 1,000 DBP in a cycle time of 1.5 hours and the third produces a batch for 300 DBP in 1 hour. Finished mixes are stored adjacent to the presses in drums fitted with lids. To avoid cross-contamination, drums are permanently dedicated to only one mix formulation. One difficulty is that these mixes have a “shelf life” of no more than one month because of chemical action between ingredients and one of Rainford Singh’s tasks is to ensure that all mixes are used up before they become out-of-date.
The DBP are formed on manually loaded presses with heated platens. The operator loads the friction material into the die using a specially designed scoop to ensure that the correct quantity of mix is used. The backplate is positioned and the press operated. The die remains closed for 30 seconds to allow the pad to partially cure giving an overall cycle time of 40 seconds. Press changeover time to another product is about 40 minutes. There are 20 presses, grouped in fours. One operator can work up to three presses simultaneously with one, and frequently two, presses undergoing set-up. SPC charts are maintained at each press, though only pad dimension and density are checked. Pressed DBP are loaded into trays for oven baking to complete the curing process.
The baking cycle is three hours and over 90% of all DBP are cured using one of two temperature profiles. There are two large ovens, one permanently set at each profile; two loads per day in each oven normally covers production needs, though an imbalance in profile requirements or the need to run an uncommon profile may make a third load, on overtime, necessary. The start of the curing cycle marks the end of the pressing team’s process responsibility. All team members are capable of carrying out all the section’s operations and regular rotation of jobs is practiced, though Terry Huyton, the Team Leader, tends to operate the mixers; not only is this the most critical operation for ensuring a quality product but it also allows some time for team leading duties when all the mixers are running.
The Finishing Team
After unloading from the ovens, the DBP are machined to ensure consistency of the final physical dimensions of the friction pad. The machining operations are carried out by machining centres consisting of a pair of interlinked CNC machines with magazine feed; three pairs of machines are available and they are now running at full capacity with overtime working often required. Though the machine tools are of a simple standard design, the magazine feed, machine linkage and tooling were designed and manufactured by a small specialist company in Coventry. An automated 100% dimensional check is carried out after machining. Though Halton Materials carried out all routine maintenance and programming, specialist support is needed from the supplier for major modifications and new tooling. A new machining centre will cost £65,000.
After machining, the pads are loaded into racks for manual spray painting of the backplates. As with the Model T Ford, the only colour is black. The DBP air-dry overnight and are then moved, on the racks, to be packed. Finished pads are manually packed, four at a time, into one of two sizes of pre-printed boxes. The boxes are purchased in large batches from a local printing company and supplied flat for assembly when needed. A pre-printed adhesive label carrying details of the product type (motorcycles that the DBP will fit) and production batch number is attached to each box. The batch number allows any subsequent quality problem to be traced back through the process to raw material suppliers’ batch numbers if necessary. These labels are produced on a PC and printer in the packing area using data from the batch documentation. Finished packed goods are then transferred to finished goods stock.
Whilst the finishing team of six operators can all work flexibly within their area, only Leon Allerton, the Team Leader, is capable of working in the pressing area.
Production Planning and Scheduling
Though the DBP manufacturing process is fairly simple and straightforward, actually achieving 100% customer satisfaction without carrying unsupportable levels of stock or working significant overtime is a more complex problem. As an aftermarket business, most demand is for “repeaters” or “strangers” and finished product stock levels are calculated based on traditional statistical stock control principles. The standard manufacturing batch size is 300 pieces, based on the capacity of the small mixer and is a compromise between set-up time on the presses and stock level. However, the need to avoid material wastage by allowing mixes to exceed their shelf life, to use oven capacity effectively and to minimise overtime working means that Rainford Singh’s weekly production schedule actually changes daily and, sometimes, even hourly. A scrap rate of 2% is allowed for in the re-order level but a large problem on a particular batch may mean that a short-term replacement must be scheduled. Rainford’s summary of the situation is:
“I thought that an MRPII system would make my life easier but all I actually seem to have is yet another boss. All I seem to be able to do is keep fire-fighting.”
The Way Forward?
Winning an OE contract will have many benefits for the company: it will provide a stable long term base-load of work for the company and success with the first contract will give confidence to the company and customers alike when further OE work is sought. On the other hand, high quality standards will have to be maintained and on-time delivery to meet the customer’s JIT scheduling is essential. Failure in either of these areas will mean loss of the contract with serious, and possibly fatal, consequences to the company.
Even without an OE contract, there is need for change; Far Eastern and Eastern European products are putting prices and margins under pressure. Though the quality and performance of many of these DBP are poor, the market at the lower end is very price-sensitive. Large capital investment is one possible solution; presses with automatic loading/unloading and a 20 second cycle time are available for approx. £75,000. The set-up time of 2 hours on these machines has made them of little interest in the past but the may be more suitable for OE production. However, Halton’s policy to date has been to use second-hand equipment where possible. As John Halewood remarked recently, only partly in jest:
“One of our competitive advantages is that many of our machines, if not the tooling, are depreciated to zero!”
Appendix I
Halton Materials Ltd. (All figures in £)
Balance Sheet 2005
Fixed Assets 4,000,000
Current Assets
Stock 760,410
Debtors 730,000
Cash 286,670
1,777,080
Current Liabilities
Creditors (<1 year) 883,330
Provisions 102.080
985,420
Working Capital 791,660
Long Term Loans 1,645,830
3,145,830
Shareholders Funds
Share Capital 2,500,000
Retained Profit 645,830
3,145,830
3,145,830
Profit & Loss 2005
Turnover 5,250,000
Cost of Sales 4,200,000
Gross Profit 1,050,000
General & Admin Expenses 158,330
Operating Profit 891,670
Interest 235,000
Profit before Tax 656,670
Tax 226,670
Earnings 430,000
Answer all three questions.
Questions:
1. Using the appropriate Concepts, Models and Frameworks from the module, identify, compare and contrast and discuss the Customer Requirements/Product Characteristics or Criteria for the two proposed product ranges, and hence discuss the implications for Operations.
(25 marks).
2. Formulate and also compare and contrast the manufacturing strategies which would be suitable for the After-Market and OEE Ranges. To do this, consider all the appropriate Hayes and Wheelwright ‘Elements’ presented in the Module, which comprise a Manufacturing Strategy and use them within the structure provided by the Hill Framework (It is Not necessary to discuss the first two sections on the Corporate Objectives or the Marketing Strategies, just focus on sections 3,4, and 5.). Discuss what implications there might be when trying to manufacture both ranges, and the problems they could encounter, if they tried to manufacture both ranges with the same operational strategy or on the same facilities. For each product range DO also include one appropriate measure for each of the 4 perspectives of the Balanced Scorecard discussing and justifying why these are appropriate and specifically promote the desired behaviour required for each range. (40 marks).
3. After 3 years of operating in the OEE Market, because of highly competitive pressure on costs, Halton have decided to Offshore their OEE Product range to China. They will construct their own factory and appoint local staff except for the factory manager who will move from their UK site. Using the appropriate models, advise the company on what differences in working culture the British manager is likely to encounter when managing a factory in China, and how he should respond. (15 marks).
To illustrate your answer, you may wish to make further assumptions about the company. This is permissible but you must state and justify your assumptions and they must be appropriate to the type of company outlined in the question.
The Word Guide Line is 5000 words. So this is NOT a Word Limit, so you are allowed to exceed this length and there will be No specific penalty, however, it does not mean that extra words will get extra marks, this will only be the case if is relevant and well supported discussion. Simply writing a longer assignment which is full of irrelevant data and poor discussion will not get a good mark. An assignment of less than 4000 words will probably mean that you have not adequately addressed the questions.
This assignment accounts for 80% of your Module Mark. 20% has already been awarded for the in-module Case Study assessment.
COMPLETION DATE:
To be submitted electronically using the appropriate web-form available from and following the guidelines provided in your handbook BEFORE Monday 09:00 on 14th November 2011
PLEASE NOTE
1. PMW received after 09:00 will be recorded as having arrived on the next working day.
2. Post Module Work which does not reach WMG by the due date will be considered to be late. Penalties for lateness may be applied at the rate of 3 percentage points per University working day after the due date, up to a maximum of 14 days late. After this period the work may be counted as a non-submission.
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