A brilliant company that produces a diverse range of a product is prone to run in to trouble if the processes are not well designed, inefficient quality measures prevail and decision making is more prone to ad hoc basis rather than a standardized process. Blitz Company, an organization distinguished for its capability to cater the diverse needs of their customers, not only on basis of design features but also lot size, has been facing a cumulative number of issues.
To name a few, these issues range from production bottlenecks to capacity utilization to inability to reach deadlines. The analysis has indicated that these problems are just not due to process designs and the methodologies applied in executing them but can also be attributed to a varying number of haphazard managerial decisions. In order to scrutinize these process design flaws and varying managerial decisions, it is prudent to first understand the process flow and then analyze the bottle necks in detail.
The flow of this paper will be as such that I will start by first describing the process flow, then laying down the assumptions, followed by the analysis and production times of various machinery and their processes, then a look at the managerial flaws and finally ending with the recommendations. Process Flow The three main manufacturing steps at Blitz, preparation, image transfer and fabrication had quite a few processes within. Amongst them some of them were more common than the others; hence in order to draw the most common ones, we have neglected Epoxy painting, stake and soldering process.
The processes now included are, photograph, inspect and shear, drill (location holes), KPR, touch up and inspect, Plate, etch, shear, drill, configuration (Rout was popular with small lot size whereas Punch press for larger ones), Drill holes (use manual for less than 100 boards otherwise use the Green pantographic) and then finally inspect and pack. Hence from a total of 15 steps we have included 12 in our process flow, shown in Exhibit 1. The WIP boxes indicate the main bottle necks in the manufacturing process, they are, KPR, Plate, Etch and Drill Holes. Of course when we move forward, Drill Holes would top all.
Based on the popularity and the total number of boards, Epoxy Painting, Stake and Soldering Processes are neglected in designing the process flow, since they had the lowest number of orders and lot size. 2. The cycle times are based on per circuit board, i. e. time between two successive boards is calculated for all the steps; hence for the first seven steps, from Photograph to Etch, the cycle time is calculated by dividing the runtime by 8. 3. Since each step is for a board, all the units are standardized to min/board; this is for the drilling step which was originally given on per hole basis.
All calculations are in minutes. 4. Our understanding is that the drill hole run time was calculated on the basis of total holes from all the 8 machines divided by the total time, hence the cycle time 0. 1min/hole is based on the assumption that the 8 machines are running simultaneously. The same concept is applied for the KPR machines. 5. In calculating the capacity utilization, setup time is neglected based on the understanding that utilization is total run time over the total time available. 6. Taking all the days in Exhibit 6 of the case as the only working days, we use 21 days.
And with eight hours of daily workload, the total working minutes in a month are 10,080 minutes. 7. For orders that had a lot size of more than 100 boards, we have used Green Pantographic Machine whereas the manual machines are used for all those less than 100. 8. The cycle time for drilling (both manual and Green Pantographic) is highest; it will be used for the purpose of cycle of each circuit board. 9. Since the photography stage has no run time, we have omitted it in calculating the through put time. 0. Since Blitz caters to customized boards and also standard ones, we can safely assume the company to be a combination of job shop and batch processing. Analysis Production time for different lot sizes To understand how production time differs in different lot sizes we will try to calculate it in sample sizes of 8, 40, 120 and 800. Our assumption that we will need use manual drilling method for lot sizes that are less than 100, we have the following calculations for lot size 8 and 40.
The above calculations used a setup time of 185 minutes since we used Rout for configuration which is used when the lot size is small. However for calculating 120 and 800 we will have two different setup times. 120 will continue to use Rout but Green for drilling whereas 800 will be using Green for drilling and Punch Press for configuration.
The above calculations indicate that the Green Pantographic takes much lesser time than the manual method, however it is important to understand that because of high machine cost and setup time it will be feasible to use it for a bigger lot size. Taking the discussion forward we can also try to determine the feasible lot sizes for both Green Pantographic and Punch Press. Having done the calculations, with incorporation of setup time, and assuming that cost of running the machines for a shorter duration is economical, it is recommended to use Green for lot sizes of more than 7 and Punch Press for lot sizes of more than 250.
Capacity Utilization Exhibit 2 gives a good indication of the Capacity Utilization in various processes. KPR has a 72%, Punch press with a 20% and finally Green pantographic with an impressive 93. 2%. The very low utilization of punch press could be attributed to the fact that even though it has a high lot size, the little number of orders leaves the machine un operative for a long duration of time. It would be of interest however to see the capacity utilization for photography, which has not been included in exhibit 2 since it has no run time.
The setup time would prove to be pivotal here in calculating the utilization, since this is the only variable which is order based and not board.
Bottle Necks, Production and Managerial It is evident that the main bottle neck in the production is the drilling process. However the problem just doesn’t stop here, there is an entire plethora of issues that entail. The first issue of quality and comebacks can be derived from the fact there is no quality assurance department. Employees in their spare time tend to “quality” which is detrimental in maintaining consistency for Blitz, since many faulty boards pass by without any check.
The next factor comes from the lack of utilization of the machines in different processes, this can be attributed to the fact that the distance between each process is significantly large and employees have to move around a lot, letting them to spend lesser time in working on the machines. Third factor comes in when there is a rush order or a change in schedule due to returns, the entire process gets messed up and that leads further loss in utilization.
Then the concept of shipping out towards the end of the month causes piling up of inventory, leading to high inventory cost. Continuing further, there is a concept of allowing the employees to learn on their own, if substantial time is spent in the first couple of days in training the new incoming employees, they would start performing on standard basis right away. Recommendations The recommendations could be well addresses in form of short term and long term plans. Starting with the short-term plan, it is important to right the managerial flaws.
These include, setting up a highly skilled quality assurance department (consisting of at least three employees) which would monitor the boards after the end of each of the three main operations. This would undoubtedly address the quality issue arising from the specific needs of the customers. The company should setup a small training facility that would not only help new employees to gain the skills but also allow seasoned employee like Arthur Dief to pass on his skills to other employees already working. The latter step would help the senior employees to gain more skills and develop their own batch processes for less than 10 boards, but this would come in the long term plan. Continuing with the short term, the company might want to shift operation area 1 to operation area 5 (in the layout), this would reduce employee movement time a lot and help in increase utilization. Most importantly, the company should develop a set of charter or rules on how to address return, rush orders and shipping.
For the first two issues, the company can have double shift in a week which would only cater to such things, this way the original schedule would remain unharmed and the present ad hoc nature of operations can be fully addressed. Finally for shipping, the company should ship out order as soon as it is manufactured and not pile it up. The company should also look in to the procurement channel since substantial time is spent in actually trying to find the best prices, maybe signing up a supplier would help not only in saving two days but also provide the company with economies of scale.
In the long term plan, it is suggested that the company concentrate on developing further skills in their senior and more talented employees. This is pivotal since the company makes more margins in small customized lot sizes, thus using the forecasted profit and loss statement, we can predict gains in the future which can be invested in setting some working units for the employees to work on small profitable orders in batch size. These units can be setup in the large empty areas around the building.
Secondly, the company should invest more in drilling machines, both manual and Green Pantographs. The manual ones, being cheaper and more important should be bought more in quantity. To sum up, a more standardized approach would help Blitz address numerous of its issues, leading to more margins and sales and lesser bottle necks, quality and other issues.