Quality Parts Case Study Keller Graduate School of Management September 21, 201
Quality Parts Case Study
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Quality Parts Company manufactures three different types of gi!mos for a local co mputer manufacturer" #he company produces t$o different models of gi!mos and its production runs a%erage bet$een 100 and &00 units" 'ccording to the (uarterly report, monthly demand for the company)s gi!mos is a%eraging bet$een 12 and 1* units per month and in%entory for these components is increased early in the month to ensure that there is enough product to meet an unanticipated surge in demand"
Currently, +0 percent of the manufacturing costs of each gi!mo
can be attributed to ra$ materials and purchased parts for subassemblies" Scrap rates are at are about 10 percent each operation, in%entory turns t$ice yearly, employees are paid on a day rate, employee turno%er is 2 percent per year, and net profit from operation is steady at percent per year- ./acobs Chase, 201&" Proposed Changes
Currently, the manager of Quality Parts Company is considering maing some changes at the plant" Some of the changes being considering are3 • • • • •
installing an automated ordering system to help control in%entory and eep the sids full4 placing t$o days $orth of $or in front of each $orers $orstation4 adding three inspectors to address the issues $ith product (uality setting up a ne$ re$or line to speed repairs4 5nstalling high6rise shel%ing to store the parts coming off machine +"
7y implementing these changes, the manager feels that it $ill increase production, pro%ide much needed help managing in%entory and eliminate the issues the company has been ha%ing $ith the (uality of its gi!mos" Lean Production Philosophy
'ccording to /acobs and Chase .201&, lean production refers to integrated acti%ities designed to achie%e high6%olume, high6(uality production using minimal in%entories of ra$ materials, $or6in6process, and finished goods" 8hen using lean production principles, the ey ob9ecti%es are eliminating $aste, unnecessary processing steps and e:cess in%entory"
Quality Parts Case Study
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#he changes the manager of Quality Parts Company is proposing are not in6line $ith lean production philosophies" 5nstead of stocpiling in%entory and eeping the sids full as the manager suggested, in a lean production en%ironment, a /5# production strategy is used and the company only produces the in%entory they need and no more" 'nything o%er the minimum amount necessary is %ie$ed as $aste because effort and material e:pended for something not needed cannot be utili!ed no$- ./acobs Chase, 201&" 'nother change that the management of Quality Parts is considering is placing t$o days $orth of $or in front of each $orstation and hiring three additional inspectors" ;ean re(uires the plant layout to be designed to ensure balanced $or flo$ $ith a minimum of $ or6in process in%entory- ./acobs Chase, 201&" Since companies that operate using a lean production philosophy do not produce in%entory ahead of time, there is no point in placing the additional $or in front of each $orstation" 5t $ould be more beneficial to introduce the Quality at the Source concept that means doing it right first and $hen there is a problem, stop the assembly line immediately" 5n addition, the manager should consider empo$ering her employees and encourage them to buy into- the process by maing them accountable for the (uality of their $or, the maintenance of their machine and houseeeping" 7y concentrating on one part of their 9ob at time, $orers are able to tae the time to focus better and problems are disco%ered much earlier in the process" 's a result, hiring the three inspectors $ould be a $aste of money" Pull System #he follo$ing is a diagram of the pull system currently running Quality Parts Company)s operation" ' pull system is based on produces goals that allo$ Quality Parts to meet the demand of its customers" #his process is based on the critical path method" , please note that the process begins at ;athe-"
Quality Parts Case Study
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Pull System Diagram for Quality Parts Company
B perating #ime 2
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Introducing Lean at Quality Parts Company )o introduce lean at Quality Parts Company* some changes +ould need to #e made in the +ay the company operates, Some components o- a lean supply chain that +ould need to #e integrated are as -ollo+s. • • • • • •
Partner +ith lean suppliers/ "utomate sourcing* #idding* and auctions 0se +e##ased apps/ "dopt lean manu-acturing principles/ educe e3cess in&entory and adopt lean +arehousing/ 4mploy lean logistics methodology 5uild relationships +ith lean customers
?eferences /acobs, <", Chase, ?" .201&" Chapter +3 Strategic Capacity Management" 5n Operations and supply chain management, the core .&rd ed"" @e$ >or3 McGra$6Aill 5r$in"
Quality Parts Case Study
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