Case Description

Custom Molds,Inc is a manufacturing company which produces custom designed molds for plastic parts and plastic parts for the electronics industry. It was set up by father-son duo Tom and Mason Miller in 1975. The company began with the focus on molds and later expanded into manufacture of plastic parts. All fabrication and production operations were housed in a single facility and were characteristic of a typical job-shop. Below is the plant layout:

Dock

Dock

Lunch Room Receiving Raw Material Inventory Packaging And Shipping Finished Goods Inventory

Cut And Trim Dry Mix Testing And Inspection

Wet Mix Injection Machines

Assembly Mold Fabrication Office

Traditionally, the company has emphasized more on the production of custom molds, but starting 1991, Tom and Mason Miller realized that the electronic industry to which they were supplying was changing very rapidly. Manufacturers were now developing strategic partnerships with parts suppliers to ensure timely delivery of high-quality, costeffective parts. It is evident from the data provided that, over the last 3 years, number of orders for multiple mold fabrication declined. While the demand for order size of 10 was 15 in the year 1998, it has reduced to just 5 for the year 1990. On the contrary, the orders received for plastic parts were constantly increasing for large order sizes. As can be seen from the data, for order size of 3000 and 5000, the no of orders in 1988 and 1990 was 9 and 8 respectively. This was also the period when Custom Molds started having delivery problems. Parts delivery was taking 4-5 weeks instead of the stated 3 weeks. On enquiring with Scheduler, it was observed that the occurring of bottlenecks could not be predicted which was a concern for the management.

What are the major issues facing Tom and Mason Miller? Major issues faced by Tom and Mason Miller can be listed below: The Electronics industry to which they supplied was changing very rapidly

Manufacturers have shifted their strategies; more emphasis being laid upon developing strategic partnerships with their suppliers. So adaptation on part of Custom Molds is also very essential.

The Demand for multiple molds is declining

Earlier Custom Molds used to produce custom designed molds in majority but through the data provided we can analyze that in the last 3 years, the company has been getting more and more orders in the production of plastic parts consistently and the orders for custom molds have been decreasing. This calls for a mass production of plastic parts.

Inefficient Testing and Inspection Process

It has been mentioned in the case that two orders were returned recently because of number of defective parts in those batches. This can be attributed to the inefficiency of the testing and inspection team. The transportation, packing, shipping etc. costs have to be incurred by the company and could have been avoided if the testing and inspection been rigorous.

Increase in order sizes for plastic parts

There has been a shift in demand from custom molds to plastic parts. Therefore there is a need to change the layout of the plant to something more suitable for mass production.

Delivery Problems

As mentioned, customers are complaining about the late delivery of the products. This will lead to loss of credibility in front of their customers. Need to pin-point the cause of these delivery problems on an urgent basis.

Identify the individual processes on a flow diagram. What are the competitive priorities for these processes and the changing nature of the industry?

Mold Fabrication flow diagram

Manufacturing of plastic parts

Competitive Priorities

The company should compete on the following competitive priorities to increase the sustainability of the operations:

1. Cost: Cost of production should be lowered. The company should follow competitive based pricing and for that the overall cost of the production should be equal to competitors cost, if not lower than that.

2. Lead Time: Lead time is the time taken by the company to process a given

order and to deliver the finished product. It should be lowered and for that high development speed is necessary.

3. Flexibility: Customization of the mold should be flexible and variable

volumes of plastic parts should not affect the cost.

4. Quality: Quality of all the parts produced should be consistent and should

be of top quality.

What alternatives might the Millers pursue? What key factors should they consider as they evaluate these alternatives? Short Term Alternatives

Layout of the plant should be changed: Custom Molds needs to change the plant layout from job shop to Assembly line. This is because the company is getting more orders for manufacture of plastic parts consistently over the last three years.

Identify bottlenecks in production process: This is necessary to retain the clients.

Improve the efficiency of Testing and Inspection Team: As has been mentioned in the case, two orders have been rejected by the customer. For this

not to happen again, the efficiency of Testing and Inspection team needs to be improved.

Long Term Alternatives

Investment in Research and Development: Company would be better off to invest in R&D in order to stay ahead of its competition. R&D can often show ways to reduce costs by maintaining the same quality.

Expansion Plans: As the orders increase, company should plan for some expansion plans or some new plants to cater to increasing demand.

Phase-out the production of custom molds: As the number of orders for custom molds are decreasing consistently over the last 3 years, the company should look out for phasing out the production of custom molds as the company may start losing out money.

Product Process Matrix

Product-Process matrix is a useful tool for the used in operation management to understand the relationship between the layout structures. There are two dimensions, the first dimension relates to the volume of the particular product or group of standardized product and the second dimension relates to variation in the product.

After analysing the change in demand and sale mix it seems that the Custom Molds Inc. may be in need of a shift from its existing product-process to a more suitable position on the above posted matrix. The existing position of the plant is in the workcenter where similar equipment or functions are grouped together. After the changed demand the owners will have to look at the current demand and will have to come to manufacturing cell model as it provides for more efficiency as in this process a dedicated area is allotted that are similar in processing requirement are produced, and these set are designed to perform specific set of processes and the cells are dedicated to limited range of products.

Recommendations

Rearrangement of Plant Layout: Testing area should be moved to more central location for more time-efficient movement of goods back and forth and for increased, easier communication between testers and office and manufacturing areas. Dock

Dock

Receiving Raw Material Inventory

Lunch room Packaging And Shipping Finished Goods Inventory

Dry Mix

Office

Wet Mix

cutting and trimming

Testing & Inspection Assembly Injection Mechanism Mold Fabrication

Shift to Assembly line: As the number of orders for big order sizes are increasing for plastic parts, the plant layout should be changed from job-shop to an assembly line production.

Operational Excellence: The company should focus on overall efficiency in terms of process, movement and inter-department communication. Market Research: The company should do extensive market research to ascertain customers needs and use it to determine the needs of facility and human resources.