Donner Company

Central Issues

When looking at the Donner Company in 1987, there are some initial concerns. The company as a whole does not have a true sense of how long it takes them to do what they do, and their process flow table is made up of "guesstimates", as throughput time at individual processes have not been formally taken. The company appears to be operating below capacity based on their need to rework their products often, find things for people to do, and meet deadlines that are based on fuzzy estimates, which only adds to the chaos. In short, there are three main issues facing the Donner Co.:

* iming and delivery discrepancies

* Lack of quality control

* Need for labor utilization improvements

The addition of a new building in the near future provides a ray of hope, but the current operation and its capacity should be thoroughly understood before adding more to it.

Recommendations

Timing and Delivery

Careful analysis of the current situation, with the information provided, leads us to believe that one particular way to improve flow time and productivity is to purchase a second CNC Drill. The drill would allow a completed panel to exit the process every 12.5 minutes. It is also recommended that a second inspection station be added, as that would reduce the cycle time to 8.5 minutes. The most qualified of the underutilized staff could then also work in the inspection area and help reduce the amount of returns.

Another thing that needs to be done is a physical tracking of the actual throughput time for a board in the system. The numbers provided in the analysis are only as good as their inputs, therefore improved figures on timing would allow the company to provide better delivery time estimates. As it stands, a maximum of ~1200 boards can be produced during a week. An order queue can build up after that, and the length would help determine delivery times in providing estimates. Rush orders should be charged a premium because of the interruption of flow, and an extra day or two of leeway should be added to all estimates so that the interruption a rush order causes can be accounted for.

Quality Control - Errors & Missed Processes

The highest of standards demanded should be set, and an additional inspection area should be added behind the most sensitive portion of the process, the Dry Film Photoresist(DFPR). This would allow items to be caught before the entire process has been completed. Additionally, upgrades in the air filtration systems of the company, and the amount of time spent cleaning the machines would likely aid in the reduction of production errors, such as the reported nicks and scratches found on reworked and returned items. Processes that run the potential of contaminating each other could also be further separated through the addition of barriers. For example, the tin striping process, which utilizes special corrosive chemicals, has the potential to contaminate the boards and should be performed in a separate room (see Exhibit XX) so that the air within that area is kept localized and filtered, and the corrosive materials in the air are removed.

Labor Utilization Improvements

The labor utilization rate is currently at 15.78%Q7 and could be improved dramatically by reassigning people to the various tasks mentioned in the examples above. Additionally, the lower cycle times would improve utilization, but a closer look at the overall process might indicate that not as many people are needed to work at any particular time. We question the need for 22 employees and feel that with a better understanding of actual flow times, a lower number of essential employees may be found. And finally, we question whether the programming portion of set up time could be performed earlier, and reduce the time needed to set up the drilling machine.

Rationale/Analyses

Productivity: The total capacity and standard labor times with the given assumptions, can be seen in Exhibit XXQ5,Q6. Given this analysis, and supported by the labor utilization rate, it is evident that there is substantial room for improvement in the productiveness of this company. The layout of the plant could be improved to minimize the amount of time spent walking from one work space to another, but this should not be determined until discussions with workers on the amount of space needed to perform a task are conducted as overcrowding of work space would be counterproductive.

The bottleneck is located at the drilling portion of the process. It sets the cycle time at 16 minutes. It appeared to be moving constantly because of the differences in order size, the delays in waiting for artwork, the bypassing of some operations, the interruption of flow due to rework and rush orders, and the choppy assignment of staff. The push for end of month completion also proved problematic in that it kept people from focusing on the true delivery time and focused irrationally on completing projects with a calendar cycle.

Delivery: In the last 3 months, actual deliveries had averaged ten, eight, and nine days