Issues Faced by Donner Co.

Issues faced by Donner Co.

1. Delivery Delays

a. Different customer ordered specifications

There are no specified acceptance criteria for the PCBs by the customer. This has resulted in rejection of several "out of tolerance" consignments when others "scratched" PCBs have been accepted by the same customer.

b. Rework due to bypass of operations

There have been incidents when the batch has missed out on one or two operation which in turn resulted in orders being returned. This probably suggests that the procedures were not followed as required.

c. Four day rush orders

Such result in delays for the longer orders (either 3 or 5 weeks' ones) due to lack of effective planning.

d. Customer design changes

Customer, on numerous instances, has modified the design of the PCBs earlier ordered - leading to idle time of the order and hence delays.

e. Late intimation of order to the Manufacturing team

The manufacturing team received the intimation of the order, approximately four days after the bid has been completed. Moreover, the scheduling is not done until the raw material arrives at the plant. These two lead to unnecessary idle time of the plant/workers.

f. Improper Logistics

Delivery of order is mainly concentrated towards the end of the month leading to a lot of pressure on the plant on those days. This would increase chances of delays in the last days of the month.

2. Productivity Issues

a. Time estimates not correct

They are using relaxed time estimates for planning and scheduling of the processes. This leads to idle time of machines - loss in the productivity. Moreover, the inter-process transfer and rework time are not included.

b. Existing inferior job methods & improper implementation of improvement methods

There are inefficiencies within the existing methods. They are not able to improve them due to delivery pressures and the risk involved in the changes.

3. Quality and Delivery Issues

a. Increase in customer returns due to damaged boards

Ten percent of the orders returned, were damaged or out of tolerance - leading to rejection of such PCBs.

b. Increase in customer returns due to incomplete operations

Ninety percent of the orders returned because Donner had missed to complete one or two of the required operations. Then these were re-worked to be sent again. Such re-work also resulted in delay in other processes.

c. No quality standards or their enforcement

Due to the nature of the products, there is no strict quality policy introduced. This has led to a lot of non-conformities, further leading to rejections or re-works.

Solutions

1. The company should take up only those orders which it can deliver at best quality and on time. Rest of the orders should be refused, even at the cost of loss of revenues. The company's reputation should not be ruined in any case.

2. For all quality related issues, a proper quality standard checklist should be introduced and enforced. Since there exists already a visual inspection of finished goods at delivery from the plant, the concerned person should ensure all the operations have been completed for all PCBs.

3. The company should ensure that these short term orders, even if accepted, should not compromise on the commitments made on the longer term orders. Furthermore, there is no information regarding the profitability of such orders. If the profitability is significant, then there are no issues in continuing such orders otherwise they should be discontinued because they have a negative impact on rest of the orders.

4. In case the customer changes the design, the contract should be re-negotiated to specify the new terms of the deal or the original contract should specify the right terms in this case.

5. The manufacturing should be involved from the start of the bidding processes, so that