Introduction................................................................1
Problems and Causes...................................................2
Data Analysis..............................................................3
Process flow chart...............................................................................................5
Recommendations.......................................................7
Generic recommendations .................................................................................7
Conclusion.................................................................16
Introduction
The basic work process can be divided into three important stages –
preparation, image transfer and fabrication. The detailed process flow
chart is given in exhibit 1.
The firm has three persons, Diane Schnabs, Bruce Altmeyer & David
Flaherty who occupy supervisory roles in the company. Schnabs kept
track of delays in the manufacturing process and made sure that clients
were informed about possible delays. She also coordinated the serving of
rush orders. Altmeyer was involved with the design of computer control
and analyzing the customer requirements. He was responsible for locating
the errors in customer artwork. David was responsible for overall
manufacturing process until the final product was shipped to the client.
Plummer during the review realized that the there were problems related
to productivity, quality and delivery systems.
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Donner Company – Case Analysis
Idle machines and incorrectly defined labour hours were a major concern
for Plummer. Further the time estimates used by the company were way
higher than those of the competition. Besides, Plummer noticed that job
methods needed improvements but the major hindrances in bringing
about the changes was the pressure of output and frequent shifting of
labour.
Lloyd Searby, the sales manager also brought to notice that the company
was not meeting the quality standards and even defaulting on delivery
deadlines. Enforcement of rigorous formal quality inspection standards
could not be applied because of variations in these standards from order
to order. Also there were some problems faced because of the policy of
despatching shipments for delivery of outputs to clients. The problem is
majorly because most of the shipments are despatched towards the end
of the month. This can be seen in the figure below:
Data Analysis
3
Donner Company – Case Analysis
Data analysis gave us deep insight into the some of the problems
plaguing Donner Company. Some of the observations are mentioned
below.
The company’s shop floor policy of not using CNC machine for
drilling if orders are less than 100 boards is flawed
Please refer to the exhibits at the end of the report. Detailed calculations
can be found in the excel worksheet object that has been included.
Standard production times with order size of 1, 8 and 200 boards
have been worked out in these exhibits.
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Donner Company – Case Analysis
Preparation Stage
Purchase of 2 sided copper clad epoxy sheet (36” X 48” sheet; 0.059” thick)
5
Donner Company – Case Analysis
Drilling
of 500
holes
6
Donner Company – Case Analysis
Fabrication Stage
Circuit boards are separated from the panel and reduced to its required “profile”
and shipped
customers’ artwork
tested, packaged
prepared for the
electrically
the CNC router is
inspected,
is necessary for
visually
Computer control
Boards are
Recommendations
Generic recommendations
Hold an inventory of raw material to reduce the time an orders spends
waiting for the purchase to happen.
Change the policy of using CNCs for drilling for order greater than 6
boards
Change the policy of using CNCs for drilling for order size greater than 200
boards unless the machine is idle.
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Donner Company – Case Analysis
The important factor to note is the TAM for smaller orders. Rush orders
and small size might not be able to give the volumes. With the
assumption that there is enough market for short orders below we present
implications of focusing on smaller order size.
First, Donner has highly skilled employees which alone can complete all
steps of an order, therefore focus on a small order size will help drastically
reduce the idle time of labour.
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Donner Company – Case Analysis
• Materials
Currently, raw materials are being “simmered” by those who are fulfilling
expedited orders, namely by Arthur Dief. Such a practice may
consistently lead to an order remaining as a Work in Progress (WIP) order,
in the firm’s manufacturing stream for longer than necessary. WIP are
further delayed as it awaits another shipment of raw materials that were
originally acquired for its use but now consumed by the “rush” orders.
Fulfilling only small-volume, quick turn-around orders would require the
firm to either hold larger inventories of raw materials or to acquire
materials in a more timely fashion, but would decrease the probability of
this inefficient process from continuing to hamper the entire
manufacturing process.
• Labor utilization:
• Capacity:
9
Donner Company – Case Analysis
• Information Flow:
It goes without saying if there is enough TAM for small orders. The
recommendation one will help Donner reduce the TAT significantly.
• Financial
• Productivity
• Quality
• Deliveries
Since all these items are inter-linked, an improvement in one area will
lead to an improvement in all. Should the firm decide to produce only
small quantities of fast turn-around SMOBCs, it will be able to fix the flaws
in all of these areas. Since new employees typically take only
approximately 3 ½ months to become proficient in their assigned areas
and if the order size is small, managing the orders would be easier. Staff
could work either individually or in teams to ensure their orders are of
high quality and free of errors, from the moment the order is received till
the moment it is shipped to the customer. The productivity and morale of
workers should also benefit from this as the floor staff are given more
responsibility for assuring their orders efficiently move along the
manufacturing process.
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Donner Company – Case Analysis
Also favourably affected will be the financial health of the firm since it will
be able to bill its customers sooner and will have less rejections and
defects as well as it will carry smaller inventory of work in progress.
Unlike the previous case there is a huge obvious market for larger orders
as 90% of the orders in September of Donner were greater than 200 in
size. Therefore TAM is not a problem and top line should not be a problem
till Donner can meet the TAT below 3 weeks.
Focusing on the captive market will mean that Donner will be in a position
to further support its larger customers (i.e. IBM, AT&T, etc) with orders
larger than 200 boards (90% of total orders received in September)
• Labor Utilization:
From the exhibit 3 we can see, significant time is saved per board when
using the CNC Drill and Router (for orders over 200 boards); hence no
requirements for manual drill or punch press. Employment could be
reduced or workers could be re-deployed to work in other areas in the firm
(Workers are well cross-trained and able to perform different functions
throughout the manufacturing process).
• Drilling Holes
Let's calculate the board size for which the time taken by manual labor for
drilling holes equals the time taken by CNC machine
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Donner Company – Case Analysis
Therefore, y=5.92
So for board size greater than equal to 6, using CNC machine would result
in reduction of production time
Either CNC router can be used or Punch press, Let's determine the board
size when production time using punch press equals the time taken by
CNC Router
Therefore, z = 200
Operation
Strategy
Board 6<=Board Board
Process Size<6 Size<200 Size>200
Manual Drill Y N N
Drillin CNC
g Machine N Y Y
The increase in batch size will reduce the time per average board for
manufacture and subsequently reduce labor time. Also for the fact that
the larger the order size, the less time the process flow looked using the
CNC machine, as opposed to manual processes. Company can consider
purchasing a second CNC machine to accommodate this new strategy
(advantageous for large-volume orders).
• Capacity:
Capacity mainly depends on the order size, product mix and technology
choices. By choosing to manufacture just the large quantity simple
technology boards, product mix is no longer an issue, the technology is
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Donner Company – Case Analysis
set and order size will always be high, hence producing at a lower average
time per board (and low cost by utilizing economies of scale). The
bottlenecks inherent in the current process would be easier to identify and
solve, without further reoccurrences.
• Materials:
• Information :
Analyzing all processes within the company, by far the most complex and
confusing is the information flow. At present, until an order is shipped,
Flaherty keeps the factory order and blueprint at all times throughout the
process. This indicates that possibly, vital information is not being
disseminated throughout the production line. September 1987’s pre-
shipment rejection rate amounted to 7%, causing a large amount of
rework. This information flow policy must change from being centered on
Flaherty. In addition, the current process of expediting rush orders
through the manufacturing process is adversely affecting the rest of the
production process and increasing the information over load. Focusing on
only large volume boards should allow for enhancements within
information flow.
Quality improvements:
13
Donner Company – Case Analysis
sales and focus on the large quantity simple technology boards, there
should be a marked improvement in Donner’s financial health. The on-
time delivery should be enhanced significantly due to the company’s new
strategic policy of concentrating on the large quantity boards, as well as
the reduction in product returns and re-works.
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Donner Company – Case Analysis
Such a set-up would help the company assess its capacity, increase its
productivity and quality and at the same time reduce the delivery time.
• Labor Utilization:
Exihibit 4 shows that the company’s labor utilization factor is 43.8%. Such
low labor utilization can be primarily attributed to the following factors:
To increase the labor utilization, Flaherty and Arthur Deif can be assigned
for the supervision of large and small volume production lines
respectively. Having two separate production lines under two different
supervisors would not only ensure that the interrupts because of different
size orders are avoided but would also help get rid of the existing
operating problems thus increasing the productivity and quality of both
divisions.
• Capacity:
The company has not able to assess its production capacity accurately
because of the regular shift in its production bottleneck. Anticipating
where work would pile up in the shop on a given day had proven difficult
because individual orders imposed varying workloads on each operation
resulting from different size orders. Two different production lines would
help avoid such a situation. It would also help the company achieve the
sales of $3 million in the small order category in addition to the production
for the large volume orders.
• Materials:
Besides the re-work and rush orders, the company’s inventory policy has
adversely affected its performance. A significant amount of time is lost
because of the delay in Flaherty’s scheduling decision until the raw
materials arrive from the vendor. The two different production lines
combined with the availability of some raw materials would help the
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Donner Company – Case Analysis
supervisors schedule the steps more efficiently. It would also reduce the
company’s vulnerability to its suppliers.
• Information Flow:
Two fully dedicated production lines, each optimized for their respective
production processes, can help the company increase the quality of its
deliverables, thus decreasing the customer returns. Improve in labor
utilization, increase in capacity and adequate information flow would
further improve its productivity. The on-time delivery would also increase
significantly due to the company’s new strategic policy.
Conclusion
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Donner Company – Case Analysis
Exhibit 1
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Donner Company – Case Analysis
Case I No of Boards = 1
Standard Production Time
Times (in
minutes)
Operating
Time Operating
(Using Time
Operation Set Total Run Manual (Using CNC
Type up Run Time Drilling) machine)
PREPARATI
ON
Artwork
Generation 29 0 29 29
Inspect & 0.5/pane
Shear 20 l 0.5 20.5 20.5
Punch Tooling 0.5/pane
Holes 10 l 0.5 10.5 10.5
IMAGE
TRANSFER
Drill Holes
0.08/hol
Manual 15 e 40 55
0.004/ho
CNC Drill 240 le 2 242
0.75/pan
Metallization 10 el 0.75 10.75 10.75
Dry Film
Photoresist
1. Panel 0.20/pan
Prep 5 el 0.2 5.2 5.2
2. Laminate
& Expose 20 2/panel 2 22 22
0.2/pane
3. Develop 20 l 0.2 20.2 20.2
8.5/pane
Electroplate 25 l 8.5 33.5 33.5
0.2/pane
Strip DFPR 5 l 0.2 5.2 5.2
Etch & Tin 0.2/pane
Strip 10 l 0.2 10.2 10.2
FABRICATION
1.5/pane
Soldermask 45 l 1.5 46.5 46.5
0.5/pane
Solder Dip 30 l 0.5 30.5 30.5
Profile
Punch 1.0/boar
Press 50 d 1 51
CNC 150 0.5/boar 0.5 150.5
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Donner Company – Case Analysis
Router* d
Inspect and 1.5/boar
pack 45 d 1.5 46.5 46.5
Total 396.55 683.05
Exhibit 2
Case II No of Boards = 8
Standard Production Time
Times (in
minutes)
Operating Operating
Time Time
Operation Set Ru Total Run (Using Manual (Using CNC
Type up n Time Drilling) machine)
PREPARATI
ON
Artwork
Generation 29 0 29 29
Inspect &
Shear 20 0.5 0.5 20.5 20.5
Punch Tooling
Holes 10 0.5 0.5 10.5 10.5
IMAGE
TRANSFER
Drill Holes
Manual 15 0.08 320 335
0.00
CNC Drill 240 4 16 256
Metallization 10 0.75 0.75 10.75 10.75
Dry Film
Photoresist
1. Panel
Prep 5 0.2 0.2 5.2 5.2
2. Laminate
& Expose 20 2 2 22 22
3. Develop 20 0.2 0.2 20.2 20.2
Electroplate 25 8.5 8.5 33.5 33.5
Strip DFPR 5 0.2 0.2 5.2 5.2
Etch & Tin 10 0.2 0.2 10.2 10.2
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Donner Company – Case Analysis
Strip
FABRICATIO
N
Soldermask 45 1.5 1.5 46.5 46.5
Solder Dip 30 0.5 0.5 30.5 30.5
Profile 0
Punch Press 50 1 8 58
CNC
Router* 150 0.5 4 154
Inspect and
pack 45 1.5 12 57 57
Total 694.05 711.05
Exhibit 3
IMAGE
TRANSFER
Drill Holes
Manual 15 0.08 8000 8015
0.00
CNC Drill 240 4 400 640
Metallization 10 0.75 18.75 28.75 28.75
Dry Film
Photoresist
1. Panel 5 0.2 5 10 10
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Donner Company – Case Analysis
Prep
2. Laminate
& Expose 20 2 50 70 70
3. Develop 20 0.2 5 25 25
Electroplate 25 8.5 212.5 237.5 237.5
Strip DFPR 5 0.2 5 10 10
Etch & Tin
Strip 10 0.2 5 15 15
0
FABRICATIO
N 0
Soldermask 45 1.5 37.5 82.5 82.5
Solder Dip 30 0.5 12.5 42.5 42.5
Profile
Punch Press 50 1 200 250
CNC
Router* 150 0.5 100 250
Inspect and
pack 45 1.5 300 345 345
Total 9215.25 1840.25
Exhibit 4
21