OM ASSIGNMENT – MSL

PROBLEM STATEMENT
HOW TO IMPROVE AND EXPAND MANUFACTURING OPERATIONS OF MSL SO AS TO HAVE
ASSURED CASH FLOW, STEADY ORDERS BY TARGETING OEM’S?
PLANT DETAILS
• LOCATED IN MAHIPALPUR, DELHI
• BUILT ON FAMILY OWNED LAND (ANIL KISHORE)
• LOT OF UNUSED SPACE IN PLANT SITE
• NETWORK OF RELIABLE SUPPLIERS
PRODUCT DETAILS
• PRODUCT : HORNS

• SELLING MEDIUM : WHOLESALERS AND WORKSHOPS

• SELLING PRICE : RS 150
• PAYMENT : 60 DAYS
• AVERAGE MONTHLY SALES : 15000
• BRANDED MSL HORNS : 3000 (20% OF MONTHLY AVERAGE SALES)
• NON BRANDED HORNS : 12000 (PACKAGING AND ENGRAVINGS WERE DIFFERENT)

• OPERATION STRATEGY : MAKE TO ORDER

PRODUCT DETAILS
• CLASSIC HERO HONDA 90 DIA AND MITHU AC 72 DIA : 12000 (80% OF AVERAGE MONTHLY SALES)

• UNPREDICTABLE DEMAND : DUE TO AFTER MARKET AND VARIETY OF MODELS

• PEAK DEMAND : 2 MONTHS (USUALLY OBSERVED IN POST MONSOON MONTHS AUGUST TO SEPTEMBER)
• LOWEST ATTRITION RATES DUE TO TRUST . FAMILY MEMBERS IN MARKETING AND SUPERVISORY STAFF
COMPETITION
MSL Largest Competitor

Selling Price(per horn) Rs 150 Rs 200

Average Monthly Sales 15000 28000

Average Monthly Revenue Rs 2250000 Rs 5600000

• Not so strong brand name in the market (MSL)

• Healthy order backlog in spite of the competition
PROCESS FLOW DIAGRAM-CLASSIC HERO HONDA – REFERENCE VIDEO

Coil Assembly : 74 sec

Diaphragm Assembly
Coil Edge 55 sec
Winding Cleaning
(46 sec) 28 sec Final Assembly
(1 min 54 sec)
Housing Assembly
Housing ready: 8 sec (2mins 45sec )

Burr Company
Cleaning Stamping

Final Testing (After 4

Packaging Testing Stud & Bracket Fitting
hrs)
(1 min 24 sec) (45 sec) (45 sec)
(10 sec)
PROCESS MEASUREMENTS – CLASSIC HERO HONDA – REFERENCE VIDEO
Working Hours/Availability Details
• Number of workers : 12
• Break time per day : 50 mins = 0.833 hrs
• Working Hours : (12 X 26 X 9) – (12 X 26 X 0.833) = 2808 – 260 = 2548 hrs = 152880 mins
• Working Hours/Worker = 212.33 hrs

Process Measurement
• Work in process = 3 horns
• Bottleneck/Cycle Time : 2 mins 40 sec/160 sec( Housing Assembly) – for 3 units = 160 sec
• Output Rate : Operating time per day / cycle time : (490*60)/160 = 183 units
• Throughput 46+28+160+114+45+45+10+84 = 532 sec (without any waiting time)= 8.86 mins
• Sum of task time : 46+28+160+114+45+45+10+84 + 55 + 8 = 595 sec
• Utilization :
[(46/160)+(28/160)+(8/160)+(55/160)+(160/160)+(114/160)+(45/160)+(45/160)+(10/160)+(84/160)]/10
= 59.5%
• Monthly output= (26*490*60)/160 * 3 = 14332 units (without overtime) – Consider a lot produces 3 units
at a time
FACILITY LAYOUT IMPROVEMENT – REFERENCE VIDEO
Workstations Time Eligible Assign Task Revised time Station idle time
Remaining(sec) remaining
1 160 Coil Winding, Burr cleaning Coil Winding 114

114 Burr Cleaning, Edge Cleaning House Ready 86

86 Edge Cleaning, Diaphragm diaphragm cleaning 31

Cleaning
31 Edge Cleaning. House Edge Cleaning 23
Assembly
23 None 23

2 160 House Assembly House Assembly 0 0

3 160 Final Assembly Final Assembly 46

46 Stud & Bracket Fitting Stud & Bracket Fitting 1

4 160 Testing Testing 115

115 Final Testing Final Testing 105 3

105 Packaging Packaging 21 21
FACILITY LAYOUT IMPROVEMENT – REFENECE VIDEO

Idle time per cycle = 23+0+3+21= 47 sec

N min = 3.71

N actual = 4

Cycle Time = 160 sec ( for 3 products)

Balance Delay/% Idle time = 47 /(4*160) X 100 = 7.3%

Efficiency = 100% - Balance Delay = 92.65%

FACILITY LAYOUT IMPROVEMENT – REFERENCE VIDEO
Coil Assembly : 74 sec
Coil Edge Diaphragm Assembly
Winding Cleaning WS-2
55 sec
(46 sec) 28 sec

Housing ready: 8 sec Housing Assembly

(2mins 45sec )
Burr Company
Cleaning Stamping WS-1

Final Assembly
WS-3 (1 min 54 sec)
Final Testing (After 4
Packaging Testing Stud & Bracket Fitting
hrs)
(1 min 24 sec) (45 sec) (45 sec)
(10 sec)
WS-4
PROCESS FLOW DIAGRAM-CLASSIC HERO HONDA – REFERENCE CASE LET
Coil Assembly : 2mins
Diaphragm Assembly
Coil Edge (2 mins)
Winding Cleaning
Final Assembly
(4 mins)
Housing Assembly
Housing ready: 2mins (5 mins)

Burr Company
Cleaning Stamping

Final Testing (After 4

Packaging Testing Stud & Bracket Fitting
hrs)
(5 mins) (4 mins) (2 mins)
(2 mins)

Reference : Case let – Estimated values by supervisor

PROCESS MEASUREMENTS-CLASSIC HERO HONDA – REFERENCE CASE LET
Working Hours/Availability Details
• Number of workers : 12
• Break time per day : 50 mins = 0.833 hrs
• Working Hours : (12 X 26 X 9) – (12 X 26 X 0.833) = 2808 – 260 = 2548 hrs = 152880 mins
• Working Hours/Worker = 212.33 hrs

Process Measurement
• Bottleneck/Cycle Time : 5 mins ( Shared by housing assembly and packaging)
• Output rate = operating time per day/cycle time = 490/5 = 98 units
• Throughput : 2 + 5 + 4 + 2 + 4 + 2 + 5 = 24 mins (without any waiting time)
• Maximum task time : Through put + waiting time : 24+(4*60) = 264 mins
• Sum of task time = (2 + 2 + 2 + 5 + 4 + 2 + 4 + 2 + 5) mins = 28 mins
• Utilization : [(2/5)+(2/5)+(2/5)+(5/5)+(4/5)+(2/5)+(4/5)+(2/5)+(5/5)]/9 = 62.2%
FACILITY LAYOUT IMPROVEMENT – REFERENCE CASE LET
Workstations Time Remaining Eligible Assign Task Revised time Station idle time
remaining
1 5.0 Coil Assembly, Coil Assembly 3
House Ready
3 House Ready, Diaphragm House Ready 1
Assembly
1 None -- 1

2 5.0 Diaphragm Assembly Diaphragm Assembly 3

3.0 None 3

3 5.0 House Assembly House Assembly 0 0

4 5.0 Final Assembly Final Assembly 1 1

5 5.0 Stud & Bracket Fitting Stud & Bracket Fitting 3 3

6 5.0 Testing Testing 1 1

7 5.0 Final Testing Final Testing 3 3

8 5.0 Packaging Packaging 0 0
FACILITY LAYOUT IMPROVEMENT – REFERENCE CASE LET

Idle time = 1 + 3 + 1 + 3 + 1 + 3 =12 mis

N min = Sum of task times / cycle time = 28 / 5 = 5.6

N actual (no. of workstations) = 8

Cycle Time = 5 mins

Balance Delay / % Idle Time= 12 /(8*5) X 100 = 30 %

Efficiency = 100% - Balance Delay = 70%

FACILITY LAYOUT IMPROVEMENT – REFERENCE CASE LET
INVENTORY MANAGEMENT – CASE LET

• D (Demand Jan’12) : 2824 (210+720+50+100+20+20+20+20+20+70+100+600+270+100+100+300+104)

• C (Cost/Unit) = 47.3775
• Total Material Cost (Jan’12) = Rs 133794.06
• h (Holding %) = 500/3000 = 0.1667
• H = h*C = 7.89
• Ordering cost per order = 47.3775
• EOQ = SQRT (2 X D X S/H) = ~ 183 lots
• Carrying Cost = Q/2 * H = 721.935
• Ordering Cost = D/Q*S = 731.11

• At EOQ = 183 , Carrying cost equals Ordering cost

OBSERVATIONS
VIDEO CASELET

Bottleneck/Cycle Time 160 sec 300 sec

Output Rate (per day) 183 units 98 units

Throughput 8.86 mins 24 mins

Sum of task times 9.91 mins 28 mins

Utilization 59.5 % 62.2%

N actual 4 8

Efficiency Achieved 92% 70%

SUGGESTIONS
• Capacity Improvement Measures :
a) Case let : Addition of 2 new workers to the existing process i.e.; 1 on housing assembly and 1 on
packaging will reduce the bottleneck/cycle time from 5 mins to 4 mins (shared with final
assembly and testing) . Output rate may increase 98 units to ~122 units
b) Video : Addition of 1 new worker to housing assembly will reduce the bottleneck time from 160 sec
to 114 sec . Output rate will increase from 183 units to ~257 units
• Maximum task time improvement Measures : Identify waiting time root cause and try to eliminate it , this
will improve maximum task time
• Efficiency Improvement Measures :
a) Group testing and final testing process will reduce the through put time and improve
efficiency
b) Define in process inspection process to reduce the process time
c) Invest in information system to check and ensure workers usage of automation devices for
manufacturing processes
• Inventory Management Process : Make the lot size as 183 units ( case let)
• Brand Building Measures : Invest in quality certifications of the product. This will have a positive impact
on both sales and selling price of horn in a longer run. Also it may help in acquiring OEM
SUGGESTIONS
• Information Systems Improvement :
a) Tracking of customer satisfaction index and feedback mechanism will help in identifying the root
cause of product returns
• Facility Layout Improvement Measures
a) Case let : Increasing workstations to 8 will raise the efficiency to 70%
b) Video : Increasing workstations to 4 will raise the efficiency to 92%
REFERENCES
• Youtube : https://www.youtube.com/watch?v=aXjEDGq29h0&feature=youtu.be