Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Report: Production Improvement

376 views

Published on

Written and prepared for Introduction to Operations Management - OPER1160, Conestoga College, 2012.

Published in: Business
  • Be the first to comment

  • Be the first to like this

Report: Production Improvement

  1. 1. PRODUCTION IMPROVEMENT:ANALYSIS OF NUT AND BOLT PRODUCTION PROCESS Presented to K. Morgan Creditor School of Business OPER1160 Section 3 Conestoga College Prepared by Sara Bechard Student of Business Administration: Accounting Conestoga College October 24, 2012 i
  2. 2. Table of ContentsExecutive Summary ....................................................................................................................... iiiIntroduction – Description of Activity ............................................................................................ 1Responsibilities and Challenges ..................................................................................................... 1 Roles and Responsibilities .......................................................................................................... 1 Problems and Challenges ............................................................................................................ 1Changes and Results ....................................................................................................................... 1 Recommended Actions ............................................................................................................... 1 Projected Results ......................................................................................................................... 2Measurement of Effects of Changes ............................................................................................... 3 Analysis of Results ..................................................................................................................... 3 Measures for Continuous Improvement...................................................................................... 3Conclusion ...................................................................................................................................... 3 ii
  3. 3. Executive SummaryA lack of proper work flow and the successful, quality production of nuts and bolts have led tothis report on the improvement of the supply chain management and product marketingdepartments within the company, as well as the subsequent tracking of changes and analysis ofnew developments. The purposes of this report are (1) to explain the problems and challengesboth departments are experiencing, as well as their roles in the development process, (2) to makea recommendation of action to be taken by both departments in order to improve these processes,and the projected results of such action, and (3) to outline the tools and techniques with whichthe company could manage and analyze the results of the change.The research reveals that both the Inventory Management and Customer RequirementsManagement teams are experiencing difficulties in their departments due to lack of clear andspecific input from the customer, and the lack of the use of a bill of inventory when stock is usedor acquired. These departments are responsible for the management of production as it relates tothe customer’s requirements and standards, as well as how it is affected by the fluctuation ofavailable stock.To improve these processes, the teams should employ the use of a Bill of Materials and processmaps, as well as ensure increased communication with the customer on a more regular andfrequent basis. If customer communication is impossible for any reason, manufacturingemployees should be empowered to make changes and develop solutions. The projected resultsof these changes are that company inventory can be more closely monitored and more frugallyutilized, with a decrease in the amount of lost product or materials due to mistakes. Also, with anincrease in communication with the customer and employee empowerment, fewer mistakes willbe made in the initial design and manufacturing of the product, resulting in complete customersatisfaction and therefore increased revenue.In order to track the changes which will be made, the company should utilize benchmarking andcontinuous improvement tools such as PDCA and frequently updated Pareto charts, as well as acontinued focus on design for manufacturability. The QFD process should be used for every newproduct order to update each process and ensure continued customer satisfaction.Overall, the most important fact to note is that the quality of the production line and eachdepartment’s individual production capabilities must be improved in order to prevent furthermistakes and losses for the company. Total quality management strategies and new operationalmanagement strategies must be employed for any positive change in the productivity of thecompany to occur. iii
  4. 4. Introduction – Description of ActivityDuring class time, a mock example of the production process at our company was performed. Ateam of four students were given instructions to manufacture a product. One student was namedthe quality control specialist, and one student was named the inventory manager. The firstactivity was to make 6 copies of a prototype, using given inventory. The second was to collectenough materials to make 10 copies of the product, without the prototype to rely on for assembly.The third was to deal with a customer change to product specs, which were very vague, and thefourth was to change the product based on an even vaguer request from the CEO’s wife to “makethe product pretty”. Responsibilities and ChallengesRoles and ResponsibilitiesThe two departments both play important roles in the development process. Supply ChainManagement (SCM) is involved in acquiring materials and managing inventory, as well as its usewithin the company. They control how many nuts and bolts are required for each product,purchase them, and distribute them according to the number of products to be made. The ProductMarketing (PM) Department is responsible for customer communications, and must identify thecustomer’s requirements. They must relate changes to the product to other departments, such asadded or subtracted materials, or changes to the look or feel of the product.Problems and ChallengesDuring the activity, both departments were challenged by the obstacles which were presented inthe simulation. It seems that the biggest setback for inventory management was when it wasgiven a large order for product, but there were no specifications, nor a list of how many itemseach product would consume in production. Retrieving too much stock from inventory wouldresult in a cost for unused materials, while retrieving too little would result in a second triphaving to be made to the inventory stockpile – a loss of money through loss of time. The hurdlefor customer requirements management was when the customer announced a change whichneeded to be made to the product… It was not specified exactly how to make the change, onlythat and extra washer be added some distance up the screw. This was confusing and vague, anddemanded stronger customer communication methods. Changes and ResultsRecommended ActionsTo improve the inventory control process, SCM should:  Keep a record of the number of materials required to make each product  Utilize a Bill of Materials to accurately indicate how material should be collected to complete each order, and to keep track of how much is being drawn monthly from stock  Use a process map to identify loops or stagnation points which might cause the timeliness of the company to be restricted  Eliminate these untimely and inadequate procedures and adapt a more streamlined and efficient process 1
  5. 5. An outline of the current process is depicted below: Order received QCM delivers 2–6 IS retrieves IS determines 40s mins by Quality order to req’d # of materials from Control Manager Inventory materials from stock, production from customer Specialist memory (20s) beginsMany problems are evident in this process. The inventory manager should receive the order first,to begin work sooner, and then they should not have to recall the required materials frommemory. These product specs could be written down on the order itself, as it is sent throughassembly. Then the manager could go directly to stock, and retrieve the exact number ofmaterials the first time, with no mistakes. These would be recorded on a Bill of Materials toprevent confusion when inventory is to be counted at the end of the month.To improve the customer requirements management process, PM should:  Increase the frequency of communications with the customer  Identify the customer’s needs at the start of the project, in order to prevent confusion  Empower and train manufacturing employees to make decisions and collaborate with other departments if customer communications should failMost importantly, product marketers should use quality function deployment graphs (QFD) suchas those developed in Japan in the 1970s. These will help production move from vague customerrequirements, to product characteristics and specifications, to process characteristics andspecifications.Projected ResultsThe improvements will not only expedite production, but will also ensure customer satisfactionand reduce internal costs. For example, the new inventory management process, as seen below: Order received IS calculates # of IS retrieves exact Total cycle time by Inventory req’d materials, 2 mins # of materials reduced by Specialist from writes BoM from stock, 50 – 290 customer (10s) production begins seconds!This new process will reduce total time as shown, but will also reduce costs as mistakes will nolonger be made with regards to drawings from inventory.By increasing communications with the customer, PM teams can keep other departments up todate on all changes the customer decided to make during product development. The use of thismethod in combination with QFD in the product marketing process will not only clarify toproduction teams the exact needs of the customer, but will also aid inventory managers incollecting the exact materials required. Empowering and training company employees (like TRWand their airbag manufacturers) to deal with lack of customer communication will not onlyincrease their happiness and sense of usefulness, but will also eliminate time consuming periodsof confusion when employees are forced to wait on an answer from upper management regardingchanges. 2
  6. 6. Measurement of Effects of ChangesAnalysis of ResultsThe company should utilize benchmarking and frequently updated Pareto charts to measureprocess problems, compare them against industry standards, and attempt to improve processes.The company can set benchmarks for production quality by, (for example,) comparing thecompany’s operational standards to those of other, more efficient nuts and bolts manufacturers,such as the company’s direct competitors in Vietnam (Bibimbap Nuts Corp.). This will help toimprove upon mistakes and errors in production which were pointed out in the previous section.Pareto charts would also outline such mistakes, but when production is re-evaluated on a regularbasis after taking the recommended action, these charts could be updated. A visible change to theproductivity and accuracy of company operations may then be observed, and corrective actionmay be taken sooner than before in order to rectify problem areas and frequent mistakes.Measures for Continuous ImprovementTools such as PDCA, as well as a continued focus on design for manufacturability should beused to insure the continuous improvement of the company. By using the Pareto charts whichwould regularly be created, the company could improve itself by taking action when certainmistakes such as overdrawn inventory or communication failures with the customer become toofrequent. This prevents problem areas from getting out of hand. PDCA is a quality managementmodel developed by Shewhart which would drive managers in all departments to follow the 4step process (Plan, DO, Check, Act) when developing and testing improvements. This wouldensure that improvements are well-organized and thoroughly investigated before put into place.Finally, the company should continue to focus on design for manufacturability, and continue tomake improvements which would facilitate the production and design of products which can beproduced at high quality levels for low cost, using existing or less inventory. This would reducethe overall costs incurred by mistakes, upsetting the customer, and scrap inventory which isrendered useless. ConclusionThe total quality management strategies and new operational management strategies outlinedabove must be employed in the near future in order to create a positive change in the company’sproductivity. Each department must identify with these changes and alter their processesaccordingly, as shown with the Product Marketing and Supply Chain Management departments.Following these necessary recommendations will result in the improvement of inventory records,the expansion of customer relations capabilities, and the prevention of further mistakes andlosses for the company. 3

×