Read the attached case studyand then address the following instructions.
The company has many problems and, in order to survive,the new Managing Director feels the company needs to develop and
implementnew and/or improved Manufacturing Management practices throughout (including the adoption of Management Information
Technology). This will be aimed at achieving his goal of a World Class Manufacturing strategy which will ensure survival of
the Company in the immediate and long term future.
You are required to identify Management improvements which can, in your view, ensure increased efficiencies leading to
increased profitability for, and survival of, the Company.
Prepare a report detailing the areas you feel need to be addressed and outline the improved (and integrated) Management
system you would adopt to rectify the situation. Highlight and discuss any tools and techniques you may employ, the role they
play and the problems they address.
Detail clearly any assumptions you make in addressing the above.
THIS ASSIGNMENT IS WORTH 50% OF THE TOTAL MARKS FOR THIS MODULE
General Assessment Criteria
Marks will be awarded on the basis of the knowledge of Manufacturing Management(MM) application, thinking and techniques
displayed by the candidate and on the quality of analysis and discussion in applying related perspectives to the case
material
Specific Assessment Criteria
• Demonstrating knowledge and understanding MM in context.(25%)
• Ability to apply MM tools in a systematic way, with suitable analysis and interpretation.(25%).
• Insight, deep understanding and critical appraisal of how MM techniques impact on Company performance. (30%).
• Report quality including referencing and bibliography (if appropriate), writing style, use of grammar and correct
spelling(20%)
Case Study – Harpers PLC
JD Engineering are a large engineering manufacturer specialising in the manufacture of food manufacturing plant. In an
attempt to diversify they have just bought out Harpers, a manufacturer of paper and cardboard making machinery.
After a year of operation of under JD Engineering control, a number of problems have become evident that were not apparent at
the time of the take-over. In an effort to overcome these problems, Harpers have appointed a new managing director. He is an
accountant by profession but with a good understanding of engineering, He is a great believer in information technology and
‘high tech’ equipment although has limited experience in implementing or running such technology.
Over the past few months there have been an increasing number of complaints from customers regarding a number of aspects, but
particularly late deliveries and quality of the company’s products. As a result of this, the Managing Director employed AP
Management Consultants to investigate the company’s operation.
The following is an account of their findings:
Investment
Much investment has been made in recent years in the development of the new company product: the MK10 Packer. This
development has consumed much of Harpers’ profits, but it is felt that the M10 packer should expand company markets.
In the past, Harpers have also invested in a wide range of equipment: computerised production planning and control systems,
CNC machine tools, robots, .individual personal computers for a variety of uses. However, it is felt that in many cases the
company as a whole has not gained the maximum benefit from these investments, as more often than not, each department has
tended to look after its own interests. As a consequence of this, purchases of equipment tend to be initiated by a particular
department for its own use without regard to the needs of others.
Sales
There are 3 salespersons covering the whole of the UK. There is a limited amount of exporting (about 10% of the total volume
of production) but this is done through an agent. One of the principal reasons for not expanding abroad has been the
reluctance on the part of the company to expand its after sales support service (see below).
The Sales personnel feel that they are being held back by the company’s ability to deliver the goods on time and of the
required quality. They are also of the opinion that if the whole factory was a more efficient unit then their job would be
much easier. They are enthusiastic to expand their overseas markets particularly in Europe.
Design
There are 16 designers and draughtsmen. The work is highly specialised and after serving an apprenticeship, it takes on
average 6 years to acquire the skills necessary to do the most complex work. Due to the suspension of training a few years
ago, no new draughtsmen have been employed for 5 years. Several of the senior designers are in their mid-fifties.
The office is currently overloaded and overtime is worked by all staff. To try and alleviate this, the company have recently
advertised for new designers and draughts men from outside – but the response has been poor. The principal problem is that
of skill – none of the applicants possessed the required expertise.
CAD was considered about 4 years ago, but due to cash flow problems there was insufficient money to support it. Also, it was
felt by in some quarters that it was ‘not the right time for such a radical venture’. Due to this the project was shelved.
Most of Harpers’ principal customers and sub-contractors use CAD.
Process Planning
Process planning is where it is decided how to make a particular product and its component sub-assemblies and parts. The
office employs 11 people, who like the Design staff have all served an apprenticeship. The problems here are in some ways
similar to that of the Design Office, but less acute. Skill is the major problem. At the present time the office can just
about cope with the work load. However, if this increases, then there could be problems.
About 60% of the total work done is process planning for the conventional manually operated machines. The other 40% of the
work, done by 4 staff, is programming CNC machines (see Production). The company use a part programming system based on
standalone PCs, which are not linked to either the CNC machine tools or any of the company’s other computer based systems.
Production Planning
This is where all of the various work to be carried out within the Production and Assembly areas is planned and scheduled.
There are 30 people employed; mainly low grade clerical staff. Some 15 years ago the company adopted an MRP system, but for
a number of reasons this system has been less than successful:
• Some senior managers are less than enthusiastic about using computers.
• There was little expertise on which to develop such a system and training was carried out in a very ad hoc manner.
• There were various political factions within the production planning area, each of which favouring its own approach.
• In the early days the computer’s predictions were always several hours or even days out of date, consequently
confidence was lost in such a system.
As a result of this, a complex hybrid system has built up which involves both a computer based system and a traditional
paperwork system. The work is felt to be fairly mundane and mistakes are commonplace, causing a number of problems:
• incorrect number of parts being made,
• the wrong parts being made,
• some parts not produced that should be.
Goods Inwards
This is the area through which all deliveries are processed. A paperwork system is utilised. There are 5 people employed.
The major problem is the time it takes for goods to be processed to the department which requires them. Most of the
deliveries eventually end up in the Raw Material Stores or Finished Part Stores.
Raw Material Stores (RMS)
This is where all raw materials are stored. Principally, these are bar, castings, forgings, plastic granules, etc., which go
to make the various parts that make up the company’s products. There are 6 store people employed.
A paperwork system of stock control is used, though this has been found to be wanting as a number of problems have been
discovered:
• stock records out of date,
• excessive stock of some items,
• some items stored which are no longer used,
• Insufficient stock of some items.
Purchasing
This department buys all goods for the company: raw materials, standard items (bolts, screws, etc.), special items (pumps,
etc.).
Prices are normally negotiated by a team of 4 Buyers. The Purchasing Department’s biggest problem is that often the various
departments within the factory do not know what they need until the last moment. Then it is simply a case of getting raw
materials, etc., into the factory in the shortest possible time.
The Purchasing Manager feels that if it was possible to accurately forecast what was required several weeks or months In
advance, the company could make significant savings on raw material costs.
Quality Assurance (Bought Out Items)
This is where all incoming goods are ‘checked’, prior to issue to the various departments. There are 3 people employed.
In reality, this process of checking involves no more than ensuring that the paperwork is correct, and that the correct
number of items has been delivered. This is despite the fact that some of the items are precision made parts supplied by
subcontractors.
The QA Manager feels that more skilled staff are required in this area” but of necessity” the Final Quality Assurance has all
the skilled inspection staff available.
Parts are often found to be of sub-standard quality during the assembly process.
Production Control
The principal function of the Production Control Department is to ensure that the required parts are made, in the right
quantities at the right time. It employs 20 staff.
This involves issuing instructions to the Production Department in the form of a ‘shop pack’:
• part drawing,
• route sheet,
• batch card,
• as well as the raw material.
Feedback on the production of a particular part is obtained by ‘progress chasers’ liaising with the machine, shop foremen. If
a batch of parts is falling behind schedule then it is the progress chasers responsibility to remedy this. In its present
form Production Control, is a labour intensive, largely paperwork driven department relying solely on the ability of its
staff.
Production
The Production Department is the largest of the departments within the company, employing over 250 people most of whom are
skilled persons who have served an apprenticeship.
A 2 shift system of working is adopted: 8.00am – 5.00pm day shift and 9.00pm – 8.00am night shift.
The main production area is the machine shop. This is divided up into sections: turning, milling, etc.
Production is done in batches, which can vary in size from 2,000 parts/batch, down to 20 parts/batch. All parts are machined
within this single production area.
Although CNC machine tools form a significant proportion of the production capacity (some 40% of the total production time is
done using CNC), the production area has tended to be organised on traditional lines. Consequently, this department suffers
the ‘same problems of a typical batch production’ system within a process layout: high levels of work-in-progress, long
throughput time, labour intensive, etc.
As well as this some other major problems are apparent:
• Machine breakdown is high – up to 20% of an operator’s time is booked against this.
• Waiting time for work is high – up to 15% of an operator’s time.
• Old technology – typically the machines being employed are 20-30 years old.
• The workforce is highly skilled – there are constant problems with recruitment.
Tool Stores
Supplies the Production Department with all cutting tools, jigs, fixtures, etc., required for to produce the various
components and assemblies
The problems are similar to that of the RMS:
• a paperwork system is employed and tool records are out of date,
• excessive stock of some items,
• some items stored which are no longer used,
• insufficient stock of some items,
• some items stored in the wrong place
Final Quality Assurance
This is where all the finished parts are checked for dimensional accuracy. All of the 10 staff are skilled personnel who are
heavily overloaded with work.
In an attempt to get over these problems, the QA Manager has unofficially introduced a sampling inspection system. Instead of
all parts being inspected, only a small sample are. Unfortunately, this is being done on an ‘ad hoc’ basis and many
defective parts are being allowed through.
Finished Part Stores (FPS)
The FPS stores all the finished parts prior to assembly: bought out items and those made ‘in house’. There are 7 people
employed.
As with the RMS the FPS has a paperwork system of stock control, and suffers much the same problems: out of date records,
excessive stock of some items, insufficient stock of other items.
Assembly
Assembly is effectively where many of the problems outlined above are discovered:
• defective parts,
• insufficient quantity of parts,
• parts still being produced when they are no longer required,
• production of parts not started.
There are 60 people employed.
The work is highly skilled and is regarded as a major ‘bottleneck’ within the factory. The Assembly Manager is under constant
pressure to ‘push through’ work in order to get goods out of the door and to the customer. As a consequence of this, corners
are cut and the quality of the products suffer. Most of the assembly tasks are labour intensive and not regarded as
suitable for automation.
Test
The testing of the products comes under the control of the QA manager. As with other aspects of quality control within the
company, there is a shortage of labour (3 staff employed) and only a small sample of the products are actually tested. Thus,
many defective products go undetected and are sent out to customers.
As well as this, the testing function is the last significant process that the products undergo. Normally, at this stage
there is tremendous pressure on all concerned to deliver the products to the customer – and inevitably commercial
considerations take priority over technical ones.
Despatch
The Despatch Department packages the products and sends them to the customers. There are 6 staff employed.
The principal problem here is that often it is not known which products will be required to be sent out, in what quantities
and when. Much of the information that comes through on paperwork is often inaccurate and out of date. As a consequence of
this orders are often sent out late.
After Sales Support
Consists primarily of a team of installation and maintenance engineers and technicians.
Their role consists primarily of the following:
• Installation of new equipment at the customer site
• Training of the customer’s operators.
• Maintenance for up to 2 years after installation.
The team cover the whole of the UK. There has been reluctance on the part of this department to expand abroad. They claim
that the complications of communicating, translating, travel, etc., would make their job impossible.