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Case study1: Manufacturing at McCall Diesel Works

McCall Diesel Motor manufactures a range of diesel engines for use in marine applications,
manufacturing plants and agricultural applications. The company has always tried to be progressive
in terms of product design and in fact pioneered the development of a particular type of internal
combustion engine. Originally, they only manufactured large marine diesel engines but have now
diversified into small stationary type engines.
Many of the engines designed were one-off products and made specifically to order. Although this
type of work still represents 60 per cent of those manufactured, there has been a move towards
standardizing many of the component parts to reduce the variety of parts. This allows a degree of
interchangeability, especially for small components such as mechanical fasteners. There also has
been reduction in the variety of engine sizes available with the introduction of a standard range of
three engine sizes: 20, 40 and 60HP.
Production planning
In terms of production planning and control, there is no formal system in place. In fact, there is
resistance from the Production Manager to implementing any such formal system. The lack of any
such formal system has resulted in high WIP and failure to meet delivery times due to lack of WIP
monitoring and information on manufacturing lead times. Production planning has also failed to take
advantage of the economies of scale afforded by the use of standard parts. They issue orders for
small lots of the same part up to eight times in a month. There is also lack of a formal approach to lot
sizing and how the lots are processed through the shop floor. This has led to lots being lost and the
order being reissued only for the lot to turn up.
In keeping with the approach to production planning and control, there is no formal recording of any
manufacturing data. This has resulted in there being no operations lists for any parts as it is left to the
discretion of the individuals involved. The task of routing parts through departments and sequencing
the operations is left to the manufacturing department foreman. The manner in which he carries this

out has resulted in high set-up costs and thus, high manufacturing costs in general. Despite all of the
above, the manufacturing methods employed are sound and reliable and appropriate for the type of
manufacturing system being employed. Most of the equipment is general purpose in nature, although
pieces of equipment are close to obsolescence. It is intended that this will be replaced with
dedicated, single purpose production equipment. Although there is a facility for the design and
manufacture of special tooling, there is very little use made of this. Finally, there is poor utilization
of the production equipment available and this often leads to bottlenecks occurring, despite the fact
that there is sufficient capacity on the shop floor.
The senior management recognizes that in order to survive, there is an urgent need for change.
However, they are having difficulty in convincing the workforce of this and implementing any
change. In the main, the management sees the problem as the resistance of the workforce to change
their working practices. However, the workforce see the main problem as being the fact that the
senior management are essentially sales minded and dont understand the problems of production
planning and manufacturing.
Discussion points
1. What kind of manufacturing environment have McCall Diesel Works traditionally employed?
Comment on the type of workforce, plant layout and equipment.
2. How is the manufacturing environment changing based on the increased use of standard parts?
3. Comment on the state of the design/manufacture interface.
4. Based on the type of manufacturing environment, what sort of process planning documentation
would you expect to see in a company like this? What level of detail would you expect to see in such
documentation? List typical data you would expect to see.
5. What role do the industrial and quality engineering functions play in the company with regards to
process planning?
6. How does this companys approach fit the model of production planning and control presented in
the chapter?

Case study 2: Planning at High Performance Pumps*

High Performance Pumps is a small, successful manufacturing organization that specializes in
manufacturing a range of pumps. This success is due to the performance, quality and reliability of
the product and the excellent back-up service. The pumps range in size from 75mm to large
300mm pumps. The smaller pumps are manufactured in batches of 100 and the large specials in
batches of five. However, regardless of size, all pumps use the same manufacturing processes.
Manufacturing processes and planning
There is a major common component for all pumps and this is a camshaft. The size of the camshaft
varies according to the size of the pump. The process skills involved in the camshaft manufacture are
highly developed and considered cost-effective compared with competitors. In fact, one of the areas
of expansion is the design and manufacture of camshafts for other companies for their products, with
camshaft production increasing by 400 per cent in the last 6 years. Nearly all of this increase was for
customized products in a wide range of volumes. However, regardless of the production volume, all
camshafts are produced according to the same process plan and machine routing.
Design and manufacture
Although business had significantly increased over the last 6 years, there are some significant
problems within manufacturing. The most noticeable of these is the high WIP, which has tripled
during the 6 years. However, there was another major problem with regards to product costs. Product
design had initiated a value analysis programme to reduce the cost of standard products by 10 per
cent. This initiative resulted in a number of design changes.
Manufacturing blamed the introduction of design modifications, in conjunction with the overall
increase in product variety and drop in volume, for the problems. However, product design refused
to accept any of the blame for the poor performance of manufacturing and suggested that the
problem was with the poor manufacturing planning and control system.
There are further problems with the method of product costing. There is a lack of detailed
information on component costs and process costs, therefore, due to the use of common processes
across the various product ranges, a blanket overhead rate is used. This meant that the customized

products were costed using standard cost data. Finally, the cycle times and lead times being used
were very often inaccurate. An example of this is that the planners are using lead-times of 12 weeks
for small pumps when they are actually nearer to 6 weeks.
The company had already invested in new processing equipment to cope with the increase in
demand. This had meant re-organizing the shop floor which had in fact reduced the floor space for
assembly. However, it was clear that further re-organization was required. This, in turn would
require a further detailed investigation to determine the appropriate course of action.
Discussion points
1. What kind of manufacturing environment do you think is employed at High Precision Pumps,
based on the knowledge of processes and skills?
2. How are the changes in demand affecting the manufacturing environment?
3. What kind of approach is being taken to the process planning? Comment on the appropriateness of
this approach.
4. What level of detail would you expect to see in the process planning documentation for this
5. How much do you think the design modifications have contributed to the problems of
6. What kind of role does the industrial engineering function play in the organization?
7. What kind of further changes require to be made to solve the problems encountered at High
Precision Pumps?