OPERATIONS & PRODUCTION

MANAGEMENT
Fabritek Corporation

Written Case Analysis

Submitted to:
Dr. Kamran Mumtaz

Urooba Sheikh
05265
Case Synopsis
The case is based on Fabritek Corporation where Mr. Stewart Baker, the automotive product manager is
faced with the issue of meeting the quality and timely delivery of order for Pilgrim Corporation. The
problem arises when one of the miller operator assigned for the Pilgrim contract is injured in an accident
and has to take leaves due to his injuries. As a result, Frank Deere who reported to Stu Baker decides to
temporarily replace him with Arthur Moreno who used to start the Pilgrim job after lunch and was already
earning a substantial premium pay. Upon shifting to the new job, Moreno was not only earning a
substantial less amount per week as compared to his previous work assignment but also was unable to
make more than a 33% bonus. There was an imbalance between the work pace of Moreno with other
workers in Pilgrim operations where there were times that he used to run out of work. Due to lack of
cohesiveness in team’s work with that of Moreno lead to rework and delay in delivery parts to Pilgrim
Corporation.

Process Design
Fabritek Corporation operations were divided into 8 parts. The human resource was efficiently divided for
each operation as per the needs and manufacturing requirements. One operator was assigned for each of
the initial and final inspection tasks. The four milling operations required four milling machines to make
one cut which were located in close proximity to each other and since they were equipped for automatic
feed, only a single operator was assigned to run all four of them. The drill press and grinder were also
moved closer to the four milling machines and were handled by a single operator. A schematic of the
process is given below:

Inspect Cast Rough Finish Mill face Mill Keyway

Milling Milling

Final Finish Drill eight

inspection Grinding holes Buffer
Problem Identification
On January 26th, 38 pieces were rejected of Monday’s and Tuesday’s output due to unqualified bearing
surface on the parts. The problem was seemed to be with the grinding operation. However, even after the
grinder operator, Paul Clarke worked overtime to regrind some of the defective parts and cut them into an
accumulated backlog ahead of the machines, the quality problem was still unresolved. Even though,
Moreno was working at a rate of 167% per day as compared to the average performance of 135% of
standard, the product quality was being compromised and the company was having a difficult time in
making timely delivery to Pilgrim Corporation.

Analysis
The strategic fit on which Fabritek is competing is its quality and timely delivery of products. The
contract with Pilgrim Corporation requires 17,000 units in a period of 6 months where a weekly shipment
of 650 units were to be made by each week. Since it was a trial contract, Fabritek’s quality and delivery
performance were crucial if they wished to gain larger and more permanent contracts.

Flexibility

Quality Delivery

Cost

The standard set of 100 completely milled pieces per day were set for the milling operations but since an
experienced operator was assigned on operating machineries, an average of 133% of standard output was
expected. With efficient and smooth operations, the group had settled to an average performance of 135%
of standard.

The total cycle time for the Milling operations is 11.584 minutes. It is difficult for Fabritek Corporation to
get the order out because of high scrape rate. The total external time is 3.226 minutes. The total cycle time
according to the case is Total cycle time = machine time + external time where machine time equals to
8.358 minutes. Therefore the machine time is supposed to remain constant throughout unless the
company decides to upgrade its technology. In that sense 100 units of output has a cycle time of 11.584
minutes. With experienced operators, the external time is reduced so in case of 133% output; 11.584/1.33
gives a total cycle time of 8.71 minutes. For 135% output; 11.584/1.35, 8.581 minutes of total cycle time
takes place. However, on the other hand Moreno produces milled castings at the rate of 167% of standard
per day with a cycle time of 6.94 minutes. It seems impossible that Moreno is able to produce output in a
significantly less amount of time where only the machine time is about 8.4 minutes. Based on this
analysis, we can assume that Moreno in order to gain a higher bonus on the total output produced, has
skip some steps in the machine thus compromising the quality of the end product produced.

Supporting Calculations

Total Cycle time = 3.594 + 2.964 + 3.301 + 1.725 = 11.584

Total External time = 0.994 + 0.744 + 0.881 + 0.607 = 3.226

Total Machine time = 2.60 + 2.22 + 2.42 + 1.118 = 8.358

Estimated cycle time:

133 units: 11.584/1.33 = 8.711

135 units: 11.584/1.35 = 8.583

167 units: 11.584/1.67 = 6.939

Recommendations & Action Plan

After a thorough analysis of the situation, it can be concluded that even though Moreno was tampering
with the milling operation process causing a downfall in the product quality it would not be wise to fire
him. As per Deere, he is one of the best man in the job and since they are already in dire need of a skilled
operator to fulfil their delivery consignment to Pilgrim Corporation, Moreno can be re-shifted to another
department. With 135 outputs per day, Fabritek can easily achieve its desired target of delivering 17,000
units. Moreno should hence be transferred to the drilling and grinding operation to keep the operations
streamlined without the waste of any additional time in finding and training a new worker.

However, the solution maybe temporary because considering the pace at which Moreno works, he will
have to be now dependent on Clarke in milling operation to proceed with his work. This will cause
Moreno to work less and earn less bonus that can make him unsatisfied and discontented. Stu Baker
should revise the premium pay policy. Instead of paying workers on total output, wages should be paid on
the basis of total good output in order to maintain the high quality of end products. Because as seen in the
case, Moreno was concerned with more about earning good money on the quantity of the output he
produced instead of its quality. An increasing scrap rate should not be accepted and if there is any
unqualified unit produced, the operators must be asked to work overtime to regrind and re-mill. Another
technique that we can do is to estimate the total output that can be produced based on the machine time
and set it as a benchmark to manage the production process.