Custom Molds, Inc

(Operations Management, page 139)

Presented by Group 2:
Sureash Muthu Emran Ismail Hwa Tee Hai Soon Hor Fam Lee Chia Fuh GM04500 GM04694 GM04680 GM04510 GM04647

Synopsis
Founded in 1987 in Tucson, Arizona by father and son Tom & Mason Miller. Manufacture custom made moulds for:

Plastic

parts Plastic connectors for the Electronic industry

They began by focusing on mould then expanded into production of plastic parts.

Issues
Changing strategies in customers business also changes the order needs. Total time from order placement to receipt by customer is longer than promised. Increasing number of defective products Bottlenecks in production

Cant

predict where, why, when.

Purpose
The purpose of this case is to focus on issues relating to process design and to discuss how decisions involving process structure, customer involvement, vertical integration, resource flexibility and capital intensity interacts with different competitive priorities.

Purpose

(contd)

In answering the questions, we will look into how to compete effectively in each of Custom Molds markets & how to best configure its processes. Issues that we will consider:

There are 2 different processors taking place in the same facility The different processors serve different customers. Mould fabrication requires flexibility and quality where parts manufacturing competes on delivery and low cost. Although the number of orders has remained relatively stable, the volume per order for parts has increased significantly over the last 3 years. This increased has caused a bottleneck in the shop. The change in sales mix has created excess capacity and in mould fabrication and the owner has relegated one of the master machinist to the role of the expediter.

Question (1)
What are the major issues facing Tom and Mason Miller?

Solution (1)
Declining orders of multiple molds and plastic parts. Delivery problems:

Promised 3 weeks but actual 4-5 weeks. Affects clients production schedule.

Solution (1) ..contd

Poor quality of products

Defective parts.

Inefficient production processes. Poor manpower planning/expertise. Piece-meal problem-solving.

Question (2)
a) Identify the individual processes on a flow diagram. b) What are the competitive priorities for these processes and the changing nature of the industry?

Solution (2a)
Molds Processes Flow Diagram
ORDER RECEIVED DESIGN REVIEW ORDER MATERIAL & TOOLING

TESTING & INSPECTION

MOLD FABRICATION

M & T RECEIVED FABRICATION SCHEDULED

PASS

FAILS

CLEAN & POLISH

PACKING & SHPPING

Solution (2a) ..contd

Parts Processes Flow Diagram
ORDER RECEIVED

PART & MATERIAL REVIWED

R. MATERIAL & PRODUTION SCHEDULED

R. MATERIALS RECEIVED

MOLD SECURED FROM INVENTORY OR FABRICATION

SLURRY TRANSFERRED TO HOLDING TANK

MATERIAL WET MIXED INTO SLURRY

MATERIALS DRY MIXED & BLENDED

PARTS MOLDED

CUT AND TRIM OPRERATION

INSPECTION (ASSEMBLY NEEDED)

NO

PACKING & SHPPING

ADDITONAL ASSEMBLY

YES

Solution (2b)
Companies compete in the marketplace by virtue of one or more of the following competitive priorities:

Quality to produce in accordance with the

specification without error.

Speed do things quickly in response to customers

demand.

Cost to produce at low cost. Flexibility to change the volume of production, the
time taken to produce, mix of different product or services produced and ability to innovate and introduce new products and services.

Solution (2b) ..contd

Mold Fabrication Process:

Job process, limited no of molds manufactured per order.

Competitive Priorities: Quality

Should be of top quality Should be consistent Delivery should be on-time High development speed
Customization of the mold

Lead-time

Flexibility

Solution (2b) ..contd

As this industry is moving toward an increased need for speed in development and timely delivery at consistently top quality, hence the company should focus these competitive priories on the core process of supplier relationship to reduce lead times for delivery of material and tooling.

Solution (2b) ..contd

Parts Manufacturing Process:

Batch process, higher volume & cost sensitive market.

Competitive Priorities: Cost

Low cost operations

On-time delivery Should be consistent

Lead-time

Quality

Solution (2b) ..contd

As the customers in this industry dependent on timely consistent deliveries at low cost, the company should adjust to the dynamic environment and focus on these competitive priorities and the core processes of supplier relationship & customer relationship to avoid being out-competed.

Solution (2b) ..contd

The nature of the industry has changed. From traditional mold fabrication.

speed in development and timely delivery at consistently top quality. dependent on timely consistent deliveries at low cost.

To part manufacturing.

The company should focus these competitive priories on the core process of supplier relationship to reduce lead times for delivery of material and tooling.

Question (3)
a) What alternative might the Millers pursue? b) What key factors should they consider as they evaluate these alternatives?

Solution (3a)

Alternatives with 3 aspect of focus

Short term

To resolve day to day operational issue Minor incremental operation process changes to immediately improve delivery performance. To decide for an in depth change on overall operation methodology and process. Realignment of strategic operational decisions with organizational objectives.

Medium term

Long term

Solution (3b)

Short term

Implement flexibility of pool resource utilization E.g. any master machinist from 1 of the 13 pool resources to handle mold fabrication to reduce potential delay scheduling. To evaluate reduce of delay (improvement in core processes) Material ordering (3 to 4 weeks). Scheduling of fabricate mold to produce part (1 to 3 weeks). Reorganize the plant layout, streamlining the process with quality management culture, e.g. TQM process. Enhancement in supplier relationship through supply chain management enhance time based competitive priorities. Better utilize resources. Holding raw material inventory based on forecasting, e.g JIT.

Medium term

Solution (3b) ..contd

Long term 4 options

Refocus the company on custom mold fabrication. Refocus on growing parts manufacturing market. Reorganize the different requirement for 2 separate processes. Establish 2 entirely separate lines.

Key factors to consider

Cost of implementation vs benefits to organization. Competence in the organization and the capacity to execute the change. Market trend development customize mold vs manufacturing market an evaluation of Organizational core business strategy.

Summary

Many operations at manufacturing facilities involve customer contact. Quality Control, design engineering, marketing, sales and other organizations represent the customer at various stages of any process. Customer contact can be very high, especially between production and engineering and production and quality control.

Summary ..contd

Changing customer demand has change business. To address this, Custom Molds needs to make decisions involving process structure, customer involvement, vertical integration, resource flexibility and capital intensity interacts with different competitive priorities.

Thank You