Which of the changes being considered by the manager of Quality Parts Company are counter to the JIT philosophy?
The most conspicuous proposed change is the manager’s request that the industrial engineering department look into high-rise shelving to store parts coming off machine 4. Any parts coming off of any machine, not just machine 4, should be immediately sent to the next machine for further processing. Even though a 10% scrap rate is inordinately high, she should hold off on the rework line as this adds an additional level of complexity to the process, which is certainly counter to the JIT philosophy. More specifically, if it is only being used to remanufacture 10% of the factory’s output (10% being the scrap rate), look at how much more floor space (a scarce resource that needs to be maximized) is going to be required just to solve that 10% problem — with no guarantees that all 10% of the scrapped units can be successfully remanufactured. If her quality control efforts pay off, a rework line won’t be necessary anyway. That’s the third thing — the quality control inspectors. If she is serious about solving the quality control problem, she needs to think about re-designing the assembly process to minimize the number of times people have to touch the parts; this is almost always where the problems enter that lead to defects.
The fourth issue is the fact that at least some time (we aren’t told how much) must be spent manufacturing the subassemblies. These are then stored.
2. Make recommendations for JIT improvements in such areas as scheduling, layout, kanban, task groupings, and inventory. Use quantitative data as much as possible; state necessary assumptions.
The machines requiring setup times are the mill, lathe, the two drills, and the paint booth. Since they can be setup concurrently, and since the mill and lathe require the most setup time, on days in which production starts with Gizmo Z (Gz), the maximum setup time for the whole assembly line is 60 minutes, and 30 minutes on days in which production starts with either Gizmo X (Gx) or Gizmo Y (Gy). Actual manufacturing times for Gx and Gy are therefore 395 minutes (6.58 hours) for the first unit of each, and 445 minutes (7.42 hours) for the first unit of Gz. Thereafter, since there is no manufacturing step longer than 50 minutes, the assembly line can produce 1 Gizmo every 50 minutes. This assumes that the paint booth and oven can each operate on only 1 unit at a time. If we also assume that the factory operates continuously for 24 hours daily and 7 days weekly, it can produce the minimum and maximum quantities ordered by the customer in only 123.08 hours (5.13 days) and 165.58 hours (6.19 days) respectively (these times represent theoretical minimums).
However, management has chosen to produce Gizmos in runs of 100 or 300. Based on the prior assumptions, it takes approximately 11.2 days in total to produce 100 units each of Gx, Gy, and Gz, and approximately 33.5 days in total to produce 300 units each of the same. In both cases, even assuming the customer consistently orders his maximum volume from Quality Parts, the company is producing units far faster than the customer needs them; the surplus translates into additional inventory costs associated with stockpiling completed gizmos beyond the customer’s immediate needs. An important caveat is that some time must be spent to manufacture the subassemblies, but we do not know how much.
In any event, altering the manufacturing schedule to more closely fit the customer’s needs is one obvious way to increase the company’s profit margin.
Another way to approach the JIT ideal is to negotiate with vendors so that supplies arrive just as they are needed, rather than randomly as in the scenario and redesigning the assembly line so that the subassemblies are produced continuously and arrive just as they are needed at the other workstations.
3. Sketch the operation of a pull system for quality Parts Company’s current system.
Placement of a pull system should be preceded by analysis of product failure. Is there a consistency in how the assembled units fail? If, for instance, a subassembly installed in assembly step 2 is the culprit 100% of the time and the failure is not due to human error, a pull system should be instituted there.
4. Outline a plan for introducing JIT at Quality Parts Company.
We know that the mill remains unused for approximately 2/3 of the time, that the subassemblies must be stockpiled before incorporation into Gizmos, and that at least some of the quality control problems must arise because of defective subassemblies. That being the case, the first thing the manager should do is outsource subassembly and millwork functions so that only finished, already-inspected subassemblies and already-milled parts arrive. The savings in reduced remanufacturing of defective units is probably greater than the additional cost of having someone else do the millwork and subassembly work. It also frees up space for other uses that was formerly occupied by the mill and the subassembly area. — perhaps for running assembly lines for Gx, Gy, and Gz simultaneously. Doing so would certainly reduce the need to stockpile parts and supplies.
Another step toward introducing a JIT would be to negotiate with suppliers to ensure that parts and materials arrive just as they are needed: ideally, deliveries of new parts should arrive just as the last of the old parts is picked up by the employee about to work on it. Since computer components are essentially commodities, switching costs are low for Quality Products in the event that suppliers cannot accommodate this requirement.
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