om-custom mold inc_final
TRANSCRIPT
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Custom Molds, Inc(Operations Management, page 139)
Presented by Group 2:
Sureash Muthu GM04500Emran Ismail GM04694Hwa Tee Hai GM04680Soon Hor Fam GM04510
Lee Chia Fuh GM04647
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Synopsis
Founded in 1987 in Tucson, Arizona byfather and son Tom & Mason Miller.
Manufacture custom made moulds for:
Plastic parts
Plastic connectors for the Electronic industry
They began by focusing on mould thenexpanded into production of plastic parts.
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Issues
Changing strategies in customersbusiness also changes the order needs.
Total time from order placement to receiptby customer is longer than promised.
Increasing number of defective products
Bottlenecks in productionCant predict where, why, when.
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Purpose
The purpose of this case is to focus on issuesrelating 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.
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Purpose ( con t d )
In answering the questions, we will look into how to competeeffectively in each of Custom Molds markets & how to best configureits processes.
Issues that we will consider:
There are 2 different processors taking place in the same facility
The different processors serve different customers. Mouldfabrication requires flexibility and quality where partsmanufacturing competes on delivery and low cost.
Although the number of orders has remained relatively stable, thevolume per order for parts has increased significantly over the last3 years. This increased has caused a bottleneck in the shop.
The change in sales mix has created excess capacity and in mouldfabrication and the owner has relegated one of the mastermachinist to the role of the expediter.
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Question (1)What are the major issues facingTom and Mason Miller?
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Solution (1) Declining orders of multiple molds and
plastic parts.
Delivery problems:
Promised 3 weeks but actual 4-5 weeks.
Affects clients production schedule.
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Solution (1) ..contd Poor quality of products
Defective parts.
Inefficient production processes.
Poor manpower planning/expertise.
Piece-meal problem-solving.
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Question (2)a) Identify the individual processes
on a flow diagram.
b) What are the competitivepriorities for these processes and
the changing nature of theindustry?
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Solution (2a)
ORDERRECEIVED
DESIGNREVIEW
ORDERMATERIAL &
TOOLING
M & T RECEIVEDFABRICATIONSCHEDULED
MOLDFABRICATION
CLEAN & POLISHPACKING &SHPPING
TESTING &INSPECTION
FAILS
PASS
Molds Processes Flow Diagram
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Parts Processes Flow DiagramORDER
RECEIVED
PART &MATERIALREVIWED
R. MATERIAL &PRODUTIONSCHEDULED
R. MATERIALSRECEIVED
MATERIALS DRYMIXED &BLENDED
MATERIAL WETMIXED INTO
SLURRY
SLURRYTRANSFERRED
TO HOLDINGTANK
MOLD SECURED FROMINVENTORY ORFABRICATION
PARTSMOLDED CUT AND TRIMOPRERATION PACKING &SHPPING
ADDITONALASSEMBLY
INSPECTION(ASSEMBLY
NEEDED) NO
YES
Solution (2a) ..contd
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Companies compete in the marketplace by virtue ofone or more of the following competitive priorities:
Qualityto produce in accordance with the
specification without error. Speeddo things quickly in response to customers
demand.
Costto produce at low cost.
Flexibilityto change the volume of production, thetime taken to produce, mix of different product or servicesproduced and ability to innovate and introduce newproducts and services.
Solution (2b)
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Mold Fabrication Process: Job process, limited no of molds manufactured per order.
Competitive Priorities:
Quality Should be of top quality
Should be consistent
Lead-time
Delivery should be on-time
High development speed
Flexibility
Customization of the mold
Solution (2b) ..contd
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As this industry is moving toward an increasedneed for speed in development and timelydelivery at consistently top quality, hence thecompany should focus these competitive
priories on the core process of supplierrelationship to reduce lead times for deliveryof material and tooling.
Solution (2b) ..contd
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Parts Manufacturing Process: Batch process, higher volume & cost sensitive market.
Competitive Priorities:
Cost Low cost operations
Lead-time
On-time delivery Quality
Should be consistent
Solution (2b) ..contd
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As the customers in this industry dependent ontimely consistent deliveries at low cost, thecompany should adjust to the dynamicenvironment and focus on these competitive
priorities and the core processes of supplierrelationship & customer relationship to avoidbeing out-competed.
Solution (2b) ..contd
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The nature of the industry has changed. From traditional mold fabrication.
speed in development and timely delivery atconsistently top quality.
To part manufacturing.
dependent on timely consistent deliveries at lowcost.
The company should focus these competitivepriories on the core process of supplierrelationship to reduce lead times for deliveryof material and tooling.
Solution (2b) ..contd
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Question (3)a) What alternative might the Millers
pursue?
b) What key factors should theyconsider as they evaluate these
alternatives?
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Alternatives with 3 aspect of focus Short term
To resolve day to day operational issue
Minor incremental operation process changes toimmediately improve delivery performance.
Medium term
To decide for an in depth change on overall
operation methodology and process. Long term
Realignment of strategic operational decisionswith organizational objectives.
Solution (3a)
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Short term
Implement flexibility of pool resource utilization
E.g. any master machinist from 1 of the 13 pool resources tohandle 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).
Medium term
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.
Solution (3b)
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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 businessstrategy.
Solution (3b) ..contd
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Many operations at manufacturing facilitiesinvolve customer contact.
Quality Control, design engineering, marketing,sales and other organizations represent thecustomer at various stages of any process.
Customer contact can be very high, especially
between production and engineering andproduction and quality control.
Summary
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Changing customer demand has changebusiness.
To address this, Custom Molds needs to makedecisions involving process structure, customerinvolvement, vertical integration, resourceflexibility and capital intensity interacts with
different competitive priorities.
Summary ..contd
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Thank You