Pickwick Paper Company’s Mount Gambier plant manufactures paperboard. Its production process involves the following operations:

(a) Harvested trees arrive by rail in the woodyard and are stored outside.

(b) Logs are moved by a forklift truck into the plant, where they are passed through a debarker and cut up into chips.

(c) The chips are stored in large bins near the chipping machines.

(d) The chips are then transported by small trucks to another building and placed in a digester—a large pressure cooker where heat, steam and chemicals convert the chips into moist fibres.

(e) The fibres are stored near the digester.

(f) In the next step, the fibres are loaded by workers onto a conveyor belt, which carries the fibres to a depressurised blow tank. This operation separates the fibres.

(g) The separated fibres are placed on wooden pallets and are stored next to the blow tank.

(h) Forklifts are used to carry the separated fibres to the refining area, where the fibres are washed, refined and treated with chemicals and caustic substances until they become pulp.

(i) The wood pulp then enters the paper machines through a headbox, which distributes pulp evenly across a porous belt of forming fabric.

(j) Water is removed from the pulp by passing it over a wire screen.

(k) Additional water is removed from the pulp in a series of presses.

(l) Dryers then remove any remaining water from the pulp.

(m) The thin, dry sheets of pulp are then smoothed and polished by large rollers called calenders.

(n) The paperboard is wound into large rolls, and workers place the rolls on wooden pallets.

(o) Forklifts are used to move the rolls of paperboard to the labelling building.

(p) There, the rolls are labelled and stored for shipment.

(q) The rolls of paperboard are shipped to customers from the loading dock in the labelling building.

The partially processed product is sometimes stored between production operations for two to three days. This delay can be caused either by a faster production rate in the earlier processes than in the later processes, or by breakdowns in the production machinery

Required:

1. Identify the non-value-added activities that might be present in Pickwick Paper’s plant layout and production process. Explain each choice.

2. What criteria did you use to assess whether an activity was valued-added or non-value-added?

3. Explain why the theory of constraints appears to be relevant to managing costs at Pickwick Paper. Besides costs, what other aspects of performance could be improved with better throughput management?