Sung Yu Chen is a purchasing manager for Hilbert Construction, a builder of custom homes. Hilbert is implementing JIT philosophies and has informed Sung Yu that new purchasing procedures need to be developed. For the past 10 years, to obtain the lowest possible cost on building materials, Hilbert has requested quotes from many different suppliers.

Building materials usually are stored in the company's inventory area, where employees select the materials needed for the day, load the materials, and take them to the job site. Materials received in the inventory area are inspected by the shop supervisor. Sometimes the inspection occurs days after receipt. After inspection, poor-quality materials are separated and returned to the supplier.

Under the new plan, the inventory area would be eliminated and suppliers would deliver materials directly to job sites. The delivery of materials must be made as construction progresses, with no buildup or excess inventory held at any site.

\section*{Required}

A. What changes in supplier relationships will result from the implementation of JIT philosophies?

B. How will the implementation of JIT affect internal and external communications?

C. Under the new plan, how would the inspection process change?

\section*{Required}
A. Calculate the production rate for a completed enclosure.
B. Assume that the company has a total of 384 minutes per day available in each department. Calculate the total daily throughput of completed enclosures.
C. Assume that the company currently has a manufacturing cycle time of 123 minutes per enclosure. Calculate the total process time and total wait time for an enclosure. What does the wait time reveal about the manufacturing process?
D. Which of the departments represents a manufacturing bottleneck? If all departments are operating at maximum output, what effect does the bottleneck have on inventory levels and unit output? Explain your answer.

Transcribed Image Text:

Department Processing Time per Unit Forming 8 minutes Milling 11 minutes Grinding 9 minutes Assembly 32 minutes Finishing 25 minutes