Case: Quality Parts Company

Quality Parts Company supplies gizmos for a computer manufacturer located a few miles

away. The company produces two different models of gizmos in production runs ranging

from $100$ to $300$ units. The production flow of models X and Y is shown in Exhibit $14\mathrm{.}14.$

Model Z requires milling as its first step, but otherwise follows the same flow pattern as X

and Y$.$ Skids can hold up to $20$ gizmos at a time. Approximate times per unit by operation

number and equipment setup times are shown in Exhibit $14\mathrm{.}15.$ Demand for gizmos from

the computer company ranges between $125$ and $175$ per month, equally divided among

X$,$ Y$,$ and Z$.$ Subassembly builds up inventory early in the month to make certain that a

buffer stock is always available. Raw materials and purchased parts for subassemblies

each constitute $40$ percent of the manufacturing cost of a gizmo. Both categories of parts

are multiple sourced from about $80$ vendors and are delivered at random times. $($Gizmos

have $40$ different part numbers.$)$ Scrap rates are about $10$ percent at each operation,

inventory turns twice yearly, employees are paid on a day rate, employee turnover is $25$

percent per year, and net profit from operations is steady at $5$ percent per year.

Maintenance is performed as needed. The manager of Quality Parts Company has been

contemplating installing an automated ordering system to help control inventories and to

$$keep the skids filled.$($She feels that two days of work in front of a workstation motivates

the worker to produce at top speed.$)$ She is also planning to add three inspectors to clean

up the quality problem. Further, she is thinking about setting up a rework line to speed

repairs. Although she is pleased with the high utilization of most of her equipment and

labor, she is concerned about the idle time of the milling machine. Finally, she has asked

the industrial engineering department to look into high$-$rise shelving to store parts coming

off machine $4.$

Questions

$1.$ Which of the changes being considered by the manager of Quality Parts Company are

counter to the lean philosophy?

$2.$ Make recommendations for lean improvements in such areas as scheduling, layout,

kanban, task groupings, and inventory. Use quantitative data as much as possible;

state necessary assumptions.

$3.$ Sketch the operation of a pull system for running Quality Parts Company$$s current

system.

$4.$ Outline a plan for introducing lean at Quality Parts Company.