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OPERATIONS MANAGEMENT

Case Analysis

DONNER COMPANY

GROUP INFORMATION

Section A | Group 13

NAME ROLL NO. EMAIL ID

1 ANOOP CHAURASIA 1711006 anoop.chaurasia17@iimb.ac.in

2 NAMRATHA S 1711034 namratha.s17@iimb.ac.in

3 JENISH KAMDAR 1711022 jenish.kamdar17@iimb.ac.in

4 VAIBHAV 1711063 vaibhav.17@iimb.ac.in

5 SACHIN RAJORIA 1711046 sachin.rajoria17@iimb.ac.in

Solution

Assumptions:

1. We are assuming standard labor time as setup time plus run time because no
information is given in this regard
2. Assuming Setup time for 1 board will be equal to the setup time for 1 panel
3. Assuming order size to be one for all three cases (order size 1, 8 and 200)
4. Assuming the labour time consideration for steps involving choice of manual or CNC
machine based process will be taken as the minimum of the two cases for efficiency.

Based on the data provided in Exhibit 2 given in the case for the Standard Process flow and
the above stated assumptions, the labour time for order size of 1, 8 and 200 is shown in the
below table.
Table 1: Standard Process Flow Labour Time Calculation
Note:
In the above calculations, the drilling process will either be manual or CNC based. The
labour time needs to be considered on a use-case basis. Below calculations explain which
use-case will be preferred based on the number of boards being processed.

Calculations:
Table 2: CNC drilling use cases
For break-even, total processing time from manual drilling and CNC drilling should be same.
15 + 40 = 240 + 2
= 5.921052632 6
For Circuit Board size greater than 6, it is advisable to use CNC drilling.

Table 3: CNC Router use case

For break-even, total processing time from manual profiling and CNC Router should be
same.
15 + 1 = 150 + 0.5
= 200
For Circuit Board size greater than 200, it is advisable to use CNC Router.
Problem 2

Solution

Based on the analysis of the end-to-end flow time, below are few strategic recommendations
that will help to improve it: Commented [A1]: Any comments on the current layout?

1. Process only high-volume factory-orders (with size more than 200)

Donner was initially a specialized manufacturer of printed circuit boards for devices
designed for experimental purposes, which essentially meant the order size was
usually small. But with time they also started processing high-volume factory orders
by large electronics companies. As part of automating the drilling and profiling
process, Donner invested in CNC machine. From the analysis of labour time for
orders of various sizes, it is observed that the average labour time per board for order
size of 200 boards is 0.15 hours, while the same for an order size of 8 is 1.2814 (from
tables 1, 2 and 3).

So, the efficient drilling and profiling with the help of CNC machine for order sizes
more than 200, helps to significantly reduce the overall flow time or lead time per
board. Also, the labour time saved by using CNC instead of manual drilling would
help to utilize the employees in other processes since they are already cross trained.
Also, by not taking low-volume rush orders, the interruptions in the manufacturing of
large orders will be reduced, thereby reducing chances of expediting and re-
scheduling of processes which add to the overall flow time.

2. Stock raw materials based on historical data of demand

The case mentions that it would take 1-2 days for the purchasing agent to locate the
raw materials at low cost and order it. It usually took approximately 4 days for the
order to reach Flaherty, after which it took several days for the raw materials to arrive
which caused delay in Flaherty scheduling his decisions.

This delay can be reduced by stocking up the more frequently used base stock types.
By analysing the previous orders and base stock types required, the recurrently used
raw materials can be ordered and stocked up in advance instead of purchasing raw
materials when orders arrive. This will reduce the delay in scheduling to a great
extent, thereby leading to a lower overall flow time. One important point to note here
is to ensure inventory stocking is done keeping in mind that inventory costs are
maintained
below a certain limit.
3. Have separate production lines for high-volume and low-volume:

Produce large and small quantities of simple technology boards. This can be done by
using two separate production lines.
Currently, Donner is producing for both the segments. However, catering to both the
low and high-volume markets, it is turning out to be very difficult for it to utilize its
full capacity. Also, the production facilities at Donner was designed for small
volumes. At the same time, Donner is trying to adapt its production unit with the
diversification in product lines (the penetration of captive markets). The sales
forecast of Donner looks very promising, but this will only be achieved if the delivery
process is made faster, along with less WIP and re-works. The major problem in
meeting the above stated goals is the effect that rush orders have on the production
process. In order to complete Rush orders within the stipulated time, the processes are
expedited, leading to the delay in work-in-progress.

As the case mentions, in future the additional 1800-sq. feet of factory space available
can be utilized to have the additional product line. This should be planned in order to
meet rush orders of small quantities, say 200 units or below. Also since small volume
production can be carried out manually, there will be no need of any extra investments
in purchase of new machineries. To fulfil the large volume production orders, existing
production line can be fully devoted. Setting up two separate production lines will
simplify the manufacturing process and make it more efficient. Currently, utilization
of labour at Donner is around 40% and this can be drastically improved by this new
strategy.
Labor utilization:
APPENDIX
Calculation sheet
Standard Production Required Time
Operations Times (in minutes) 1 Circuit Board 8 Circuit Board 200 Circuit Board
Setup Run t/board board Setup Time Run Time Total Setup Time Run Time Total Setup Time Run Time Total
PREPARATION
Artwork Generation 29 0 0 0 29 0 29 29 0 29 29 0 29
Inspect & Shear 20 0.5/panel 0.5 0.0625 20 0.0625 20.06 20 0.5 20.5 20 12.5 32.5
Punch Tooling Holes 10 0.5/panel 0.5 0.0625 10 0.0625 10.06 10 0.5 10.5 10 12.5 22.5

IMAGE TRANSFER
Drill Holes
Manual 15 0.08/hole 0.08 40 15 40 55
CNC Drill 240 0.004/hole 0.004 2 240 16 256 240 400 640
Metallization 10 0.75/panel 0.75 0.09375 10 0.09375 10.09 10 0.75 10.75 10 18.75 28.75
Dry Film Photoresist
1. Panel Prep 5 0.2/panel 0.2 0.025 5 0.025 5.025 5 0.2 5.2 5 5 10
2. Laminate & Expose 20 2/panel 2 0.25 20 0.25 20.25 20 2 22 20 50 70
3. Develop 20 0.2/panel 0.2 0.025 20 0.025 20.03 20 0.2 20.2 20 5 25
Electroplate 25 8.5/panel 8.5 1.0625 25 1.0625 26.06 25 8.5 33.5 25 212.5 237.5
Strip DFPR 5 0.2/panel 0.2 0.025 5 0.025 5.025 5 0.2 5.2 5 5 10
Etch & Tin Strip 10 0.2/panel 0.2 0.025 10 0.025 10.03 10 0.2 10.2 10 5 15

FABRICATION
Soldermask 45 1.5/panel 1.5 0.1875 45 0.1875 45.19 45 1.5 46.5 45 37.5 82.5
Solder Dip 30 0.5/panel 0.5 0.0625 30 0.0625 30.06 30 0.5 30.5 30 12.5 42.5
Profile
Punch Press 50 1.0/board 1 1 50 1 51 50 8 58 50 200 250
CNC Router 150 0.5/board 0.5 0.5
Inspect and pack 45 1.5/board 1.5 1.5 45 1.5 46.5 45 12 57 45 300 345
Total Time (in Minutes) 383.4 615.05 1840.25
Total Time (in Hrs.) 6.39 10.251 30.6708