Managing Manufacturing Operations: Analysis and Discussion: Teachers’ Manual

75 Pages·1978·9.233 MB·English

by  T. A. J. Nicholson (auth.)

Managing Manufacturing Operations: Analysis and Discussion
By the same author
OPTIMISATION IN INDUSTRY
COMPUTERS IN PRODUCTION PLANNING (with R. D. Pullen)
MANAGING MANUP ACTURING OPERATIONS: A CASEBOOK
Managing Manufacturing Operations: Analysis
and Discussion
Teachers' Manual
T. A. 1. Nicholson
© T.A.J. Nicholson 1978
Softcover reprint of the hardcover 1st edition 1978
All rights reserved. No part of this publication may be
reproduced or transmitted, in any form or by any means,
without permission
First published 1978 by
THE MACMILLAN PRESS LTD
London and Basingstoke
Associated companies in Delhi
Dublin Hong Kong Johannesburg Lagos
Melbourne New York Singapore Tokyo
Typeset by
Cambrian Typesetters
British Library Cataloguing in Publication Data
Nicholson, T A ]
Managing manufacturing operations
Teachers' manual
1. Factory management - Great Britain -
Case studies
I. Title
658'.007'22 TS155
ISBN 978-1-349-04014-8 ISBN 978-1-349-04012-4 (eBook)
DOI 10.1007/978-1-349-04012-4
This book is sold subject
to the standard conditions
of the Net Book Agreement
Contents
1 Analyses of the Cases 1
2 Medina Polymers Plastic Mouldings 2
3 Parsons Peebles Electric Motors 9
4 Van Heugten Carpet Tiles 13
5 Midland Components Machine Shop 17
6 Midland Components Star-line 22
7 Smiths Industries 28
8 Speedcraft Transport Ltd 32
9 Perivale Giltermann Threads 37
10 English Steel Plate Mill 42
I 1 Adams Ice Cream 46
12 Gomme's Furniture 52
13 Arnold's Children's Wear 58
14 Micronair Aircraft Crop Sprays 65
1 Analyses of the Cases
The purpose of these notes is to provide teachers and readers of the case studies with some analysis,
comments and insights into the cases. They are particularly designed for readers who are new to the case
study method to help them launch themselves into this approach. They have been compiled after
extensive teaching of the material to various audiences of management students. Many of the points
were directly obtained as suggestions from the students in the course of case discussion. However the
notes are only proposals to help with understanding: the student of management will find new indivi
dual ways of using the material and further interests and complications in the cases which are not
mentioned here. Being so much concerned with observational insights and understanding, the proper
use of the case method is much more a work of art than a scientific method.
Each case study is analysed in the same format, geared to two sessions of study. The objectives of
the case are defined and a preliminary question for focusing the reader is proposed. It is recommended
that both the objectives and the preliminary question be clear to the student before initial case reading
starts.
This is followed by the question on the case and a detailed account of:
- how the question can be viewed in general
- alternative approaches to the problem
- a suggested approach to deal with the main issue.
The whole slant of the analysis is prepared as a proposal on the main question. It is appropriate to treat
it in this way and to test its acceptability to management.
The main points made are summarised at the end of each chapter.
POINTS ON THE OBJECTIVES OF THE CASE STUDIES
The first chapter is primarily concerned with the objectives of the material. It is important for the
student to read it to establish clear expectations of the case studies. It describes the form and content
of the cases, what the main function of each case is and how the cases relate to each other.
The student needs to notice the following points:
I The case studies are all constructed in the same format:
company contexts, products, markets,
product and process specification
orders processing
operational performance.
2 Each case has a leading question which needs a precise answer but which calls upon consideration
of all the factors in the text. Many points of view are possible.
3 A useful focus for the studies is to aim to conclude with a clear definition of the operational
responsibilities which people in the company must carry out supported by appropriate information.
These conclusions require that a point of view has been established on the sales and production
policy of the company and that the form of the plans and procedures to carry them out has been
fully defined.
2 Medina Polymers Plastic Mouldings
OBJECTIVES OF THE CASE
This case introduces the detailed activities involved in running a small organisation, the setting of
standards and the formulation of plans.
The most important feature of this case is the opportunity to see the whole picture of everything
that happened. Nothing need be assumed; there is no missing data. On the other hand it is sobering to
realise just how much information needs to be understood to know everything about the operations
of a small company. Despite the particular flaws in Medina's operations which can readily be discovered
by analysing the data, it is important to applaud the company for having high morale in the workforce
and real vigour in its manager. In any event, it is profitable and has high productivity.
PRELIMINARY QUESTION
What are the estimates which are used for production management at Medina Polymers?
MAIN QUESTION
Assess the estimates used for production management at Medina Polymers.
The question is analysed below in terms of five issues:
1. Dennis Welsh's requirements
2. Analysis of the quality of the estimates currently in use
3. Implications of weaknesses
4. The development of an information systein
5. The use of the information system
1. Dennis Welsh's requirements
-to know that a job is running at a profit on the day it runs
-to be able to evaluate performance
-to have a good procedure for preparing next month's plan
These requirements appear to be the right ones to help him resolve both the short-term and the longer
term issues he faces. The first point is not straightforward. To a large extent the job will run at a profit
if it has been correctly estimated in the first place. It is not dependent on factors 'on the day it runs'.
Secondly, Dennis's concept of performance as 15 lifts an hour for £3 per hour value on the presses and
£6000 sales value per month is a narrow perception of adequate performance and does not relate to
physical capacity. On the third point, there is no evidence of any procedure for determining next
month's plan in the text of the case.
2. Analysis of the quality of the estimates currently in use
A whole range of estimates and standards can be checked as well as the accuracy of Dennis Welsh's
assessment of the current situation:
(a) Output rates (standards)
(b) Contribution (consequential upon output rates)
(c) Cash position (current position)
(d) Capacity
(e) Yields
(f) Press allocations
(g) Total workload (current position)
Medina Polymers Plastic Mouldings 3
(a) Check on standards of output rates This can be done by comparing outputs and estimates from
Illustrations 2.4 and 2.5 in the case. Table 2.1 below shows the difference between estimated and actual
output per hour by product.
TABLE 2.1 Analysis of estimated and actual work times for the items produced between 3-26 March
75 (Illustration 2.5)
Estimated
cycle Number Units per hour Error + (-)
time of
Item (minutes) impressions estimated actual units %
1 2.5 1 24 14 (10) (42)
3 2.5 2 48 14 (34) (71 )
5 3.0 1 20 24 4 16
6 3.0 1 20 22 2 10
13 4.0 1 15 12 (3) (20)
16 3.0 2 40 24 (16) (40)
17 2.0 1 30 31 1 3
26 3.0 6 120 59 (61 ) (51 )
28 12.0 2 10 7 (3) (30)
32 12.0 1 5 4 (1) (20)
33 3.0 1 20 9 (11) (55)
36 1.5 4 160 68 (92) (58)
37 3.5 1 17 14 (3) (18)
39 3.0 1 20 14 (6) (30)
42 2.0 1 30 31 1 3
43 2.0 4 120 65 (55) (46)
TOTAL (excluding Item 5) 679 388 (291) (43)
Notes
Item 3 Only 26 March iilcluded
Item 6 Only data for 13-26 March taken
Item 13 All data included except for 11 and 25 March on press 2
14 and 21 March on press 12
Item 16 All data included except for 11 March
Item 33 All data included except for 20 and 21 March
Item 37 All data included except for 20 March
(b) Check on estimated to actual contribution As a consequence of having faulty estimates of output
rates, the estimated contribution on each product line is also astray. Table 2.2 analyses the actual costs
in detail. Table 2.3 shows the degree of error in contribution in terms of value per 100 units produced
and also in terms of value per hour of production on the product.
This has implications for pricing. As some prices can apparently be trebled without losing the order,
correct analysis of contribution is a necessary step.
Some of the low estimates in work content may be attributable to the fact that one man works three
presses, not one, and he will therefore, in practice, take longer. The flexibility attainable by having one
man work three presses makes precise costing difficult, and the underestimating of work content may in
part be due to overlooking the practical difficulties of working three presses. Yet it is this very flexibility
which keeps costs down.
(c) Check on cash position The estimate of the cash shortage may also be unreal. The customers owe a
lot of money. Unfortunately a small company like Medina Polymers has little power to extract cash.
In the general cash shortage of 1975 the larger companies had all the power and the cash from the banks.
Medina could factor their debt collection to a bank. It would be John Torrance's decision as he holds
the cheque book.
(d) Check on capacity On the boarder question of the total capacity available there are no estimates.
4 Managing Manufacturing Operations: Analysis and Discussion
TABLE 2.2 Analysis of actual costs and contributions per product
Press
work Actual costs per 100 units Price Contribution
Units Moulding Finishing Material Total Per 100 units Per hr
per
Item hour £ p £ p £ p £ p £ £ p £ p
1 14 7.14 0.13 2.00 9.27 17 7.73 1.08
3 14 7.14 0.42 1.00 8.56 10 1.44 0.20
5 24 4.16 0.83 1.00 5.99 15 9.01 2.16
6 22 4.54 0.83 1.00 6.37 15 8.63 1.90
13 12 8.33 0.33 6.00 14.66 50 35.34 4.24
16 24 4.16 0.17 2.00 6.33 14 7.67 1.84
17 31 3.23 4.17 4.00 11.40 8 (3.40) ( 1.05)
26 59 1.69 0.02 1.00 2.71 3 0.29 0.17
28 7 14.29 1.25 2.00 17.54 60 42.46 2.97
32 4 25.00 1.25 12.00 38.25 66 27.75 1.11
33 9 1 1.1 1 0.42 11.00 22.53 13 (9.53) (0.86)
36 68 1.47 0.17 0.50 2.14 5 2.86 1.94
37 14 7.14 0.14 3.00 10.28 18 7.72 1.08
39 14 7.14 3.85 2.00 12.99 40 27.01 3.78
42 31 3.23 0.13 7.00 10.36 20 9.64 2.99
43 65 1.54 0.25 1.00 2.79 25 22.21 14.44
TOTAL 1 1 1.31 14.36 56.50 182.17 379 196.83 37.99
Notes
1 The labour costs are based on March 1976 as follows:
Moulding Finishing
Wage bill (£) 514.3 351.67
Hours worked 560.0 672.0
Hourly rate 0.92 0.52
Say 1.00 0.50
2 For finishing rates see Illustration 2.4.
TABLE 2.3 Error in Estimated Contribution
Estimated
Actual
press work
moulding Contribution
Units Moulding costs Difference
Per 100 units Per hour
per costs per 100 £ p
Item hour per 100£p £p +(-) actual estimate actual estimate
1 24 4.16 7.14 2.98 7.73 10.75 1.08 2.58
3 48 2.08 7.14 5.06 1.44 6.50 0.20 3.12
6 20 5.00 4.54 (0.46) 8.63 8.17 1.90 1.63
13 15 6.67 8.33 1.66 35.34 37.00 4.24 5.55
16 40 2.50 4.16 1.66 7.67 9.33 1.84 3.73
17 30 3.33 3.23 (0.10) (3.40) (3.30) (1.05 ) (0.99)
26 120 0.83 1.69 0.86 0.29 1.15 0.17 1.38
28 10 10.00 14.29 4.29 42.46 46.75 2.97 4.68
32 5 20.00 25.00 5.00 27.75 32.75 1. 1 1 1.64
33 20 5.00 11.11 6.1 1 (9.53) (3.42) (0.86) (0.68)
36 160 0.63 1.47 0.84 2.86 3.70 1.94 5.92
37 17 5.88 7.14 1.26 7.72 8.98 1.08 1.53
39 20 5.00 7.14 2.14 27.01 29.15 3.78 5.83
42 30 3.33 3.25 (0.08) 9.64 9.72 2.99 2.92
43 120 0.83 1.54 0.71 22.21 22.92 14.44 27.50
TOTAL 75.24 107.17 31.93 185.82 220.15 35.83 66.34
Notes
1 It is assumed that material and finishing costs are the same for actual and plan.
=
2 Planned contribution actual contribution ± difference in moulding costs.
3 Actual moulding cost is obtained by using the work content of Table 2.1.
4 The above calculations are based on a moulder's rate of £ 1.00 per hour and a finisher's rate of £0.50 per hour.