OPERATIONS MANAGEMENT

DONNER COMPANY
SUBMITTED
TO

PROF. JANAT SHAH

PREPARED BY:

ABHISHEK PRASAD BURJOR DADACHANJI ROHIT GOEL JAYARAMA HOLLA

0511147 0511160 0511178 0512005

VISHAL AGGRAWAL 0511196

Donner Company

Group 07

2

......................................................................27 Group 07 3 ...............................................................Donner Company TABLE OF CONTENTS Exhibit A........................................................................25 Exhibit B....................................

classified as captive or contract manufacturers. and is run by engineers who have substantial experience in the electronics industry. CASE FACTS Manufacturing Process Flow Donner produces “solder mark over bare copper” (SMOBC) boards.Donner Company INTRODUCTION The Donner Company manufactures printed circuit boards for a variety of electronics manufacturers based on the specifications provided by them. This process has three broad stages: 1. The industry has shown phenomenal growth as electronics increasingly becomes a vital part of all aspects of life. The Donner Company is believed to be more adept than its competitors in creating prototypes of new designs and anticipating/resolving any problems that might be associated with these designs. There are 750 printed circuit board manufacturers in the US market. It started operations in 1985. Preparation Stage • Master artwork received from the customer – used to produce negative image Group 07 4 .

Image Transfer Stage • Approximately 500 holes per circuit board – Individual image repeated to maximize panel utilization (panel size 12” by 18”) – typically 8 images per drilled manually or using CNC drill (worth $80000) – drilling process needs the operator in both cases • Panel is processed through copper immersion bath – metallization – deposits thin layer of copper on drilled holes • • • are desired • copper • Exposed DFPR – stripped off the panel – uncopper is etched off – circuit pattern electroplated Conductors are electroplated – bare areas and metallized holes are covered by an additional layer of Panels are washed.Donner Company • panel • • Double sided copper-clad glass epoxy sheets – Location holes punched – used in aligning. imaging and routing 2. 36” by 48” sheared into 12” by 18” panels drilling. scrubbed and coated with Film of the artwork is placed on the panel and it DFPR machines wash away un-exposed DFPR photo-resist (DFPR) is exposed to UV light leaving conducting copper surface bare where conductors protected by tin coating Group 07 5 .

packaged and shipped – one senior Donner employee assigned to this Group 07 6 . Fabrication Stage • • • Protective epoxy coating over circuit traces – Through holes – covered with solder Individual boards separated from panel – solder-mask silk-screening reduced to desired size and shape using the CNC or a punch press • final step Boards are inspected.Donner Company • Tin coating chemically stripped off – leaving the desired circuit pattern on both sides of the board 3. tested.

Special racks are used between process operations to hold up to 20 panels in order to reduce handling damage Supervision Process Supervision responsibilities are shared by three people: Diane Schnabs – expediter Group 07 7 . Sometimes additional steps may also be involved.Donner Company Figure 1: Manufacturing Process Flow The normal flow described above could be modified based on specific requirements of customers.

fixed problems. find design errors. Took charge of rush orders. Group 07 8 . The design engineer: Inspect artwork. and create processing strategy. worked with the blue-print. The shop supervisor: In charge of manufacturing. kept customers informed. Investigated delays. supervised 22 production employees.Donner Company Bruce Altmeyer – design engineer David Flaherty – shop supervisor Figure 2: Flow of Information The expediter: Keep track of orders in process.

larger orders – 5 weeks Material specification and factory order created Supervisor receives the blueprint (4 days after the bid is finalized) Scheduling decisions. made after material arrived Ticketing used to track orders as they moved through processing Group 07 9 . labor estimates.Donner Company Order Processing Figure 3: Order Processing Flow Key steps involved: • • • • • • Estimating labor and material costs – preparing a bid for the customer Orders less than 1000 boards – 3 weeks.

Donner Company Facilities and Layout • • • Machines installed prudently to ensure longevity and isolation of corrosive elements No outside capital – most of the companies funds invested Full utilization of space in existing plant PROBLEMS AND REASONS Problem Statement . Product Related • • Special boards require additional steps Company concentrating more on small order sizes and has a lower delivery time (3 weeks) vis-à-vis its competitor. Small order delivery cannot be delayed to prevent revenue target constraint Customer Related • • • Normal work flows interrupted by several customer orders each Delays due to artwork modifications to be received from the 1 to 9 design changes a week – One fourth of delays caused by week. Also involve rework in case they want to revert to original design Group 07 10 . all having specific requirements customer these requests from the customers.Difficulty in manufacturing two products with different production requirements in a single facility.

order sizes and differences in designs for different client orders. Average delay in shipping completed orders is 5. (Materials received same day or next day for rush orders. No pattern available to forecast where the pile-up would take place Group 07 11 .Donner Company Production Related • Workflow interrupted 6 to 12 times per day 1. Otherwise it took “several” days) • • • Most orders reached manufacturing only 4 days after the bid had been accepted Scheduling decision takes place only after raw materials arrive Prioritization of orders based on work in process at critical points and the manufacturing manager’s • assessment of the sale’s possibilities of these orders being held up Production bottlenecks shifting based on processes utilized.2 days (As calculated further down in the report ) • • • • • Daily at least 2 – 3 slow orders (non-rush orders) delayed and need to be expedited Around 3 rush orders a week Rework required in rush orders needing rework in one or two operations Estimated order completion time is a standard rate and not based on capacity utilization as of time order received No raw material storage maintained. and procurement initiated with purchasing agent only after order received. To seek advice on a problem (Should assistant manufacturing supervisors spend more than 10% of their time instructing and monitoring employees?) 3. To secure more work from the upstream process 2.

Isolated the diverse operating environments • Production facilities have been designed primarily around process layout Group 07 12 . is expedited to that original process Quality Related • • Customer rejection rates up from 1% to 3% Returns due to a) Damaged or out of tolerance (10%) b) Process missed out (90%) • • • • • • • Leading to reprocessing and reshipping costs Method improvements not implemented due to output pressure No overall coordination on increasing efficiency of process as a whole Quality inspection standards seem to be too stringent Quality checks being duplicated (both at beginning and end) as well as informal worker examination Pre-shipment rejection rate = 7% (1% total losses & 6% process missed) Shipments are 9 days late on average Layout related • Production layout with a view to: 1. Preserved equipment life 3. which are occupied by the time the order.Donner Company • Movement of resources from a particular process to meet bottlenecks. Minimized installation costs 2.

Donner Company • Constant interruptions due to need for walking from one section to another Group 07 13 .

5 1 576 640 160 0 281 6 Hrs Capacity utilization Refer to exhibit A for the details. Bottleneck processes are Drilling – Manual (4 in number) – – – – Capacity utilization of 104% Cycle time: 80 min/panel Capacity utilization of 127% Cycle time: 16 min/panel Drilling CNC (Usage is more than 8Hrs/day) Group 07 14 . of peopl Utilizatio e n Asst. Supervisor New Workers Others Total • 4 8 10 22 0.Donner Company CASE ANALYSIS Analysis of September Standard Production data • • On an average 3 orders of size 96 are processed per day Manpower utilization No. Overall capacity utilization is 56%.9 0.

Also 660 hrs are spent in labor movement and 24 hrs is wasted in plating operation.7 Hrs 3. Wait time analysis (Based on data for September) Average Order Size Average delay Average Order processing time (1000 boards/order) Expected Time in the system (Ws) Total processing time (5761 boards) Average processing time (For 1000 boards) Lead time before start of manufacturing raw material) Average delay in shipping (per Order) ** 5.2) *Elapsed time (in days) Total available man hours Group 07 1000 boards/order 8 days 4 weeks 36 days (7*4+8) 1531.3. This totals to an average time spent in rework = 379 hrs. An average of 139.4 – 7 – 2816 Hrs 15 . It can also be found that on an average 20 orders are being reworked/ month at an average order size of 360 boards.4 Days* (266 Hrs) 7 days (4 days for the order to reach the shop floor and 3 days for procuring 20.2 hrs are lost when rush orders (3 per week) are loaded on to the process.4 days (36 .2 days Expected time waiting in the Line (Wq) 5.Donner Company In addition electroplating has a very high capacity utilization of 82%.

No. 140.Donner Company (Per month) Total available man hours (Per Day) Capacity Utilization Average processing time 56% 3. Average delay in shipping is calculated by taking the weighted average of the individual order delays.85 Hrs. DATA ANALYSIS Standard labor time calculations Order size 1 Group 07 16 .85) Utilized Man Hours (per day) 78.8 Hrs **Average orders shipped /day = 288. of orders shipped per day is calculated using exhibit no.4 days (266/78. 5.

0 5 0.0 9 5.004 0.2 2 0.0 3 45.0 3 0.08 0.0 5 20 20 25 5 10 0.3 6 40.1 9 30.5 8 9 0.5 Total Standard Production time Set up Run Min Hrs 2 29.5 0 6 1.5 0. Test.0 0 0.5 3 10.1 5 0.0 6 10.5 0.5 1 0.0 8 0.4 3 20.0 6 0.1 5 0.5 0. pack 45 30 50 150 45 1.Donner Company Standard Production time Set up Run Artwork Generation Inspect & Shear Punch Tooling Holes 29 20 10 0 0.0 0 10.2 5 2 0 2 0 2 5 5 1 0 4 Soldermask Solder dip Profile – punch press Profile .1 0.0 0.0 3 26.8 6 0.0 7 0.0 8 0.7 3 1.1 8 0.0 3 0.0 7 0.0 0 46.0 6 51.CNC router Inspect.2 4 0.5 5 3 0 5 0 4 5 0 0 1.0 7 0.0 3 0.3 Total: 6.39 hours Order Size 8 boards Group 07 17 .0 6 55.0 3 0.0 6 5.7 3 0.2 5 20.9 3 0.0 0 20.2 8.2 0.4 9 2 0 1 0 1 Drill – Manual Drill – CNC Materialization DFPR Panel Prep Laminate & Expose Develop Electroplate Strip DFPR Etch & Tin Strip 15 240 10 0.75 5 1 0 9 0.5 1.3 0 0.0 2 0.

50 58.48 0.50 0.5 1.50 10.20 10.00 0 10.18 0.20 2.Donner Company Standard Production time Set up Run Artwork Generation Inspect & Shear Punch Tooling Holes 29 20 10 0 0.37 0.CNC router Inspect.00 20.58 0.75 15 10 0.50 8.5 Total Standard Production time Set up Run Min Hrs 29 20 10 0.50 0.97 0.20 0. pack 45 30 50 150 45 1.5 0.34 0. Test.20 22.punch press Profile .004 0.09 0.00 46.50 0.17 Soldermask Solder dip Profile .75 5.78 0.00 0.75 320.50 5.20 8.50 335.2 5 20 20 25 5 10 0.2 8.2 0.00 0.20 0.56 0.18 5 20 20 25 5 10 0.34 0.95 Total: 11.20 5.51 0.5 0.00 20.00 57.2 2 0.50 30.0 Drill – Manual Drill – CNC Materialization DFPR Panel Prep Laminate & Expose Develop Electroplate Strip DFPR Etch & Tin Strip 15 240 10 0.09 0.20 33.57 hours Group 07 18 .5 1 0.5 0.50 29.5 45 30 50 45 1.00 12.08 0.

00 0 82.00 5.50 12.00 18.08 0.0 1.75 8 0.50 250.0 5.00 5.5 45 30 50 - 37.00 300.00 212.5 0.48 0.50 200.75 15 10 8.00 25.25 Soldermask Solder dip Profile .50 29.42 3.5 Total Standard Production time Set up Run Min Hrs 29 20 10 12. pack 45 30 50 150 45 1.004 0. Test.17 1.00 70.Donner Company Order Size 200 Standard Production time Set up Run Artwork Generation Inspect & Shear Punch Tooling Holes 29 20 10 0 0.75 0 28.5 1.54 0.50 22.38 133.5 0.75 Group 07 19 .00 0 10.00 0.5 0.5 5 20 20 25 5 10 0.17 0.5 1 0.00 50.CNC router Inspect.50 8.5 0.2 5 20 20 25 5 10 5.50 5.00 237.48 0.50 42.17 0.2 2 0.96 10.0 Drill – Manual Drill – CNC Materialization DFPR Panel Prep Laminate & Expose Develop Electroplate Strip DFPR Etch & Tin Strip 15 240 10 0.38 0.2 8.00 32.015.17 345.50 12.00 15.000.punch press Profile .71 4.2 0.

2 = 14. there were 57 orders of size 100 and the total reduction in the processing time would have been 362 hours.32+3.52 hours.using CNC drill and CNC router RECOMMENDATIONS Change in job scheduling At present all the panels that belong to an order are processed completely in a particular process before moving on to the next process. That implies 25 more orders of size 100 could have been processed with the same capacity. When the panels are allowed to move to the next operation then the process time reduces to 11. The timing worked out for an order of size 100 shows that the existing method takes 20. the number of times a loaded job is 20 Group 07 .87 hours to 14. To smoothen this it is recommended that the panels that have been processed should move on to the next process without waiting for the entire order to be processed. on an average. A decrease in the throughput time from 20. In September on an average.59 hours – using Manual Drill and punch press Total Time: 30.Donner Company Standard Production time Set up Run Total Standard Production time Set up Run Min Hrs 45 0 Total Time: 153. an improvement of 58%.35 hours.67 hours . The time saved is 6. This figure of 58% has been calculated assuming that there is no interruption in the flow once an order is loaded for processing.52 hours would also reduce. This results in WIP buildup at each stage causing spikes in the arrival pattern of job from the previous process.87 hours for complete processing.

With an extra 1800-sq. it was considered that the company could look to develop additional production facility to cater to rush and small volume orders. Also. A line-flow or hybrid layout would help in cutting down the material and labor movement time. Due to the nature of the processes involved there are layout constraints such as processes that release acid vapors are located away from machining operations to prevent corrosion of machines and machining operations that produce dust are separated from processes requiring pure atmosphere (imaging. thus making it uneconomical to duplicate such facilities.Donner Company removed to make way for the rush order. However. But this would require installation of additional technology. Installation of a second CNC machine would reduce the machining time from 203 hours to 119 hours Group 07 21 . such air ventilation systems or air screens. to isolate the atmospheric air of plating and etching processes. plating and etching). At present the machines have been arranged in a job shop layout. feet of factory space available in the near future. resulting in the loss of setup time. the cost involved in setting up a new production facility may be very high. the utilization of certain processes would be very low. Change Layout of the machine assembly There is lot of scope to reduce or eliminate the time wasted due to labor and material movement between operations. Reducing Process Bottleneck Drilling is the critical process.

This would result in machining time reduction from 662 hours to 331 hours. if Manufacturing is informed upfront and the procurement order initiated with a return policy with the vendor. but key items should be stocked. Change in Quality Control Mechanism Quality checks should focus more on operations required by a client being missed out rather than on actual damages. Improve Inventory Planning It has been acknowledged that scheduling has been delayed till raw materials are received from the vendor. scratched PCB’s etc.Donner Company (September production figures) but this may require a huge capital expenditure. capacity of the manual drilling process can be increased by adding 4 machines. This would also reduce the duplication of quality checks in the current process. Alternatively. On an Group 07 22 . Changing Information Transmission The orders are taking almost 4 days to reach manufacturing after the bid is accepted. Especially those related to the start of the manufacturing process. The additional requirement of 4 units of labor can be met by re-allocation of underutilized manpower from other processes. Time may also be saved in case of larger orders which use common core materials. There needs to also be a separate personnel assigned to Quality Control to reduce rework caused by processing errors. Improving capacity of the drilling process would result in a reduction of the large average waiting time (~20 days) before the order is scheduled on the production line. It may not be possible to stock all raw materials. This means that there are bottlenecks in information transmission which need to be resolved by the company.

Donner Company average. Group 07 23 . there is an additional load of 20 orders of average size 360 per month.

Donner Company APPENDIX Group 07 24 .

450.5 3 0 1.6 0 450.5 39.2 6 0.1 8 0.7 5 203.20 6 150.82 1 82% 0.9 7 0.0 16.08 1 8% 0 30 3 1.3 0.00 1 0 0 60 3 0 30 3 150.20 375.05 1 5% 0.08 0.00 1 6.Manual Drill .1 0 0 7 1.876.0 0 45.00 5 20 20 25 5 10 0.00 1 6.5 8 0.0 0 131.376.CNC Materialization DFPR Panel Prep Laminate & Expose Develop Electroplate Strip DFPR Etch & Tin Strip 15 240 10 0.2 0 7 7 5 76 39.1 1 450.0 3 7.2 0 7 7 5 60 375.3 1 0.00 1 6.20 3 6.75 51 9 60 5 5.5 1.350.2 8.2 6 1.14 4 104% 0.765.162.0 26.00 1 97 Drill .5 3 19.1 4 10.2 5 1.2 2 0.0 0 12.2 0.00 1 6.14 1 14% 0.0 662.10 1 10% 0.212.3 8 7.0 8 1.28 1 28% 0.1 7 7.45 1.8 1 33.02 6 6.0 0 12.0 0 0 1.5 0.0 3 0 1.0 8 562.50 1 150.0 3 750.00 1 6.15 1 15% Group 07 25 .12 1 12% 1.3 8 2.052.27 1 127% 4.0 24.004 0.2 1 1.5 0.2 0 22.1 3 6.700.16 Hrs Required Per day Resources required per day Resources allocated Capacity Utilization September's Total Standard Production Set up Run Min Hrs 1.0 975.500.5 September's Production Order 50 60 60 Board 83 2 6.575.00 1 6.0 3 2.000.0 0 10.16 1 16% 0.2 60 60 60 60 60 60 1 6.0 1.05 1 5% 0 60 5 2.6 0 150.6 0.Donner Company Exhibit A Standard Production Time Set up Run Artwork Generation Inspect & Shear Punch Tooling Holes 29 20 10 0 0.5 0.

9 Resources allocated Capacity Utilization 3.580.7 59.21 1 21% 0.5 2.51 1 6.4 8 1.6 0 195.punch press Profile .00 1 Average 3 orders per day Average 288 Boards per day Group 07 26 .5 55 55 47 6 60 Total 3 5.47 5 8 1.701.0 2 21 1.22 2 61% 0.284.6 3 9.5 0.5 3.8 8 2.6 9 3.33 1 33% 0.0 0 1.121.7 5 79.7 3 11.28 4 4.023.634. Test.37 1 37% Soldermask Solder dip Profile .98 3 1.255.7 1.155.70 0 6 9. pack 45 30 50 150 45 1.596.9 6 3.Donner Company Standard Production Time Set up Run Hrs Required Per day Resources required per day September's Production Order Board 5.5 1 0.98 September's Total Standard Production Set up Run Min Hrs 2.5 1.38 1 38% 0.001.0 3 2.3 7 52.9 3 60.8 5 33.5 6 373.0 3 1.35 0 8 90 0 3 2.65 0 6 2.3 8 3.CNC router Inspect.

66291 Group 07 27 .Donner Company Exhibit B Daily Order value No of boards shipped 0 1 4 5 6 7 8 11 s12 13 14 15 18 19 20 21 22 25 26 27 28 29 11118 -1188 4057 1696 2226 8430 2395 -684 2560 5926 -147 3952 13216 10070 5561 2275 176 -1327 -7975 17939 44560 11118 9930 13987 15683 17909 26339 28734 28050 30610 36536 36389 40341 53557 63627 69188 71463 71639 70312 62337 80276 124836 513 0 187 78 103 389 111 0 118 274 0 182 610 465 257 105 8 0 0 828 2057 No of boards produced 237 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 No of boards pending shipment 237 12 300 400 610 795 694 872 1160 1330 1344 1632 1738 1416 1239 1270 1453 1733 2021 2309 1769 0 Date Cumulative order value Sales No of boards Value per board $ 124800 5761 21.

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