Anusha Prasadam Fabritek

CWID 893342394

Possible causes for the high reject rate include 1) Limited labor force and was running a single
man show as this all started after Ambrose got into an accident and was replaced by Arthur
Moreno who tried to complete work faster to get premium pay and didn’t care much about the
quality 2) Frank Deere advised “Don't worry about piling up work ahead of the next operation. If
you want to go faster, go ahead.” and didn’t care much about the quality in his statement 3)
Minimal employee communication as there were communication gaps and one employee was not
able to find another 4) employee salaries were more based on the quantity of the output and not
the quality 5) bottle neck in the operation where there was job piling up at grinding and drilling
as Moreno was working faster
The total cycle time for the Milling operations is 11.584 minutes for 100 units of production per
day and is calculated by adding all the Total Cycle Times. It is difficult for Fabritek Corporation
to get the order out because of high scrape rate. The total external time is 3.226 minutes. The
total cycle time according to the case as shown in the exhibit 1, is Total cycle time = machine
time + external time where machine time equals to 8.358 minutes. Therefore the machine time is
supposed to remain constant throughout unless the Fabritek decides to upgrade its machines. In
that sense 100 units of output has a cycle time of 11.584 minutes. With experienced operators,
the external time is reduced so in case of 133% output; 11.584/1.33 gives a total cycle time of
8.71 minutes. For 135% output; 11.584/1.35, 8.581 minutes of total cycle time takes place.
However, on the other hand Moreno produces milled castings at the rate of 167% of standard per
day with a cycle time of 6.94 minutes. It seems impossible that Moreno is able to produce output
in a significantly less amount of time where only the machine time is about 8.4 minutes. Based
on this analysis, we can assume that Moreno in order to gain a higher bonus on the total output
produced, has skip some steps in the machine thus compromising the quality of the end product
produced.
Stewart Baker should change the premium pay policy so that employees are paid on the basis of
the total quality and not the quantity of the output in order to maintain the high quality of the
products. An additional policy like, 1) increasing scrap would also be considered for deciding the
bonus and 2) for unqualified products, operators should be asked to work overtime to reprocess
and would reduce the bonus. Another technique that we can do is to estimate the total output that
can be produced based on the machine time and set it as a benchmark to manage the production
process.
As a short term solution Moreno’s wage can be made fixed can be paid better and not by
incentives, so that he doesn’t rush to complete job faster without being worried about the quality
or can also be placed at Grinding and Drilling departments so that his input is based on the
output of milling operator and is not impeding the workflow. For the long term, team building
events can be organized to reduce the communication gap between the employees and also do
cross training between the teams so that company doesn’t depend on one employee for the jobs.
Team meetings can also be conducted on a periodic basis so that problems like, running out of
material can be brought to the notice on time. Employee wages policy should be changed so that
wages can be decided more by the quality of the product and not the quantity.
Anusha Prasadam Fabritek
CWID 893342394

Exhibits
Exhibit 1:

Exhibit 2

Process:

Calculations:
Total Cycle time = 3.594 + 2.964 + 3.301 + 1.725 = 11.584
Total External time = 0.994 + 0.744 + 0.881 + 0.607 = 3.226
Total Machine time = 2.60 + 2.22 + 2.42 + 1.118 = 8.358
Estimated cycle time:
133 units: 11.584/1.33 = 8.711
Anusha Prasadam Fabritek
CWID 893342394

135 units: 11.584/1.35 = 8.583

167 units: 11.584/1.67 = 6.939