CASE STUDY 2 Discussion otcase To start with, the unit was producing pressed components of 10 per month. It has been given that the power press could produce 30 tonnes per month. This clearly shows that the power press was underutilised. Since the unit was engaged in the production of pressed components, power press is the major machinery that would decide upon the production capacity of the unit. By the time the unit was executing orders of about 10 tonnes per month, the production capacity of the power press was 30 tonnes per month, the production capacity of other general purpose machines like drilling machines, welding machines, punching machines, nibbling machines etc., was 15 tonnes per month and the production capacity of powder coating machine was 10 tonnes per month. Thus. there was mismatch of the production capacity of machines. In other words, the machines were not balanced. When the unit was producing orders to the tune of 10 tonnes per month, only the powder coating machine was put to full use. The general purpose machines (like drilling machines, welding machines, punching machines, nibbling machines etc.,) were used to the extent of only for about 67% [(10 + 15)%] of their production capacity while the power press was used only for about 33% [(10 + 30)%] of its production capacity. After the first phase of expansion, the following were the production capacity of the different machinery. Power press + 30 tonnes per month (original capacity retained as it was) General purpose machines 30 tonnes per month (original capacity doubled) powder coating machine 20 tonnes per month (original capacity doubled) Even then, the machines were not perfectly balanced. In view of the lower capacity of powder coating machine (i.e., 30 tonnes per month), the production capacity of the plant was restricted to 20 tonnes per month in spite of having higher production capacity in the other machines. (1) Was Mr. Venket right ?Mr. Venkat is a quality conscious person. Hence he Rea esate eal ee eae he prefered to tave all the peadaction Tua way lic was right in the seme thet he uid sot want to c Raoul os 1 compromise ot quality Bul the indications were that the onder poston would improve eyond 20 tones pe ut and this was proved correct subsequently. Hence, before going in for expansion, Mr. Venkat would have made a realistic assessment of the likely orders that he could et and axed on this assessment he could have gone in for a full Medged expansion. What was additionally needed was only increasing the capacity of the powder coating machine from 10 tonnes per month to 30 tonnes per month (instead of 20 tonnes per month which he had done). The capacity of general purpose machines were already increased to 30 tonnes pet month, Thus, Venkat Should have gone in for an expansion of production capacity from 10 tonnes pet month to 30 tonnes per month. This would have helped him in handling the incre: comfortably (2) Was the production engineer's view right ? ‘As the company has received orders to the extent of nbout 30 tonnes per month, it was not {vise to tu down a portion of the orders and to accept orders to the extent of only 20 tonnes, It is always a difficult thing to capture the market. The company had received increased orders only because of the confidence that it had gained among the customers. Hence, it was advisable to retain the customers and to retain their orders. Once a few customers shit ihr suppliers it would be a difficult task to bring them back. Hence, the production engines? as right in his view to accept orders to the tune of 30 tonnes and to diver powder Poul work of about 10 tonnes to outside and to get it done ‘on job-order basis. As Mr. Venkat was any way planning for another expansion (by way of increasing the capacity of the powder Coating section from 20 tonnes per month to 30 tonnes per month), this arrangement of getting things done on job-order basis must have been only a iemporsny affair. If Mr. Venkat did not want to compromise on quality, be might have placed a supervisor at the site of the cifent to whom he entrusted job-order and might have supervised the quality first hand, Such sn arrangement till time the expansion of the plant was completed would have helped Mr. Venkat to retain the customers sed order position