OPERATIONS MANAGEMENT

DONNER COMPANY
SUBMITTED
TO

PROF. JANAT SHAH

PREPARED BY:

ABHISHEK PRASAD BURJOR DADACHANJI ROHIT GOEL JA HOLLA

0511147 0511160 0511178 051"005

VISHAL AGGRAWAL 0511196

ARA!A

Donner Company

Group 07

Donner Company

TABLE OF CONTENTS
Exhibit A........................................................................................................................25 Exhibit B........................................................................................................................27

Group 07

Donner Company

INTRODUCTION
The Donner Company manufactures printed circuit boards for a variety of electronics manufacturers based on the specifications provided by them. It started operations in 1985, and is run by engineers substantial e!perience in the electronics industry. There are "5# printed circuit board manufacturers in the $% mar&et, classified as captive or contract manufacturers. The industry has sho n phenomenal gro th 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 ne designs and anticipating'resolving any ith these designs. problems that might be associated ho have

CASE FACTS
Manufacturing Process Flo
Donner produces (solder mar& over bare copper) *%+,-C. boards. This process has three broad stages/ 1. 0reparation %tage +aster art or& received from the customer 1

used to produce negative image

Group 07

Donner Company panel Double sided copper4clad glass epo!y sheets 1 8ocation holes punched 1 used in aligning, 56) by 78) sheared into 13) by 18) panels drilling, imaging and routing 3. Image Transfer %tage 9ppro!imately 5## holes per circuit board 1 Individual image repeated to ma!imi2e panel

utili2ation *panel si2e 13) by 18). 1 typically 8 images per

drilled manually or using C:C drill * orth ;8####. 1 drilling process needs the operator in both cases 0anel is processed through copper immersion bath 1 metalli2ation 1 deposits thin layer of copper on drilled holes are desired copper ?!posed D<0= 1 stripped off the panel 1 un4 copper is etched off 1 circuit pattern electroplated Conductors are electroplated 1 bare areas and metalli2ed holes are covered by an additional layer of 0anels are ashed, scrubbed and coated ith photo4resist *D<0=. <ilm of the art or& is placed on the panel and it D<0= machines ash a ay un4e!posed D<0= here conductors is e!posed to $> light leaving conducting copper surface bare

protected by tin coating

Group 07

Donner Company Tin coating chemically stripped off 1 leaving the

desired circuit pattern on both sides of the board

5. <abrication %tage 0rotective epo!y coating over circuit traces 1 Through holes 1 covered Individual boards ith solder from panel 1

solder4mas& sil&4screening

separated

reduced to desired si2e and shape using the C:C or a punch press final step -oards are inspected, tested, pac&aged and shipped 1 one senior Donner employee assigned to this

Group 07

Donner Company

Figure !" Manufacturing Process Flo The normal flo involved. %pecial rac&s are used bet een process operations to hold up to 3# panels in order to reduce handling damage described above could be modified based on specific

re@uirements of customers. %ometimes additional steps may also be

Su#er$ision Process
%upervision responsibilities are shared by three people/ Diane %chnabs 1 e!pediter
Group 07

Donner Company -ruce 9ltmeyer 1 design engineer David <laherty 1 shop supervisor

Figure %" Flo The expediter:

of Infor&ation

Aeep trac& of orders in process. Investigated delays, fi!ed problems, &ept customers informed. Too& charge of rush orders. The design engineer: Inspect art or&, find design errors, and create processing strategy. The shop supervisor: In charge of manufacturing, supervised 33 production employees, or&ed ith the blue4print.

Group 07

Donner Company

Or'er Processing

Figure (" Or'er Processing Flo Aey steps involved/ ?stimating labor and material costs 1 preparing a bid for the customer ,rders less than 1### boards 1 5 ee&s, larger orders 1 5 ee&s

+aterial specification and factory order created %upervisor receives the blueprint *7 days after the bid is finali2ed. %cheduling decisions, labor estimates, made after material arrived Tic&eting used to trac& orders as they moved through processing

Group 07

Donner Company

Facilities an' La)out

+achines installed prudently to ensure longevity and isolation of corrosive elements :o outside capital 1 most of the companies funds invested <ull utili2ation of space in e!isting plant

PROBLEMS

AND

REASONS
ith

Problem Statement - Difficulty in manufacturing t o products different production re@uirements in a single facility.

Pro'uct Relate'
%pecial boards re@uire additional steps Company concentrating more on small order si2es and has a lo er delivery time *5 ee&s. vis4B4vis its competitor. %mall order delivery cannot be delayed to prevent revenue target constraint

Custo&er Relate'
:ormal or& flo s interrupted by several customer orders each

ee&C all having specific re@uirements Delays due to art or& modifications to be received from the 1 to 9 design changes a ee& 1 ,ne fourth of delays caused by customer these re@uests from the customers. 9lso involve re or& in case they ant to revert to original design

Group 07

10

Donner Company

Pro'uction Relate'
Dor&flo interrupted 6 to 13 times per day or& from the upstream process

1. To secure more

3. To see& advice on a problem *%hould assistant manufacturing supervisors spend more than 1#E of their time instructing and monitoring employeesF. 3. 9verage delay in shipping completed orders is 5.3 days *9s calculated further do n in the report . Daily at least 3 1 5 slo to be e!pedited 9round 5 rush orders a operations ?stimated order completion time is a standard rate and not based on capacity utili2ation as of time order received :o ra material storage maintained, and procurement initiated ith purchasing agent only after order received. *+aterials received same day or ne!t day for rush orders. ,ther ise it too& (several) days. +ost orders reached manufacturing only 7 days after the bid had been accepted %cheduling decision ta&es place only after ra 0rioriti2ation of orders based on and the manufacturing managerGs materials arrive saleGs ee& orders *non4rush orders. delayed and need

=e or& re@uired in rush orders needing re or& in one or t o

or& in process at critical points assessment of the

possibilities of these orders being held up 0roduction bottlenec&s shifting based on processes utili2ed, order si2es and differences in designs for different client orders. :o pattern available to forecast here the pile4up ould ta&e place

Group 07

11

Donner Company +ovement bottlenec&s, of resources from a particular process to meet

hich are occupied by the time the order, is e!pedited

to that original process

*ualit) Relate'
Customer reHection rates up from 1E to 5E =eturns due to a. Damaged or out of tolerance *1#E. b. 0rocess missed out *9#E. 8eading to reprocessing and reshipping costs +ethod improvements not implemented due to output pressure :o overall coordination on increasing efficiency of process as a hole Iuality inspection standards seem to be too stringent Iuality chec&s being duplicated *both at beginning and end. as as informal missed. %hipments are 9 days late on average or&er e!amination ell

0re4shipment reHection rate J "E *1E total losses K 6E process

La)out relate'
0roduction layout ith a vie to/

1. +inimi2ed installation costs 3. 0reserved e@uipment life 5. Isolated the diverse operating environments 0roduction facilities have been designed primarily around process layout

Group 07

12

Donner Company Constant interruptions due to need for another al&ing from one section to

Group 07

13

Donner Company

CASE ANALYSIS
Anal)sis of Se#te&+er Stan'ar' Pro'uction 'ata ,n an average 5 orders of si2e 96 are processed per day +anpo er utili2ation :o. of peopl $tili2atio e n 9sst. %upervisor :e Dor&ers ,thers Total 7 8 1# 33 #.9 #.5 1 5"6 67# 16# # 381 6 Lrs

Capacity utili2ation =efer to e!hibit 9 for the details. ,verall capacity utili2ation is 56E. -ottlenec& processes are Drilling 1 +anual *7 in number. 1 1 1 1 Capacity utili2ation of 1#7E Cycle time/ 8# min'panel Capacity utili2ation of 13"E Cycle time/ 16 min'panel

Drilling C:C

*$sage is more than 8Lrs'day.

Group 07

14

Donner Company In addition electroplating has a very high capacity utili2ation of 83E. It can also be found that on an average 3# orders are being re or&ed' month at an average order si2e of 56# boards. This totals to an average time spent in re or& J 5"9 hrs. 9lso 66# hrs are spent in labor movement and 37 hrs is plating operation. 9n average of 159.3 hrs are lost per ee&. are loaded on to the process. asted in

hen rush orders *5

,ait ti&e anal)sis -Base' on 'ata for Se#te&+er. 9verage ,rder %i2e 9verage delay 9verage ,rder processing time *1### boards'order. ?!pected Time in the system *Ds. Total processing time *5"61 boards. 9verage processing time *<or 1### boards. 8ead time before start of manufacturing ra material. aiting in the 8ine *D@. 3#.7 days *56 4 5.7 1 " 1 " days *7 days for the order to reach the shop floor and 5 days for procuring 9verage delay in shipping *per ,rder. MM 5.3 days ?!pected time 5.3. M?lapsed time *in days. Total available man hours
Group 07

1### boards'order 8 days 7 ee&s

56 days *"M7N8. 1551." Lrs 5.7 DaysM *366 Lrs.

3816 Lrs 15

Donner Company *0er month. Total available man hours *0er Day. Capacity $tili2ation 9verage processing time 56E 5.7 days *366'"8.85. $tili2ed +an Lours *per day. "8.85 Lrs. 17#.8 Lrs

MM9verage orders shipped 'day J 388. :o. of orders shipped per day is calculated using e!hibit no. 5. 9verage delay in shipping is calculated by ta&ing the eighted average of the individual order delays.

DATA ANALYSIS
Stan'ar' la+or ti&e calculations Or'er si/e !

Group 07

16

Donner Company
Standard Production time Set up Run Artwork Generation Inspect & Shear unch !oo"in# $o"es 29 20 %0 0 0.5 0.5 Total Standard Production time Set up Run Min Hrs 2 29.0 0.4 9 2 0 % 0 % &ri"" ' (anua" &ri"" ' )*) (ateria"i+ation &, ane" rep .a/inate & 01pose &e2e"op 0"ectrop"ate Strip &, 0tch & !in Strip %5 240 %0 0.08 0.004 0.75 5 % 0 9 0.0 5 20 20 25 5 %0 0.2 2 0.2 8.5 0.2 0.2 5 2 0 2 0 2 5 5 % 0 4 So"3er/ask So"3er 3ip ro4i"e ' punch press ro4i"e - )*) router Inspect5 !est5 pack 45 30 50 %50 45 %.5 0.5 % 0.5 %.5 5 3 0 5 0 4 5 0 0 %.5 0 6 %.0 0 46.5 8 9 0.0 6 5%.0 5 0.7 3 0.% 9 30.0 0 0.8 6 0.0 3 0.0 3 45.% 5 0.5 3 %0.0 7 0.7 3 %.0 6 5.0 8 0.% 5 0.0 3 26.0 3 0.0 3 0.2 5 20.0 3 0.4 3 20.2 4 0.3 0 0.0 9 5.0 8 0.3 6 40.0 0 %0.0 7 0.0 6 0.0 6 55.0 2 0.% 0.0 0 20.0 6 %0.0 7 0.9 3 0.% 8 0.3

Total"

01(2 3ours

Or'er Si/e 4 +oar's

Group 07

17

Donner Company
Standard Production time Set up Run Artwork Generation Inspect & Shear unch !oo"in# $o"es 29 20 %0 0 0.5 0.5 Total Standard Production time Set up Run Min Hrs 29 20 %0 0.50 0.50 29.00 20.50 %0.50 335.0 &ri"" ' (anua" &ri"" ' )*) (ateria"i+ation &, ane" rep .a/inate & 01pose &e2e"op 0"ectrop"ate Strip &, 0tch & !in Strip %5 240 %0 0.08 0.004 0.75 %5 %0 0.75 320.00 0 %0.75 5.58 0.%8 0.48 0.34 0.%8

5 20 20 25 5 %0

0.2 2 0.2 8.5 0.2 0.2

5 20 20 25 5 %0

0.20 2.00 0.20 8.50 0.20 0.20

5.20 22.00 20.20 33.50 5.20 %0.20

0.09 0.37 0.34 0.56 0.09 0.%7

So"3er/ask So"3er 3ip ro4i"e - punch press ro4i"e - )*) router Inspect5 !est5 pack

45 30 50 %50 45

%.5 0.5 % 0.5 %.5

45 30 50 45

%.50 0.50 8.00 %2.00

46.50 30.50 58.00 57.00

0.78 0.5% 0.97 0.95

Total" !!156 3ours

Group 07

18

Donner Company

Or'er Si/e %77

Standard Production time Set up Run Artwork Generation Inspect & Shear unch !oo"in# $o"es 29 20 %0 0 0.5 0.5 Total Standard Production time Set up Run Min Hrs 29 20 %0 %2.50 %2.50 29.00 32.50 22.50 850%5.0 &ri"" ' (anua" &ri"" ' )*) (ateria"i+ation &, ane" rep .a/inate & 01pose &e2e"op 0"ectrop"ate Strip &, 0tch & !in Strip %5 240 %0 0.08 0.004 0.75 %5 %0 85000.00 %8.75 0 28.75 8 0.48 0.48 0.54 0.38 %33.5

5 20 20 25 5 %0

0.2 2 0.2 8.5 0.2 0.2

5 20 20 25 5 %0

5.00 50.00 5.00 2%2.50 5.00 5.00 0

%0.00 70.00 25.00 237.5

0.%7 %.%7 0.42 3.96

%0.00 %5.00

0.%7 0.25

So"3er/ask So"3er 3ip ro4i"e - punch press ro4i"e - )*) router Inspect5 !est5 pack

45 30 50 %50 45

%.5 0.5 % 0.5 %.5

45 30 50 -

37.50 %2.50 200.00 300.00 0

82.50 42.50 250.0

%.38 0.7% 4.%7

345.0

5.75

Group 07

19

Donner Company
Standard Production time Set up Run Total Standard Production time Set up Run Min Hrs 45 0

Total Ti&e" !5(152 3ours 8 using Manual Drill an' #unc3 #ress Total Ti&e" (7106 3ours 9 using CNC 'rill an' CNC router

RECOMMENDATIONS
C3ange in :o+ sc3e'uling
9t present all the panels that belong to an order are processed completely in a particular process before moving on to the ne!t process. This results in DI0 buildup at each stage causing spi&es in the arrival pattern of Hob from the previous process. To smoothen this it is recommended that the panels that have been processed should move on to the ne!t process processed. The timing ithout aiting for the entire order to be or&ed out for an order of si2e 1## sho s that

the e!isting method ta&es 3#.8" hours for complete processing. Dhen the panels are allo ed to move to the ne!t operation then the process time reduces to 11.53N5.3 J 17.53 hours. The time saved is 6.55 hours. In %eptember on an average, there ere 5" orders of si2e 1## ould have been 563 and the total reduction in the processing time processed the flo

hours. That implies 35 more orders of si2e 1## could have been ith the same capacity, an improvement of 58E. This figure of 58E has been calculated assuming that there is no interruption in once an order is loaded for processing.

9 decrease in the throughput time from 3#.8" hours to 17.53 hours ould also reduce, on an average, the number of times a loaded Hob is 20

Group 07

Donner Company removed to ma&e time. ay for the rush order, resulting in the loss of setup

C3ange La)out of t3e &ac3ine asse&+l)

There is lot of scope to reduce or eliminate the time asted due to

labor and material movement bet een operations. 9t present the machines have been arranged in a Hob shop layout. Due to the nature of the processes involved there are layout constraints such as processes that release acid vapors are located a ay from machining operations to prevent corrosion of machines and machining operations that produce dust are separated from processes re@uiring pure atmosphere *imaging, plating and etching.. 9 line-flow or hybrid layout ould help in cutting do n the material and labor movement time. -ut this ould re@uire installation of additional technology, such air ventilation systems or air screens, to isolate the atmospheric air of plating and etching processes. Dith an e!tra 18##4s@. feet of factory space available in the near future, it as considered that the company could loo& to develop production facility may ould be very additional production facility to cater to rush and small volume orders. Lo ever, the cost involved in setting up a ne be very high. 9lso, the utili2ation of certain processes

lo , thus ma&ing it uneconomical to duplicate such facilities.

Re'ucing Process Bottlenec;

Drilling is the critical process. Installation of a second C:C machine ould reduce the machining time from 3#5 hours to 119 hours
Group 07

21

Donner Company *%eptember production figures. but this may re@uire a huge capital e!penditure. 9lternatively, capacity of the manual drilling process can be increased by adding 7 machines. This time reduction from 663 hours to 551 ould result in machining hours. The additional

re@uirement of 7 units of labor can be met by re4allocation of under4 utili2ed manpo er from other processes. Improving capacity of the drilling process ould result in a reduction of the large average aiting time *O3# days. before the order is scheduled on the production line.

I&#ro$e In$entor) Planning

It has been ac&no ledged that scheduling has been delayed till ra materials are received from the vendor. It may not be possible to stoc& all ra materials, but &ey items should be stoc&ed. ?specially those hich use common core materials, if related to the start of the manufacturing process. Time may also be saved in case of larger orders ith a return policy +anufacturing is informed upfront and the procurement order initiated ith the vendor.

C3anging Infor&ation Trans&ission

The orders are ta&ing almost 7 days to reach manufacturing after the bid is accepted. This means that there are bottlenec&s in information transmission hich need to be resolved by the company.

C3ange in *ualit) Control Mec3anis&

Iuality chec&s should focus more on operations re@uired by a client being missed out rather than on actual damages, scratched 0C-Gs etc. There needs to also be a separate personnel assigned to Iuality Control to reduce re or& caused by processing errors. This ould also reduce the duplication of @uality chec&s in the current process. ,n an
Group 07

22

Donner Company average, there is an additional load of 3# orders of average si2e 56# per month.

Group 07

23

Donner Company

APPENDI<

Group 07

24

Donner Company

E=3i+it A
Standard Production Time Set up Run Artwork Generation Inspect & Shear unch !oo"in# $o"es 29 20 %0 0 0.5 0.5 September's Production Order 50 60 60 Board 83 2 6500 % 6500 % 97 &ri"" - (anua" &ri"" - )*) (ateria"i+ation &, ane" rep .a/inate & 01pose &e2e"op 0"ectrop"ate Strip &, 0tch & !in Strip %5 240 %0 0.08 0.004 0.75 5% 9 60 5 5502 6 6500 % 6500 5 20 20 25 5 %0 0.2 2 0.2 8.5 0.2 0.2 60 60 60 60 60 60 % 6500 % 6500 % 6500 % 6500 % 6500 % 0 0 60 3 0 30 3 %50.0 3 0 %550 % %50.0 3 750.0 0 0 %520 3 65376.% % 450.0 0 %2.5 3 0 %520 6 %50.0 3 75876.% 7 7.5 8 0.6 0.08 % 86 0 30 3 %5500.2 6 %5350.0 0 %3%.2 6 0.3 0.05 % 56 0 60 5 25%6 Hrs Required Per day Resources required per day Resources allocated Capacity Utilization

September's Total Standard Production Set up Run Min Hrs %545 %5450.0 24.% 0 0 7 %520 375.0 %5575.0 26.2 0 7 7 5 60 375.0 975.0 %6.2 0 7 7 5 76 395000.0 0 %05052.0 8 562.6 0 %50.0 3 25700.2 0 22.5 395765.0 0 %252%2.0 8 %5%62.6 0 450.0 0 45.0 662.7 5 203.5 3 %9.3 8 7.5

%.2 % %.3 % 0.8 % 33.% 4 %0.% 8 0.9 7 0.3 8 2.2 5 %.% 3 6.5 0.82 % 826 0.%4 % %46 0.28 % 286 0.05 % 56 0.%2 % %26 %.27 % %276 4.%4 4 %046 0.%0 % %06 0.%6 % %66 0.%5 % %56

Group 07

25

Donner Company
Standard Production Time Set up Run Hrs Required Per day Resources required per day

September's Production Order Board 5598

September's Total Standard Production Set up Run Min Hrs 2547 5 8 %565 0 6 2535 0 8 90 0 3 2570 0 6 9500%.5 25255.7 %5284.3 8 35%55.7 3 %%570%.5 6 373.9 6 35634.3 7 52.6 0 %95.0 3 %5580.4 8 %5%2%.8 8 25023.9 3 60.5 35596.8 5 33.7 59.9

Resources allocated

Capacity Utilization

3.0 0 %.6 9 3.0 3 2.6 3 9.7 5 79.0 2 2% %.22 2 6%6 0.33 % 336 0.38 % 386 0.2% % 2%6 0.37 % 376

So"3er/ask So"3er 3ip ro4i"e - punch press ro4i"e - )*) router Inspect5 !est5 pack

45 30 50 %50 45

%.5 0.5 % 0.5 %.5

55 55 47 6 60 !ota"

3 5598 3 %528 4 455% % 6500 %

A2era#e 3 or3ers per 3a7 A2era#e 288 8oar3s per 3a7

Group 07

26

Donner Company

E=3i+it B
&ai"7 9r3er 2a"ue *o o4 :oar3s shippe3 0 % 4 5 6 7 8 %% s%2 %3 %4 %5 %8 %9 20 2% 22 25 26 27 28 29 %%%%8 -%%88 4057 %696 2226 8430 2395 -684 2560 5926 -%47 3952 %32%6 %0070 556% 2275 %76 -%327 -7975 %7939 44560 %%%%8 9930 %3987 %5683 %7909 26339 28734 28050 306%0 36536 36389 4034% 53557 63627 69%88 7%463 7%639 703%2 62337 80276 %24836 5%3 0 %87 78 %03 389 %%% 0 %%8 274 0 %82 6%0 465 257 %05 8 0 0 828 2057 *o o4 :oar3s pro3uce3 237 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 288 *o o4 :oar3s pen3in# ship/ent 237 %2 300 400 6%0 795 694 872 %%60 %330 %344 %632 %738 %4%6 %239 %270 %453 %733 202% 2309 %769 0

&ate

)u/u"ati2e or3er 2a"ue

Sa"es *o o4 :oar3s ;a"ue per :oar3 <

%24800 576% 2%.6629%

Group 07

27