INDIAN INSTITUTE OF MANAGEMENT, BANGALORE

PGP 2018-20

OPERATIONS MANAGEMENT

CASE SUBMISSION
on

DONNER COMPANY

SUBMITTED BY:
Group 4
Varsha Hegde (1811170)
Shashwat Gupta (1811167)
Ragini Das (1811160)
Prasanjan Mitra (1811186)
Mohit Upadhyay (1811218)
Chinton Chaudhury (1811159)
1. What is the strategic focus of Donner? Where does donner fall on the product-process matrix, and
why?
Donner Company manufactured printed circuit boards to the specifications of a variety of electronics
manufacturers. Most of the company’s manager were engineers with substantial experience in the
electronics industry. The strategic focus of Donner was anticipating and resolving the problems inherent
in new designs and prototype production techniques of printed circuit boards.
Since the artwork for creating the circuit patter for each customer differed, the process was highly
customized and hence Donner can be considered to fall under the Job-shop category of the product-
process matrix. But also, the volumes are dynamic and differs as per the orders received. Sometimes
repetitive patterns are followed for a large no. Of PCBs, hence it can also be considered to fall in Batch
process category. Hence, it is a hybrid of both Batch and Job-shop process.

2. Draw the process flow diagram of Donner.

Order Processing Flow Diagram
where:
r = run time (per board)
s = Setup time (per order)
f = flow time (per order)
Here flow unit is a board.

3. How should Donner choose between manual drill and CNC drill machines?
As per exhibit 2, the setup and run time for the manual drill and CNC drill machines are as
below: -

S. No. Time (in minutes) Manual CNC Drill

1 Setup Time (per order) 15 240
2 Run Time (per board) 0.080*500 = 40 0.004*500 = 2

Let us consider ‘x’ boards per order, such that the total times for both Manual and CNC drill
process are the same. Then: -
15 + 40*x = 240 + 2*x
=> x = 5.92
Thus, for orders with less than 6 boards, Donner should use the Manual drill process, else it
should use the CNC drill machine.
4. Is Donner following your answer to question 2 above? Why?
Donner is currently not following the above strategy. The current shop floor policy states that only
orders for more than 100 boards are to be drilled on the CNC equipment.
This is probably because the CNC is extremely costly (80,000$) and hence Donner is trying to make
the most optimum use of the machine. Also, since the machine takes 4 hours to setup, it would consume
a lot of electricity. Furthermore, there might be wear and tear in the machine, which again would incur
a lot of costs.
5. How should Donner choose between Punch Press and CNC router?

(All in minutes) Punch Press CNC Router

Set up time 50 150

(per order)
Run time (per board) 1 0.50

Let us consider ‘x’ boards per order. Comparing Punch Press and CNC Router,
x + 50 = x * 0.5 + 150
x * 0.5 = 100
x = 200
Therefore, for orders more than 200 boards, Donner should choose CNC Router. For orders less than
200 boards, Donner should work with Punch Press.

6. How is Donner doing currently and what are the problems that you observe in its current
operations?
The operating problems faced by Donner can be broadly distributed into the following categories.

• Production:
The issues affecting productivity constitute shifting bottlenecks resulting from changing sizes of
batch and orders, procurement delays related to raw materials, and the presence of acid vapors and
dust in unwelcome places.
• Productivity:
Donner finds it difficult to reliably estimate shop productivity. This arises because of unaccounted
movement of employees across machines, and idleness of machines. Another issue affecting
productivity are the high volume of phone calls from the customers’ engineers. Delivery times also
exhibit inefficiency, exhibiting an average delay of 9 days from the promised delivery times.
• Quality:
The customer returns signify that there is something significantly wrong with the quality of the
products being shipped by Donner.
7. If there are any problems that you listed above, why do you think they exist?
Here are some of the reasons behind problems faced by Donner.

• Production:
There are bottlenecks in the existing production process. For order size less than 6 boards, CNC
machine is the bottleneck whereas, for order size above 6, manual drill is the bottleneck. Thereafter,
for order size less than 200, CNC router acts as bottleneck whereas, for order size above 200, punch
press is the bottleneck.

• Productivity:
The plant layout was designed to prevent cross-contamination from keeping machines/units nearby.
However, it was later found that contamination was not related with distance between machine units.
Also, some of the appropriate material are not pre-stocked and need to be ordered when needed. Both
these factors lead to wastage of process time.

• Quality and Deliverables:

The quality and delivery are facing issues due to over promising their clients and under delivering later.
There are bottlenecks and other barriers to efficient performance that are not mitigated beforehand.
This leads to mis-matched products and returns. The products are front loaded at the beginning of every
month. It leads to delays in delivery for some products and unnecessarily burdens the production line
to meet deadlines.

8. What are your recommendations to remediate the above problems?

We propose the following recommendations to remediate problems listed in ques. 6 above.

• Production:
Donner can use two production lines. One line will include the manual CNC drill and the other will
include automatic CNC. For order sizes below up to 6 boards, the former line will be utilized. For orders
above 6 boards, the latter production line will be used.
This will allow both lines to be run simultaneously at optimum utilization and it will avoid the need to
frequently stop & re-start production line. Consider the following scenario. Two orders are being served
simultaneously: 4 boards and 120 boards. Suddenly, Donner receives a rush order of, say, 6 boards.
The large order will continue to be served while the 1st line (containing manual drill) will be utilized
for the rush order. Therefore, Donner will be able to keep up with their scheduled orders.

• Productivity:
This has two components: plant/floor layout and material availability.
The platers spend 15% of their time walking from one location to another. This can be avoided by
reconfiguring machines that need human interference so that less time is wasted.
Similarly, lack of materials on hand leads to production delays as new material needs to be ordered
depending on immediate requirements. Donner can stock key components to avoid such delays.
Analysis of historical demand data to identify any patterns will help Donner in better stocking
components by anticipating requirements.

• Quality and Deliveries:

There are multiple factors in play here. Projects need to be finished before moving on to a new project.
This can be achieved by implementing two production lines, as discussed above. This will also improve
Donner’s quality of work.
Returns and mis-made products can be avoided by clearly outlining and communicating customer
specifications to the team. This can be done by circulating a memo detailing the specifications.
Delivery issues at Donner can be easily resolved by modifying shipment policy to rolling basis. Such
flexible policies will allow Donner to meet specific shipping deadlines, too and thus, improve overall
quality.