Operations Management Principles

You have been tasked with assisting the three facilities in Oregon. The "T" facility manufactures toner cartridges, the "P" facility manufactures PC printers, and the "S" facility manufactures stamped metal parts, injection molded plastic parts, and some assemblies for the T and P facilities. The T and P facilities are located in the same building, but are run as separate businesses. The S facility is located about seventy miles (at least 90 minutes) and across a major body of water from the other two facilities. Organizationally, all three facilities answer to a vice-president who is located at the P location.

The T facility has one major customer which accounts for over 98% of its production. Shipments to this customer are covered by long term contracts and require virtually the same quantity to be shipped every production day. The production process is a dedicated production line. The remaining (2%) business is opportunistically scheduled when time, materials and facilities permit. The T facility produces a total of four tone cartridge models. The T facility operates two shifts a day, five days a week. There is comparatively little space for storing incoming parts or materials.

The P facility has the same major customer which accounts for 100% of its production. Similarly, shipments are covered by long term contracts which require virtually the same quantity to be shipped to that customer every production day. The production process is a combination of assembly line and cellular manufacturing. The P facility currently produces a total of three PC printer models, but negotiations are underway to introduce a new, more configurable, PC printer line. The P facility operates two shifts a day, five days a week. This location has virtually no space for storing incoming parts or materials.

The S facility is starkly different from the T and P facilities. It has three departments: stamping, molding, and assembly. The stamping department consists of about twenty large stamping, bending, cutting, and welding machines. These twenty machines produce over fifty distinct parts for the T and P facilities. The stamping department is virtually a job shop in which any given part may be processed on up to seven different machines, all of which require significant time and expense to convert from producing one part to another. The molding department produces over thirty distinct plastic parts for the T and P facilities using twenty molding machines and twelve different plastic resins. In practice, eight of the twenty molding machines are dedicated to producing five of the parts, leaving the remaining twelve machines to produce the remaining twenty eight parts. Like the stamping department machines, the molding machines require significant time and expense to convert from one part to another. A further constraint is the availability of molds which are periodically removed from service for maintenance, cleaning, or rebuild. The assembly department produces sub-assemblies for the T and P facilities using certain parts from the stamping and molding departments and certain "accessory" parts. The "accessory" parts are small pins, springs, clips, and screws which are actually purchased by the P and T facilities and shipped to the S facility. The molding and stamping departments operate three shifts a day, seven days a week. The assembly department operates one shift a day, five days a week. This location has comparatively more storage space for parts / materials, but that space is generally consumed by WIP (work in process) in the stamping and assembly departments.

There are normally eight semi-trailer load shipments from the S facility to the T and P facilities every operational day. They leave the S facility every two hours with parts. Once a day, "accessory" parts are "back-hauled" from the P and T facilities to the S facility.

Based on the facts presented above, conduct an informal performance assessment. Identify the problems, their significance, and the relative benefits of solving them?