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Custom Mold Inc

In: Business and Management

Submitted By nurazza85
Words 1546
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Question 1
What are the major issues facing Tom and Mason Miller?

1. Strategies changed by the client
Manufacturers were developing strategic partnerships with parts suppliers to ensure the timely delivery of high quality, cost-effective parts. This approach allowed funds to be diverted to other uses that could provide a larger return on investment.

2. Changes in order needs in an unexpected way, as order for multiple molds are declining but order size for plastics is increasing.
The impact on Custom Molds could be seen in sales figures over the past three years. The sales mix was changing. Although the number of orders per year for mold fabrication remained virtually constant, orders for multiple molds were declining. The reverse was true for plastic parts, for which the number of orders per year had declined but for which the order sizes were becoming larger. (Refer to the data provided)

3. Late delivery
This is occurred to most of the plastics parts. Customers were complaining that parts orders were taking four to five weeks instead of the stated three weeks and that the delays were disrupting production schedules. Total time from order placement to receipt by customer is much longer than promised. This problem arises as the master scheduler was not able to determine the priority of a particular order and unexpected bottlenecking occurred during the production process.

4. Defective parts delivered to customer.
Parts were returned to Custom Molds Inc after delivered to customer as a result from inefficient testing and inspection process. This will increase transportation and labor cost due to repair needed to fix the product and return back to the customer.

Figure 1: Fabrication for mold

Figure 2: manufacturing process for plastic parts Question 2
Identify the individual processes on a flow diagram. What are the competitive priorities for these processes and the changing nature of the industry?

Competitive priorities, according to “Hayes and Wheelwright in 1984” suggest that companies which compete in the marketplace by virtue of one or more of the following 4 priorities which are quality, lead time, cost and flexibility. Thus we will need to focus on these four factors in order for the company to compete better in the market. In the fabrication of mold process, we see that the company need to be able to produce high quality mold in order for them to produce high quality product, thus design team play a major role in making sure that the mold design is not only meet what customer demand but also to make sure that every aspect of the mold is top quality. Next is the lead-time, as there were no mention of lead time specially at designing stage, it shows that the company don’t have the competitive edge against their competitor. Having lead time in design allowed for your customer to have better planning accuracy, when they expect they can produce the part? When can they start selling? And many more questions that will lead to how long will their return to investment will be. Talking about planning, the company delivery accuracy also should be taking into importance, any promise not meet, could surely damage your company reputation and effect possible business in future, this is seen as there were complain regard to their delivery. Next is the Cost factor, Mold fabrication business is a high cost industry, thus a small cost saving will truly help in long run, especially when you are competing for a lower cost compare to your competitor, thus company must focus on cost saving in order to be able to give their customer a competitive price. Lastly is flexibility, one way to be flexibly is where they allowed more customization of the mold to better attract possible customer.
While competitive priories for Part manufacturing process consist of the same factor but do have a bit of difference in term of focus. First the quality, as this is manufacturing, then what important here is that the output quality they produce must be consistence with minimum defect as possible. Next is the lead time, again being able to meet promises schedule is important as any delay could affect customer sales planning, thus give the company a bad reputation. Cost is the game in manufacturing, being able to save a little goes a long way, and when you have higher saving mean you can give your customer cheaper price tag. Lastly is the flexibility, where what company could do is to provide the flexible of producing at various level with little effect on price, this is an important competitive edge, as customer sees this as a way for them to minimize their inventory at the same time still being able to sell their product, as explain if customer could buy at a certain level of output, they may plan their inventory according to their sales forecast and thus giving them that flexibility.
The changing nature of the industry can be easily seen in the table (Custom mold case study, pg 3) that companies now days are moving toward a lower cost with high output and speed. For plastic parts, we can see an increase in order size where in sense higher quantity produce have lower cost per unit, thus more and more customer are looking at this as a cost saving method, and producing lower number of order size have a constant drop each year. While Number of ordering in Mold have different direction, lower order size have a more steady demand increase compare to higher one. This is due to the fact having many mold would consider a high cost for customer, thus what they do is to have partnership with other company to but different mold that produce supporting part for them. An example is company Ahmad produce a TV, they buy a mold to produce the frame, while they will outsource the screen from other company which will but a different mold to support Ahmad. Thus allowed a fully utilization of the mold, as they could not only support to produce for themselves but could also produce it for other company.

Question 3
What alternatives might the Millers pursue? What key factors should they consider as they evaluate these alternative?
For the current delay and defect return goods
1) Tom Miller has to hire expertise and skilled workers to see where has gone wrong and try to maximise the available raw materials, labour and space and tools and allocate appropriate labour and time to finish the required orders. 2) If expertise is not available at the short notice, Tom has to get the current workers report what are the problems incurred that caused the delay, physical go down to the operations side to see all the problems accounted for the delay and have breifing and encouraging them to work in a team and effectively and efficiently. They should be briefed the whole process and incentives to be given upon completion or otherwise redundancy on them if they did on purpose to delay the process for a long term period. 3) For those standard order that can be outsource, Tom has to negotiate with the available suppliers for the time and period of the delivery so that can meet the target of deliveries.
To improve current situation and future ongoing operations. 1) Tom should sign contract with those capable skilled workers and supervisors for their expertise and skills and get them heavily involved and responsible for the operations and allocate and assign them at task they are good 2) Standard moldings and plastics for customers to choose so that workers can sharpen their skills on the available samples for faster deliveries. For custom made only selected section workers are involved with different price and time of deliveries to customers 3) Daily training and briefing should be done to encourage and motivate workers to carry their tasks.

4) Assign certain segment of operations outsourcing if cheaper and faster. A backup team or suppliers should Tom receive huge orders over the period

5) To get the factory or customer association to check the good from time to time for constance good quality of products. 6) To appoint quality control and health and safety officer to daily check the operations and good

7) To set up business development department for long term survey, research and development on market needs and better products with cheaper source and faster process

As for conclusion to this Custom Mold Inc case, the Millers should plan their strategy with few alternatives to counter the up-coming problem. When the clients changes their strategies to timely delivery of high quality and cost effective mold, the Millers should reconstruct their operations strategies. They should have the lead time where they will know the turnaround time for the mold to be processed and delivered to the clients. The clients can easily estimate on how long they can get their orders. After getting the process of manufacturing the mold amount and time, they should plan on adding more workers and machines to reach the targeted demand such as the Chase Strategy. Last but not least, being in a manufacturing industry the Millers should have alternative plans or cost strategy to counter an ad-hoc changes to the industry or the clients.

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