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Five Star Tool

In: Business and Management

Submitted By mondesire
Words 627
Pages 3
Five star tools is a small family-owned tool that manufactures diamond coated cutting tools used by jewelers. Recently, the company has begun to experience growth which has caused constraint in one of the three production process. The president of the company, Maxfield Turner and vice-president of marketing Betty Spence, recently sat down to discuss the possible solutions to eliminate this constraint.
Five star tools have three major production processes: first, the steel blanks are cut to size, second the blanks are sent to a chemical bath that prepares the coating process. Lastly, the major process where constraint is shown, the blank are coated with diamond chips in a proprietary process, simultaneously coats and sharpens the blade of each tool. The president fears that since there is a bottleneck in the last process, customers will not get their tools in a timely manner. The president does not want the company to garner a reputation for unreliability. Betty Spence the vice president of marketing believes that the solution to this constraint is to concentrate on the more profitable tools which will free up production resources. Using Goldratt’s theory of constraint, identifying and coming to a solution can be solved in Goldratt’s five steps;
The first step is identifying the problem, Both Maxfield and Betty has identified that the problem is the bottleneck in the third process of production
The second step is optimizing use of restraint, which means finding the product with the highest margin per unit of constraint which according to the data is model C210 because it has a higher profit margin of $420 per unit of constraint.
The third step of Goldratt’s theory is subordinates everything else to the constraint, which mean to focus on trying to loosen the constraint, this can be achieved by what the marketing VP suggested by focusing on the higher profited...

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