Quality was once a competitive priority for Tom and Manson Miller, this important aspect has since eluded them as is evidenced in the recently returned orders that were deemed defective by customer. This should be a wake up call to the company as it could impact negatively on its reputation leading to loss of business opportunity.
DECLINING SALES FIGURES
Although the number of orders for mould fabrication has remained virtually unchanged the order for the multiple and molds are on the decline. The orders for plastic parts are also on the decline despite the fact that the order size was on the increase.
DELAYS AND BOTTLENECKS
These are characteristic problems with the job shop layout. And to make the matter worse, these problems are unpredictable and lead to re –scheduling of the ` whole production process. Tom and Miller had to re- schedule the jobs in attempt to put things in order. This however did not bear fruits, instead the problem persisted. As a result of these, complaints of late delivery would be witnessed.
Because of limited capacity, the company concentrated its sales efforts on supplying parts that were used in limited quantities for research and development efforts and in pre-production pilot runs.
Quality by definition lies on the eyes of the beholder, however quality are specific characteristic that meets some laid down requirements. The custom molds virtually met the exacting standards and were somewhat unique in all aspects. The high quality products enhanced the company’s image and thus attracting more customers.
The ability to adapt to changes in market ensured the enterprise remained a float. The firm diversified its production as time went by. Being flexible allows an organization to respond to changing environmental requirements.
The growth of Tom and mason enterprise depended on Custom Mold’s reputation. The precision with which the design and fabrication was done elevated its stature. Performance of a company is influenced by what people around it say. Sales will increase for any company with good reputation.
The production process for the custom mold was cost effective and thus giving the enterprise a competitive edge over similar firms in the industry. Being able to minimize cost will translate to higher profit margin due to reduced cost. Higher the costs lower the profit.
Initially the lead time for fabrication of mold was 9 weeks while that of production of plastic parts was 3 weeks. Thus the processes were efficient. Being able to respond to a customer’s requirements in time, leads to gaining competitiveness within the industry.
The manufacturing of molds and plastics are carried on high precision machines with the state of art Technology by a highly skilled master machinist. This has helped them to gain competitiveness within the industry.
CHANGING NATURE OF THE INDUSTRY
The electronics manufactures; the main customers of Tom and Miller had shifted from the vertical integration of component-parts to strategic partnership with the parts suppliers. This was done with view of attaining high quality and cost effective parts as well as improving on the efficiency. The impact of these changes manifested on the sales figures and sales mix of Custom Molds. Even though the number of orders per year for mold fabrication remained practically steady, orders for multiple, molds were moribund.
Custom Molds could not meet the delivery commitments as before. Delivery complaints emerged as parts orders were taking four to five weeks instead of the stated three weeks and that the delays were disrupting production schedules. This compounded with unpredictability in the determination of orders lead time resulted in the bottlenecks in the production process.
The process efficiency also changed. Quality is no longer guaranteed as evidenced by the recently returned orders for parts being defective.
ALTERNATIVES MILLERS MIGHT PURSUE
This would be achieved by making complement parts so as to supply a complete set of parts required by the customers.
Miller can opt for Outsourcing those parts of the production that are not meeting the standards as per the customers’ specification.
Management of supplier base;
This will make sure that the suppliers feel part of the company. By doing this it reduces supplier base and the end result. Further it will ensure quality raw material which translates to good quality product that meet customers’ demand.
The Miller should focus on their customer’s requirements. This will help avoid misperception of what the customer expects.
FACTORS TO CONSIDER IN ALTERNATIVE EVALUATION
The company should also consider the viability of the alternatives as presented by the situations and also if they are able to accomplish it.
Miller should also consider whether it has the technical resources to help in such operations
Miller should consider the availability of capital resource to facilitate the operations that are expected to be carried out due to the increased activities.
Miller should also consider whether thy actually have the personnel to incorporate such changes
Shafer, Scott M. and Jack R. Meredith, (2010), Operations Management for MBAs,. 4th Edition. Hoboken: John Wiley and Sons, Inc.
Duening, Thomas N. and John N. Ivancevich, (2006), Managing Organizations, 2nd Edition. Cincinnati: Atomic Dog Publishing
George Albert Steiner, (1997), Strategic Planning: What Every Manager Must Know, Free Press.
Case Study KR pp125-127 – Chap Product Design Strategy