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  • Category:
    Business
  • Document type:
    Assignment
  • Level:
    Masters
  • Page:
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    1896

BUSINESS OPERATION CASE STUDY (FABRITEK CORPORATION)

TABLE OF CONTENTS

  1. Introduction………………………………………………………………………………….2

  2. Situation Analysis…………………………………………………………………………….3

  3. Assumption………………………………………………………………………………………4

  4. Hypothesis…………………………………………………………………………………….5

  5. Analysis to prove the hypothesis……………………………………………………………6

  6. Solution problem………………………………………………………………………………..6

    1. solution…………………………………………………………………………………..8

  7. Alternative Action…………………………………………………………………………….8

  8. Recommendation and Action………………………………………………………………..9

1.0 Introduction

The report is an analysis of man-machine operations, characteristics of such operations, and the processes involved. The study uses a case study of Fabritek Corporation for the analysis. The study seeks to explore specific aspects of business operations such as line operation dynamics, time-standards of machine operation and the influence that man has on the time-standards of a machine operation. The report will also explore the effects of change processes on the infrastructure and management of an organization. The challenges that that are often experienced with machine operations and how such challenges can be solved in order to maintain optimum production while keeping the quality of production as well. Fabritek Corporation is used for this analysis since; it offers a good insight into general production and line production.

Fabritek was initially dealing with machine cast products whose design and nature were general purpose. The incentives for the workers were generally based on the individual worker output and the average rate was established at 133% given the capacity of the machine. Eventually the corporation secured a contract of supplying specific machine parts to a company called pilgrim. The order involved shipment of a total of 17,000 parts over a period of six month starting 31st January 1969. The order translated into a supply of 650 units per week.

In order to meet the order demand, Deere the corporation milling foreman and baker the automotive parts manager set up a milling operation system that involved two milling operator and two inspection handlers. Four machines were assigned for this purpose and the first and second shipment of orders was made successfully. Before the third shipment was made, one of the milling operators got involved in accident and Moreno was brought in to replace him. Moreno was working at 167% and soon the department started having high rejection rates from the final inspection before packing.

2.0 Situation Analysis

In order to understand the situation at Fabritek, we must analyze the cause of the high rejection rates that prompted the analysis. The analysis must consider the production flow line and the people involved. The operation flow line involved Moreno and clerk working as the milling operators, and other two inspection handler. The problem seemed to be originating from the milling in which Moreno was in charge or grinding, for which Clerk was in charge. Therefore to identify the possible causes of the high rejection rates, these two must be considered as the first priority.

Among other possible causes of the problem could as well involve;

  • wrong feed rates of the milling machines

  • Moreno could be less trained in milling since before he came to the milling department he was working in another department where his duties could have been different

  • Clerk could have been unable to keep up with Moreno’s pace or maybe he deliberately decided not to keep up with Moreno’s pace

  • The defaults could have been as a result of damage between operations

  • Wrong setting or feed rates and speed of the grinding machines

  • Moreno could have been rushing his operation in order to meet the 167% level

  • Equipments may be unable to take up the high rates set by Moreno

  • Someone could have been deliberately making the defaults in the production process in order to set up Moreno since he was busting the rates at which the other operators were working at; the rate of 135%

The production system certainly contributed to the problems observed. The production was placed in a set up that more resembled a shop; it was not suitable for a process operation that involves group of workers, most of the workers were all involved in individual kind of production and the new system seemed unfamiliar to them and therefore, Moreno and clerk could have been at odds with one another.

The wage structure was also another problem. The production process is a flow type where one persons work is dependent on another person’s yet; the wage structure is of incentives based on individual output rather than total output of the process. Furthermore, the wage structure was not consistent for everyone, Moreno for example was a permanent employee but he was rewarded based on individual incentives. The inspection handlers were paid on hourly basis while the milling operators were being paid per output.

3.0 Assumptions

In order to further analyze the situation at Fabritek. It is important to make an assumption about the study.

  1. That the speed or the feed rates of both the milling and grinding machine were maintained at the rate of 135% as initially set during the start of the production process.

4.0 Hypothesis

  1. the defects were originating from the milling operator (Moreno)

  2. the defect were caused the grinding operator (Clerk)

  3. the defects were caused by the inspection handlers

5.0 Analysis for the prove of the hypotheses

Table 1. Cycle analysis of milling operation for pilgrim parts

Milling cuts

Total cycling time

Machine time

Total operation time

External time

Internal time

Time is minutes, the rates shown results in 100 parts per day, with a total of 39 minutes allowed per operator per day for personal time and fatigue.

Consider column 4 of the above table: the total operation time. Every operator spends the time shown in the column which is a total of 4.41 (1.139+0.992+1.242+1.035) minutes to produce a piece. Therefore to produce 100 pieces, it requires 441 minutes per day, in addition to the 39minutes allowed per operator it becomes 480 minutes per operator per day.

The operators were however working initially at 133% (133pieces/day). At this rate, the operator’s cycle time becomes 4.41/1.33 which gives 3.31, at 167% the cycle time is 4.41/1.67 which gives 2.64. If Moreno for example, does not take the personal time allocated, then the cycle time becomes 4.80/1.67 which is 2.874. Total cycle time is operation cycle time plus external time. At the cycle time of 2.874 which correspond to 167% rate; the following data are generated.

Total cycle time @ 167 units/8hours

Machine time

Left for external time

Rates of operation as % of standards

If Moreno is going to produce 167 units per day, it means that all elements in the production process, including clerk and the four machines must work at a cycle time rate of 2.874. Moreno was in charge of cut one and two, and Clerk was in charge of cut 3 and 4. For Moreno to produce 167 units, he has to make both cuts one and three at 363% and 194% respectively or otherwise speed up the machines to these capacities, which is practically impossible

the problem however is, how do you determine that Moreno speeded up the machine, if he is spied on, or talk to other members at job, that would have ethical concern issues.

6.0 Solution to the problem

In order to discuss the possible solutions to the problems of Fabritek, it is important to consider several aspects of business operations, the following literature gives an insight into important aspects of business management.

Quality; as defined by Bohn (2015, 2), means the conformity of a particular product to the designs and specification for its use.

Operation strategies; the operations of a corporation are very fundamental in determining the strategy that an organization takes or pursues in the short or long run (Marco & Alain, 2015, 3).

Design; design is also important in success of a company and it provides a competitive age over other firms in the same industry (design council, 2015, 2). Design can be company specific or general in nature depending on the use of the product

Incentives; incentives are generally means by which corporation or organization uses to gain a competitive age over a specific aspect either over their rivals or to get better performance from employees. As Narayanan and Raman (2004, 3) argues, incentives can sometime get out of line and become rather detrimental to the corporation’s objectives.

Inventory control; Janice (2015, 2) writes that, poor inventory control strategy can lead to poor customer service and quick depletion of a company’s cash and consequently starve its operation.

Forecasting; forecasting is very essential in business operations, it enables businesses predict possible demand and supply behavior of the future based on past and present data (wheelwright & Winslow, 2015, 5). Forecasting enables businesses to strategically plan for the future.

Supply chain; supply chain is a web that involves or the activities and organizations that are directly or indirectly involved in the production of a particular item (Gaur, 2013, 3)

Competition; many manufacturing companies in the U.S have learned the importance of competition in manufacturing as an ingredient to success. Competition through product quality and innovation have become basic ingredients for success in production (wheelwright & Hayes, 1985, 1)

Core competence; Prahalald & Hamel (1990, 2) argue that managers are judged by their abilities to identify and explore the core competence that fosters growth.

Management ethics; this is a very important aspect of management given the pressure that managers faces at work places from time to time (chartered Accountants, 2015, 8) asserts that in Australia however, business ethics is conceived as a more individual and personal aspect of a manger.

6.1 Solution

Moreno must either get punished by either firing him or forcing him to operate at 133%, because, he is compromising the responsibility of Fabritek to supply quality produce and in time.

7.0 Alternative action

Fabritek can consider rewarding Moreno by offering him subsidy to meet the $215 target per week in exchange that he reduce hid rate to 133%

Several aspects of Fabritek operations must be considered, they must stop basing incentives on individuals but rather on total output. The operation strategy also needs to be tailored towards specialization in specific manufacturing such that they expand the production and acquire more specialized machinery for special operation. The inventory must also be determined by the future strategy of operation. Fabritek also must realize that they are a part of a wider supply chain in the manufacture industry, as a result responsibility of manufacturing must be observed.

8.0 Recommendations and actions

  • Fabritek needs to expend their operation to meet the supply demand by pilgrim since the initial contract was for six months but with possibility of securing a more permanent contract.

  • The company also needs to change their production from general machine casting manufacturer to a specific line of production

  • The company also must review it wage structures to become more consistent

Appendices

Appendix 1: Table 1

Appendix 2: Table 2

References

Janice, H.H., 2014. Managing Inventory. Harvard Business Publishing, 8016, 1-30

Wheelwright, S.C., Anna, B.W. 2013. Forecasting. Harvard Business Publishing, 8042, PP 1-30

Gaur, V. 2015. Supply chain management.
Harvard Business Publishing, 8031, PP. 1-40

Narayanan, V.G., Raman, A. 2004. Aligning incentives in supply chains. Harvard business review pp. 94-102

Marco, I., Alain, S. 2013. Operations strategy. Harvard Business Publishing, 8000, pp. 1-26

Wheelwright, S., Hayes, R.H 1985. Competing through manufacturing. Harvard business review pp. 99-109

Chartered Accountants. 2014. Why business ethics. Australia, Chartered Accountants

Bohn, R.E. 2013. Managing quality. Harvard Business Publishing 8025, pp. 1-17

Prahalald, C.K., Hamel, G. 1990. The core competence of the corporation. Harvard business review pp. 79-91

Design council 2012. A study of the design process. London, Design Council