Solving a Complex Problem at EMC

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Analysis of the situation in the Plasti-brack product line The problems with the Plasti-brack product line are numerous. The reject rate lies between 12 and 20% which is very high and is obviously costing the company since it takes money and time to correct defects. When customers buy products that are defective it can affect the company’s business in terms of the public perception as one unsatisfied customer can lead to a loss of other customers. The molding dies are very old which means that they have been bought and stored for too long. This implies that the company is holding too much of this type of inventory. There is a problem with the dies which means that they have to be replaced. New plastic injection die cost between $25,000 and $30,000 each. This means that it will cost the company between $150,000 and $180,000 to replace the six dies. The company will only be able to get these within six weeks from the date of order which means quick action is required in terms of the best way forward. The M101molding machine has a record of high unscheduled repair and downtime requiring minor adjustments several times per week. Replacing or repairing this machine should lead to a significant reduction in backlog. The advantages and disadvantages of replacing or overhauling the machine need to be analyzed before making a decision. Additionally, the availability of funds is another factor that should be considered in making the decision. The purchasing manager has also indicated that there are resins of better grade that can be used. They cost between 10 and 15% more than the one which is currently in use with the more expensive one – the RP625 being able to reduce some of the scrapped parts generated by the MG251. However, he is not sure how the RP515 which is the cheaper one would do. A decision is therefore required and since waste is an issue the RP625 may be ideal. Another matter for consideration is that a new shift will mean a shift premium of 15% or overtime work at time and a half. New shift will mean employing additional staff and this cost money. It is possible that the six weeks back log may be resolved by quick changeover and a reduction in machine down time. However, current productivity levels need to be determined. The set up times which is the die changeover time for both blanking and molding is four (4) hours on average which means that more than half the work time is spent on just setting up. If this can be reduced it would benefit the company tremendously since it would increase production. Tom Tucker has indicated that it would cost $10,000 to modify dies with quick clamps in order to reduce set up times to between half hour and one hour. This reduction in set up time would lead to twice the production levels per day. Diagnosis of the problem In addition to the frequent downtime in machine M101 which is a major problem, it appears as if the die changeover time is the main reason for the back log. Once something is done in relation to machine M101 then the problems associated with Machine Group 251 for which it is apart may be completely resolved. The die changeover currently takes an average of 4 hours. Reducing this time should double daily production levels. Therefore, overtime may not be an major issue in resolving the backlog issue. Plan for resolving the problem The problem