Mccall diesel motor works case study

CASE STUDY:

MCCALL DIESEL MOTOR WORKS (Need for a complete system for production control)

To be submitted by;

ACOT, Amenolah ACEVEDO, Goldie CASTRO, Korina CEPRES, Bernadette CONDE, Kimberly GAY-YA, Carla LAURIO, Gela POOYA, Jadery To be submitted to: DR. ROWEL E. ANTONIO

OVERVIEW McCall Diesel Motor Works has been a pioneer in the manufacture of a particular internal combustion engine. The plant is located on tidewater in the state of New Jersey because the company originally built engines for the marine field, chiefly fishing boats pleasure craft. Subsequently, its activities were extended to the stationary types of engines, used primarily for the production of power in small communities in manufacturing plants, or on farms. The company has always been advanced in its engineering department and design. The production phase, on the other hand has not been progressive. The increasing popularity of diesel engines has brought many new producing companies into the field. About the Company’s design, many of the engines designed were one-off products and made specifically to order. Although this type of work still represent 60 percent of those manufactured, there has been a move towards standardizing many of the component parts to reduce the variety of parts. This allows a degree of interchangeability, especially for small components such as studs, bolts, and spring, or as mechanical fasteners. There also has been reduction in the variety of engine sizes available with introduction of a standard range of three sizes: 20, 40, and 60 HP The company has always been advanced in terms of its product engineering, in the development and design of their product. The production phase on the other hand, has not been so advanced. The heritage of production in the type of job shop operation persists, and despite the tendency of standardization, the company is still continues largely on a made-to-order basis. The increasing popularity of diesel engines meant that competition has been tight because it brought may new entrants to the market. High manufacturing cost and poor service have been reflected in the loss of orders. Customer complaints together with pressure from sales department prompted management to call in a consulting engineer to make survey of the Manufacturing department and recommend a plan of action for improvement. The engineer showed the report from the manufacturing methods, Machinery and equipment, and production control. The senior management recognizes that in order to service, there is an urgent need for change. However, they are having difficulty in convincing the workforce of this and implementing any change. In the main, the management sees the problem as the resistance of the workforce to change their working practices. However, the workforce see the main problem as being the fact that the senior management are essentially sales minded and don’t understand the problem of production planning and manufacturing.

I. TIME CONTEXT Because there is no specific date in the case study, we conclude that the time context of the study is at the present time. II. VIEW POINT The viewpoint of the study is the engineers. Because they are the ones who make the surveys to know what is wrong with the company and reasons why does the company are having a lot of customer complaints and why are their sales are decreasing. The engineers also are the ones who discovered the problem and have some recommendation. III. STATEMENT OF THE PROBLEM McCall Diesel Motor Works is currently going through where the current systems have collapsed. They embody the main problems in the field of production management. How will the McCall Diesel Motor Works can provide the need for a general system of production control? From the start of the case study, it was already stated to the title that McCall diesel motor works need a complete system of production control. Also the engineers also notice that the production planning and control of the company have no formal system. In fact there is resistance from the production manager to implementing any such formal system. The lack of any such formal system has resulted in high work in process and failure to meet delivery times due to lack of work in process monitoring and information on manufacturing lead times. Production planning has also failed to take advantage of the economies of scale afforded by the use of standard parts. There is also lack of formal approach to lot sizing and how the lots are processed through the shop floor. This has led to lots being lost and the order being reissued only for the lot to turn up. IV. STATEMENT OF THE OBJECTIVES  Short range  To limit bottleneck area

 To continue produce quality engines for small stationary power plants for small communities  To minimize the high production costs and low customer service  To minimize the customer complaints  To be able the General Superintendent not opposed the ideas of Engineers.  To increase sales of the company  Long range  To maximize efficiency and utilization of machine  To become the best manufacturer of internal combustion engine in the country after 5 years.  To provide the need for a general system of production control  To ensure customer satisfaction by meeting the delivery date.

V. SWOT ANALYSIS

Strengths  Standardized parts  Knowledgeable workers  Advancement in engineering development and design.  Pioneer in the manufacture of a particular internal combustion engine.  The company’s operation in its engines were largely special-order jobs.

Weaknesses  Obsolete machines  Made-to-order type of business  Failure of a piecemeal manufacturing  Lack of definite sequence of manufacturing operations for a given part.  Lack of information regarding overall manufacturing time  Arbitrary delivery dates by the sales department  High production cost  Low-level of customer service.  Failure to use proper lot sizes, even when lots are not broken up during manufacture.  Absence of any record











  

Opportunities  Location that allows them to have easy access to the customer  Customer requires engines that are made-to-order  The increasing popularity of diesel engines.

concerning the whereabouts of orders in the process from their initiation to delivery at assembly. Failure of all necessary component parts to reach assembly at approximately the same time. Failure to meet delivery promises or high production cost due to rush or overtime work． Difficulty in rendering adequate repair service and at the same time meeting delivery promises. The general superintendent shows little enthusiasm for the idea of a system of production control; in fact, he is opposed to such an installation. Top management of the company was essentially sales minded. The production phase has not been progressive. Increasing number of customer complaints. Pressure from the Sales Department.

Threats  Many new producing companies into the field, with a consequent tightening of the competitive situation.  Inordinate number of rush order

 Calamities and other forms of natural disasters.  Sizes of marine engines have been standardized to some extent.

VI. ALTERNATIVE COURSES OF ACTION ACA #1: Implement and organize a more advanced general system for production control. ACA #2: Limit made-to-order orders and instead concentrate to the sale of standard-line of the agricultural engine ACA #3: Set an exact delivery time/date for each product.

VII. ANALYSIS OF ALTERNATIVE COURSES OF ACTION

ACA #1: Implement and organize a more advanced general system for production control. ADVANTAGES

DISADVANTAGES

 Management will know the overall manufacturing time, this will enable them to estimate the time it will take for the product to finish so that it will be determined on time.

 This may require changes in the process that may not be readily accepted by the workers.

 This will determined possible areas

 This in-process parts cannot be easily uses the service department to supply for their

of bottlenecks thus, these will be eliminated.

emergency repairs.

 Reduce in process inventory of parts.  Illustrate the essential role of the human resource and its effective integration into the manufacturing system.  minimize the high production costs and low customer service

ACA #2: Limit made-to-order orders and instead concentrate to the sale of standard-line of the agricultural engine ADVANTAGES

DISADVANTAGES

 This will greatly help in the  This may result to decline in sales simplification and standardization as 60% of the company’s sales are of the production process generated through made-to-order engines

ACA #3: Set an exact delivery time/date for each product. ADVANTAGES

DISADVANTAGES

 This will inhibit any disruption in the  This may cause a customer manufacturing process dissatisfaction as rush order will not be allowed

VIII. RECOMMENDATION Though the engineer recommendation in the study is to have a simple, straightforward program that would provide adequate control over production and could be instituted gradually and logically, it still answer it because if we already know the sequence, we will have an adequate control over the production. We recommend the first alternative course of action which is to Implement and organize a more advanced general system for production control. Which have the goals of the following: 1. Provide world class quality and service to the customer. 2. Develop each employee’s potential, based on mutual respect, trust and cooperation. 3. Reduce cost through the elimination of waste and maximize profit 4. Develop flexible production standards based on market demand. IX. PLAN OF ACTION ACTIVITY

BUDGET

TIME FRAME

1. Assemble a cross-functional project team with a respected project leader.

P8,000.00

A month

2. Understand why the organization needs the system (i.e., define your business “pain”) and why the pain exists (e.g., system issues and/or business-process issues). 3. Define the scope of the system.

P1,000.00

2 weeks

P1,000.00

2 weeks

4. Establish phases for system implementation

P2,000.00

2 weeks

5. Gather and define the organization’s requirements of the system.

P3,000.00

2 weeks

6. Acquiring of new equipment and machineries.

P50,000.0 0

2 weeks

7. Installation of new equipment and machineries.

P2,000.00

2 weeks

PERSON RESPONSIBL E Manufacturing Process Engineering Manufacturing Process Engineering Manufacturing Process Engineering Manufacturing Process Engineering Manufacturing Process Engineering Manufacturing Process Engineering Manufacturing Process Engineering

8. Prepare the organization for change.

P1,000.00

2 weeks

9. Prepare people and data

P1,000.00

2 weeks

10. Manage “scope creep

P2,000.00

2 weeks

11. Thoroughly test the functionality of the system. 12. Run and refine the system.

2 weeks

P5,000.00

Years

Manufacturing Process Engineering Manufacturing Process Engineering Manufacturing Process Engineering Manufacturing Process Engineering Manufacturing Process Engineering

ACTIVITY #1: Assemble the Project Team and Leader Implementation Requires assembling a cross-functional project team with constituents from all business units likely affected by the new system. At the heart of this group is the project team leader. Many personalities can fill this role, but good leaders always: > Know when to say “no” or at least “not right away.” > Possess the energy to question everything. > Are part diplomat and part drill sergeant. > Are disciplined and do what they say. > Deal deftly (and swiftly) with whiners, nay-sayers, and bullies. > Have enough authority to manage the project. > Make or find the time to do the project right. ACTIVITY #2: Define Your Business “Pain” and Why It Exists Recording and defining pains allow an organization to justify the need for a new manufacturing system, provided the underlying issues are indeed system-related. For example, a company may fail to satisfy customers (pain) because it ships late, its inventory is inaccurate, and its investment in inventory is too high or not enough (issues).The company realizes it must better manage its inventories (business objective) but first needs to understand the root causes of its inventory difficulties. Is it a system problem? A new system must positively impact the issues that cause the pain and help achieve business objectives, or it risks merely making old, mistakenladen processes run faster – at higher costs. ACTIVITY #3: Define System Scope and Implementation Phases

Scope is delineated by duration or phases, and, depending on the breadth of your project and organization, the implementation could go live in a single day or extend over months as various departments and/or physical locations turn on their systems. Factors to consider in selecting a start sequence include ease of implementation, site accessibility to the project team and partners, and location of the best-prepared staff and most- thoroughly tested functionality. Phase 1 – financial modules to get the transactional elements in place that impact inventory data; Phase 2 – planning functions, such as master scheduling to begin feeding new data into the system; and Phase 3 – tactical functions, such as shop-floor scheduling where new, accurate data is a system imperative. ACTIVITY #4: Gather and Define System Requirements Remember that a new system may be an antidote for an organization’s pain, but the implementation team is not a band of faith healers capable of miraculous achievements. Managing unrealistic expectations and requirements is a critical step and demands a rigorous review of all system and data requests. Too many organizations bend over backward to accommodate old processes or reporting methods that are archaic, wrong, or simply unnecessary. Successful project leaders tie requirements to the established objectives – e.g., standardization, real-time plant data, or improved materials management – and not to old processes. By limiting system selection and design to requirements based on old processes and methods, many companies unwittingly saddle themselves for another five years with inferior practices and missed opportunities. ACTIVITY #5: Structure the Implementation and Prepare for Change Your implementation success will hinge less on technology itself than on creating new, more efficient processes enabled by technology. As such, treat the system launch like the most important strategic project you’ll ever manage – because it probably is. This will require a disciplined project-management schedule that includes an aggressive timeline, quality checks and milestones, and mandated attendance for team members at weekly meetings (all meetings, not just those that impact their departments, in order to provide peer scrutiny and pick up best practices from other departments). ACTIVITY #6: Acquiring of new equipment and machineries. The phases of a project will include some or all of the following: • Project commencement - the development of a specification and identification of standards to be met.

• Pre-purchase inspection and assessment of prospective equipment to decision. • Verification of selected supplier • Pre-purchase installation plan • Production of Contract • Placing of order • Post order project confirmation meeting • Inspection of equipment prior to arrival and when arrived on site • Preparation for delivery • Delivery and provision of manufacturer’s information.

prior

ACTIVITY #7: Installation of new equipment and machineries. A risk assessment has to be undertaken. This assessment can only be effectively achieved with the full participation of machine operators and maintenance staff, who can bring practical expertise to the process. This task will best be performed during trial running and before the installation/commissioning engineers hand the machine over to production. ACTIVITY #8: Prepare People Before system training hits the front lines, the project team needs to be fully trained as early in the implementation process as possible (immediately following project planning).The project team members must be well-versed in order to design the system, train end-users, and define system procedures. All others affected by the system should receive some level of system training. How much training is a matter of debate? While some companies opt for large-scale training that includes an overview of the entire system with deep-dive breakouts for specific modules, most organizations have trouble devoting the time or resources for such exhaustive measures. ACTIVITY #9: Data Integrity and Migration Data migration is critical (i.e., garbage in, garbage out) and offers a tremendous opportunity to ease the transition and improve process efficiencies going forward by deleting unnecessary or redundant information. Data can be classified into one of four categories prior to migration: > Irrelevant data that can be left behind; > Questionable data that should not be transferred but retained; > Pertinent data that may prove useful and must be retained and cleansed; and > Priority data upon which the new system will rely and that must be thoroughly scrubbed. Successful implementations follow these migration steps:

1. Define the scope of the data migration; 2. Identify the amount of data cleansing required; 3. Clean the data to be migrated; 4. Map legacy data to the new system; 5. Develop necessary data-migration tools; 6. Conduct initial data migration; 7. Run data-integrity checks; 8. Perform data-migration tests; 9. Make necessary changes; 10. Retest; and 11. Perform final migration. ACTIVITY #10: Manage “Scope Creep” No implementation proceeds without suggestions to alter or expand the original project. This “scope creep” requires a project team leader with both the authority and strength to make original decisions stick and, where the scope creep is legitimate to achieve business objectives, to revise the project. The steering committee is critical when creep arises because it carries veto power. In considering scope revisions, it’s vital that everyone understand what is native in the system and which additional functionalities will require a modification or integration with a third-party solution. This requires two steps: > Assess whether there is a gap between the new needs and the current system’s out-of-box capabilities. > Determine if an alternative to modification or third-party integration is possible, or if modification or third-party integration can be postponed. ACTIVITY #11: Test the System As the system launch grows closer, it’s important that users adhere to a testing schedule and vigorously track and follow up on issues that arise from testing. This testing must be thorough and as close to post-launch conditions as possible; one successful method is the use of monitored sessions under the guidance of the implementation team – “conference room pilots” – that simulate real-world usage. If testing can’t occur in pilots, team members must monitor individual testing sessions and ensure that no integration issues exist. ACTIVITY #12: Run and Refine the System Once the system is up and running, the refinement process typically consists of clean-ups to solve small problems, review of previous workarounds, a look at postponed issues and new issues that may have arisen, and planning of subsequent

phases. Above all, make sure that a myopic focus on “the system” hasn’t blinded you and your staff to the need to deliver improved processes that achieve your business objectives. Don’t Implement without Them As you move forward with your implementation, make sure you follow the proven steps. They have been proven many times in many projects and in many industries, and they’ll continue to lead to success, provided you start and finish every project with the following must-have components: > Strong-willed project leader with time and resources; > Representative project team with time and resources; > Well-defined list of business objectives; > Rigorously critiqued list of system requirements; > Realistic but aggressive timeline; > Thoroughly documented system procedures; > Partner that is the right strategic fit with industry, manufacturing, and system experience; and > Thorough testing that can uncover any problems and ensure a smooth kick-off. X. MANAGEMENT LESSONS LEARNED 1. 2. 3. 4. 5. 6. 7. 8.

Total Quality Management Implementation of a Manufacturing system guidelines Customer Satisfaction Identifying Target Market Planning Communication in an organization Standardization

9.