Custom Molds

Issues faced by Custom Molds Inc.:

• The delivery times on parts order were taking four to five weeks instead of the stated three weeks.

• Number of defective products was on the rise.

• Bottlenecks increased in the production process.

• Changing strategies within their clients business needs changed order needs in an unexpected way.

There are two distinct processes taking place in the same facility and each process serves different customer needs. Below is the analysis of each the processes (Mold Fabrication and Parts Manufacturing) along with recommendations for the same.

1. MOLD FABRICATION PROCESS:

Mold fabrication is the core business of Custom Mold Inc., and the recommended process is shown in Exhibit 1. Mold Fabrication requires flexibility and quality; hence concept of Job Shop must be applied to streamline the process. Following are the Recommendations to do the same.

• LAYOUT:

Similar equipment or function must be grouped together and the layout of the equipment must be designed so as to minimize the material handling, cost and work in process inventories. Digital numerically controlled equipment should be used as it gives flexibility to change set-ups on the various machines quickly. This will allow Custom Mold Inc. to compete on quality, speed, customization and new product introduction.

• STANDARDIZATION:

To identify and eliminate bottlenecks, Custom Mold Inc must standardize all processes. This means that every task, every job, every event must be approached the same way each time it occurs. This includes a standard way of engineering, workholding, manufacturing and shipping. With standard processes, it will become easier to identify which areas are profitable and which are not. This will enable Custom Molds Inc to look t areas, which have the most variables and make them less variables.

For example вЂ" Fixturing / Workinholding is one of the biggest variables in every shop. In a year that has 8,760 hours, we spend 2,200 hours on weekends, 1,160 hours for holidays and 3,600 hours on leisure time, sleep, meals, etc. The remaining 1,800 hours are for a single-shift of an eight-hour day. The average single-shift operation on a machine with an operator only yields about 800 hours of true chip making. That leaves 1,000 hours of time that is used in the setup of that same machine. To take full advantage of those 1,000 hours we need to use standardization as the driving principle on how to adjust a process, then standardizing how we hold onto the work should be a priority in eliminating this variable. In simple terms, reducing the time it takes on the average machine to do setups can almost double the capacity of a single machine.

• AUTOMATION:

Purchasing the right tools for manufacturing can save Custom Mold Inc., considerable time and money down the line, regardless of the upfront cost. There are many factors that affect the real cost of ownershipвЂ"ranging from financing and resale value, uptime and operation efficiency to consumable tooling costs and reduced secondary operations to improved accuracy. By having the correct tools, whether cutting tools, the machine itself and/or the software, these items will improve the speed and accuracy. If Custom Mold Inc. manages to do all this and run unattended, then the costs will go down and result in better quality and accurate product. Simply put, the older the technology, the more manual labor is used which costs more money in the long run.

Cost Analysis - If currently a core or cavity insert is machined on a traditional CNC machine in 50 hours at $65 an hour ($3,250) and added approximately $300 for consumable tooling costs, two days of polishing (16 hrs X $50/hr) at $800 and one day of spotting at $400 (8 hrs x $50/hr) the total cost for production would total $4750. Investing in newer technology would reduce production costs by 25 percent by decreasing machine hours to (30 x 100 = $3000), consumable tooling costs to $200 and spending fewer hours polishing (5 hrs x $50 = $250) and spotting (2 hr x $50/hr = $100). With the new technology the total cost would be reduced to $3450.

2. PARTS MANUFACTURING PROCESS:

As the reputation of Custom Molds Inc. grew as a designer and fabricator of precision molds, it expanded into the business of limited parts supply. Initially they concentrated on supplying parts that were used in limited quantity. However, with the changing electronics industry, manufacturers now developed strategic alliances and partnerships to ensure timely delivery of high quality, cost-effective parts. Custom Molds Inc., soon realized that with this changing trend they were unable to deliver parts on time and the defective parts compounded their problems. Following are the Recommendations to address this issue.

• SUBCONTRACT:

As can be seen from table 2, the number of orders have been reducing, however the size of the orders have been increasing for Custom Molds Inc. This surge in volumes is leading to delays in delivery times. To counter the same Custom Molds Inc., can explore the option of subcontracting the production of parts for which the molds are already available with them. To successfully implement outsourcing, Custom Molds will have to conduct a market research and determine the