Custom Molds, Inc.

5 Pages   |   1,215 Words
Custom Molds has been in the business of fabricating molds for electronics equipment manufacturers since 1987. The company also started manufacturing plastic parts for its clients (electronics manufacturers). Custom Molds is primarily a family-run business shared by a father and son, namely Tom Mill Miller and Mason Miller. The company enjoyed a good reputation in the electronics industry for several years while being located in Tucson, Arizona. Both the processes of fabricating molds and manufacturing plastic parts are located in a single factory with a specific design and layout for its various operations. However, the company is wondering whether its operations and processes need to be changed, revamped, and redefined due to changing market requirements. The competition in the area may develop quickly and start serving the customers.

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Problem Identification
The primary problem, as identified in the case, relates to the changing nature of the industry. The suppliers such as Custom Molds now had to be on their toes to serve their customers (electronics equipment manufacturers). This is due to the changing business requirement of establishing strategic alliances and partnerships with parts suppliers. Such demands by the customers require quick action on the part of parts suppliers such as Custom Molds. The primary issue is how capable Custom Molds is in satisfying customer order requirements as currently; there are a large number of complaints. The complaints regarding late deliveries, which Custom Molds claims are due to bottlenecks in its production process. In this scenario, quick rectifications need to be made to smooth out the production process and flow, and ultimately, to provide timely delivery of parts to customers.

Analysis of the Issues
As part of the analysis, there is need to understand the major issues and their reasons as faced by Tom and Mason Miller to then identify the possible alternatives. There are some factors that are beyond the control of suppliers such as Custom Molds. The nature of both business processes, fabricating molds and plastic manufacturing, is quite different. The recent trend in fabricating molds is that orders for multiple folds are decreasing while the number of orders throughout 2006, 2007, and 2008 is fairly constant. This trend is reverse for plastic manufacturing where per order quantity is on the rise but the total number of orders is declining. Hence, Custom Molds is finding it difficult to coordinate between these two processes and tailor-make the products to its electronics customers.

Secondly, the number of defective parts was increasing in the orders supplied to the customers. Two shipments had been sent back to Custom Molds due to defective parts. Hence, the reputation of the company as a quality supplier was also at stake in this scenario. While the main issue identified above has been the lack of preparedness of the company to respond to a changing market environment, the linked issues are those of immediately satisfying the customer requirements and build up trust. Although the significant employees of the company, such as master machinists are committed to the task of orderly supplies to the customer, they have not been able to assure timely supplies even after utilizing the excess labor capacity. Hence, the issues need to be resolved at some other level rather than relating them to excess capacity.
It is also important to identify the competitive priorities for Custom Molds’ processes. The company needs to focus on its competitive strengths, that is, the areas where they have an edge as opposed to the competitors. Firstly, the company has excess labor capacity available which can be exploited in the best interests of the company. Secondly, Custom Molds has been supplying a reliable base of customers since 1987. Hence, with a small amount of trust in the abilities of Custom Molds, the customer can be won back. The company also needs to consider whether its current plant layout, as presented in Figure 3.18, can be modified to improve the processing time to the customer.

In the given scenario, the following three alternatives are proposed to the company:
  • Separate the shop floor for fabricating molds and plastic manufacturing.
  • Use excess labor capacity and plant capacity to allocate according to the changing requirements of both businesses- fabricating molds and plastic manufacturing,
  • Develop a separate Supply Chain department to ensure efficient and speedy transportation at all stages of production, from acquiring raw material to delivery to the customers.
The first alternative is realistic as the two production processes today are going in opposite directions. For fabricating molds, the focus has to be on individual and small orders. Hence, each order needs to be more customized and precise for the customers to stay interested. On the other hand, plastic manufacturing process needs to involve a greater number of workforce as order sizes are rising, and delay in each order is likely.
The second alternative talks about exploiting the excess labor capacity while continuing to have both processes in the same shop floor. This alternative would save considerable cost to the company as opposed to establishing a separate shop floor. However, greater conflicts could arise among the master machinists about setting priorities and allocating the workforce.
Lastly, forming a separate Supply Chain department may ease the workload for master machinists as then each process will make an effort to speed up each component of the process. However, this may be a costly affair for the company as it may outsource its supply chain management to industry experts who will be managing each stage of the supply chain.

Flow Chart
The flow chart presented below is part of the recommendation for separating the shop floors for fabricating molds and plastic manufacturing and will be explained in the Recommendation section. The sequence of activities can be tailor made as per the requirements of molding or plastic manufacturing process:

  • As per the analysis of the situation presented above, it is recommended that Custom Molds go with the alternative of separating the shop floors for molds and plastic manufacturing, and tailoring each department to its customer requirements.

  • For this alternative to materialize, the bottlenecks in each function have to be realized and removed first. To remove the bottlenecks, the engineers, top management of the company, and master machinists need to sit together and discuss the problems with shop floor workers (the laborers). It is expected that with the passage of time, each function/process will be more different, and customer requirements will continue to alter. Hence, it makes sense to separate the two processes and allocate shop floor space accordingly in the same plant.

  • To implement this alternative, excess labor and machine hours need to be calculated. The excess labor and machinery then needs to be allocated as per the customer preferences. For example, small ordering requirements of the customer for fabricating molds require more precision in tools and equipment, as well as in the labor force. Hence, more skilled labor needs to be hired for catering to customers of fabricating molds. Molds fabrication, therefore, is a more skill-oriented process for the company.

  • On the other hand, plastic manufacturing needs to be made more mechanized and machine-oriented as large quantities per order need to be supplied to the customer in a short span of time. Hence, the involvement of labor is less significant here.

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