Case Study

On

“Donner Company”

Presented by (Group M): Guided by:

* Archit More (18A3HP652) Prof. Kalyan C Chejarla

* Paritosh Srivastava (18A2HP416)

* Richa Verma (18A1HP023)

* Tanumoy Mishra (18A3HP602)

* Vatsala Tiwari (18A1HP063)

Donner Company
Donner Company manufactured printed circuit boards (PCBs) as per the specifications received from their
client. Donner was managed mainly by engineers, who had main expertise in technical field. In the year
1987, on reviewing the profit and loss statement for the company it is noticed that the total sales till August
1987 had already crossed the total sales in the previous year. Also by August 1987, it is again noticed that
EBIT has continuously increased from -2.8% of net sales in 1985 to 10.29% of net sales. But, the main
point of concern for Donner was the recent prominent slump in the sales and profit of in the month of
September 1987.

1. Problem Analysis
Here we try and analyze the problems which could have led to fall in profit of the company:

1.1. Production bottleneck: Since Donner received different types of circuit board to be manufactured
from different clients, they faced bottlenecks at different points in the process flow. This was a regular
occurrence but didn’t have any pattern as such and hence no solution till now had been found of dealing
with such bottlenecks. Here are some reasons which led to development of bottlenecks:

a. Rush orders: Donner had promised delivery time for rush orders as 4 days and hence when
received, these orders were given priority and replaced existing orders which were in process; thus leading
to frequent bottlenecks at different stages. These rush orders had a frequency of three a week.

b. Modifications post order placement: Sometimes, the customer requested modifications in the
board design after the manufacturing process had started. This stalled the production and consumed a lot of
time as the modification needed to be worked upon into the design and approved which resulted in almost
two weeks delay. Such modification requests in the design of the boards ranged between 1-9 per week.

c. Cross training and constant resource shuffling: The idle resources were often relocated at a
different work station when they were idle. This resulted in piling up task in their original location as they
had no proper forecast of when they would be required back on their original task also resulted in
bottlenecks.

1.2. Factors hampering productivity:

a. Wrong estimation of working time: It was found that the labor hours did not correctly denote
the additional time a resource spent on reworking on parts which failed inspection or were returned by
customer. Moreover, Movement of boards between operations was also not accounted for and method
improvements lead to bottlenecks at subsequent operations.

b. Interruption in task: Most of the operators had to move in between their task almost 6-12 times
per day to seek advice, ask for work from upstream sources and for the delivery of the completed work.
This further added to the time taken and denotes the lack of set process flow and communication between
different operations and their workers.
1.3. Lack of quality standards:

a. Return rework: The quality standards of each finished product ranged from client to client.
Some had a lot of margin of error and only an informal check was required whereas some had pretty
stringent set of standards. This resulted in almost 1 of 10 deliveries lacking in quality in terms of missed
parts or other quality constraints.

1.4. Delivery issues:

Like in most cases the major concerns was because of procrastinating work till the end of the month where
prior work needs to be dispatched by month end. This naturally affected the utilization in the earlier part of
the month and also results in more overhead during the month end.

2. Manufacturing process analysis

a. Reflections on the Donner company manufacturing process: Donner company operates

in a multistage process of make-to-order. It is a job shop process having low volume of
production and has a high level of flexibility since the company offers highly customized product
designs to customers.
b. Operating Problems: In the manufacturing process of Donner’s company there are differences in
the cycle times of each task. These time differences in completion of tasks results in starvation and
blocking of non-bottleneck tasks. Thus, the whole process suffers from different bottlenecks, the
most apparent one resulting from high flexibility and uncontrolled process, leading to
unpredictability of the bottlenecks. Besides this, because different orders vary in sizes not all of
them undergo all the operating processes. Additionally, some tasks gets delayed in the process of
design, causing unpredictable bottlenecks. Unorganized processes also leads to machines being idle
for longer time than predicted.

In the manufacturing process of Donner’s company there are some bottlenecks which require modifications:

1) Breakeven point analysis in selecting CNC drill or manual drill.

2) Breakeven point analysis in selecting automated CNC router or manual punch press.
3) Identification of bottleneck in DFPR process.

1. Breakeven points determining the use of CNC drill or manual drill

CNC Drill Manual Drill

Set up time for 1 order 240 15
Run time for 1 circuit board 0.004*500 0.080*500
Order size X X
Total time 240+2X 15+40X

Equating the total time taken (setup time +run time) for both CNC Drill and manual drill:
240+2X = 15+40X

38X = 225

X = 5.92, rounded off to 6

Thus,

 For order size more than 6, CNC Drill should be used

 For order size less than 6, manual drill should be used

2. Breakeven points to determine which one to use between CNC router and manual punch
press

CNC Router Punch Press

Set up time for 1 order 50 150
Run time for 1 circuit board 1 0.5
Order size X X
Total time 50+X 150+0.5X

Thus, by equating the total time taken (setup time +run time) for both CNC Router and Punch Press:

50+X = 150+0.5X

0.5X = 100

X = 200

Thus,

 When the order size is more than 200, CNC Router should be used
 When the order size is less than 200, Punch Press should be used

3. Identification of bottleneck in DFPR process

 Operation Setup Time Run Time Total time Total Time Total Time
(order size = (order size = (order size =
8) 80) 800)
Panel 5 0.2 (per 8 =5*1+0.2*1 =5*1+0.2*10 =5*1+0.2*100
Preparation boards) =5.2 =7 =25
Laminate and 20 2.0 (per 8 =20*1+2*1 =20*1+2*10 =20*1+2*100
Expose boards) =22 =40 =220
Develop 20 0.2 (per 8 =20*1+0.2*1 =20*1+0.2*10 =20*1+0.2*100
boards) =20.2 =22 =40
Considering an 8-hour daily shift, the capacities for every stage of the DFPR area can be determined as
follows:

Order size
8 80 800
DFPR area
Panel Prep 738.4 5485.6 15360
Laminate & Expose 174.4 960 1744
Develop 190.08 1744.8 9600

Thus,

 If order size is 8 boards, then to avoid bottleneck the orders should be of less than 174 boards per
day.
 And, If order size is 80 boards, the maximum daily capacity of DFPR is 960 boards.

Based on the analysis we found out that laminate and expose of DFPR process is the bottleneck.

3. Recommendations
The donner company was facing difficulty in taking longer time to complete their different tasks and delay
in their delivery time. Following are some of the suggestions for the same:-

1.They can save time by setting up the artwork and the inspect & shear and punch tooling holes
simultaneously at the same time. Performing this task in large batch sizes can be possible:-

Time to do artwork generation 29 min for a batch size of 200,

Time to do Inspect & Shear 32.5 min

Time to do Punch Tooling 22.5 min

Time to do CNC drill setting -240 min

At saving the time by 55 minutes

2. One fourth of the job has been delayed due to the requests by the customers for change; these situations
cause both the wastage of time and resources. They should modify the process by charging the customer
who wants changes after the finalized design. So that even if they have to change the additional cost will
be recovered.

3. The flow time of the process can be reduced if the facility layout is enhanced. The assembly line is not
strategically placed which on some instances has cost them around 15% of the working hour to relocate
from one process to another.

4. They can separate the production line and produce the small and large quantities of simple technology
boards in two separate lines. As we can see from the exhibit 4 that 4531 orders out of the 5761 orders were
of sizes greater than or equal to 200 which is more than the 78% of the total orders they received. As the
CNC machine uses less time for higher batch sizes. It can be very beneficial to move the units in two
separate lines in many ways. Firstly it will resolve the problem of bottleneck. It can reduce the delay time
of large orders which is currently 9 days. Secondly, it will increase the workers efficiency which is currently
underutilized as they are working only 41.4 % of their time (1531/3696). Lastly the defects and repetitive
works will get reduced because now the resources will be channelized and the workers won’t have to shift
from one process to another.

5. The organizational structures should be improved so that it won’t cost more issue in handling the flow
of processes or in instructing and assisting workers, or in inspecting products or for the modifications in the
change of the customers. If these processes won’t be solved in time they might create bottleneck in the
process.

6. It has proved to be wastage of time by randomly assigning workers to the available process my moving
them from one task to another. The workers should be trained in their preferred specializations and should
be assigned to the task related to that