Introduction: In late 1980s, proliferation of electronics across the industries and households led to the

increase in demand for electronic circuit boards, which are the core components of any electronic
equipment such as Washing machine and computers. To fulfil this demand, 750 PCB manufacturers were
competing in the space of PCB manufacturing, which was a B2B business. There were essentially two
types of firms in this space.

A. Firms which process large orders: Usually such firms were

captive to the large electronic firms such as IBM. These large
electronic firms were giving orders that were large and
technologically complex to such organisation.
B. Smaller sub-contracting firms: Usually when the order was of
less complex technologically, and when the order quantity
Figure 1: A picture of a PCB was smaller, the large electronics companies used to place
such orders to smaller subcontracting firms. Donner company was a company competing in
such subcontracting space.

Donner company positioning: Considering the production volumes and the level of variety in the
production, we can place Donner company somewhere between job shop and batch production.

Figure 2: Position of Donner in variety and volume

Major problems faced by Donner Company:

a. Bottleneck uncertainties: The bottleneck during the orders used to vary a lot and the
management was unable to identify the bottleneck of their operations. Due to this, the
allocation of personnel was not well planned.
b. Shipment delay: Huge number of the deliveries from the plant were being delayed. This caused
inventory increase.

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 c. Unsure about productivity: There were no measures to find out productivity. The variability of
the order size and other variations across the processes made it difficult to measure productivity.
d. Quality problems: Different customers had different criteria for the quality of the final product.
Such differences were leading to order rejection.
e. Rework: There was often change in specifications of the orders during the middle of production.
f. Finally, there was a dilemma whether they should bid only for low volume and reject large
orders or continue taking both order types.

Process flow:

The process flow was same for all the orders. There were multiple steps in the production. The below
image shows the flow diagram of the process:

Figure 3: Flow diagram

Analysis: Let us analyse the operations of Donner company to answer the above questions. The
company accepts order size varying from 1 unit to 1000+ units.

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 Total
45.00%
40.00%
35.00%
30.00%
25.00% Total
20.00%
15.00%
10.00%
5.00%
0.00%
(blank 1-5 6-10 11-15 16-20 36-40 46-50 56-60 81-85 96- >101
) 100

The above chart shows that the order size varies drastically but most of the variation is between 1-50
order size.

There are only 2 orders with order size 1000+.

Let us analyse the order processing time for different order sizes:

Exhibit 2 shows the processing time details of each step. We can analyse the time taken to manufacture
one board, 8 boards, 104 boards and 1000 boards.
Operation Setup Run Units Time time taken time taken time taken
time time taken for for 8 boards for 104 for 1000
1 board (mins) boards(mins) boards(mins)
(Mins)
Artwork Generation 29 0 29 29 29 29
Inspect & Shear 20 0.5 20.5 20.5 26.5 82.5
IMAGE 10 0.5 10.5 10.5 16.5 72.5
TRANSFER
Manual drill 15 0.08 55 335 4175 40015
CNC Drill' 240 0.004 242 256 448 2240
Metallization 10 0.75 10.75 10.75 19.75 103.75
Dry Film
Photoresist
1. Panel Prep 5 0.2 5.2 5.2 7.6 30
2. Laminate & 20 2 22 22 46 270
Expose
3. Develop 20 0.2 20.2 20.2 22.6 45
Electroplate 25 8.5 33.5 33.5 135.5 1087.5
Strip DFPR 5 0.2 5.2 5.2 7.6 30
Etch & Tin Strip 10 0.2 10.2 10.2 12.6 35
Solder mask 45 1.5 46.5 46.5 64.5 232.5
Solder Dip 30 0.5 30.5 30.5 36.5 92.5
Profile

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Punch Press 50 1 51 58 154 1050
CNC Router 150 0.5 150.5 154 202 650
Inspect, Test, Pack 45 1.5 46.5 57 201 1545
Total labor time in 396.55 615.05 1227.65 6545.25
minutes
Total labor time in 6.6 10.3 20.5 109.1
hours

The process analysis shows that there are two options for drilling i.e., manual or CNC drilling. Also, there
are two options for punch press i.e., manual or CNC. The faster of the two options should be chosen. The
analysis above shows that when the order size is small (for e.g.: 1 board), manual drilling is faster and
when the order size is large (for eg: 8 boards), CNC is faster.

Same is the observation for the use of punch press vs CNC press. When the order size is 200+, use CNC
otherwise manual.

Analysing Bottlenecks and shifts of bottlenecks: Bottleneck of a process depends on the slowest step of
that process. Here, let us find the top two slowest steps for a sample order of size 1,8,104, and 1000.

1 board order: Manual drilling (55 minutes) and punch press (51 minutes)

8 board order: Drilling (335 minutes if manual drill is used and 256 minutes if CNC is used) and punch
press (58 minutes-considering manual press is used)

104 board order: Drilling (448 minutes-considering CNC operation) and CNC router (202 minutes)

1000 board order: Drilling (2240 minutes- considering CNC operation) and CNC router (650 minutes)

The numbers above are showing that the drilling operation is the slowest step and CNC routing/ punch
press is the second slowest step in the entire production process.

During the production process, the addition of reworked boards to certain stages might cause these
stages to become overloaded, slowing down their pace compared to the drilling step. Consequently, the
bottleneck could shift from the drilling step to the stages where reworked boards have been
introduced. This change could impact the overall throughput and efficiency of the production process .

Analysing Capacity: Capacity of the production will depend on the flow rate through the bottleneck of
the plant. Let us analyse the capacity of the plant on the basis of speed through the bottleneck.

Considering 8 hours in a work day and 21 working days and considering the full utilisation of drilling
machines, let us see how many orders can be processed of order size 1, 8, 104, 1000.

Order Order size Order size Order size

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 size 1 8 104 1000
Time taken in
55 335 448 2240
mins
Number of = 8 x 60/
such orders order size
that can be 8.7 1.4 1.1 0.2
processed in
a day
=21 x
No of Orders
Number
that can be
of orders 183.3 30.1 22.5 4.5
processed in
processe
21 days
d in a day

There were three orders with order size 1000 or 1000+ and one order of 800 size in the month of
September, while the capacity to handle such orders is 4.5. Assuming the bottleneck drilling time for
order size 800 is approximately similar to the order size of 1000, we can see that CNC drilling will be
almost fully utilised for bigger orders (order size 800,1000,1000,1050). Hence, it is difficult to
accommodate other all other orders of size 100-252. There are 8 such orders. Processing of such 8
orders will require approximately 9+ work days of time.

Hence, by accepting bigger orders without analysing the bottleneck capacity, Donner company is
taking orders beyond the capacity of the factory.

Exhibit

Analysis of product process Matrix: Analysis of the order size and the number of orders shows us that
almost 75% of the orders are of size smaller than 20 and around 10% volumes are larger than 150 and
only a few with 1000+ size.

The case mentions many instances which tell us that the donner company is running a job shop. Such
mentions were:

a. Employees are not specialised and are highly cross trained and they handle diverse range of
tasks
b. Production and scheduling are highly complex and customer requirements vary considerably.
c. Most orders are smaller than 20.

Hence, when Donner company is accepting a larger order with size 1000, such orders cannot be handled
efficiently by donner company because, being a job shop, it neither has the specialised labour force for
each step nor efficient specialised machines as compared to the other companies which might be doing
batch production more efficiently.

By accepting the larger orders, it is entering into the inefficient side of the product process matrix.

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 Figure 4: Product process matrix for Donner company

Hence, Donner need to stick to the core production volume and variety target needed for a job shop.

Based on the analysis given above, we can now answer the questions that were raised in the case:

Major problems faced by Donner Company:

a. Bottleneck uncertainties: After calculating the bottlenecks, it is clear that drilling is a bottleneck
step. Sometimes bottleneck could shift from the drilling step to the stages where reworked
boards have been introduced because reworked boards to certain stages might cause these
stages to become slower than the drilling stage. Hence, extra care should be given to the speed
of the steps while introducing a rework piece to the production line.

b. Shipment delay: After analysing the capacity constraints from page number 5 analysis, it seems
that by working on the larger orders, the company might not have capacity to work on all the
smaller orders. Hence, this could lead to the delay in production and shipment.
c. Unsure about productivity: In a job shop, it cannot be accepted that all the machines and
people will be fully utilised all the time. The volume of production is low and the nature of work
and demand is highly variable. Hence, the capacity utilisation cannot be very high. However, by
analysing the bottlenecks, it is possible to estimate approximately how much orders can be
produced.
d. Quality problems: This can be tackled by asking for the right specifications about the job at the
bidding step. Also, since the company has accepted more orders than the capacity, it is possible
that higher workload in bottleneck areas is leading to quality issues. Additionally, the quality
should be a high priority in the bottleneck steps. A small quality problem in bottleneck steps will
lead to slower overall production and more rework again at the bottleneck step.
e. Rework: This can also be tackled by asking for the right specifications about the job at the
bidding step. Also, if the quality is improved, the rework will be reduced.
f. Dilemma whether they should bid only for low volume and reject large orders or continue taking
both order types. If Donner company wants to continue accepting larger order along with the

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small orders, they should introduce a separate production line for batch production for larger
volumes and operate in that line with highly specialized labour and machinery.
If the company doesn’t want to invest in separate production line, then the company should
accept the orders with order sizes suitable for a job shop type of production unit.