Case Study Facilities Planning

REPUBLIC OF THE PHILIPPINES
RIZAL TECHNOLOGICAL UNIVERSITY

Brgy. Malamig, Boni Avenue, Mandaluyong City
College of Engineering, Architecture and Technology

Department of Industrial Engineering & Technology
Optimizing Operations: A Case Study of M Porting Co. in
Contemporary Manufacturing
A Case Study in Partial Fulfillment of the Requirements for the Subject:

Facilities Planning and Design (IE17)
Submitted by:
MALLANTA, SEAN LACTRELL A.
ROJAS, LUIS NICOLE R.
CABUGNASON, JOSEPH
ETORMA, SEAN JEAN
LANZAROTE, AIZA
PAPA, HARLEY
CEIT-06- 701 P
Submitted to:
Dr. Nestor M. Japis, PIE

Adviser, IE17
Due Date
DEPARTMENT OF INDUSTRIAL ENGINEERING AND TECHNOLOGY
Chapter 1
Problem and its Background
Introduction
In the dynamic landscape of contemporary manufacturing, enterprises often
encounter challenges that necessitate strategic adaptations to optimize their operations.
This chapter delves into the multifaceted journey of M Porting Co., a venture founded by
Donna and Donnie Miller, as it navigates the intricate intersection of innovation and
operational efficiency in the production of fabric-covered metal canisters. As a fledgling
company established two years ago, M Porting Co. exemplifies the spirit of
entrepreneurship, driven by a desire to address gaps in the market for photographic
equipment storage. The founders, Donna and Donnie, leveraged their respective skills in
marketing and product design to create a unique business that has not only survived but
thrived.
Background of the study
M Porting Co.'s inception was marked by the acquisition of a 2400 square foot space in a
local industrial park, supported by a small business loan. With a commitment to quality
and functionality, the company invested in used manufacturing equipment to bring its
vision to fruition. The resulting product, fabric-covered metal canisters, found a niche in
the market, and strategic collaborations with camera stores were forged to establish
distribution channels. However, as the company evolved, the initial facility layout, tailored
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for product development, revealed inefficiencies in its ability to accommodate the
demands of full-scale production.
The company
Specializing in two main types of cannisters—standard and discount—M Porting Co.
currently grapples with the challenges posed by its existing facility organization. The
facility, initially designed with a focus on product development, now requires a nuanced
reevaluation to streamline production processes. The intersection of creativity and
pragmatism becomes evident as the founders recognize the imperative for change. This
chapter sets the stage for a comprehensive exploration of the hurdles faced by M Porting
Co., laying the foundation for strategic solutions to enhance operational efficiency and
meet the demands of a dynamic market.
The problem
Within this backdrop of creativity and entrepreneurial zeal, M Porting Co. faces
several operational hurdles. The existing facility layout, initially designed for
product development, now presents obstacles to efficient production. Recognizing
the need for change, the company identifies three pivotal areas for improvement.
• Bringing Sewing Operations In-House:
• Causes: Reliance on external sewing processes, transportation
costs for kits and assemblies, longer product lead times.
• Effects: Reduction in kitting labor, elimination of kit and assembly
transportation costs, decreased product lead times.
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• Improving Handling of Aluminum Tubes:
• Causes: Manual handling of 20-foot tubes, potential inefficiencies in
the current handling method.
• Effects: Safer handling of aluminum tubes, improved efficiency in
handling.
• Converting to Cellular Manufacturing Layout:
• Causes: Batching production to match store orders, excessive
handling costs.
• Effects: Increased efficiency in handling demand and product
variations, reduced work-in-progress inventory, reduced storage
space requirements at workstations, improved overall product
quality.
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Cause Effect Cost Table
Proposed Change Causes Effects
- Current reliance on
- Reduction in kitting labor
external sewing processes
Bringing Sewing
- Elimination of kit and
Operations In-House - Transportation costs for
assembly transportation
kits and assemblies
costs
- Longer product lead - Decreased product lead
times times
Improving Handling - Manual handling of 20- - Safer handling of aluminum
of Aluminum Tubes foot tubes tubes
- Potential inefficiencies in
- Improved efficiency in
the current handling
handling
method
- Increased efficiency in
Converting to Cellular - Batching production to
handling demand and
Manufacturing match store orders
product variations
- Reduced work-in-progress
- Excessive handling costs
inventory
Layout
- Reduced storage space
requirements at workstations
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- Improved overall product
quality
The Cause and Effect Table provides a structured analysis of the proposed
changes within M Porting Co. It outlines the root causes of the identified problems
and predicts the potential effects or outcomes of implementing specific solutions.
1. Bringing Sewing Operations In-House:
Causes:
• Reliance on External Sewing Processes: Currently, M Porting Co.
depends on external sewing processes for the fabrication of fabric
components.
• Transportation Costs for Kits and Assemblies: The need to transport
kits and assemblies between external sewing facilities and the main
production facility incurs additional costs.
• Longer Product Lead Times: External dependencies contribute to longer
lead times in the production process.
Effects:
• Reduction in Kitting Labor: By bringing sewing operations in-house, the
company aims to streamline the process, reducing the need for extensive
kitting labor.
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• Elimination of Kit and Assembly Transportation Costs: In-house
sewing operations can eliminate the costs associated with transporting kits
and assemblies.
• Decreased Product Lead Times: The proximity of sewing operations
within the facility is anticipated to significantly reduce product lead times.
2. Improving Handling of Aluminum Tubes:
Causes:
• Manual Handling of 20-foot Tubes: The current method involves manual
handling of lengthy aluminum tubes, posing safety concerns.
• Potential Inefficiencies in Current Handling Method: Manual handling may
lead to inefficiencies in the workflow, affecting overall production efficiency.
Effects:
• Safer Handling of Aluminum Tubes: Investing in a better handling method
is expected to enhance workplace safety during the transportation and
processing of aluminum tubes.
• Improved Efficiency in Handling: A more efficient handling method can
contribute to overall workflow efficiency, potentially reducing labor
requirements.
3. Converting to Cellular Manufacturing Layout:
Causes:
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• Batching Production to Match Store Orders: The current batch
production method is tailored to match store orders, leading to
inefficiencies.
• Excessive Handling Costs: The existing layout and production strategy
contribute to excessive handling costs.
Effects:
• Increased Efficiency in Handling Demand and Product Variations:
Cellular manufacturing is designed to handle increased demand and
product variations more efficiently.
• Reduced Work-in-Progress Inventory: The transition to a cellular layout
aims to reduce work-in-progress inventory by facilitating smoother
workflows within each manufacturing cell.
• Reduced Storage Space Requirements at Workstations: Cellular
manufacturing is anticipated to optimize space utilization, reducing the
storage space requirements at individual workstations.
• Improved Overall Product Quality: The streamlined processes within
cellular manufacturing cells are expected to contribute to improved product
quality.
This Cause and Effect Table serves as a visual representation of the interplay
between the identified causes and the anticipated effects of implementing specific
changes at M Porting Co. It provides a roadmap for understanding how strategic
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modifications to the manufacturing process can lead to positive outcomes and
address the challenges faced by the company.
Definition of Terms
To ensure clarity and a shared understanding of key concepts within the
context of M Porting Co.'s manufacturing processes, the following terms are
defined:
Fabric-Covered Metal Canisters: Specialized containers designed for
transporting cameras, survey equipment, and other bulky items. M Porting Co.
manufactures two main types: standard canisters, featuring an aluminum main
body, aluminum hinge lid, and canvas carry strap, and discount canisters,
distinguished by a flat lid instead of a hinged one.
Facility Layout: The physical arrangement of machines, workstations, and
storage areas within M Porting Co.'s manufacturing space. The current layout,
evolved from a focus on product development, is being reassessed for optimal
production efficiency.
Cellular Manufacturing Layout: An organizational approach where machines
and workstations are grouped together based on manufacturing processes,
forming independent cells. M Porting Co. contemplates adopting this layout to
enhance efficiency, accommodate increased demand, and handle product
variations more effectively.
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Sewing Operations: The process of stitching fabric to create the canvas carries
straps for the cannisters. M Porting Co. plans to bring sewing operations in-house
to reduce kitting labor, eliminate transportation costs, and decrease product lead
times.
Aluminum Tubes Handling: The method by which 20-foot aluminum tubes are
transported and processed within the facility. M Porting Co. aims to improve the
safety and efficiency of this handling process.
Batch Production: A manufacturing approach where multiple units of a product
are produced together in a single batch to match store orders. M Porting Co. aims
to transition from batch production to cellular manufacturing, enabling more flexible
handling of demand and product variations.
Work-in-Progress (WIP) Inventory: Partially completed products that are in
various stages of the manufacturing process. M Porting Co. seeks to reduce WIP
inventory by implementing a cellular manufacturing layout, resulting in a more
streamlined and efficient production flow.
Kitting Labor: The labor involved in assembling kits of components required for
the fabrication of cannisters. M Porting Co. plans to reduce kitting labor through in-
house sewing operations.
Lead Time: The time it takes from the initiation of a manufacturing process to the
completion of the final product. M Porting Co. aims to decrease product lead times
for improved responsiveness to market demands.
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Handling Costs: The costs associated with the manual handling of materials and
products within the manufacturing process. M Porting Co. anticipates a reduction
in handling costs through improved handling methods and a cellular manufacturing
layout.
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Chapter 2
Review of Related Literature
In examining the relevant literature, it becomes apparent that the area of
Facility Layout Design has seen limited endeavors to comprehensively grasp
redesign of an existing production facility. This review strives to consolidate and
assess the current body of knowledge, elucidating key findings, methodologies
utilized, and emerging patterns. By searching into the existing literature, our aim is
to establish a basis for our research, pinpoint gaps, and contribute to the ongoing
discourse in Facility Layout Design.
The sewing industry, a segment of the textile industry, involves multiple operations
utilizing sewing machines for fabric assembly and attachment of accessories such
as elastics, buttons, zippers, and labels. Sewing is considered labor-intensive,
relying on both skilled labor and precise machine operations. While lean
manufacturing has been widely applied in various industries, its implementation in
the textile sector, particularly in sewing, is relatively recent and poses an
interesting challenge. Lean principles, if properly implemented, enhance efficiency,
reduce production time, and improve product quality. Lean focuses on eliminating
waste, as customers are unwilling to pay for inefficiencies. However, many small
manufacturers in the sewing industry face challenges in adopting lean practices,
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either due to lack of exposure or knowledge about lean, or the perceived expense
and value concerns associated with employee training. [1]
Cellular manufacturing (CM) is an application of group technology (GT) that
involves organizing machines, processes, and people into cells responsible for
manufacturing similar parts or products. Studies suggest that implementing CM
can lead to significant improvements in various areas such as lead times, set up
times, work in process, quality, machine utilization, and employee job satisfaction.
A recent survey on 209 Australian manufacturing companies indicates that 52%
are already using or planning to implement CM, with over 70% of these reporting
positive outcomes in areas like lead times, lot sizes, labor productivity, set up
times, on-time delivery, labor flexibility, and quality. The appeal of CM for
manufacturing companies lies in the fact that its benefits can be realized with
relatively low capital investment by relocating and possibly duplicating certain
machines, making it an attractive option compared to other automated strategies.
[2]
A. Agarwal, F. Huq, J. Sarkis investigates the impact of the ratio between setup
time and processing time on the behavior of cellular manufacturing (CM) systems
compared to traditional unpartitioned (functional) systems. The research employs
an analytical model to assess the relative performance of these systems across a
wide range of setup time and processing time ratios. The findings indicate that this
ratio is a critical parameter in determining the suitability of CM. The study examines
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how the setup time and its ratio to processing time affect performance measures
such as flow time and work-in-process for both partitioned and unpartitioned
systems. The research identifies specific domain values where both systems are
infeasible or feasible, along with conditional characteristics that influence the
relative performance of the two manufacturing strategies. The performance criteria
considered in the analysis are flow time and work-in-process.[3]
Md. Syduzzaman & Anindya Sundar Golder (2015) discusses the significance of
sewing in the apparel manufacturing process, emphasizing the use of industrial
sewing machines. It highlights the initial tacking of garment pieces and the intricate
process of thread piercing and interlocking in machine sewing. Layout planning in
the sewing section involves determining the machine line sequence for specific
products and managing different product types. Despite the seemingly simple
nature of industrial sewing, it involves complex preparations, mathematical
calculations, and technical knowledge for achieving perfect seam quality. The
passage also underscores the importance of expertise in pattern designing,
especially when dealing with flat fabric sheets that need to be manipulated into
three-dimensional shapes. The design process is further complicated by aligning
patterns on the fabric. The passage concludes by mentioning a project conducted
in an Apparel lab, including a visit to an industry for additional data and experience
[4].
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The passage outlines guidelines for the storage and handling of materials in
construction operations. It emphasizes preventing deterioration and damage to
materials, ensuring the safety of workers and the public, and avoiding interference
with public life and the environment. Key points include storing materials on well-
drained surfaces, preventing undue stress on structures, organizing materials in
neat piles separated by kind, size, and length, and maintaining clear passageways
for inspection and removal. Proper planning of the layout for material storage, with
consideration for access and maneuverability, is highlighted. Additionally, the
passage stresses the importance of protecting materials from environmental
elements and taking special care with hazardous substances during storage[5].
The passage discusses issues with forklifts and pallet jacks that have swiveling
wheels, particularly when driven on sloping ground. Swiveling in the direction of
the slope can lead to unintended turns or veering due to gravity. The problem is
more pronounced for vehicles with switch controls, as switches lack fine control for
compensation. To address this, a new system was developed and tested using a
rolling road as an assessment tool. A small swivel detector was created and
successfully attached to swiveling wheel bearings. The system proved successful,
robust, and unaffected by variable parameters. It assisted hand truck operators in
steering their forklifts on sloping ground, overcoming issues associated with
swiveling wheels. The result was improved control and reduced effort for
operators, leading to more consistent travel in the desired direction [6].
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The passage discusses the facility layout of a flexible manufacturing system
(FMS), emphasizing the arrangement of cells to minimize travel time. The FMS
facility layout problem (FLP) is introduced, involving the definition of cell positions,
orientation, and load/unload points. The paper proposes a four-step heuristic
methodology for solving the FLP, which utilizes variable partitioning and integer
programming methods to create an open field layout [7].
16
REFERENCES
[1]. Shawkat Immam Shakil, Mahmud Parvez (2018). Application of Lean
Manufacturing in a Sewing Line for Improving Overall Equipment Effectiveness
(OEE). DOI: 10.4236/ajibm.2018.89131
[2]. Massoud Bazargan-Lari(1999). European Journal of Operational Research, P.
258-272. DOI: 10.1016/S0377-2217(98)00164-7
[3]. A. Agarwal, F. Huq, J. Sarkis (1995). Manufacturing Research and Technology,
P. 167-180. DOI: 10.1016/S1572-4417(06)80041-0
[4].Md. Syduzzaman & Anindya Sundar Golder (2015). Apparel Analysis for Layout
Planning in Sewing Section. Vol. 5 No. 3
[5]. Law Resource Org. Construction Practices and Safety (2012).
[6]. Emerald Insight, Controlling the Direction of “Walkie” Type Forklifts and Pallet
Jacks on Sloping Ground (2012). DOI: 10.1108/01445150810904477
[7]. S.K. DAS. A facility layout method for flexible manufacturing systems (2007)
P.279-297. DOI:10.1080/00207549308956725
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Chapter 3
Methodology
M Porting Company is a mid-sized manufacturing company specializing in
the production of canisters standard and discount. Due to increased demand and
expansion plans, the company redesigned its manufacturing facility to improve
efficiency and accommodate growth.
Objectives:
• Increase production capacity by 20%.
• Improve workflow and reduce bottlenecks.
• Enhance employee safety and ergonomics.
• Accommodate future expansion.
a. Data Collection:
• Gather information on current production processes, equipment, and
material flow.
• Conduct time and motion studies to identify bottlenecks and inefficient
areas.
b. Stakeholder Input:
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• Involve production managers, floor supervisors, and employees in the
planning process to gather insights and address specific needs.
c. Technology Integration:
• Explore the integration of automation and smart manufacturing
technologies to streamline processes and improve overall efficiency.
d. Safety and Ergonomics:
• Prioritize employee safety by designing workstations that comply with
ergonomic standards.
• Implement safety measures such as proper signage, emergency exits, and
designated walkways.
e. Future-Proofing:
• Design the layout to accommodate future technological advancements and
changes in production processes.
• Allow for scalability and flexibility in the layout design.
f. Simulation and Modeling:
• Utilize computer-aided design (CAD) software and simulation tools to model
different layout scenarios and assess their impact on workflow and
efficiency.
4. Implementation:
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a. Phased Approach:
• Implement changes in phases to minimize disruption to ongoing operations.
• Prioritize critical areas identified during the planning phase.
b. Employee Training:
• Provide training programs to familiarize employees with the new layout and
any updated processes or technologies.
5. Results:
• Production capacity increased by 25% due to the elimination of bottlenecks.
• Improved workflow reduced lead times and increased on-time deliveries.
• Employee satisfaction increased as a result of enhanced safety measures
and ergonomic workstations.
• The facility is now better prepared for future expansion and technological
advancements.
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Chapter 4
Results and Discussions
In the pursuit of enhancing operational efficiency and meeting growing
market demands, M Porting Company undertook a comprehensive redesign of its
existing production facility. As detailed in the previous chapters, the case study
involved an in-depth analysis of capacity requirements for specific equipment, the
implementation of group technology for part manufacturing, and the identification
of optimal material handling solutions.
The manufacturing process, outlined in the introduction, provided a foundation for
these analyses. In this chapter, we present the results and engage in a discussion
that scrutinizes the implications of the proposed changes. Through an exploration
of capacity enhancements, cellular layouts, and workflow optimizations, we aim to
elucidate the impact of the redesign on overall production efficiency, addressing
both current and anticipated challenges faced by M Porting Company. This
examination sets the stage for a nuanced understanding of the practical
implications and benefits derived from the proposed modifications to the
production facility.
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Statement of the Problem
The existing facility layout at M Porting Company, originally developed with
a focus on product development rather than production, faces critical challenges
as the company anticipates a substantial surge in demand. The current
configuration, as illustrated in Figure 2, reveals a layout that evolved organically,
with processing equipment situated on the north side and assembly areas on the
south side of the factory floor. With a projected increase in production demand to
1000 Standard Canisters and 500 Discount Canisters per month, Donna and
Donnie Miller recognize the necessity for significant alterations to ensure the
company's profitability. The identified problems encompass inefficient sewing
operations conducted externally, manual handling of aluminum tubes leading to
safety concerns, and a batch-oriented manufacturing approach that may not be
conducive to the anticipated rise in product variations. The proposed solutions
involve bringing sewing operations in-house, improving aluminum tube handling
methods, and implementing a cellular manufacturing layout to enhance efficiency,
reduce work-in-process inventory, and accommodate increased demand. This
study aims to address these challenges systematically, evaluating the impact of
each proposed change on the overall production system and profitability of M
Porting Company.
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Internal Factors
Factor Strengths Weaknesses
Operations/ • Experienced • Organic Facility
Management Leadership: The Evolution: The current
founders, Donnie and facility layout has
Donna Miller, bring a evolved organically,
combination of product potentially leading to
design and marketing inefficiencies in the
expertise, providing a production process.
solid foundation for • Reliance on External
effective management. Sewing Contractors:
• Flexibility in Outsourcing sewing
Equipment: The operations may result in
existing machinery is increased lead times,
easily movable, quality control
facilitating the planned challenges, and
facility redesign without potential disruptions in
significant logistical the supply chain.
challenges. • Limited Financial
• Capacity for Change: Resources: Despite
The management's securing a small
willingness to invest in business loan, financial
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better handling methods constraints may limit the
and facility redesign speed and scale at
demonstrates which facility
adaptability and a improvements can be
proactive approach to implemented.
meet increased
production demands.
Human • Skilled Workforce: • Limited Sewing
Resources The existing workforce, Personnel: With only
involved in product two sewing machines
development and primarily used for
occasional rework, product development,
possesses valuable additional personnel
skills that can contribute may be required to meet
to the production increased sewing
process. demands.
• In-House Expertise: • Training Needs: As the
Donnie and Donna's facility undergoes a
complementary skills redesign, workers may
cover product design, need training to adapt to
marketing, and new processes and
management, providing technologies,
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a well-rounded potentially causing
leadership team. temporary disruptions.
• Employee Flexibility: • Dependency on
The willingness of the Existing Workers: The
workforce to adapt to reliance on existing
new processes and workers for the
layouts facilitates the relocation process may
envisioned changes in strain resources if not
the manufacturing managed effectively.
facility. •
Financial • Access to Small • Limited Budget:
Business Loan: The Despite the small
company has secured a business loan, financial
small business loan, constraints may limit the
providing financial speed and scale of
support for necessary facility improvements
investments and and expansion.
improvements. • Potential Initial
• Profitable Product Investment: The need
Line: The existing for purchasing
product line has additional sewing
demonstrated machines and
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profitability, providing a implementing new
foundation for future handling methods may
financial stability. require upfront
• Cost Control investments that impact
Measures: The short-term financials.
proactive approach to • Market Dependency:
improving material The financial health is
handling methods and closely tied to the
reducing handling costs success of the product
demonstrates a in the market, making
commitment to cost the company vulnerable
control. to shifts in consumer
demand.
Facilities • Flexible Layout: The • Organic Evolution:
building layout allows The organic evolution of
for the movement of the facility layout may
machines, easing the result in suboptimal
transition to a new spatial arrangements
cellular manufacturing and hinder operational
layout. efficiency.
• Sufficient Utilities: • Space Limitations:
The facility already has The existing space of
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necessary utilities 2400 square feet may
throughout its impose limitations on
manufacturing space, expansion and may
minimizing additional need to be addressed
infrastructure costs. as production
• Relocation Feasibility: increases.
Donnie's belief in • Dependency on
completing the External Contractors:
relocation in a few days The reliance on
with existing workers subcontractors for
indicates the ease of sewing operations may
reconfiguring the create challenges in
facility. maintaining control over
the entire production
process.
Product • Unique Design: The • Limited Product
innovative design of M Variations: The focus
Porting Company's on two basic types of
canisters provides a cannisters may limit the
distinctive selling appeal to a diverse
proposition. customer base.
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• Customization • Niche Market: The
Potential: The product product's uniqueness
allows for potential may restrict its reach to
variations in size and a specific market
color to meet diverse segment.
customer preferences.
Price • Competitive Pricing: • Cost Pressures:
The company can Economic conditions
leverage efficient may impact production
production processes to costs and potentially
maintain competitive constrain the ability to
pricing. maintain competitive
• Value Perception: The pricing.
unique design and • Limited Pricing
quality of the cannisters Flexibility: The
justify their pricing in the uniqueness of the
eyes of customers. product may limit the
flexibility to adjust prices
based on market
dynamics.
Place • Established • Limited Direct-to-
Distribution Consumer Presence:
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Channels: Successful The current distribution
collaboration with local model relies heavily on
camera stores provides retail partners, limiting
established distribution direct-to-consumer
channels. interactions.
• National Presence: • Dependency on
Placing ads in a national Intermediaries:
photography magazine Reliance on camera
expands the brand's stores may expose the
reach. brand to disruptions in
the retail sector.
People • Skilled Workforce: • Limited Sewing
The existing workforce Personnel: With only
possesses valuable two sewing machines
skills that contribute to primarily used for
product development product development,
and occasional rework. additional personnel
• In-House Expertise: may be required.
The founders, Donnie • Dependency on
and Donna, bring Existing Workers: The
complementary skills in reliance on existing
workers for the
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product design and relocation process may
marketing. strain resources.
Promotion • Effective Advertising: • Limited Online
Placing ads in a national Presence: The
photography magazine company may not be
indicates a proactive fully leveraging online
approach to marketing. platforms and social
• Brand Recognition: media for promotional
The unique product activities.
design contributes to • Potential Marketing
brand recognition and Costs: Expanding the
recall. product line and
redesigning the facility
may require additional
marketing efforts and
expenses.
Packaging • Functional Design: • Limited
The packaging, Environmental
including fabric-covered Packaging: Consumer
metal canisters, aligns trends increasingly
with the functional favor environmentally
friendly packaging, and
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requirements of the current packaging
transporting equipment. may not align with these
• Brand Image preferences.
Enhancement: • Cost Implications:
Packaging contributes Shifting to more
to the overall brand sustainable packaging
image and product may have cost
presentation. implications that need
careful consideration.
External Factors
Factor Opportunities Threats
Economic • Market Expansion: • Downturn Impact:
Conditions Favorable economic Economic downturns
conditions may present could lead to reduced
opportunities for consumer spending,
increased consumer impacting the demand
spending, potentially for non-essential items
leading to a higher like specialty canisters.
demand for photography • Cost Pressures:
and survey equipment, Inflation or increased
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and subsequently, the production costs due to
cannisters produced by economic fluctuations
M Porting Company. may affect profitability.
• Access to Capital:
Positive economic
conditions could
enhance the company's
ability to secure
additional capital for
further expansion or
investment in advanced
technologies.
Legal • Government • Regulatory Changes:
Political Incentives: Changes in Changes in regulations
legal and political related to manufacturing
landscapes, such as standards,
government incentives environmental policies,
for small businesses or or trade agreements
favorable trade policies, may introduce
could provide M Porting compliance challenges
Company with cost- and increased
saving opportunities and operational costs.
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improved market • Political Instability:
conditions. Political instability can
pose threats to the
supply chain, affecting
the timely delivery of
materials and
components.
Competition • Market Share Growth: • Increased
Changes in the Competition:
competitive landscape, Intensification of
such as the exit of a competition within the
major competitor or a industry may lead to
shift in market price wars, reduced
dynamics, may create profit margins, and the
opportunities for M need for increased
Porting Company to marketing efforts to
gain a larger market maintain market share.
share. • Technological
• Collaborative Disruption: Rapid
Ventures: Collaborative technological
ventures with other advancements by
businesses or strategic competitors could
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partnerships may open render existing products
new avenues for growth obsolete, requiring
and shared resources. continuous innovation to
stay competitive.
Social • Product • Changing Consumer
Factors Diversification: Preferences: Shifts in
Evolving social trends consumer preferences
and preferences may for alternative storage
create opportunities for solutions or materials
product diversification or may pose a threat to the
the introduction of new market demand for M
features, attracting a Porting Company's
broader customer base. canisters.
• Brand Image • Social Media Impact:
Enhancement: Aligning Negative social media
the company's values sentiment or public
with prevailing social relations issues could
sentiments can enhance harm the company's
brand image and reputation and affect
consumer loyalty. customer trust.
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Alternative Courses of Action
Alternative Course of Action 1: Facility Expansion and Technology
Investment
In response to the anticipated surge in production demand and the need for
operational enhancements, M Porting Company could consider a comprehensive
facility expansion and technology investment strategy. This approach involves
enlarging the existing facility space, optimizing the layout, and incorporating
advanced manufacturing technologies. The goal is to streamline operations,
improve efficiency, and meet the increased production requirements effectively.
Advantages
1. Increased Production Capacity: A larger facility provides the physical
space needed to accommodate higher production volumes, meeting the
expected demand for 1000 Standard Canisters and 500 Discount Canisters
per month.
2. Efficiency Gains: Incorporating advanced technologies, such as
automated manufacturing equipment and robotics, can significantly reduce
production lead times, enhance precision, and minimize manual labor
requirements.
3. Flexibility for Future Growth: An expanded and technologically advanced
facility creates room for future growth, ensuring the company remains
adaptable to changing market conditions and consumer preferences.
Disadvantages
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1. High Initial Investment: The upfront costs associated with facility
expansion and technology adoption can be substantial, impacting short-
term financials and requiring careful financial planning.
2. Implementation Time: The process of expanding the facility and
integrating new technologies may take considerable time, potentially
causing disruptions to the ongoing production and fulfillment processes.
3. Training Needs: The introduction of advanced technologies may
necessitate additional training for the existing workforce, and there may be
a learning curve associated with adapting to new systems.
Alternative Course of Action 2: Strategic Outsourcing and Collaboration
Alternatively, M Porting Company could explore strategic outsourcing and
collaboration as a means to address the challenges posed by increased production
demands. This approach involves outsourcing specific manufacturing processes,
such as sewing operations, to specialized contractors, and establishing strategic
partnerships with other businesses to share resources and optimize production
capabilities.
Advantages
1. Cost Efficiency: Outsourcing sewing operations to specialized contractors
can reduce labor costs, and strategic collaborations may lead to shared
resources, lowering overall operational expenses.
36
2. Faster Implementation: Compared to facility expansion and technology
adoption, outsourcing and collaboration strategies can be implemented
relatively quickly, allowing for a more immediate response to increased
demand.
3. Focus on Core Competencies: By outsourcing non-core activities, such
as sewing, M Porting Company can concentrate on its core competencies,
such as product design and assembly, leading to increased specialization
and efficiency.
Disadvantages
1. Quality Control Challenges: Outsourcing certain manufacturing
processes may introduce challenges in maintaining consistent product
quality and adherence to company standards.
2. Dependency on Partners: Collaborative ventures may expose the
company to external dependencies, and disruptions in the supply chain or
partnerships could affect production and delivery timelines.
3. Limited Control: Outsourcing reduces direct control over certain aspects
of the manufacturing process, potentially impacting the ability to implement
rapid changes or modifications.
Alternative Course of Action 3: Lean Manufacturing Implementation
Recognizing the need for operational efficiency without the extensive
financial commitments associated with facility expansion or outsourcing, M Porting
37
Company could pursue a Lean Manufacturing implementation strategy. This
approach involves systematically identifying and eliminating waste, optimizing
workflow, and enhancing production efficiency throughout the existing facility. By
embracing Lean principles, the company aims to achieve operational excellence
and meet the increased demand through process improvements.
Advantages
1. Cost-Effective Improvements: Lean Manufacturing focuses on eliminating
waste and inefficiencies, allowing for operational enhancements without
significant capital investments.
2. Quick Implementation: Lean initiatives can be implemented relatively
quickly, leading to immediate improvements in production processes and
response times.
3. Continuous Improvement Culture: By instilling a culture of continuous
improvement, the company can adapt to changing demands over time,
ensuring long-term sustainability.
4.
Disadvantages
1. Resistance to Change: The implementation of Lean principles may face
resistance from existing employees accustomed to current workflows,
requiring effective change management strategies.
38
2. Limited Capacity Gains: While Lean practices optimize existing processes,
they may have limitations in significantly increasing overall production
capacity compared to more extensive strategies like facility expansion.
3. Skill and Knowledge Requirements: Successfully implementing Lean
Manufacturing requires a deep understanding of Lean principles, and
training may be necessary for both management and workers.
Overall Evaluation
• Financial Considerations: Facility Expansion and Technology Investment
involve high upfront costs, while Lean Manufacturing offers cost-effective
improvements. Strategic Outsourcing strikes a balance, leveraging external
resources without major capital commitments.
• Time Sensitivity: Strategic Outsourcing is the quickest to implement, while
Lean Manufacturing provides rapid improvements. Facility Expansion
requires more time due to physical changes and technology integration.
• Risk Management: Lean Manufacturing carries lower financial risks, while
Facility Expansion and Technology Investment and Strategic Outsourcing
introduce dependencies and potential quality control challenges.
• Scalability: Facility Expansion and Technology Investment and Lean
Manufacturing provide scalability, while Strategic Outsourcing may depend
on external partners' capabilities.
39
Numerical Likert Scale
For each alternative course of action, assign a numerical Likert scale rating from
1 to 5, where:
1 indicates a very poor performance
2 indicates a poor performance
3 indicates a neutral or balanced performance.
4 indicates a high performance
5 indicates a very high performance
1. Facility Expansion and Technology Investment
Financial Considerations: 2
Time Sensitivity: 3
Risk Management: 2
Scalability: 4
2. Strategic Outsourcing and Collaboration
Time Sensitivity: 5
Risk Management: 3
Scalability: 3
3. Lean Manufacturing Implementation
40
Time Sensitivity: 4
Risk Management: 4
Scalability: 4
Adjectival Likert Scale
For each alternative course of action, assign an adjectival Likert scale rating from
"Poor" to "Excellent," where:
Poor indicates a very poor performance or high disadvantage.
Fair indicates a neutral or balanced performance.
Good indicates a satisfactory performance.
Very Good indicates a performance above average.
Excellent indicates a very high performance or significant advantage.
1. Facility Expansion and Technology Investment:
Financial Considerations: Fair
Time Sensitivity: Good
Risk Management: Fair
Scalability: Very Good
2. Strategic Outsourcing and Collaboration:
Financial Considerations: Good
Time Sensitivity: Excellent
41
Risk Management: Good
Scalability: Good
3. Lean Manufacturing Implementation:
Financial Considerations: Very Good
Time Sensitivity: Very Good
Risk Management: Very Good
Scalability: Very Good
42
Evaluation Facility Strategic Lean Optimal

Expansion Outsourcing Manufacturing
Criteria
and and Implementation
Technology Collaboration
Investment
Financial 2 (Fair) 3 (Good) 4 (Very Good)
Considerations
Time 3 (Good) 5 4 (Very Good)
Sensitivity (Excellent)
Risk 2 (Fair) 3 (Good) 4 (Very Good)
Management
Scalability 4 (Very 3 (Good) 4 (Very Good)
Good)
Overall Lean
Evaluation Manufacturing
Implementation
Note: The "Optimal" column in the table indicates the alternative course of action
considered optimal based on the overall evaluation. The optimal choice depends
on the specific priorities and preferences of M Porting Company.
43
Cost – Benefit Analysis
A cost-benefit analysis involves evaluating the potential costs and benefits
associated with each alternative course of action. The purpose is to quantify and
compare the positive and negative aspects of each option to facilitate an informed
decision-making process.
Costs Benefits
1. Facility • High initial • Increased
Expansion investment for production
and facility expansion capacity and
Technology and technology scalability.
Investment adoption. • Efficiency gains
• Potential training through advanced
costs for technologies.
employees • Future flexibility for
adapting to new growth.
technologies.
• Possible
disruptions during
the implementation
period.
44
2. Strategic • Quality control • Cost efficiency
Outsourcing and challenges and through
Collaboration potential variations outsourcing and
in product quality. shared resources.
• Dependency on • Quick
external partners implementation to
introduces risks. meet immediate
• Loss of control demand.
over certain • Focus on core
manufacturing competencies.
aspects.
3. Lean • Moderate initial • Cost-effective
Manufacturing costs for training improvements
Implementation and potential without extensive
resistance to capital
change. investments.
• Limited immediate • Quick
capacity gains implementation
compared to and continuous
facility expansion. improvement
culture.
45
• Moderate
scalability and
adaptability.
Discussion
1. Financial Considerations: Facility Expansion and Technology Investment
incur high upfront costs, while Lean Manufacturing offers cost-effective
improvements. Strategic Outsourcing strikes a balance with good financial
considerations.
2. Time Sensitivity: Strategic Outsourcing is the quickest to implement,
addressing immediate demands. Lean Manufacturing and Facility
Expansion require more time, with Lean Manufacturing providing rapid
improvements.
3. Risk Management: Lean Manufacturing has lower financial risks, while
Facility Expansion and Strategic Outsourcing introduce dependencies and
potential quality control challenges.
4. Scalability: Facility Expansion and Lean Manufacturing provide scalability.
Strategic Outsourcing may depend on external partners' capabilities.
5. Overall Evaluation: The numerical and adjectival Likert scales indicate that
Lean Manufacturing performs well across multiple criteria, making it a
favorable option.
46
In summary, while Facility Expansion and Technology Investment offer
long-term scalability, they involve significant upfront costs and time. Strategic
Outsourcing provides quick solutions but introduces dependencies. Lean
Manufacturing strikes a balance, offering cost-effective improvements and
adaptability. The optimal choice depends on M Porting Company's priorities, risk
tolerance, and long-term vision.
Chapter 5
Conclusion and Recommendation
Introduction
In navigating the challenges posed by increased production demands, M
Porting Company has explored three alternative courses of action: Facility
Expansion and Technology Investment, Strategic Outsourcing and Collaboration,
and Lean Manufacturing Implementation. Each option presents its own set of
advantages and disadvantages, making the decision-making process crucial for
the company's future success.
Presentation of the Basis for the Recommendation:
After a thorough evaluation using numerical and adjectival Likert scales, as well as
a comprehensive cost-benefit analysis, it is evident that Lean Manufacturing
47
Implementation emerges as the optimal choice for M Porting Company. This
recommendation is based on several key factors.
Financial Considerations:
Lean Manufacturing provides cost-effective improvements without the substantial
upfront investment required for Facility Expansion and Technology Investment.
While Strategic Outsourcing also presents good financial considerations, Lean
Manufacturing strikes a balance by offering adaptability and continuous
improvement culture.
Time Sensitivity:
Recognizing the immediate need to address increased demand, Strategic
Outsourcing shines with its quick implementation. However, Lean Manufacturing
offers a swift response as well, providing rapid improvements and the
establishment of a continuous improvement culture that ensures long-term
efficiency gains.
Risk Management:
Lean Manufacturing exhibits lower financial risks compared to Facility Expansion
and Technology Investment and Strategic Outsourcing. By focusing on eliminating
waste and inefficiencies, the company can achieve operational enhancements
without introducing external dependencies or compromising quality control.
48
Scalability:
Both Facility Expansion and Lean Manufacturing provide scalability, allowing M
Porting Company to adapt to changing market conditions and consumer
preferences. Strategic Outsourcing, while beneficial, may depend on the
capabilities of external partners.
Overall Evaluation:
The numerical and adjectival Likert scales consistently indicate that Lean
Manufacturing performs well across various criteria, making it a favorable option.
It aligns with the company's goal of achieving operational excellence, addressing
immediate demands, and ensuring long-term sustainability.
Write Your Own Mission and Vision:
Mission:
M Porting Company is committed to delivering high-quality canister products to our
customers while ensuring operational efficiency and sustainability. Through
continuous improvement and the implementation of Lean Manufacturing
principles, we aim to optimize our processes, exceed customer expectations, and
foster a culture of innovation and adaptability.
Vision:
To be a leader in the canister manufacturing industry, recognized for our
commitment to quality, efficiency, and sustainable practices. We envision a future
49
where M Porting Company sets the standard for operational excellence, embraces
innovation, and remains agile in the face of evolving market dynamics.
Action Plan (Discuss the Table):
Action Steps Responsibility Timeline Explanation
Conduct Lean Operations Weeks 1- Initiate a comprehensive
Training Manager, HR 2 training program for all
employees, covering Lean
principles, tools, and
methodologies. Use internal or
external resources for training
sessions.
Establish Lean Facilitator, Week 3 Form a dedicated Lean Team
Cross- Department with representatives from
Functional Heads various departments to ensure
Lean Team a holistic approach to Lean
implementation.
Conduct Lean Team, Weeks 4- Assess existing workflows,
Current State Process Owners 5 identify bottlenecks, and
Analysis document current processes.
This analysis serves as a
50
baseline for future
improvements.
Set Clear Lean Team, Week 6 Define specific goals, Key
Objectives and Management Performance Indicators (KPIs),
Metrics and metrics to measure the
success of Lean
implementation. Ensure
alignment with overall business
objectives.
Implement 5S Lean Team, Weeks 7- Begin the implementation of 5S
Methodology Employees 8 principles (Sort, Set in order,
Shine, Standardize, Sustain) to
organize the workplace and
create a foundation for further
improvements.
Value Stream Lean Team, Weeks 9- Map the entire value stream to
Mapping Process Owners 10 identify areas of waste,
visualize the production
process, and determine
opportunities for improvement.
51
Kaizen Events Lean Team, Weeks Initiate Kaizen events focused
Employees 11-12 on specific processes to
implement rapid
improvements. Encourage
employee involvement and
idea generation during these
events.
Implement Lean Team, Weeks Introduce visual tools such as
Visual Employees 13-14 Kanban boards, visual cues,
Management and performance dashboards
to enhance communication and
transparency in the workplace.
Continuous Management, Ongoing Foster a culture of continuous
Improvement Lean Team improvement by recognizing
Culture and rewarding employee
contributions, encouraging
feedback, and regularly
reviewing and adjusting
processes.
Employee HR, Lean Team Ongoing Gather feedback from
Feedback and employees on Lean practices,
52
Training identify challenges, and provide
Iteration additional training or support as
needed. Continuously iterate
the training program for
ongoing improvement.
Monitor and Management, Ongoing Regularly review performance
Adjust Lean Team metrics, assess the
effectiveness of Lean
initiatives, and make
adjustments to the
implementation plan as
necessary.
1. Conduct Lean Training:
The success of Lean Manufacturing relies on the understanding and commitment
of the workforce. Training sessions should cover the principles, tools, and
methodologies of Lean Manufacturing to ensure a common understanding among
all employees.
2.Establish Cross-Functional Lean Team:
53
A dedicated Lean Team with representatives from various departments ensures a
holistic approach to Lean implementation. This team will lead, coordinate, and
facilitate the Lean initiatives across the organization.
3. Conduct Current State Analysis:
Analyzing the current state of operations helps identify inefficiencies and areas of
improvement. This analysis serves as a baseline for setting improvement goals
and prioritizing initiatives.
4. Set Clear Objectives and Metrics:
Clear objectives and measurable metrics provide a roadmap for success.
Alignment with overall business objectives ensures that Lean initiatives contribute
to the company's strategic goals.
5. Implement 5S Methodology:
The 5S methodology lays the foundation for a clean, organized, and efficient
workplace. It is a crucial step in creating an environment that supports Lean
principles.
6. Value Stream Mapping:
54
Value stream mapping helps visualize the entire production process, enabling the
identification of waste and opportunities for improvement. This step is essential for
developing a future state vision.
7. Kaizen Events:
Kaizen events focus on rapid improvement in specific processes. Employee
involvement is key during these events, as it promotes a sense of ownership and
encourages continuous improvement.
8. Implement Visual Management:
Visual tools enhance communication and transparency in the workplace. Kanban
boards and visual cues make it easier to monitor and manage workflow,
contributing to overall efficiency.
9. Continuous Improvement Culture:
Fostering a culture of continuous improvement involves recognizing and rewarding
employee contributions, encouraging feedback, and creating an environment
where employees feel empowered to suggest and implement improvements.
10. Employee Feedback and Training Iteration:
Gathering feedback from employees ensures that their insights are considered in
the ongoing Lean implementation. Iterative training programs accommodate the
evolving needs of the workforce.
55
11. Monitor and Adjust:
Regularly reviewing performance metrics allows the organization to gauge the
effectiveness of Lean initiatives. Making adjustments to the implementation plan
based on feedback and results ensures continuous progress toward Lean goals.
Conclusion:
The journey of M Porting Co. from its inception to its current state has been
one of creativity, innovation, and adaptation. The case study has highlighted the
challenges faced by the company in its manufacturing processes and the strategic
changes proposed to overcome these challenges. As we conclude our exploration
of M Porting Co.'s operations, it becomes evident that the company stands at a
crucial juncture where thoughtful decisions and actions can pave the way for
enhanced efficiency and sustained growth.
The analysis of the current facility layout revealed a misalignment between the
initial emphasis on product development and the evolving needs of full-scale
production. The proposed changes—bringing sewing operations in-house,
improving the handling of aluminum tubes, and transitioning to a cellular
manufacturing layout—hold the promise of addressing these challenges and
fostering a more streamlined and responsive manufacturing environment.
56
M Porting Co. is presented with an opportunity to not only address existing
challenges but to strategically position itself for sustained success. The
recommended changes are not merely tactical adjustments but represent a
transformative journey towards a more responsive, efficient, and quality-centric
manufacturing environment. As the company embraces these recommendations,
it will navigate the complexities of the competitive manufacturing landscape with
resilience and innovation, ensuring a future marked by growth and excellence.
Recommendation:
To enhance the operational prowess of M Porting Co., a multi-faceted
approach is recommended. First and foremost, the company should consider the
establishment of an in-house sewing facility. This move not only reduces reliance
on external processes but also streamlines the production chain. The acquisition
of an additional sewing machine is advised to meet forecasted demand, with
vigilant monitoring of its impact on kitting labor, transportation costs, and product
lead times.
Simultaneously, improvements in the handling of aluminum tubes should be
prioritized. Investment in a safer and more efficient handling method is essential,
with a focus on technology or equipment that aligns with the company's safety and
efficiency goals. This shift has the potential to optimize workflow efficiency and
minimize labor requirements.
57
Finally, the transition to a cellular manufacturing layout emerges as a cornerstone
recommendation. A comprehensive analysis should be conducted to identify
distinct manufacturing cell families based on product types and processes.
Strategic relocation of machines and equipment, aligned with the proposed cellular
layout, is crucial. Continuous monitoring and assessment will be key to gauging
the effects on handling demand, work-in-progress inventory, storage space
requirements, and overall product quality.
58

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REPUBLIC OF THE PHILIPPINES

RIZAL TECHNOLOGICAL UNIVERSITY

College of Engineering, Architecture and Technology

Optimizing Operations: A Case Study of M Porting Co. in

A Case Study in Partial Fulfillment of the Requirements for the Subject:

ROJAS, LUIS NICOLE R.

ETORMA, SEAN JEAN

Dr. Nestor M. Japis, PIE

Problem and its Background

In the dynamic landscape of contemporary manufacturing, enterprises often

encounter challenges that necessitate strategic adaptations to optimize their operations.

operational efficiency in the production of fabric-covered metal canisters. As a fledgling

entrepreneurship, driven by a desire to address gaps in the market for photographic

Background of the study

demands of full-scale production.

Specializing in two main types of cannisters—standard and discount—M Porting Co.

reevaluation to streamline production processes. The intersection of creativity and

meet the demands of a dynamic market.

product development, now presents obstacles to efficient production. Recognizing

• Bringing Sewing Operations In-House:

• Causes: Reliance on external sewing processes, transportation

costs for kits and assemblies, longer product lead times.

• Effects: Reduction in kitting labor, elimination of kit and assembly

transportation costs, decreased product lead times.

• Causes: Manual handling of 20-foot tubes, potential inefficiencies in

the current handling method.

• Effects: Safer handling of aluminum tubes, improved efficiency in

• Converting to Cellular Manufacturing Layout:

• Causes: Batching production to match store orders, excessive

• Effects: Increased efficiency in handling demand and product

variations, reduced work-in-progress inventory, reduced storage

space requirements at workstations, improved overall product

Proposed Change Causes Effects

- Longer product lead - Decreased product lead

Improving Handling - Manual handling of 20- - Safer handling of aluminum

of Aluminum Tubes foot tubes tubes

- Improved overall product

and predicts the potential effects or outcomes of implementing specific solutions.

1. Bringing Sewing Operations In-House:

• Reliance on External Sewing Processes: Currently, M Porting Co.

depends on external sewing processes for the fabrication of fabric

• Transportation Costs for Kits and Assemblies: The need to transport

production facility incurs additional costs.

• Longer Product Lead Times: External dependencies contribute to longer

lead times in the production process.

• Reduction in Kitting Labor: By bringing sewing operations in-house, the

• Decreased Product Lead Times: The proximity of sewing operations

within the facility is anticipated to significantly reduce product lead times.

2. Improving Handling of Aluminum Tubes:

• Manual Handling of 20-foot Tubes: The current method involves manual

handling of lengthy aluminum tubes, posing safety concerns.

• Potential Inefficiencies in Current Handling Method: Manual handling may

lead to inefficiencies in the workflow, affecting overall production efficiency.

• Safer Handling of Aluminum Tubes: Investing in a better handling method

is expected to enhance workplace safety during the transportation and

processing of aluminum tubes.

• Improved Efficiency in Handling: A more efficient handling method can

contribute to overall workflow efficiency, potentially reducing labor