Custom Gear, Inc.

LEE CHEAU SHIN (PBS1411550)

ABDUL HAKIM BIN ABDUL RAZAK (PBS1411560)
JENNY OH (PBS1321264)
NUR AZZA BIN MOHD NORDI (PBS1411562)

OPERATIONS MANAGEMENT(GSM5113)
DR. AFFENDY ABU HASSIM
PUTRA BUSINESS SCHOOL
17 MARCH 2015

Operation Management Case study: Custom Gear, Inc.

Table of Content

Question 1....................................................................................................................... 2
Question 2....................................................................................................................... 4
Question 3....................................................................................................................... 6
Conclusion...................................................................................................................... 8

Operation Management Case study: Custom Gear, Inc.

Question 1

What are the major problems being faced by Custom Gear?

Accepting large order within small capacity

It was found that the large orders caused many of the small orders to wait for a long time before
being processed. As a result some deliveries of small orders were late

Late mold design confirmation from the customers engineer

Customers engineer will call up after the order has been placed and request a change in the
design. In these cases, it may be necessary to stop production and wait for new raw materials
or for the design to be clarified. The customers prints submitted with the order do not always
contain the tolerances or finishes required during machining. As a result the customer is
contacted directly when the information is needed.
Bottlenecks in production process
Joe Irvine expressed concern about the bottlenecks which appear in the production process.
One week the bottleneck may be in one machine centre, and the next week it is in another.
These bottlenecks make it difficult to get the orders out on time.
Job shop layout was not supporting smooth workflow
The location of the first process (milling) and the second process (drilling) is not side by side.
From the milling station, the workers need to cross the third and forth process flow location in
order to reach the drilling workstation. This result, increased the lead time, thus resulted in the
need for an expeditor.

Operation Management Case study: Custom Gear, Inc.

Operation Management Case study: Custom Gear, Inc.

Question 2
What action should Mr. Rhodes take to solve his problems?
Accepting large order within small capacity
Mr. Rhodes may need to increase in his machinery capacity to cope up with the orders and do
not also delay on the other small orders. Other than that, Mr. Rhode also needs to hire more
skill full employees so that they are able to produce the orders given. Also, Mr. Rhodes may
divide two departments for small order and large order so that they may deliver the product to
customer just in time(JIT).
Late mold design confirmation from the customer's engineer
I will suggest Mr. Rhodes to have a strict processing policies such as within a time frame the
customer's engineers needs to reply to Custom Gear Inc. so that they will not delay on other
order's delivery. Other than that, Mr. Rhodes may hire employees with coordinator skill set so
that they may follow up with the customers for faster reply.
Bottlenecks in production process
To reduce the defects on productions, Mr. Rhodes may need to employ a quality manager for
each department which is for milling, drilling, grinding, and heating centers so that there will be
less defects in the processing line. Also, he may take up orders according to his capacity to
produce on that particular time. This may decrease the pressure in the employees for finishing
their products and it will increase on the quality of the gears.

Job - shop layout we not supporting smooth workflow

I will suggest each department should be side by side so that it will cut down the time for
process one which is milling to process two for drilling. Below will be suggested layout:

Operation Management Case study: Custom Gear, Inc.

Receiving dock
Milling Machines

Receiving and Raw

Material Storage

Drilling

Finishing and Grinding

Centres

Tool Crib

Shipping Dock

Heat Treating

Lunch
room

Shipping & Finished Goods

Storage

Question 3

Operation Management Case study: Custom Gear, Inc.

How can this case be related to operations strategy and process design concepts?
Operation strategy and processing design is a fertile area for achieving competitive
advantage and / or increasing customer satisfaction and increasing sales and maintaining a
reputable market. Potential sources of such benefits include:
1) Increasing on better quality and more options raw materials where it can be components
of the gear for future expansion to make it easier to use the same parts across different
models and brands, thereby saving time on design and testing, and saving money on
manufacturing and quality improvement. With these, Custom Gear should set a research
and development department to survey and search various trustable suppliers for cheaper
and trustworthy raw materials.
2) Change the machines or upgrading them. 90% of the bottlenecks is due to the machine.
They may be obsolete and not friendly user and the worst case scenario may need overhaul
which is more expensive than buying a better technology machines and platforms for
expediting the production process for better quality products. Hence, concurrent
engineering to shorten engineering time.
3) Marketing and implementing tactics to attract customers and reduce the changing order
during process ie standardize but more options of attractive, reliable and useful gears to
choose and satisfying customer needs such as protocol of customization before the process
of the product.
4) Packaging products and ancillary services such as reduced costs for bulk buying, offering
installation and services, offering extended warranty, etc.
5) Continually monitoring products for small improvements such as getting feedback from
customer on the usage what problems they encounter during the usage and what to
improve after a period of using.

Operation Management Case study: Custom Gear, Inc.

6) Using technology such as computer-aided design (CAD) equipment to rapidly design or

modified products.
7) Merging the processing steps if more advance machines are used.
It is important to have operations strategy and process design concepts as "first to market"
approach is able to enter markets ahead of their competitors, allowing them to set higher
selling prices and defense against competition from cheaper "clones" because competitors
will always catch up with us.

Conclusion

Operation Management Case study: Custom Gear, Inc.

In conclusion we know that the lack of operational control will lead few complications like slow
series of production process, operation management efficiency, low level of effectiveness, the
poor supplier profiling, and limited range of sales target. As you can see the process flow it were
a big issue as it had been slow down due to the design layout and at the same time create
delays in delivery. Management was not active or alert towards the details of each operational
function, has cost critical issue within the organization. Thus it is the management responsibility
to make sure every detail is not left out, and to identify the best solution or practice for certain
process. Custom Gears also have been focusing on acquiring the gears from small companies,
which dont have the capacity to support nor does they have the ability to provide the economics
of scale needed to make the company cost effective, thus Custom Gear should consider to work
with supplier who are able to support large scale production in order to be cost effective, and at
the same time actually lead to a shorter lead time and avoid any possible delays at the supplier
side. Then there is the process design and facility layout is what contributes to the smoothness
of the operation, as Custom gear ineffective layout had affected Custom gear production flow
which in end has total cost custom gear possible sales. So as mention earlier, Custom gear
need to focus on the layout design of their factory in order to smoothen their operation, making it
less confusing and ineffective.