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Case Study:

Aashish Chopra, Julio Ortic and Ankur Jain1Custom Molds, Inc.1987Founded by father/son team Tom and Mason Miller Custom design molds for plastic partsand custom made plastic connectors

Mid 1990'sBuilding on its reputation decided to expand into a limited manufacturer of plastic parts

Early 2009Changing industryManufacturers developing strategic partnerships with parts suppliers

2Custom Molds Inc- Madevelop molds used in the customer's product development process Originally concentrated its sales efforts on supplying parts that were used in limited quantities for research and

custom-made plastic connectors for the electronics industry

2009 industry changing instead Company has seen their sales mix change over the last three years. Custom Molds is currently experiencing delivery problems. Part orders are not being delivered in the time quoted. Bottlenecks are occurring throughout the entire production processProcess Flow ChartMold Fabrication Process

Primary Focus - Mold FabricationHigh Customer ContactMade-To-OrderHigh customization- Low product volume- Job ProcessTime wasted in scheduling a Mold fabricationHigh wait time on resourcesCould use the wait time on resources to schedule for mold fabricationSame machinist required for design and fabrication phase, creating a potential bottleneck

3Process Flow ChartPlastic Parts - Mold Already Made

Plastic PartsLower Customer ContactAssemble-to-Orderbatch line process - Products standardized - High volumeHigh wait time on resourcesLimited Injection Mold resources

4IssuesChanging market environmentMold market in mature phasePlastic parts in growth phase

This information may imply that customers are letting Custom Molds prototype the mold design, but they are thenfabricating the molds in-house once they validate the design.

5Competitive PrioritiesCustom moldLead time not criticalQuality is very important in meeting demand specificationsTypically not price sensitiveLow volumePlastic partsLead time criticalQuality very importantPrice sensitiveHigh volume

AlternativesDiscontinue custom mold fabrication and shift their focus to plastic parts production.require increasing the space dedicated to plastic parts production or adding additional spaceThis choice will require commitment to expand resources and maintain delivery reliability.move back to the focus on molds.this requires moving against the apparent trend in the industryPrice competition may become the primary factor in industry competition

Other alternativesReduce emphasis on mold fabricationRestructure plant layout Increase part production capacityChange pricing to reflect changing marketOffer larger bulk discounts for plastic partsFlexible workforce - make sure any machinist can work on any jobReview quality control processes

7Initial vs. Proposed Layout

Questions

Clear RecommendationsImprove Lead TimesThereare onlyfour weeks (maximum) accountedfor in the process chart formold production and a nine week lead time quoted.Flexibility exist with process and with customers expectations.Leverage this flexibility to improve plastic part deliveriesCompany was historically driven by custom molds. Plastic parts production is not being allocated its due time.Maximize use of time of injection machines (capacity=5000/day)Proper scheduling needs to take place to allocate time for small (0-500), large (500-5000) and custom mold testing.Operations before and after injection machine is a day or two so bottleneck is with machine itself.Clear RecommendationsEliminate one machinist Custom Mold, Inc. operated with overtime staffing in 2006 and 2007 for mold manufacturing 2008 volumes allows for elimination of one master machinist. Currently being reassigned to help expedite other functionsOrder SizeTotal Molds 2006Total Molds 2007Total Molds 200818074722120140150312015316542024205152520624483071407880483299972451015010050Total:722684591Available Capacity(250 days/year,5 days/mold,13 machinists)650650650Clear Recommendations Revise block layoutImprove closeness factor of key groupsAllocate more space to injection machineAcquire more injection machines to increase capacityReduce space for mold fabricationReview and focus on who their customer base isMarket to other customer base to increase plastic part manufacturing business if now equipped to handle it.They should create a subsidiary for plastic partmanufacturing (Plastic Parts, Inc.) and operate them as more distinct business but under one roof.Renewed focus on qualityImproved scheduling time and better layout should open up possibilities and timefor quality measures to be put in place.3rd party quality audit.Detailed Next StepsImplement RecommendationsContinued review of process flow and process layoutIn the future, Custom Molds may consider moving testing to a more central location to mitigate back and forth time between departments. Cost prohibitive at this point.We are not recommending this immediately due to uncertain costs associated with retro-fitting and plumbing