Reference no: EM132106411

Eastern Gear, Inc. Case Study

Eastern Gear, Inc. is a manufacturer of custom-made gears ranging in weight from a few ounces to over 50 pounds. Last year 40 different types of steel and brass alloys have been used as raw materials. Most of the orders Eastern gear receives are small orders and rarely the same gear is ordered more than once. Orders over 100 have been recently accepted to help pay for overhead, but as a result this forced the smaller orders to wait a lot longer to finish. Taking orders goes through the sales manager, and the customer provides the specifications for the gear, sometimes after the order is placed there is a request to change the design creating a bottleneck. Once the order is received, a copy gets sent to the production manager and the controller (to purchase raw materials). Production processes for gears used to take two weeks, now the time has increased to four weeks. Bottlenecks have been a problem recently and each week it seems to be coming from a different place of the operation.

Eastern Gear currently uses a standard job shop layout. Each work center has a common set of machines or processes. Materials flow from one work center to another depending on operations needed in order. Machines on the shop floor are laid out by similar type, this layout helps with training and worker skills but, results in a jumbled flow of products throughout the shop. Currently a typical order spends 90% of its time waiting in line and 10% of the time being worked on. Large and small orders are processed together with no special work flow. The large orders are in fact helping Eastern Gear stay at full capacity. The first couple years at Eastern Gear the company lost money, but recently small profits have been made and sales are up 100% from last quarter. Market surveys have shown sales can be further expanded over the next couple of years. If Eastern Gear can fix the total delivery lead time from 5-6 weeks to 3-4 weeks the sales could go from 5 million to 5.5 million. Eastern gear hired an expeditor whose job it is to tag behind orders with a red tag, currently 20% of orders are red tagged. Eastern Gear experiences a 6% return rate of which 75% failed to undergo an operation or the operation was done wrong. One employee is responsible for rush orders, and 10% of orders are rush orders. The workforce consists of 50 employees from high-skilled to semi-skilled. 10 employees were hired last quarter. Good labor relations exist because, the workforce is managed using a family type approach.

Powerpoint in attachments.

1) Because an order spends 90% waiting in line and 10% worked on. What can Eastern Gear do to minimize the wait time and maximize the more production?

2) Because Eastern Gear uses a family type approach for the work force right now. Do you think they can do better if changing the work force approach?

3) Due to Eastern Gear being behind in orders they hired an expeditor to flag down the orders that are behind. Do you really think that helps their company or slows them down? How you think they should approach this?

4) Being behind schedule on some deliveries and orders in waiting lines for 90% of the time. What would happen to the company if orders where messed up or misplaced? How can they prevent becoming more behind schedule? Should they hire more workers? Should they change their operations?

5) What you read about Eastern Gear. Do you think they need to work on their employee capacity more? Update their machinery? Or be more organized? Explain why?

Eastern Gear case study summary.docx(12.95 KB)

Eastern Gear Inc Project presentation.pptx(90.96 KB)

1) Because an order spends 90% waiting in line and 10% worked on. What can Eastern Gear do to minimize the wait time and maximize the more production?

2) Because Eastern Gear uses a family type approach for the work force right now. Do you think they can do better if changing the work force approach?

3) Due to Eastern Gear being behind in orders they hired an expeditor to flag down the orders that are behind. Do you really think that helps their company or slows them down? How you think they should approach this?

4) Being behind schedule on some deliveries and orders in waiting lines for 90% of the time. What would happen to the company if orders where messed up or misplaced? How can they prevent becoming more behind schedule? Should they hire more workers? Should they change their operations?

5) What you read about Eastern Gear. Do you think they need to work on their employee capacity more? Update their machinery? Or be more organized? Explain why?