The Fabrication & Baking Industries Ltd (The FBI)

The FBI is a specialty manufacturer of fabricated, baked enamel components for the mining industry, located in Newcastle. Large mining companies such as Rio Tinto, BHP Billiton and Xstrata use The FBI to make specialised components for use in mining equipment. It is important that The FBI give quick and high-quality service. The mining company customers ordering the components are on a tight schedule and have little patience with sloppy work or missed delivery dates.

The FBI purchases blank sheet metal from a local vendor. These sheet metal blanks are supplied as precision-cut to fit a standard size, and come with a protective coating applied to each face.

Engineers at the customer companies prepare a computer aided design (CAD) drawing of their component. This CAD drawing specifies the particular size, shape and configuration of the component, including details of all fold lines, drill holes and weld points that are required. The FBI have worked with their customers to standardise the component offering such that all individual customer components can be fabricated from the same size sheet metal blank.

An electronic version of the CAD is sent to The FBI and downloaded into their computer controlled equipment. The components are then fabricated on The FBI's equipment in what is essentially an automated process.

A typical order from a mining company is for a set of 100 identical components, but the actual order size can vary from around 85 up to about 115. The FBI experiences some quality issues and typically increases the average order quantity by 17%, so that on average, 117 sheet metal blanks would be started through the process. Typically, 5% of the components are rejected during an early in-process inspection and another 10% of the remaining components are rejected at a final test.

Baked Enamel Component Fabrication Process

The following is a description of the steps involved in processing a customer order at The FBI:

1. Order acceptance.

(a) Check to verify that the order fits within the specifications of components that can be produced with The FBI equipment.

(b) Machine programming. CAD information is downloaded and the computer controlled equipment is programmed.

2. Component construction.

(a) Clean. All of the sheet metal blanks for a customer order are manually loaded onto a rack and the rack placed in the cleaning machine by an operator. The machine then cleans the sheet metal blanks with a special chemical, to remove the protective coating. Each rack of blanks is then automatically transferred to the drilling machine.

(b) Drilling. A computer controlled machine is used to drill the holes at the points specified in the CAD drawing. Each sheet metal blank is automatically taken from the rack, loaded, drilled and then placed on a conveyor belt. There are six drilling machines and they are arranged so that one employee is able to oversee the operation of all six machines.

(c) Cutting. A second computer controlled machine is used to cut the desired shape from the sheet metal blank. There are six cutting machines. The drilled sheet metal blanks are automatically fed into the cutting machines. Two employees are required to oversee the cutting operation. The cut sheet metal blank is automatically returned to the conveyor belt. Operators must attend 100% of the time.

(d) Folding. A third computer controlled machine is used to fold the sheet metal blank into the desired shape. There are four folding machines and two operators oversee the operation of the machines and to place each folded sheet metal blank back onto the conveyor belt. These operators also must attend 100% of the time.

(e) Welding. A fourth computer controlled machine is used to perform all spot welding. There are two welding machines and each requires one operator to load the machines, one piece at a time. When the welding is complete, the welded components are automatically placed back on the conveyor belt.

(f) Coat. A chemically active coating is deposited on all surfaces of the welded component. This coating aids the adherence of the enamel to the metal. An operator is required to place all individual welded components for a customer order in a rack and then feed the rack into the coating machine. After each rack of welded components is coated, the rack is automatically unloaded and each coated component is placed on a conveyor belt.

(g) Inspect. As each coated component comes from the coating machine, it is automatically picked from the conveyor belt and optically checked for defects with an optical scanner. There are two stations each requiring one employee. Approximately 5% of coated blanks fail this test and are dumped and the good ones are returned automatically to the conveyor belt and pass to the enamelling stage.

(h) Enamel. The good semi-processed components are manually taken from the conveyor belt and placed in a rack, such that each rack contains all the components for that particular customer order. The rack is then fed via a conveyor belt into the enamelling machine. One employee loads the rack and oversees the enamel, bake and cooling stages.

(i) Bake. Still on the conveyor belt, each rack of enamelled components travels through the bake oven and the enamel coating is hardened.

(j) Cooling. Prior to conducting final testing, each rack of components, still on the conveyor, passes through a cooling tunnel.

(k) Final test. In the final stage, each completed component is tested for both the integrity of the enamelling and that it conforms to the specified dimensions and shape. The testing machines are a special form of computer controlled machine. Each enameled component is automatically loaded and unloaded. Approximately 10% of components fail this test, with reject components being dumped. There are 2 testing machines and each machine requires one operator. When all components for a customer order have been tested, the good components are placed in specially designed packaging and are moved to the shipping area.

3. Shipping. The completed order is shipped to the customer.

Process Data for The FBI

Required output per shift                            2000 components

Average customer order                             100 components

Production hours per day                             7.5 hours (8 hour day with a 30 minute break)

Working days per week                                  5 days

The following table sets out each stage in the process together with the number of stations, the number of employees and the set up and run times. If a process stage is able to perform its operation on a complete batch at the same time, then the run time is given as minutes per order, otherwise the run times refer to the time required to perform the operations on each item within a batch.

The FBI engineers believe that the plant was designed to run 2000 components per day when running 5 days per week and one 8-hour shift per day. However to date, on a good day they have only been able to achieve just under 1900 individual components. The times given in the table above include allowances for morning and afternoon breaks, but exclude the ½ hour lunch break. The FBI process engineer insists that capacity at each process is sufficient to produce 2000 components per day.

Required: (total marks available 20)

To resolve the problem, you have been hired as an Operations Management guru:

(a) Determine the type of process flow structure being used by The FBI.

(b) Draw the process flowchart for the construction of fabricated, enamelled components.

(c) Analyse the process and determine the overall process capacity in terms of number of customer orders per day.

(d) Detail the full impact on the total business of The FBI due to the losses in the process in Inspection and Final Test.

(e) What recommendations would you make for very short-term fixes, that is, things that can be fixed in a matter of days, to help alleviate The FBI's problems.

(f) Looking at the long-term, issues that will require months or longer to fix, what recommendations would you make to the management of The FBI?