Reference no: EM133774954

Lean and Sustainable Project:

Problems at Dilulu Dishwasher Factory

Make recommendations for operations improvements based on your knowledge of Lean Operations.

- What short-term and long-term changes need to be made at this plant?

- What would the costs and tradeoffs of making such changes be?

Problem 1:

1. There are only two inspectors on the plant, and they only inspect outbound finished goods samples on Wednesdays and Fridays. These limited inspections have high failure rates, and as many as 1.5% of the finished dishwashers have to be returned to the line for rework. However, managers on the assembly line do not like to mess with broken items that have to be reworked. So, the warehouse uses about 20% of its capacity to store the reworked items, which are often handled when workers volunteer to work overtime on the weekends. Return rates and poor quality complaints are starting to increase from customers, specifically questioning the quality of material used in the dishwashers. The Head of Purchasing, James S. Cheap, denies these supplied materials issues and blames the quality issues on high labor turnover rate and infrequent training in the factory.

Recommendations:

Benefits:

Problem 2

2. The factory also has inconsistent and varying output based on the availability of Union labor in the plant. Sometimes the factory continues to work their standard 10-hour shifts, even after the level of demand has been met for the week, just to fulfill the Union contract and not miss labor hours promised to employees. According to John Smith, the plant manager, the production schedule is designed for long production runs of each product. This helps drive down per-unit costs for each product.

However, it often means that the plant struggles to find storage space for its materials, parts, and finished goods in its warehouses, and then it has to rent public warehouse space to meet its inventory storage requirements. The tooling on the plant's equipment, which was acquired in the 1950s, lacks computerized setup capabilities, and this drives higher setup times between different product types of approximately four hours. Unfortunately, even with a large inventory being stored in the warehouse, Dilulu Dishwashers often finds itself having to use expedited shipping from two of its key suppliers, who are not located in the same state. This geographic distance to the two suppliers also results in increased lead time variability, especially since the transportation routes usually go by road through Atlanta and can be disrupted by congestion during peak traffic times.

Recommendations :

Benefits:

Problem 3

3. Blaze has also noticed issues in the plant that could be leading to increased cost problems. At times, there are workstations and machines that are sitting idle while other workstations are completely backed up. When he has questioned these idle stations, the workers say they are either not trained on the other workstation equipment or do not have the authority to leave their stations to help out in other parts of the plant. In some instances, the flow of materials on the assembly lines does not seem logical and moves from one corner of the facility to another and back again. This sometimes results in WIP inventory being put in storage when queues before workstations are backed up. Blaze wonders if the layout and process approach for this repetitive manufacturing facility has been clearly thought out since there is a lot of non-value-added time in the production of each product, and some raw materials and chemicals are simply thrown out since they are not used within their normal shelf-lives.

Recommendations:

Benefits

Problem 4

4. Finally, the jumbled flow of material movement in the plant seems to cause safety issues, and Blaze recently witnessed an employee injury when a forklift tripped a person while moving a large stack of inventory through a tight corridor in the plant. Blaze worries that similar safety mishaps will happen if the plant does not start to improve its processes.

Recommendations

• Make sure all walking lanes and forklift lanes are clearly marked, train employees to safety guidelines

• Make sure all forklift drivers have proper training on how to operate forklift