Eastern Gear Inc.

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The Production Process of a Job Shop: From Low Volume Orders to High Volume Orders Tram Trinh BUS 545 – Operations Managements Production Process of Job Shop: From Low Volume Orders to High Volume Order Eastern Gear, Inc. manufactures customized gears ranging from a few ouces up to fifty pounds using more than 40 different kinds of brass and steel. Its customers are primarily engineering research and developments laboratories or smaller manufacturers, so no order is the same. To solve the problem of high overhead, President Roger Rhodes decided to start taking larger orders. Market surveys show that adding more larger orders to the company’s production schedule could increase revenue from $3 million to $5 million. This increase would translate to a sales boost of over one hundred percent. Problems As a result of taking on larger orders, business began to rapidly increase and new customer demands such as rush orders became more frequent. However, orders that had usually taken between one-to-two weeks to complete were now taking three to four weeks. This delay in delivering rush orders is the result of a broken production strategy. Currently, there is only one controller and one production supervisor to address customer request for design changes. Once the order has been placed, production is still on hold until raw materials are ordered. The fact that Eastern Gear keeps no raw materials inventory on hand adds up the time of waiting for raw materials being route to the factory. Factory Layout The production supervisor is concerned about bottlenecks that appear in one machine center after another (Schroeder Goldstein, Gostein & Runtusanatham, 2010). An inefficient factory layout results in low throughput ratio and orders waiting ninety percent of total production time for a machine to become available. Refer to exhibit 3 on page 435, raw materials are

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