Custom molds case study

1. Case Study:  Custom Molds, Inc. Tina Cere, Nathan Kiner , David Mercuro Laurie Simmonds, Kurt Strandson

2.   Agenda      Overview Analysis Alternatives Clear Recommendations Detailed Next Steps

3. Custom Molds, Inc. 1987  Founded by father/son team Tom and Mason Miller Custom design molds for plastic parts  1990's  Decided to expand into a limited manufacturer of plastic parts Growing reputation as a supplier of high-quality plastic parts 2009 Changing Sales Mix Delivery and Quality Issues

4. Analysis   Primary Focus - Mold Fabrication  High Customer Contact Made-To-Order      In between job process & small batch processing- High customization- Low product volume Now as the sales mix has slowly changed the company is moving towards a large batch line process   Plastic Parts Lower Customer Contact Assemble-to-Order Large batch line process - Products standardized - High volume

5. Process Flow Chart Total process time: 2 to 4 weeks Fabrication: 3 to 5 days Testing and inspection: 1 day Injection machine resource shared with part process  Clean and polish: ½ day Packing and shipping:  ½ day Mold Fabrication Process

6. Process Flow Chart Order review - verifies raw materials and part specifications   Raw material orders are placed: Received with one week Dry Mix:  ½ day Wet Mix: ½ day Injection Machine: 5000 parts per day Cut and trim Testing and inspection  Packing/shipping or assembly  Plastic Parts - Mold Already Made

7. Bottlenecks occurring...                        Custom molds division - "Made to Order Strategy"   Plastic parts division -  "Assembly to order strategy"   Need to minimize idle time and keep process moving                       Allocation of equipment and manpower Limited injection machine resources Injection machines required for both part fabrication and mold test Same machinist required for design and fabrication phase, creating a potential bottleneck                             . Mold Fabrication - Work flow issues Wait to receive materials before they review work load With a typical 3 week lead-time for raw materials they could be determining scheduling   Plastic Mold-raw materials received in one week?    

8. Competitive Priorities   Custom mold Lead time not critical Quality is very important in meeting demand specifications Typically not price sensitive Low volume Plastic parts Lead time critical Quality very important Price sensitive High volume

9. Plant Layout Analysis

10. Initial vs. Proposed Layout 

11. Alternatives Continue operating as is Discontinue custom mold fabrication and focus on high volume plastic parts Restructure and reorganize plant to adjust to the changing sales mix Reduce emphasis on mold fabrication Restructure plant layout Increase part production capacity Change pricing to reflect changing market Offer larger bulk discounts for plastic parts Flexible workforce - make sure any machinist can work on any job Review quality control processes

12. Clear Recommendations Improve Lead Times   There  are only four weeks (maximum) accounted for in the process chart for mold production and a nine week lead time quoted . Flexibility exist with process and with customers expectations. Leverage this flexibility to improve plastic part deliveries   Company 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.

13. Clear Recommendations Eliminate 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 functions Order Size Total Molds 2006 Total Molds 2007 Total Molds 2008 1 80 74 72 2 120 140 150 3 120 153 165 4 20 24 20 5 15 25 20 6 24 48 30 7 14 7 8 80 48 32 9 99 72 45 10 150 100 50 Total: 722 684 591 Available Capacity (250 days/year, 5 days/mold, 13 machinists) 650 650 650

14. Clear Recommendations      Revise block layout Improve closeness factor of key groups Allocate more space to injection machine Acquire more injection machines to increase capacity Reduce space for mold fabrication    Review and focus on who their customer base is    Market to other customer base to increase plastic part manufacturing business if now equipped to handle it. They should create a subsidiary for plastic part manufacturing (Plastic Parts, Inc.) and operate them as more distinct business but under one roof .   Renewed focus on quality Improved scheduling time and better layout should open up possibilities and time for quality measures to be put in place. 3rd party quality audit.  

15. Detailed Next Steps Implement Recommendations Continued review of process flow and process layout  In 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