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Contents

Q1. What is the standard labor time for an order of 1 board? 8 boards? 200 boards?............................... 1

Q2. How is Donner doing? What problems do you see? Why do these problems exist?.............................. 3

Q3. What specific actions do you recommend Plummer take to address these problems?......................... 7

APPENDIX ...................................................................................................................................................... A

Labor Time for 1 Board Machine Processing .......................................................................................... I

Labor Time for 1 Board Manual Processing ........................................................................................... II

Labor Time for 8 Boards Machine Processing ....................................................................................... III

Labor Time for 8 Boards Manual Processing ........................................................................................ IV

Labor Time for 8 Boards Manual Drilling and CNC Router Profiling ...................................................... V

Labor Time for 8 Boards CNC Drilling and Punch Press Profiling .......................................................... VI

Labor Time for 200 Boards Machine Processing .................................................................................. VII

Labor Time for 200 Boards Manual Processing .................................................................................. VIII

Labor Time for 200 Boards Manual Drilling and CNC Router Profiling ................................................. IX

Labor Time for 200 Boards CNC Drilling and Punch Press Profiling ....................................................... X


2/22

Donner Company

1

Q1. What is the standard labor time for an order of 1 board? 8 boards? 200

boards?Two operations, drilling and profiling can be either done manually or using CNC machines. Setup times

and run times are different for manual and machine operations. From the data given, it can be observed

that the run time required for the machine processing is lesser than that required for manual

processing. However, machine setup times are greater than the setup times required for manual

processing. Therefore, as the number of boards to be processed increases, machine processing time

decreases relative to manual processing time, notwithstanding the relatively higher machine setup

times. In order to ascertain the shortest time required to process boards, we calculate the minimum

number of boards, B at which it is optimal to employ machine processing.

Drill:

For orders with less than 6 boards, it is optimal to use manual drilling.

Profile:

For orders with less than 200 boards, it is optimal to use punch press.

Assuming that machine and manual processes can be employed independently for drilling and profiling

operations, the optimal (shortest) processing times are achieved when following processing

combinations are used:

Number of Boards Drill Profile

< 6 Manual Punch Press

6 200 CNC Drill Punch Press

> 200 CNC Drill CNC Router

The above combinations are verified by calculating the processing times using the setup and run times

given in Standard Process Flow. The calculations are shown in the Appendix. It can be observed from the


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Donner Company

2

processing time calculations for 200 boards, using CNC Drill with CNC Router or Punch Press results in

same processing time.

Number of BoardsOptimal Processing Time

(Hours)

1 6.39

8 10.25

200 30.67


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Donner Company

3

Q2. How is Donner doing? What problems do you see? Why do these problems

exist?

Donners annual sales have been growing steadily over the years from 1985. The accumulatedsales figure for 1987 has reached $595,000, which is more than the total sales for year 1986.

Donner has ensured that its employees have sufficient skill to handle all the processes; thisprovides Donner flexibility in improving utilization.

Period Net Sales Equivalent Monthly Sales

Sep 1987 $ 124.80 $ 124.80

Aug 1987 $ 144.40 $ 144.40

Jul 1987 $ 85.70 $ 85.70

Jan to Jul 1987 $ 327.90 $ 54.651986 $ 404.50 $ 33.71

1985 $ 246.00 $ 20.50

$-

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$160.00

Sep 1987 Aug 1987 Jul 1987 Jan to Jul

1987

1986 1985

Sales

($)

Period

Equivalent Monthly Sales


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Donner Company

4

Problems at Donner and their probable reasons:

Productivity

1. Problem: Poor labor utilizationReason: From Exhibit 2

i. Total labor spent in the month of September87 is 1531.7 hoursii. Total no. of working days in September87 is 21 daysiii. Total man hours available in September87 is 3696 (21 days x 22 workers x 8 hours/day)iv. Hence labor utilization = 1531.7 hours/3696 = 41.44%

a. Labor hours spent on returned units is currently not accounted in the above calculationb. Transit time between tasks are not accounted for in the above calculation

2. Problem: Improved process methods could not be implementedReason: Mr. Plummer claims that new and improved methods cannot be implemented

because he assumes that the current labor capacity is fully utilized. However the above

computed labor utilization does not endorse his claims

3. Problem: Delayed job schedulingReason: Mr. Flaherty, on receiving new customer orders, waits for several days before

making his scheduling decision and this can ripple through the manufacturing process causing

further delays

4. Problem: Delay due to raw material procurementReason: Since there is no material inventory, the shop floor department does not start

work until the raw materials are procured. The purchasing agent also introduces delays in

looking out for a low cost vendor and this adds 2-3 days delay. In Made to Order (MTO),

emergency raw material procurement reduces bargaining power.

5. Problem: Delay due to resource bottleneck (CNC Machine)Reason: Donner has to go for manual drilling operation even in case of more than 100

Printed Circuit Board (PCB) order size as the CNC machine is completely utilized in the month of


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Donner Company

5

September. CNC utilization is 160 hrs for September which is close to 100% (8 hrs x 21 days =

168hrs).

6. Problem: Bottleneck in utilization of floor spaceReason: Floor space is completely utilized; therefore, no addition of machines is possible

7. Problem: Delay due to transit between different process stagesReason: Floor plan is not optimized for minimal transit time from one process location to

another

Quality

1. Problem: Informal and insufficient inspectionReason: The employees are made to inspect items/units through the manufacturing

chain. This practice is ineffective in catching defects and results in loss of productive labor hours.

2. Problem: Increased percentage of defects and return of units from 1% to 3%Reason: Low quality inspection, several missed operations in the manufacturing process,

and adding 8 new people in the month of August who may be involved in quality checks.

3. Problem: Quality standards not definedReason: Customer driven quality checks rather than company imposed quality standards.

Donner should ensure that it maintains high standards and benchmarks for quality.

Delivery

1. Problem: Delayed delivery to customersReason: Shipments are stacked towards the end of month causing delayed delivery to

customers. This claim is confirmed from Exhibit 5 where most of the shipments happen towards

the last 5 days of September.


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Donner Company

6

Strategy/Policy

1. Problem: Mr. Searby and Mr. Plummer believe in targeting low volume, special circuitboard market

Reason: From Exhibit 2, 4, and 5 we can deduce that the majority of sales for September

is from few large volume orders for which the CNC machine is the optimal choice of operation

2. Problem: Shop floor policy on CNC usageReason: The higher productivity of CNC machine over manual drilling warrants its usage

at 6 boards rather than the stated 100 board policy. These calculations have been mentioned as

part of question 1.


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Donner Company

7

Q3. What specific actions do you recommend Plummer take to address these

problems?

Specific actions have been suggested as part of Donners goal to reach $3 Million sales by 1989.

This target can be achieved with production of approximately 11,500 boards per month.

Calculations:

Current production: 5761 Boards

Current sales: $124,800

For $3 Million per year we require monthly average sales of $250K ($3 Million/12 months). This

amounts to an average monthly production volume of 11500 boards.

1. Donner should rethink its strategy and go for large volume orders to maximize its economies ofscale

i. As can be interpreted from Exhibit 2, 4, and 5, Donners majority share of revenue isfrom large volume orders

ii. Small volume orders are ineffective because they use manual labor and create abottleneck in the manufacturing process

iii. For small volume orders, the CNC setup time is relatively large compared to the totaldrilling process time

iv. Shop floor policy must be modified to use CNC Drill for order size of greater than 6boards

2. Capacity expansioni. Add CNC machines: CNC resolves the bottleneck at the drilling process and increases

efficiency. The machine occupies just 25 sq ft. As per Exhibit 1, ()

()


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Donner Company

8

In the absence of CNC Drill, 4,825 x 0.08 x 500 = 193,000 minutes of manual labor

would have to be introduced in place of 4,825 x 0.004 x 500 = 9,650 minutes. The

associated cost increase would have been $26,680 ($8.73 x 183,350/60). Therefore,

$26,680 is the potential monthly cost savings realized by employing CNC machineinstead of manual labor.

ii. Add floor space: Purchase of new machine and future expansion requires additionalspace as the present floor space is completely utilized

iii. Add electroplating machine: The electroplating machine becomes the bottleneckwhen attempting to achieve the 11,500 board target. This can be resolved by adding

a new machine.

3. Improve floor plan: Currently lot of time is spent in shifting units between processlocations. This could be minimized with an optimal floor plan that is compatible with the

process flow.

4. Division of Labor specializationi. When the employees are specialized to handle individual process components (like

fabrication, image transfer, etc.),

a. efficiency and quality improvesb. mentoring and monitoring reduces

ii. Inspection should be developed as a specialization since the current process isinefficient

5. Scheduled shipmenti. Do not hold finished goods until the end of month, instead ship as soon as produced

6. Build up raw material inventoryi. Since the volume of business increases, this has to be supplemented with a raw

material inventory to avoid unnecessary procurement delays

ii. Reduce the cost of procurement


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Donner Company

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7. Improved job schedulingi. Shop floor supervisor should start job scheduling as soon as he/she gets the make

order as opposed to waiting until raw materials arrive

8. Define quality standards and process checklistsi. Implement industry acceptable quality standards in order to reduces production

returns from customers


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Donner Company

10

Analysis of 1,000 board order processing:

Donner Company currently promises delivery in three weeks for orders less than 1,000 boards and five

weeks for orders more than 1,000 boards. Analyzing processing times, assuming sequential processing,

13.64 days are required to process an order of 1,000 boards. Accounting for factor of safety and

shipment time, a promise of 3-week delivery, is reasonable. However, assuming that parallel processing

can be adopted, the processing time can be brought down to 7.34 days and a promise of 10 day delivery

can be made to the customers. It should be noted, however, that parallel processing requires additional

manpower and machinery capacity.

Operation Setup Run Orders Board Sequential Setup By Racks

Mins Hours Mins Hours

PREPARATION

Artwork Generation 29 0 1 1000 29 0.48 29 29 0.48Inspect & Shear 20 0.5 1 1000 82.5 1.38 20 10 0.17

Punch Tooling Holes 10 0.5 1 1000 72.5 1.21 10 10 0.17

IMAGE TRANSFER

Drill

Manual

CNC Drill 240 0.004 1 1000 2240 37.33 240 320 5.33

Metallization 10 0.75 1 1000 103.75 1.73 10 15 0.25

Dry Film Photoresist

1. Panel Prep 5 0.2 1 1000 30 0.50 5 4 0.072. Laminate & Expose 20 2 1 1000 270 4.50 20 40 0.67

3. Develop 20 0.2 1 1000 45 0.75 20 4 0.07

Electroplate 25 8.5 1 1000 1087.5 18.13 25 170 2.83

Strip DFPR 5 0.2 1 1000 30 0.50 5 4 0.07

Etch & Tin Strip 10 0.2 1 1000 35 0.58 10 4 0.07

FABRICATION

Soldermask 45 1.5 1 1000 232.5 3.88 45 30 0.50

Solder Dip 30 0.5 1 1000 92.5 1.54 30 10 0.17

ProfilePunch Press

CNC Router 150 0.5 1 1000 650 10.83 150 80 1.33

Inspect, Test, Pack 45 1.5 1 1000 1545 25.75 45 240 4.00

TOTAL Hours 109.09 Hours 58.75

Days 13.64 Days 7.34


12/22

Donner Company

A

APPENDIX


13/22

Donner Company

I

Labor Time for 1 Board Machine Processing

1 Board

Operation Setup Run Orders Boards Total

Mins Hours

PREPARATION

Artwork Generation 29 0 1 1 29.00 0.48

Inspect & Shear 20 0.5 1 1 20.06 0.33

Punch Tooling Holes 10 0.5 1 1 10.06 0.17

IMAGE TRANSFER

Drill

Manual

CNC Drill 240 0.004 1 1 242.00 4.03

Metallization 10 0.75 1 1 10.09 0.17


1. Panel Prep 5 0.2 1 1 5.03 0.08

2. Laminate & Expose 20 2 1 1 20.25 0.34

3. Develop 20 0.2 1 1 20.03 0.33

Electroplate 25 8.5 1 1 26.06 0.43

Strip DFPR 5 0.2 1 1 5.03 0.08

Etch & Tin Strip 10 0.2 1 1 10.03 0.17

FABRICATION

Soldermask 45 1.5 1 1 45.19 0.75

Solder Dip 30 0.5 1 1 30.06 0.50

ProfilePunch Press

CNC Router 150 0.5 1 1 150.50 2.51

Inspect, Test, Pack 45 1.5 1 1 46.50 0.78

TOTAL Hours 11.16

Days 1.40


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Donner Company

II

Labor Time for 1 Board Manual Processing

1 Board


Mins Hours

PREPARATION


Inspect & Shear 20 0.5 1 1 20.06 0.33


IMAGE TRANSFER

Drill

Manual 15 0.08 1 1 55.00 0.92

CNC Drill

Metallization 10 0.75 1 1 10.09 0.17


1. Panel Prep 5 0.2 1 1 5.03 0.08

2. Laminate & Expose 20 2 1 1 20.25 0.34

3. Develop 20 0.2 1 1 20.03 0.33

Electroplate 25 8.5 1 1 26.06 0.43

Strip DFPR 5 0.2 1 1 5.03 0.08

Etch & Tin Strip 10 0.2 1 1 10.03 0.17

FABRICATION

Soldermask 45 1.5 1 1 45.19 0.75

Solder Dip 30 0.5 1 1 30.06 0.50

ProfilePunch Press 50 1 1 1 51.00 0.85

CNC Router


TOTAL Hours 6.39

Days 0.80


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Donner Company

III

Labor Time for 8 Boards Machine Processing

8 Boards


Mins Hours

PREPARATION


Inspect & Shear 20 0.5 1 8 20.50 0.34


IMAGE TRANSFER

Drill

Manual

CNC Drill 240 0.004 1 8 256.00 4.27

Metallization 10 0.75 1 8 10.75 0.18


1. Panel Prep 5 0.2 1 8 5.20 0.09

2. Laminate & Expose 20 2 1 8 22.00 0.37

3. Develop 20 0.2 1 8 20.20 0.34

Electroplate 25 8.5 1 8 33.50 0.56

Strip DFPR 5 0.2 1 8 5.20 0.09

Etch & Tin Strip 10 0.2 1 8 10.20 0.17

FABRICATION

Soldermask 45 1.5 1 8 46.50 0.78

Solder Dip 30 0.5 1 8 30.50 0.51

ProfilePunch Press

CNC Router 150 0.5 1 8 154.00 2.57


TOTAL Hours 11.85

Days 1.48


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Donner Company

IV

Labor Time for 8 Boards Manual Processing

8 Boards


Mins Hours

PREPARATION


Inspect & Shear 20 0.5 1 8 20.50 0.34


IMAGE TRANSFER

Drill

Manual 15 0.08 1 8 335.00 5.58

CNC Drill

Metallization 10 0.75 1 8 10.75 0.18


1. Panel Prep 5 0.2 1 8 5.20 0.09

2. Laminate & Expose 20 2 1 8 22.00 0.37

3. Develop 20 0.2 1 8 20.20 0.34

Electroplate 25 8.5 1 8 33.50 0.56

Strip DFPR 5 0.2 1 8 5.20 0.09

Etch & Tin Strip 10 0.2 1 8 10.20 0.17

FABRICATION

Soldermask 45 1.5 1 8 46.50 0.78

Solder Dip 30 0.5 1 8 30.50 0.51


CNC Router


TOTAL Hours 11.57

Days 1.45


17/22

Donner Company

V

Labor Time for 8 Boards Manual Drilling and CNC Router Profiling

8 Boards


Mins Hours

PREPARATION


Inspect & Shear 20 0.5 1 8 20.50 0.34


IMAGE TRANSFER

Drill

Manual 15 0.08 1 8 335.00 5.58

CNC Drill

Metallization 10 0.75 1 8 10.75 0.18


1. Panel Prep 5 0.2 1 8 5.20 0.09

2. Laminate & Expose 20 2 1 8 22.00 0.37

3. Develop 20 0.2 1 8 20.20 0.34

Electroplate 25 8.5 1 8 33.50 0.56

Strip DFPR 5 0.2 1 8 5.20 0.09

Etch & Tin Strip 10 0.2 1 8 10.20 0.17

FABRICATION

Soldermask 45 1.5 1 8 46.50 0.78

Solder Dip 30 0.5 1 8 30.50 0.51

ProfilePunch Press

CNC Router 150 0.5 1 8 154.00 2.57


TOTAL Hours 13.17

Days 1.65


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Donner Company

VI

Labor Time for 8 Boards CNC Drilling and Punch Press Profiling

8 Boards


Mins Hours

PREPARATION


Inspect & Shear 20 0.5 1 8 20.50 0.34


IMAGE TRANSFER

Drill

Manual

CNC Drill 240 0.004 1 8 256.00 4.27

Metallization 10 0.75 1 8 10.75 0.18


1. Panel Prep 5 0.2 1 8 5.20 0.09

2. Laminate & Expose 20 2 1 8 22.00 0.37

3. Develop 20 0.2 1 8 20.20 0.34

Electroplate 25 8.5 1 8 33.50 0.56

Strip DFPR 5 0.2 1 8 5.20 0.09

Etch & Tin Strip 10 0.2 1 8 10.20 0.17

FABRICATION

Soldermask 45 1.5 1 8 46.50 0.78

Solder Dip 30 0.5 1 8 30.50 0.51


CNC Router


TOTAL Hours 10.25

Days 1.28


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Donner Company

VII

Labor Time for 200 Boards Machine Processing

200 Boards


Mins Hours

PREPARATION


Inspect & Shear 20 0.5 1 200 32.50 0.54


IMAGE TRANSFER

Drill

Manual

CNC Drill 240 0.004 1 200 640.00 10.67

Metallization 10 0.75 1 200 28.75 0.48


1. Panel Prep 5 0.2 1 200 10.00 0.17

2. Laminate & Expose 20 2 1 200 70.00 1.17

3. Develop 20 0.2 1 200 25.00 0.42

Electroplate 25 8.5 1 200 237.50 3.96

Strip DFPR 5 0.2 1 200 10.00 0.17

Etch & Tin Strip 10 0.2 1 200 15.00 0.25

FABRICATION

Soldermask 45 1.5 1 200 82.50 1.38

Solder Dip 30 0.5 1 200 42.50 0.71

ProfilePunch Press

CNC Router 150 0.5 1 200 250.00 4.17


TOTAL Hours 30.67

Days 3.83


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Donner Company

VIII

Labor Time for 200 Boards Manual Processing

200 Boards


Mins Hours

PREPARATION


Inspect & Shear 20 0.5 1 200 32.50 0.54


IMAGE TRANSFER

Drill

Manual 15 0.08 1 200 8015.00 133.58

CNC Drill

Metallization 10 0.75 1 200 28.75 0.48


1. Panel Prep 5 0.2 1 200 10.00 0.17

2. Laminate & Expose 20 2 1 200 70.00 1.17

3. Develop 20 0.2 1 200 25.00 0.42

Electroplate 25 8.5 1 200 237.50 3.96

Strip DFPR 5 0.2 1 200 10.00 0.17

Etch & Tin Strip 10 0.2 1 200 15.00 0.25

FABRICATION

Soldermask 45 1.5 1 200 82.50 1.38

Solder Dip 30 0.5 1 200 42.50 0.71


CNC Router


TOTAL Hours 153.59

Days 19.20


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Donner Company

IX

Labor Time for 200 Boards Manual Drilling and CNC Router Profiling

8 Boards


Mins Hours

PREPARATION


Inspect & Shear 20 0.5 1 200 32.50 0.54


IMAGE TRANSFER

Drill

Manual 15 0.08 1 200 8015.00 133.58

CNC Drill

Metallization 10 0.75 1 200 28.75 0.48


1. Panel Prep 5 0.2 1 200 10.00 0.17

2. Laminate & Expose 20 2 1 200 70.00 1.17

3. Develop 20 0.2 1 200 25.00 0.42

Electroplate 25 8.5 1 200 237.50 3.96

Strip DFPR 5 0.2 1 200 10.00 0.17

Etch & Tin Strip 10 0.2 1 200 15.00 0.25

FABRICATION

Soldermask 45 1.5 1 200 82.50 1.38

Solder Dip 30 0.5 1 200 42.50 0.71

ProfilePunch Press

CNC Router 150 0.5 1 200 250.00 4.17


TOTAL Hours 153.59

Days 19.20


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Donner Company

X

Labor Time for 200 Boards CNC Drilling and Punch Press Profiling

8 Boards


Mins Hours

PREPARATION


Inspect & Shear 20 0.5 1 200 32.50 0.54


IMAGE TRANSFER

Drill

Manual

CNC Drill 240 0.004 1 200 640.00 10.67

Metallization 10 0.75 1 200 28.75 0.48


1. Panel Prep 5 0.2 1 200 10.00 0.17

2. Laminate & Expose 20 2 1 200 70.00 1.17

3. Develop 20 0.2 1 200 25.00 0.42

Electroplate 25 8.5 1 200 237.50 3.96

Strip DFPR 5 0.2 1 200 10.00 0.17

Etch & Tin Strip 10 0.2 1 200 15.00 0.25

FABRICATION

Soldermask 45 1.5 1 200 82.50 1.38

Solder Dip 30 0.5 1 200 42.50 0.71


CNC Router


TOTAL Hours 30.67

Days 3.83

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