Case Study Due July 17

Running head: JOHNSTON PRODUCTS 1

Johnston Products

Daisy Duck

Saint Leo University

MGT 417

Dr. XXXXXXXXXX

February 10, 2019

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Running head: JOHNSTON PRODUCTS 2 Johnston Products

Justin Wang, master scheduler for Johnston Products, has tried numerous times to

communicate to his people that there is a production schedule issue. Also, his workers had

consistently tried to “front-load” (Chapman, Arnold, Gatewood, & Clive, 2017, p.162), the

production schedule by attempting to catch up with the production that they had no success in

meeting the requirements for during the first week. Furthermore, this problem was progressing,

occurring every week, and Justin’s only way to attempt to resolve this problem was to revamp

the entire master schedule which occurred about every three weeks.

As explained by (Chapman et al, 2017),

The first week of the month, Justin had scheduled production to 320 standard

hours in the assembly area, which completed only 291 hours that week

due to some equipment maintenance and a few unexpected part shortages. The

assembly supervisor then had the workers complete the remaining

29 hours from week 1 at the start of week 2. Since week 2 already had 330

standard hours scheduled, the additional 29 hours really put them in a

position of attempting to complete 359 hours. The workers actually

completed 302 hours in week 2, leaving 57 hours to front-load into week 3,

and so forth. Usually by the time Justin came to three-week review of the

master schedule, it was not uncommon for the assembly area to be more

than 100 standard hours behind schedule. (pp. 162-163)

There is definitely a problem with the production schedule. Therefore, in order to

pinpoint the cause of the problem, Justin needs to identify the areas that are possibly causing

problems in

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JOHNSTON PRODUCTS 3 the facility, calculate the time required to be within the 320 hours available and access the

results,

and construct a resolution to get the production schedule back under control.

Potential Areas Causing Problems

There are four areas that Justin needs to observe as follows: Job standards, utilization,

the workers, and engineering changes. For job standards, it had been four years since the job

standards were reviewed or updated. Justin didn’t see this as an issue, because he was taught

during his operations course about the value of the learning curve. The concept suggested that

average workers should be permitted to complete more production per hour than implied by job

standards given. In addition, for the utilization aspect, the general manager was keen on the

principle of utilization, he believed it would facilitate in controlling costs, and used it as a sole

mean in his performance metrics.

Customer service was another important element of utilization due to a lack of the

company to maintain their word on order delivery dates, and “equally difficult to deliver the

product on time once the order promise was made” (Chapman et al, 2017, p. 163). Likewise, the

worker’s area was another effort to control costs, as the hourly wages for workers was high, but

the turnover rate was 70% annually because of the overall low paying salary. Despite the fact,

the building was located where replacement workers were easy to find. Once a worker had a

week of training, they were assigned to the production team. Even so, while the hiring

objectives were taking place, the company filled vacant positions with temporary workers who

were brought in by a local temporary work agency.

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JOHNSTON PRODUCTS 4 Regarding the engineering changes, the design of almost all of the products was

improving, with an average product change roughly every two months which resulted in product

improvements. So, this was not perceived as a problem to factor into the equation, and the

equipment had engineering changes, but little process changes took effect as a result. Moreover,

“setup time for these specific batches was 15 minutes, which obliged batch sizes about 50 – 300

units, pending the design. Equipment was old and caused regular maintenance to rise along with

frequent breakdowns. Each equipment item required 3 or more hours of maintenance per week”

(Chapman et al, 2017, p. 163). However, a further assessment was required to validate weekly

calculation.

Calculations

The computer had already computed most of the production calculations prior, but Justin

felt the need to validate these calculations and examine if the computer was the source of the

problem. He proceeded to collect the data to manually calculate the week that had eight

personnel assigned to work the assembly for every eight machines, per one shift a day. The

following chart was the result of what was computed without overtime to enable the 320 hours of

production.

Product Batch Size Standard Assembly Time in mins (per item)

Batch Run Time (including setup) in mins

A174 50 17 850 + 15 = 865 G820 100 9 900 + 15 = 915 H221 50 19.5 975 + 15 = 990 B327 200 11.7 2,340 + 15 = 2,355 C803 100 21.2 2,120 + 15 = 2,135 P932 300 14.1 4,230 + 15 = 4,245 F732 200 15.8 3,160 + 15 = 3,175 J513 150 17.3 2,595 + 15 = 2,610 L683 150 12.8 1,920 + 15 = 1,935 Total Time = 19,225 min = 320.42 hours

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JOHNSTON PRODUCTS 5

Findings

Justin’s research allowed just over 320 production hours as anticipated. So, what’s

causing production problems in the facility? It’s possible that the areas Justin had identified

causing production problems in the facility? It’s possible that the areas Justin had identified

were not as problematic as they seem. These areas included high turnover rates and a broad use of

temp workers, which resulted in continual learning curves and slower production. The four-year-

old company standards were likely developed due to the experienced workforce. But, another

area of interest involved the age of equipment and downtime, due to repair and as needed

replacement parts.

Also, three hours of weekly maintenance per machine totaled a loss of 24-hours of

production time for their eight machines. Additionally, the engineering changes caused a learning

curve. Even for seasoned employees, changes in the process caused a mental mishap on how

items were produced, until the employee became more proficient and confident in creating the

right product. Finally, the last area mentioned was the practice of front-loading the production

schedule in order to catch up with production. This kind of action can have a ripple effect on

efficiency, while causing changes to the master schedule by adding required work hours, but not

counteracting the cause with more manpower or work-load hours.

Solution to be Implemented

A plan on how to deal with the situation and attempt to get the production schedule back

under control, involves a constant scheduling of equipment maintenance (minimum 24 hours per

week) added to the production schedule. As equipment ages, replacement plans should be in

place to resolve or reduce untimely repairs. Also, newer equipment models will cut costs on

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JOHNSTON PRODUCTS 6 maintenance. However, another solution that could be used is to reduce the mass amount of

employees’ turnover rates. This issue can be addressed by increasing the employees’ pay and

enhancing their quality of life with better benefits such as leave time, medical, dental etc.

When an employee’s health and well-being are considered under employment terms with

a company, quality candidates will compete for positions and remain in the hopes of further

development, empowerment, and promotions. Temporary hiring agencies can be utilized to help

locate and hire full-time qualified employees versus temporary hires. The last set of solutions

that can be addressed involves the customer service concerns and meeting their needs of quality

products being delivered on time. Instead of “front-loading” production orders from the previous

week, there should be a buffer of on-hand products readily available for sale, which would omit

lead times and heighten customer service.

Summary

Overall, Johnston Products should consider all viable options to reinforce capacity and its

internal and external customer demands. Reviewing the master schedule revealed that less

prevalent problems were actually viable and detrimental to the company’s health. Looking at the

older equipment and employees’ turnover rates were rightfully addressed, and new ideas should

always be encouraged to maximize overall effectiveness. By working out the problems causing

the “front-loading” issue, production shortages and the many other problems that stemmed from

it, could now be a thing from the past and a hard lesson learned. Lastly, if Johnston’s Control

was more involved with the well-being and quality of life of their employees’, it would

drastically reduce the high turnover rate, and would also establish a working environment similar

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JOHNSTON PRODUCTS 7 to that of Saint Leo University’s that would be based on a “community of mutual trust and

respect” (n.d.).

References

Chapman, S. N., Arnold, J. R., Gatewood, A. K., & Clive, L. M. (2017). Introduction to Materials

Management (8th Ed). Upper Saddle River, NJ: Prentice Hall.

Saint Leo University. (n.d.). History, Values, and Catholic Roots. Core Values. Retrieved from

https://www.saintleo.edu/history-values-catholic-roots

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