JIT at Oak Hills Case Study

1. What are the specific quality problems Oak Hills is facing and how will they influence the companys ability to convert to a lean system? a. The first major problem of Oak Hills production process is their use of the batch flow system which drastically reduces inefficiency if there are machine or supplier failures and increases customer lead times. b. The second major problem of Oak Hills processes is their internal customers and suppliers. The article states that BlackDome, an internal supplier of Oak Hills, was often late on deliveries but attributed this to rush orders placed by Oak Hills internal customer E&E. As is the case in most examples we have discussed in class, a major reason their internal process between units is so inefficient is the lack of communication between the E&E unit and Oak Hills. The articles states the Oak Hills plant had little information concerning current or impending E&E projects that would require the testing instruments the facility supplied. Another problem was the fact that E&E customers were used to the luxury of placing rush orders: Hence the plant had to maintain a high level of raw materials inventory on-site. In order for Oak Hills to implement a successful lean system there must be improved communication between its internal units and a system enforced that will require the E&E unit to forecast its potential demand better and reduce the amount of expedited orders. However, this will only work domestic orders. There is no way for Oak Hills to expedite the foreign orders process because of stringent U.S paperwork. 2. What changes in the manufacturing environment need to be undertaken to convert the current system to a lean system? Think about this from both a short-term and a long-term perspective. a. First and foremost, there must be improved communication between Oak Hills, E&E, and Black Dome. In order for Oak Hills to receive components on time, Black Dome must improve its communication and processes with E&E so they are not constantly backed up due to expedited orders to E&E. Furthermore, this improved communication should boost employee morale as it seems the remaining employees are unclear about possible mergers and are upset about possible layoffs and the constant rat race to produce orders due to process inefficiencies. b. Secondly, the physical layout of the facility must be changed to successfully implement a lean strategy. Restructuring the layout in cells will improve efficiency and also free up space from the reduction of inventory. 3. After reading this case and chapter 7, I believe that the transition for employees to a lean system will actually go quite smoothly. It sounds like the employees currently run around at a frantic pace all day switching between teams even though their bonuses are only based on their specific team. A lean system with improved efficiency should allow the production process to be more fluid and

allow team members to stay with their own team and earn their bonuses. Also, morale will be boosted by the fact that their work environment will be less stressful because they will not be running around between departments. From my personal work experience, it is very frustrating to have a job where half the time you feel like there is nothing to do and the other half you are rushing around. Creating a balanced workflow for the employees will boost morale.

4.

At what stage in the development of a supply chain is Oak Hills at, and what can be done to improve the supply chain? I am not sure what this question is really asking. From the book reading, I am guessing that Oak Hills is in a shift between mass production and mass customization as it tries to produces mass expedited orders while trying to produce a very customized product. I may be wrong but it also seems like Oak Hills is a mix of the ATO and ETO strategies as some of the product is very customized and while others parts can be prefabricated beforehand. This present batch flow system is very inefficient. I feel like I am being very repetitive but I believe improved communication with E&E department must come first for improving the supply chain. There needs to be extensive research compiled on the E&E department to better predict orders and decrease lead time and expedired orders.

5. For Oak Hills, what is the connection between demand management and the supply chain? I believe controlling demand management is the most crucial aspect of Oak Hills implementing a successful lean strategy in their supply chain. Successful demand management will allow Oak Hills to reduce their lead time and eventually have no buildup up of WIP inventory. When the process is flowing smoothly there are less quality problems which reduces the need for excess WIP inventory. Also, restructuring the plant to a lean system will allow for extra available space in the plant which they could possibly use to introduce another line of products if desired. According to the case, all the sensor boards were packaged to prevent damage; however, because of the space constraints only a limited number could be held in the area. With the extra space now available, Oak Hills can store more sensor boards can be held in the area improving efficiency. 6. What should Oak Hills do? What problems might occur in implementing your recommendations and how can these problems be avoided or neutralized? I believe that Oak Hills should implement a lean strategy. As stated above, I believe implementing this strategy will improve efficiency and employee morale. However, a major problem in trying to implement this strategy may be Oak Hills foreign order processing. Foreign orders are large for Oak Hills, and there is no real way to improve this process due to the constraints of U.S. paperwork.