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Fabritek Corporation: Written Case Analysis

Case Synopsis

The following analysis is presented for HBS Case on Fabritek Corporation where Mr. Stewart Baker,
the automotive products manager is faced with issues of quality control and on-time delivery of
pilgrim order. After one of the millers from the team assigned to Pilgrim contract has an accident and
takes leave from work, at the production floor he is replaced by Arthur Moreno, one of the best
millers available in factory by Frank Deere, the milling department foreman. Frank, soon realizes that
there is mismatch between the remuneration Moreno was able to get from his previous assignment on
shifting to the current job, as an individual's performance in getting more work done was linked to
him getting premium pay. There was also a conflict with competing objectives as Pilgrim team
originally had a good cohesiveness and Moreno was used to working on his own that resulted in
competing objectives. This incoherence ultimately lead to rework and delay in delivery of parts to
Pilgrim Corporation.

Process Design

Fabritek's engineering department knowing the constraints of the equipment availability designed the
manufacturing line with 4 milling, one drilling and one grinding machines. Human resource was
planned such that one material-inspector will be screening the castings before they go are setup for
manufacturing and help in the setting up process whereas the second material-inspector would be
responsible for quality control at the end of manufacturing process. One operator was assigned to 4
milling machines and an another operator handled the drilling and grinding operations. A schematic of
the process is given below:

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Problem Identification

Fabritek Corporation problems are identified based on different areas of the company. The list and
table explain these problems:

1. Corporate/Company Level

2. Production

3. HR

4. R&D

.Areas of Problems. .Problems. .Causes.


Corporate General Strategies The President stressed only four key
elements of the company’s strategy for
meeting objectives.
Production 1. Inconsistent labor force. 1. After getting in to an accident, the
company had no real replacement.
2. Weak labor-labor
communication. 2. Moreno and Clarke showed
communication gaps, also Moreno, and
other workers.
Human Resources 1. Lack of Training and 1. Labor force found it hard to work and
Development. understand the machining processes
required for Pilgrim’s Project which was
2. Unstructured Payments
unlike there usual work for producing
for workers.
manufacturing products for other
3. Lack of HR involvement companies.
towards motivating
2. The employees’ salaries were based on
workforce.
the quantity of the products and not on
the quality.

3. Moreno’s started to cause problems for


the production because he wasn’t getting
paid enough on this new job, unlike $215
last week he only got $174.14 on
Pilgrim’s project, due to which he raised
the output to 167%.

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R&D 1. Use of general-purpose 1. General purpose milling machines was
machinery. used to make Pilgrim’s parts.

2. Machinery was with 2.In practice, levers of the milling


missing parts. machines were missing and adjustments
were made by wrenches.

The problems identified in the above table include problems from all over the company, they include
major problems to be rectified as soon as possible to successfully complete the Pilgrim’s project and
other problems are towards a long-term plan. The major problem are in the production are where a
pile of jobs are created at Grinding and Drilling stations due to 167% extra output by Moreno’s
Milling Station.

Calculations to Explain Root Cause of Problem

Below table is extracted from Exhibit 2 of the case problem and it indicates production times in
minutes for 100 pieces per day,

As provided in the text, Total Cycle Time = Machine Time + External Time.

Total Cycle Time for all Milling Cuts are calculated by adding all the Total Cycle Times:

Total Cycle Time= 3.594 + 2.694 + 3.301 + 1.725 = 11.584 min.

Similarly,

Total Machine Time= 2.600 + 2.220 + 2.420 + 1.118 = 8.358 min.

Total External Time= 0.994 + 0.744 + 0.881 + 0.607 = 3.226 min.

The Total Cycle Time= 11.584 min is based on 100 units of production per day; this is based on Total
Machine Time and Total External Time. As Total Machine Time can be taken as constant due to the
fact that machine time is altered either with replacement of machinery or newer technology in the

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processes only Total External Time can be changed by the efficiency of the workers. As the standard
production efficiency achieved at Fabritek was 133%, this would differ the Total Cycle time by the
factor given by; 11.584 / (100%+33%) = 8.71 min. This time would be taken if the worker were
completing the job without sacrificing quality of the product. However, if we calculate the same factor
based on 167% rate of efficiency this would turn out to be 6.937min., which is lesser than the Total
Machine Time 8.358 min as calculated above. This Total Cycle Time cannot be achieved unless one
of the Milling Cuts are skipped or remains incomplete.

Recommendations

Based on the information given in the case, we can establish that 38 defective parts require 180 min to
be re-grind. This causes an extra shift cost for the re-grinding and delaying of delivery. As Machine
Time cannot be altered, the only variable time can be External Time, but that too to a certain extent.
Furthermore, Machinery cannot be changed as it would require Planning, Layout Designing and other
time taking processes. The problems identified at Fabritek can be resolved based on two criteria:

1. Short Term Problem Solving

- To incentive Moreno more because if Moreno is replaced, the new worker would take time to
learn the methods and their delivery schedule is tight and would not allow them any delays.

- The company should provide Moreno extra work or shifts to compensate his lowered weekly
pay.

- Moreno should be placed at Grinding and Drilling end so that his input is based on the output
of Clarke. Either this might leave Moreno with idle time, which could be resolved by
providing him extra work, or extra shifts in the company could compensate that.

2. Long Term Problem Solving

- Changes in Salary Policy- The Salary Policy should be more focused on Quality of Products
rather than Quantity of Output.

- Changes in Motivation of Employees- HR should focus more on engaging employees


together to reduce communication gaps between them.

- Generic Policies should be avoid and company specific policies should be made and applied.

- Fabritek should invest more on Learning and Development of employees and bridge the gap
between their skill levels to make all the labor consistent.

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