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Lean Operations

M14EKM – Lean Operations October 2014;
Assignment 2 (40% module mark)
University Case Study
Read Automotive Components (RAC) is a manufacturing company based in the Midlands. It presses, machines, paints and assembles products for high volume automotive customers. Its current manufacturing processes include pressing, conventional machining, cnc machining centres, automatic painting booth and assembly and with Heat Treatment being provided by a local subcontractor.
RAC is a first tier supplier to the automotive industry. They supply complete assemblies for the OEMs and components for the Aftermarket sector.  The company has been in business for 40 years and currently employ 200 people.  Since 2010 the company have lost 2 major orders to overseas competitors.  20 % of their direct workers have been made compulsory redundant and there may be a loss of a further 25% of workers in the next 12 months if they continue as they are.
RAC’s manufacturing facility is currently producing to mass production principles.  The machines have a functional layout (figure 1) and produce components in large batches.
The company have recently employed you as their Manufacturing Director to turn around their manufacturing performance; as you have extensive knowledge and experience of Lean Manufacturing principles.
An initial analysis of the company production data has identified a product family containing four parts, AZ123 (left hand side front) and AZ124 (right hand side front), AZ223 (left hand side rear) and AZ224 (right hand side rear), which are high value, high volume, runner products. A car set consists of one of each product.
Analyse the following data and prepare a report to be presented to the Board of Directors, assessing the current state of the manufacturing system and demonstrating a vision for the future.
Read Automotive Components (RAC) – Material and Information Flow
Customer Requirements
?    2520 car sets per month
?    Returnable carriers (universal for AZ123, AZ124 AZ223, AZ224), 15 assemblies per carrier
?    Carriers should be identified  by part number.
?    Three shipments per day to the customer by lorry.
?    Customer site working three shift system.
Production Processes
?    The AZ family of products have a common manufacturing flow.
?    The front assemblies are supplied with a component part, BZ111, which is manufactured in-house.
?    RAC’s manufacturing process for the assemblies starts with the Press, blank and form. Because of the short cycle time and high set up times the batch size is high, 2500 (almost every product every month). The pressing is placed in trays of 40 and transferred in a batch size of 800, in stillages, to the machine shop where insert, assembly and paint occurs.
?    The painting process is a fully automated and works with a twin pallet system which  holds two products in each pallet. This enables the operator to load pallet A with 2 components whilst the two components on pallet B are within the paint booth and are automatically sprayed. At the end of the cycle the pallets are switched and the process starts again with Pallet B being loaded and Pallet A in the booth.
?    After painting the ‘front’ components are assembled with BZ111 and then have 2 further assembly operations, where bought out parts are added to each part. The rear assemblies only require the final 2 assembly operations.
?    The assemblies are then loaded to the LHS / RHS designated carriers. (note: the customer will return the whole delivery if part number integrity is not 100%)
?    All moves within the same section are done manually, using trolleys.
?    All moves between sections are done by fork lift truck (a very scarce shared resource!)
?     A schematic layout of the shop floor is given in Figure 1.  Finished assemblies are then staged and shipped to the customer’s site daily.
?    Lanchester Steels Ltd supply’s bar stock to RAC on Mondays and sheet metal on Wednesdays.
Work Time
?    20 working days in a month
?    Operating a 3 shift system in all production operations
?    6am – 2 pm, 2pm – 10pm, 10pm – 6am
?    30 mins lunch and two 15 min breaks per shift
Production Control
?    This is the responsibility of the Logistics department which receives 90/60/30 forecasts from the customer.  Logistics are responsible for downloading this information onto the MRP system.
?    A 4-week forecast is issued by logistics to Lanchester Steels via MRP.
?    Logistics ensure raw materials are available and secures by weekly faxed order release to Lanchester Steels ltd.
?    RAC generates weekly departmental requirements via MRP.
?    A daily firm order is received from the customer
?    Weekly requirements are customer order based as well as logistics taking into account WIP and finished goods inventory numbers, anticipated scrap and process downtime.
?    Logistics issue weekly launch and build schedules to the stores, foundry, machine shop,  and assembly area.
?    Logistics issue a daily shipping plan to the Despatch Department.
Process Data – Common Route for  AZ123, AZ124, AZ223, AZ224
Operation 1 – Press Blank (shared resource)
?    Cycle time: 3 seconds
?    Changeover time: 320mins
?    Availability: 95%
?    EPE 2 weeks
?    Quality pass rate 99%
?    Observed inventory:
•    5 days sheet metal before press
•    After casting;    1,800 AZ123
2,600 AZ124
2,400 AZ223
1,700 AZ224
Operation 2 – Press Form (shared resource)
?    Cycle time: 5s
?    Changeover time: 280 minutes
?    Availability: 95%
?    Quality pass rate 99%
?    Observed inventory:
•    800 AZ123
600 AZ124
100 AZ223
900 AZ224
Operation 3 – Insert
?    Operator dedicated to manual process
?    Cycle time: 38 seconds
?    Changeover time: None
?    Availability: 95%
?    Quality pass rate 99%
?    Observed inventory:
•    600 AZ123
330 AZ124
480 AZ223
960 AZ224
Operation 4 – Drill
?    Operator dedicated to manual process
?    Cycle Time: 60s
?    Changeover time: 2 minutes
?    Availability: 95%
?    Quality pass rate 95%
?    Observed inventory:
•    750    AZ123
300 AZ124
250 AZ223
670    AZ224
Operation 5 – Automatic Paint (twin pallet system holding 2 parts per pallet)
?    Operator dedicated to manual process
?    Unload / load : 20 seconds per part
?    2 parts per pallet
?    Cycle Time: 280 seconds (for 2 parts)
?    Changeover time: 5 minutes
?    Availability: 88%
?    Quality pass rate 90%
?    Observed inventory:
•    600 AZ123
300 AZ124
200 AZ223 (moved immediately post op 6)
800 AZ224 (moved immediately post op 6)
Operation 6 – Assy 1 (AZ123 and AZ124 only, assembled to BZ111)
?    Operator dedicated to manual process
?    Cycle time: 290s
?    Changeover time: none
?    Availability: 100
?    Quality pass rate 95%
?    Observed inventory:
•    370    AZ123
250    AZ124
Operation 7 – Assembly 2 (All products)
?    Operator dedicated to manual process
?    Cycle time: 80s
?    Changeover time: none
?    Availability: 100%
?    Quality pass rate 98%
?    Observed inventory:
•    850    AZ123
450      AZ124
250      AZ223
370    AZ224
Operation 8 – Assembly 3 (All products)
?    Operator dedicated to manual process
?    Cycle time: 65s
?    Changeover time: none
?    Availability: 100%
?    Quality pass rate 98%
?    Observed inventory:
•    370    AZ123
260    AZ124
350    AZ223
180    AZ224
Production Data –  BZ111
Operation 1 – Saw (Shared resource)
?    One operator dedicated to manual process
?    Cycle time: 15s
?    Changeover time: none
?    Availability: 95%
?    Quality pass rate 98%
?    Observed inventory:
•    5 days bar before saw
•    After saw, 600 BZ111
Operation 2 – CNC Turn (dedicated to product family)
?    One operator per machine (automated cycle)
?    Load / unload 10s
?     Machining cycle 535s
?    Changeover time: 120 minutes
?    Availability: 88%
?    Quality pass rate 90%
?    Observed inventory:
•    280 BZ111
Operation 3 – Grind (not dedicated to product family)
?    One operator per machine (manual machine)
?     Machining cycle 250s
?    Changeover time: 90 minutes
?    Availability: 98%
?    Quality pass rate 92%
?    Observed inventory:
•    625 BZ111
Operation 4 – Heat Treatment (Sub Contracted)
?    Process Time  120 mins
?    3 day Turnaround Time
?    Batch size 2,000
?    Changeover time: 30 minutes
?    Availability: 98%
?    Quality pass rate 92%
?    Observed inventory:
•    560 BZ111 waiting shipping to sub con
•    1,000 BZ111 waiting shipping to RAC
•    800 BZ111 @ RAC waiting transport to assembly
Despatch Department
Take parts from finished goods location and stages them for shipment to customer via lorry.
Finished Good Inventory
?    Observed inventory:
•    1500    AZ123
2060    AZ124
2750    AZ223
1750    AZ224
1.    Assess the current manufacturing facility using Value stream Mapping, 7 waste and other techniques and audit tools.
2.    Using the above information, critically appraise the current state
The report should be presented as a formal technical report to include a summary, introduction, main body of your report, discussion and conclusions.
Please take care to reference literature correctly in your text.
Goods IN        Goods Out
Raw material    Shipment
Stores        Staging                Machine Shop
(Insert, drill, CNC, grind, paint booth)
Press shop                    Inspection
Gauge Room
Tool Stores
NDT                X ray                Tool Room
Figure 1 Schematic Layout
M14EKM – Lean Operations 2014/15 (semester 1)
Assignment 3 – Cell Design & Future State map
(40% module mark)
Moodle on line Submission Date: 11:00pm 12th January 2015 (Plus hard copy submitted to Wendy Garner, Floor 2 EC Building, Tuesday 13th January 2015 )
Learning Objective:
Assignment 3 will contribute to the module objectives listed below
•    Use value stream mapping to appraise the current state and to develop a vision for the future
•    Design single piece flow cells
•    Apply lean techniques to the visual management and control of a manufacturing system.
Assessment Time        Approximately 30 hours
Read Automotive Components (RAC) Continued
Assignment 2 resulted in a critical appraisal of the current state of  Read Automotive Components (RAC) . A current state map was developed and the waste within the system was identified.
The next stage in a lean assessment is to eliminate the waste and to make value flow. Continuing with the RAC data sheet from assignment 2:
1.    Identify the areas for flow
2.    Design cellular manufacture providing detailed information for each cell such as; yamazumi boards, walk diagrams, standard operations etc.
3.    Demonstrate your vision for the future using value stream mapping.
4.    Propose an implementation plan
5.    Assess the benefits.
The report should be presented as a formal technical report to include a summary, introduction, main body of your report, discussion and conclusions.

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