Printed Circuits Components for a Jit Factory

Printed Circuits Components for a JIT Factory

1. Major Facts

— Acacia is a major producer of graphic plotters

— Marketing forecast estimated annual volume to exceed 60,000 units

— Management determined that the newest unit, 440A, is an excellent choice for JIT process

— Supply Managers w/ technical backgrounds were assigned new product development

— Suppliers were requested to use bar-coded labels for inventory and kitting purposes

— Delivery for most JIT parts = 1 week (instead of usual monthly delivery)

— Parts considered for outsourcing = 4 integrated circuits (IC?'s), 7 diodes, 3 transistors

— Monitor Inc selected as single-source for 14 PC components

— During the production process, Monitor was not able to comply w/ JIT requirements

— Monitor-supplied components were mislabeled, out of spec and often behind schedule

— 5 diodes can not be resourced, Monitor is the sole manufacturer

— 2 alternate suppliers have been identified; capable of supplying 4 IC??™s and 3 transistors

— Alternate suppliers equipped to have deliveries ready in approx. 1 month

— Alternate suppliers??™ costs are 10% higher than Monitor, Inc.

2. Major Problems

— Monitor Inc has struggled to meet required specifications and has not delivered shipments on time. (MAJOR PROBLEM)

— Management realized that Monitor?'s focus was on high-volume production.

— Monitor is the sole source for a majority of the diodes needed.

— Why was Monitor selected as a single source for all 14 PC components, when they?'ve never supplied parts to a JIT customer before?

— What are the risks of using other sources for the transistors and IC?'s?

— Deliveries MUST be highly reliable to prevent stockouts and line shutdowns.

3. Possible Solutions

— If Monitor is a small biz, Acacia could consider entering into a Mentor Prot?©g?© agreement and assists Monitor with process development and lean manufacturing.

— Acacia could transition a portion of the orders for the IC?'s and transistors to alternate suppliers that are capable of supplying the necessary quantities.

— Acacia could conduct a Lean Event at Monitor to help the staff identify possible adjustments that could improve quality and on time delivery outputs.

4. Choice Rationale

To improve the supply process and maintain a positive relationship with Monitor Inc, a team of supply