Steel Nuggets Case Study

 

 

Steel Nuggets Inc.

 

 

A Manufacturing Case Study Exercise

 

 

Advanced Topics in Supply Chain Management

 

 

Case Study:  Part I of IV

 

 

This case study exercise is designed to provide an example simulation project that is conducted in EXCEL.

 

Students will build a model and then use that model to conduct a range of experiments that are designed to explore business improvement opportunities.

 

The exercise is focused on a manufacturing facility production line that is composed of machining operations linked by conveyors.  At the end of the line goods are stacked and palletized before being shipped out to customers.  A pallet return mechanism is also included.

 

The case is broken down into four parts.

• Exercise 1: Modeling the Factory (100 points)
  • Building your Model
  • Validating your Model
• Exercise 2: Experimentation using the Model (175 points)
• Exercise 3: Further Analysis and Experimentation (200 points)
  • Capital spend Options
  • Further Options
• Exercise 4: Advanced Experimentation (125 points)
  • Zero Spend Options
  • Further Ideas

 

OVERVIEW

 

Steel Nuggets Inc. manufactures three types of parts and they wish to maximize the capability of their production facility.  The factory is old and has a number of problems.  The manufacturing process is not smooth or streamlined and some of the equipment is unreliable.  There are many options for change, each with a different cost and each with a different potential payback.

 

Your task is to construct an appropriate model of the Steel Nuggets Inc. manufacturing facility, validate your model against the current performance of the factory and then use the model to analyze various options for improving performance.

 

THE MANUFACTURING FACILITY

 

The facility produces three products.  Product A, B and C.   Each part is constructed/built on its’ own dedicated machine (MakeA, MakeB, MakeC)

 

These machines are never starved for the raw material (metal blocks) needed to manufacture the parts.  A single part is manufactured on each machine at a time.

 

The manufacturing times of the parts on these machines are as follows:

 

MakeA – Cycle Time = 5 minutes

 

MakeB – Cycle Time = 5 minutes

 

MakeC – Cycle Time = 10 minutes

 

THE TRIM OPERATION

 

Parts are delivered to a Trim operation on three separate conveyors that can each take 3 parts only at any given time.  (Machines will stop their cycle if conveyor is full)  The Trim operation takes parts from the conveyors in sequence – but will not wait if there is no part present on a particular conveyor – it will simply continue on to the next conveyor in the sequence.

 

Trim Operation Sequence: MakeAMakeB           Make C          MakeA

 

STACKING THE PRODUCTS

 

The Trim operation outputs the part onto another conveyor that delivers the parts to a stacking operation.  The conveyor is long enough to hold 10 parts.

 

The stacking operation is actually a person who takes the components and stacks them in three separate feeds to the palletizer depending on part type.  Each of A and B take 0.65 minutes to stack but, due to the heavy weight of C, this products takes 5.5 minutes to stack

 

This results in separate stacks of A, Band C in the feeding mechanism for the palletizer.

 

THE PALLETIZER

 

When a stack reaches 12 high there is no more room for additional parts of that type until the stack is palletized.  The palletizer takes the stack and loads it onto a pallet which has been taken from the Pallet Store.  The Palletizer takes anywhere between 3 and 3.5 minutes to complete this operation.  This operation has a uniform distribution (variance)

 

Full Pallets are placed in the dispatch system where they are taken to the customer and then the pallet is returned.  The whole process of delivery takes between five hours and 11 hours randomly (a UNIFORM distribution).  When the pallet returns it is placed in the pallet store for reuse.  There is no restriction on how many pallets can be delivered at once.

 

 

THE PALLETS

 

The pallets used are expensive custom items (due to the need  to keep the parts particularly rigid while in transport).  The company currently owns just 12 pallets.

 

CONVEYORS

 

All conveyors in this facility are of the accumulating type also known as queuing conveyors.  All parts will roll up to the queue of parts at the front.  The time for all conveyors to cycle one part position is .5 minutes

 

RELIABILITY

 

Not all the machinery in the factory is 100% reliable!

 

• The Trim machine breaks down every 100 – 200 minutes (UNIFORM distribution) and takes 20 – 25 minutes to repair (UNIFORM distribution)

 

• The Palletizer breaks down every 10 – 20 operations (UNIFORM distribution) and takes between 1 – 4 hours to repair (UNIFORM distribution)

 

• The Trim machine and the Palletizer are both repaired by the same person who prioritizes work on a first come first served basis.

 

The other machines and the conveyors do not break down

 

WORK PATTERNS

 

The factory is run 24 hours a day, 7 days a week.  Each position involving people is manned for the entire duration of production.

 

ASSIGNMENT – PART I OF IV

 

Using the information available build a working model of the current facility.

 

Once the model has been built you need to then validate its accuracy against the currently observed output at the factory.

• Current Production Averages 2,456 parts per week.

 

A one page synopsis describing how your model works and the validity of the same is required.

 

Refer to Rubric for more details on the scoring of this assignment