THEIRONSHOP COMPANYCONSULTING PROJECT – PRODUCTION AND OPERATIONS MANAGEMENT

17/12/2012

Team INSOMNIA

Li Jing – 2011196049Kim Hee Jin – 2011123313Yoo So Young – 2011123293Chaibi Amine - 2012843618

PROFESSOR

Mr SUNG Joo Bae

SUMMARY

INTRODUCTION.....................................................................................................................................................2

PROCESS DESCRIPTION, CHALLENGES, AND SOLUTIONS................................................................................4

Initial Processes..........................................................................................................................................5

Cutting processes........................................................................................................................................6

Stair steps preparation...............................................................................................................................8

Welding process.......................................................................................................................................10

Finishing...................................................................................................................................................11

RECOMMENDATION.....................................................................................................................................14

Conclusion....................................................................................................................................................15

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INTRODUCTION

The purpose of this project is to define and solve the problems that daily operations may face by observing the video of actual manufacturing processes and related operations. A set of videos was proposed to us by the professor and we had to choose one among those in order to begin the work.

The video we chose is “The iron shop”. The iron shop is a company specialized in manufacturing spiral staircases since more than 40 years. Those staircases can be either made of metal or wood (oak). The iron shop is operating mostly in a very mature industry (metal / iron industry). That means it is very difficult to get bigger parts of the market and expand quickly. That may be the reason for this specialization. Focusing on what they do best.

The Company was created in 1932 by Max Cohen, a Soviet immigrant. At that time, it was just producing decorative metal.

After many years in the industry, Max Cohen passed away in 1958. His sons, David and Philip Cohen took over. Philip became president of the company.

In 1970, they began to produce spiral staircases and to specialize in that market. The Iron Shop has enjoyed a local reputation for outstanding design and fabrication of custom-built spiral staircases, curved stairs, and floating stairs. From that time, the company’s quality and value became available for the first time on a national basis. Demand for the popular kits over the years has made them The Leading Manufacturer of Spiral Staircases. The products are from the beginning sold in kits. The kits are simple to assemble and easily customized to meet the customer’s needs — in Metal, Oak, and Cast Aluminum Victorian designs.

In 2007, Philip Cohen passed away and his son Allen became president of the company, sharing the responsibilities with David’s sons Ron and Howard. Allen runs the part of the company devoted to custom work and Ron and Howard oversee the spiral production and sales. The company now represents 4 Generations of Cohens.

Nowadays, in addition to the main plant and showroom outside of Philadelphia, there are four regional showrooms and warehouses across the USA. Each is filled with fully assembled spiral staircases and staffed with professional and knowledgeable salespeople, who can provide design-build services free of charge. The company represents 130,000 Square feet of production space, 9 buildings, 220 Employees and about 90% of them working in the manufacturing processes. It focuses on both customized and standard productions which are made with Job and Batch processes

The Iron Shop Company prides itself on the highest quality spiral staircases at the lowest prices and is very confident about the fact that it can provide prices lower than any competitors.

The video presenting The Iron Shop interested us because a lot of different processes are displayed in it. It makes a very interesting topic if we want to make some improvements on the processes as a consulting team. Moreover, as the company sells a

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lot of customized products, it is more difficult to have a very efficient connection between all the processes and to reduce costs. That makes a pretty good challenge to us because if we do well, that means we acquired most of the important skills that we had to get in this class. A lot of additional research had to be done because of the nature of the processes which look kind of “messy” at first sight and to get more information about the whole supply chain. First of all, we focused on the improvements which could be made on the processes itself.

PROCESS DESCRIPTION, CHALLENGES, AND SOLUTIONS

In the video, a lot of machines and processes were presented to us; to make it clearer we displayed the whole processes in a simple way trying to follow their “stream” and grouped them by type of work.

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First part is the initial processes with designing and receiving the raw material (parts) which will be used to manufacture the stairs

Then the company uses cutting processes with waterjets, laser cutting and high definition plasma cutting. Those machines are used to cut into the metal plates in order to get all the parts needed for the stairs

Third is the stair steps preparation with the C&C Broke to bend them and the drilling to prepare the axis.

In forth, those two parts are linked together with the help of a Welding RobotAnd finally, all the finishing, with forging and brushing for the handrails and

painting too

Let’s see those processes in detail

INITIAL PROCESSES

DESIGNING

Initial processes

Cutting processes

Stair steps preparation

Welding process

Finishing

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Designing is done in offices (we can assume that a part of the factory is reserved for this process like it is usually done). A team of designer work with the customers in order to design the staircase in a way the will satisfy them.

We noticed two important points that may need some changes. First, the offices are quite “messy”. Yeah we know designing is like an art and artist are often messy… but to be more efficient,

they should work on the layout and clean a little too. The best way to do this may be a closeness matrix (as usually designing is done in teams, improving the employees movements may be enjoyable). Second, we noticed they don’t use so many computers in this process, but CAD can be very useful to add more efficiency. Modifications can be made more easily and some drawings are quicker

PARTS – INVENTORY MANAGING

The company is using a make to order strategy, it makes inventory managing a difficult task. The goal is to reduce inventory holding costs and to avoid having ordering cost that are to important either. The best way is to set a forecasting strategy for the ordering. Our solution is to use a trend adjusted exponential smoothing method to forecast (We noticed the company has more and more demand each year)

CUTTING PROCESSES

WATERJETS

There are a Waterjet machine and a Mitsubishi machine in the cutting process. The Company uses those machines because they don’t need other secondary process after cutting with this technic. They do cutting and cleaning simultaneously. Waterjet and Mitsubishi have same principles using water pressure to cut the iron materials. Waterjet focuses on the shape and design. It can cut the materials to any shape and any design.

Figure 3: WaterJet machine cutting metal

Figure 1: Workers in the designing offices

Figure 2: Metal plate (raw material)

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On the other hand, the Mitsubishi machine focuses on the strength. It can cut the any thickness of materials. So they use the Waterjet machine when they make delicate product like tennis court. And they use the Mitsubishi machine when make big scale of iron product.

This process’ main challenge is accuracy and decreasing cost and increasing efficiency. It is fine with accuracy. Waterjet can be programmed to make accurately-designed product. And it is also fine with the efficiency of process, in terms of decreasing

steps of production. But those two machines are not that easy to use and require special attention. They can be used for many different types of cutting but in order to be more efficient, the company should be careful about making too much different parts which means increasing setup time.

To solve this problem, they need to regulate the extent of customization. The more diversity the company allow to their consumers, the higher the probability of need of new setup that cause inefficiency. Therefore, they should make a limited range of customized order to extent which they can cover.

LASER CUTTING

There are many different methods of cutting material, in the Iron Shop this laser cutting is probably the most accurate, fastest, most expensive method of cutting. It’s a machine of high-technical content, so it can be very flexible cutting material as required, but is used for thinner materials than Waterjets and only metals. Also, it doesn’t need too many workers to operate.

The laser cutting machine is the most expensive method of cutting in the Iron Shop, so if the company want

to improve production efficiency by purchase more laser cutting machine, or make the company more manageable, modern and mechanized, the cost of production would greatly increase.

The Iron Shop can use the laser cutting machine to produce the tasks which have less time, more profit and high accurate ,and it’s also a way to reduce the asset depreciation. The company can try to do some technical innovation, explore cheaper and more efficient machines to replace the laser cutting machine. For example, the company can set up a research group to find some better ways to cut, or find more suitable cutting machines to the Iron Shop.

Figure 5: Laser cutting machine cutting metal plate

Figure 4: Mistubishi Waterjet

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HIGH DEFINITION PLASMA

In the Iron shop, high definition plasma is another form of cutting machine. It’s about 1/10 the price of laser cutting machine, and it can’t cut materials as precise and as fast as the laser cutting machine. Used for metals too, it can cut thicker materials than the laser cutting machine

The high definition plasma machine is not a high scientific and technological content machine, so it can’t produce high accurate task. Also it can’t produce very

fast. If the company received a large amount of orders and only use this to produce, they may be difficult to deliver products on time.

The Iron Shop can use the high definition plasma machine to produce the tasks which have more time, less profit and low accurate. If they received very complex product orders, they can use this machine to work first, leaving the more complex produce process to a more advanced machine, like laser cutting machine, or directly to the skilled workers. Task differentiation is a good way to improve production efficiency like this.

For this group of processes, we agree with the company’s strategy because they need different ways to manufacture in order to give a satisfying level of customization. Moreover, having different machines make TheIronShop able to reduce Setup time and save some costs.

STAIR STEPS PREPARATION

C&C BROKE

A worker picks up the material that is cut in advance. And the worker inserts the material partly to extent which should be folded. And the bending machine folds the material. The computer in the machine can be programmed how they fold the materials. The computer can also judge whether it can fold it or not just with the information of thickness, material hardness or type of material. It is very simple and repetitive process seemingly. It is appropriate for mass production

This process’ main challenge is the rapid/mass production. The company’s main

product is iron stair. In this production floor the machine products footholds of stairs. The footholds usually same shape and the production process require same skill. Seeing large, improve efficiency in this process is important. Maybe it is most simple part and it is more efficient to re-allocate the employee in this process to the other processes that need more skilled people. However, this process cannot work without people.

Figure 6: High definition plasma cutting metal plate

Figure 7: Worker using C&C broke machine

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We noticed in this process that the worker needs to move the part from a table to the machine. The parts seem a little heavy and it looks way easier to move when the parts are high enough (around the chest of the worker). But when the worker reaches the last parts, she has to bend over to raise them and it results in lack of efficiency and strength wasting. If the company wants to save costs (time and healthcare) we thought that a simple device should be used. This device is not expensive and is just a “spring lift table” which raises the part more and more when the weight on it decreases (taking off some parts). That allows the worker to always have the parts at the right level.

DRILLING PROCESS

This machine is a customized machine the company had to build in order to achieve this specific process. The goal is to drill into cylinders which will be fixed to the stairs in order to fit with the axis. A worker put some cylinders in a magazine and at the end of the process, the drilled finished products fall in a box.

This process’ main challenge is accuracy and efficiency. It is fine in terms of accuracy. It is much more accurate to drill holes with machines than with people. However, this process also does not need special skill. We can compare this process with water jet process. Both processes cut some part of the material. And because of characteristic of iron, cutting generates dust. That is, it inevitably requires cleaning process. But this process does not include the cleaning. So it causes additional process for cleaning. We noticed that the finished parts just fall in a box on the floor, we thought it was not very efficient either.

To solve this, they should add simple device to blow dust. They will be painted later so it is not the most effective and efficient way to clean the products using water. So it can be good to add some kind of fan system in the machine to blow dust. Or making a new cleaning infra can be another solution to solve problems simultaneously that exist in the water jet and Mitsubishi machine, but more expensive. For the box problem, adding wheels to it to move it in an easy way to improve the process. With two or three of those boxes it is possible to take the finished part to the next process without stopping the machine.

WELDING PROCESS

Figure 8: Drilling machine with magazine

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There are many footholds and drilled cylindrical irons made from previous processes. In this process, robot welds these two products. All the process is progressed without any help of human. One foothold is set with one cylindrical iron. The machine just goes and welds the foothold-cylindrical iron set.

This process’ main challenge is having accurate and dangerous work be done with machine and efficiency. Welding is not much complicated so some other company or production, skilled people take welding job. But if the company wants to make more benefit, it is more efficient to use welding machine, because there is no danger of human accident and machines can product more rapidly (1 welding robot can do the work of 4 workers). However, there is a problem of discordance of production

speed. . As we analyzed above, the drilled cylindrical iron and foothold are produced with mass production system. And because of that, waiting time between parts manufacturing process and welding process is generated. They are the basic part of whole product. Most products need that part. So it is more efficient to make them in large quantities. It is nearly impossible to develop technology and speed up the machine in short time. So the realistic choice they can choose to expand their production process is to buy one or more welding machines depending on the speed needed. That machine is not the most expensive one. The company can afford it.

FINISHING

FORGING

One of the outstanding facts about the Iron Shop is that they are using both modern engineering methods such as laser

Figure 9: Welding Robot welding parts

Figure 10: Worker performing forging

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cutting and traditional skills such as forging. One skilled employee produces delicate, fine quality hand-made items with the aid of computer control design and modern method of engineering.

To import traditional skills the Iron Shop needs to hire high-skilled employees whom the company needs to pay more than other employees. Also if there is too much demand at the same time period, the Iron Shop might be short of workers. Therefore the first solution can be limiting the amount of demand for customized products so the company can afford with current number of employees. However this might make a chance to lose the opportunity to gain profit. The second solution can be increasing the number of employees and make this process as a permanent process, process always working, not only when demand has occurred. This can increase the number of demands which the Iron Shop can afford, but increasing the number of skilled workers can be a huge investment to the company. Anyway, customization is so important in the company that we chose to keep it as a hand working.

BRUSHING

This is almost the finishing process which highlights the product. When products are produced, they are thick and unfinished. Then the employee takes these and through wire brushing it, he/she makes the product shine and be ready.

As we can see in the video clip, the process is done by an employee although it seemed to be an easy process which can be done by machines. We thought at first that it

was the best way to increase productivity and efficiency. But after thinking about it, we think that investing in machines for this process may be a loss of money first because of the price of the machine which should be a very flexible one to apply the process on sometimes very different shapes and second because this process needs delicacy and quality checking which is always human made. That is why we chose to keep this process as hand working process but we think it may be good to hire more employees to do it (1 or 2 workers).

PATTERN COATING

This is where products are colored with powder. When products are assembled, products are moved to this process to get colored. One employee sprays the powder to the product and the powder is stuck to it magnetically. After it is colored, the product is moved into an oven next to the process section and is cooked at 425 degrees for 30 minutes.

Figure 11: Worker brushing handrails

Figure 12: Worker painting staircases’ part

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The first challenge is that products are sprayed by an employee one by one. Second, after the product is sprayed; it has to be moved to oven one by one.

As this process is highly related to customization and needs a lot of care. We suggest keeping the hand working. But in order to improve efficiency, we thought that if the company uses for example wagons with wheels, it would be much easier to move products between processes and make this process to work automatically so there’s no need for workers to move back and forth.

STANDARD PRODUCT LINE

In this line, the company only deals with black products which are standardized. On hooks which are circling around, one employee moves products and hangs on to it. Next, another employee wipes out the product so there can be no other things when spraying. The third employee then sprays products with black which will be straightly moved into an oven and cooked for 6 minutes.

In the video, we see the workers are quite used to work together and are quite efficient. But, we can see that only one worker is spraying all the products, and he is moving

back and forth to keep the pace. We bet the way the machine is moving can be changed to make this process efficient. We can make those rails narrow at start and becoming wide when near to oven so the worker can stand between narrow rails and spray easily for both sides.

Figure 13: Workers at the standard production line

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RECOMMENDATION

We could get a lot of recommendable features from the Iron Shop. The most obviously is the company has two different production lines. They use modern, high level of mechanical processes to produce. On the other hand, they still retain the traditional handwork. From the strategic level, it’s a good way to show customers the Iron Shop can provide a more personalized, more artistic service. From the economic level, handwork can provide service to the high-level customers which means they can earn more profitable. Also, as a company with 90 years of history, it’s a present of the culture of the company.

On the other hand, they also have some facts which they can improve. First, they can increase advertisement, communication and visibility. At least it allows people to know or even buy the products of the iron shop. And found out through additional research that 50% of clients come from other client’s recommendation, so it’s also a good way to increase the selling of the products.

Second, they should reorganize machines to reduce the unnecessarily spent costs which can be generated when machines are arranged imprudently. For example, after cutting the materials by laser, materials should be moved to C&C broke. However because machines are arranged here and there some useless movements have occurred. These movements have made workers distracted and also increased the cost. Therefore to reduce the cost and movements of employees, the Iron Shop has to reorganize machines. We recommend implementing a “2 bins system” to improve efficiency too.

2 bins system or kanban system. In the video, that company move bended iron pads without order or rules. We see the workers laying parts on wood panels on the floor. And it is a very simple work. So the production speed is high therefore, there are probability of overproduction. Using Kanban system, they can get a simple and understandable process. And can get quick and precise information. And it doesn’t cost much. And with the system, they can

get strict limit of over-capacity to minimize waste. And they can fully control the process and improve efficiency.

Figure 14: Explanation of Kanban system

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Third, as the leading manufacturer of spiral staircases, the iron shop can do a lot of things to keep their position within the industry or even expand it. Form the internal company, they can do the following three points to make the company better. First, they can put more energy into design to make their products more special and easily recognizable. Second, trying to keep the high-level of skilled workforce reducing turnover and improve the safety of production. Some workers are very valuable as they are in the company since more than 20 years. They have a deep knowledge of the company codes and way to work. Their skills may take long time to regenerate if they were to leave the company. Last, they can improve the operation, marketing or financial level of the iron shop. From the external company, they should develop their global plan to sell products in many other countries, satisfy more customers' needs. The company is already leader in North America, why not trying to reach new markets? Also they can make the company more famous and gain more profits at the same time.

CONCLUSION

To conclude, TheIronShop is a very good company in term of durability and competitiveness. It has evolved a lot since it was founded 90 years ago. The Cohen family members showed their ability to rule this business and adapt to the market with their choice to specialize in Spiral staircases in the 70’s. They were able to take more market share and to make the company prosper. Now they are leaders in North American market.

But, a lot of improvement can still be made. Being leader and well positioned in the market doesn’t mean they can just rest on what they have already earned and just wait. Waiting dysfunction and then try to heal is not the right way to do. A commitment to continuous improvements and seeking for better efficiency and cost cutting is essential. Especially if the company want to get stronger and expand its market.

We gave some advices and parts of answers in order to help the company improve its processes. That was all the ideas we had reached within the time which was given to us. But we are sure that many other improvements can be found and made with some more time and information. In fact, information is essential too in this kind of task. We had to make a lot of additional research to complete what we saw in the video. It helped us to understand better the processes and have more information about the company, its machines and their price etc. This project made us realize the difficulty of finding improvements and increase productivity. We had to focus a lot on teamwork in order to reach good conclusions.

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