Unruly Spider - Case Study Example

 Major Facts Allen Jones is the supply manager of tooling and subcontract material at Alex Precision Manufacturing Company. This company received arejection notice from the inspection department on thirty-two spider gears. It was rejected because the holes on the bores were not polished and the magnaflux mark was not legible. Allen brought to the attention of the chief inspector that there were no drawings calling for a finish on the bore. The engineer disagreed and felt that any professional would know to give the bores a smooth finish. Mr. Speed at Speedy Tool Company furnished the parts and checked the dimensions of the spider gears with a plug gauge and everything proved to be accurate.

He stated that he would ensure a ground finish on all future work and could reproduce the order with a ground finish within a week. Major Problem The major problems lay in the fact that the subcontracted company worked with inadequate drawings and inadequate tools. There was not a clear order from the engineer and this should have been communicated more effectively. The 1 1/8-inch-diameter holes had a rough finish on the bore. The magnaflux mark was not clearly legible. The inspection department rejected it.

Extra money must now be spent by Mr. Speed to get the right tools and additional labor to finish the job right. If he does not raise the price on each unit he could lose money. Possible Solutions/Alternatives A. The gears that were rough cannot be repaired but they could possibly be recycled and the money received from that could go to furnishing new equipment to make the grinding operation more efficient. B. Mr. Speed could raise his price to compensate for his expenditures of over $25,000 in repairing the tooling and redo with order with finished bores. C. The old gears can be recycled to decrease the extra costs and Mr.

Speed should raise his prices to compensate for the difference. D. The advantages of recycling the gears are that it will offset some of the cost and the disadvantage of this would be that the costs will not meet the total expenditures. Mr. Speed raising his price per unit could result in extinguishing his output and making him a profit. The disadvantage of this would be that the price per unit may not be economical for the customer. Choice and Rationale The best choice would be for Mr. Speed to raise his price per unit and receive his profit on the back end.

The process of salvaging the rough bores is not economical because it would require the operation of expensive chrome plating. It is best to raise the price and get the necessary equipment needed to complete all future jobs efficiently. Implementation/The Action Plan Mr. Jones can maintain a good business relationship with the Speedy Tool Company by having Mr. Speed raise his cost per unit. In the long run the customer will be pleased in the finished product which can bring more business to the company increasing revenues. Mr. Jones should discuss this with the chief inspector and emphasis the importance of communicating with the engineer’s.

The supply department working with engineers could prove to be very beneficial and reduce future costs because it will reduce errors. Also, an apology to the engineer is in order to exude good business etiquette. Questions 1. What are the sources of this problem? The main source of this problem is inadequate research of the current order at hand. All orders should be verified with the customer before product production. 2. What do you think would be an equitable solution to the problem? The most equitable solution would be to have Mr.

Speed raise his prices per unit to exceed his total expenditures so he can make a profit as intended.