Ron Garcia Mexico

Ron Garcia felt good about his first week as a management trainee at Mexicana Wire Winding, Inc. He had not yet developed any technical knowledge about the manufacturing process, but he had toured the entire facility, located in the suburbs of Mexico City, and had met many people in various areas of the operation. Mexicana, a subsidiary of Westover Wire Works, a Texas firm, is a medium-sized producer of wire windings used in making electrical transformers. Carlos Alverez, the production control manager, described the windings to Garcia as being of standardized design. Garcia’s tour of the plant, laid out by process type, followed the manufacturing sequence for the windings: drawing, extrusion, winding, inspection, and packaging. After inspection, good product is packaged and sent to finished product storage; defective product is stored separately until it can be reworked. On March 8, Vivian Espania, Mexicana’s general manager, stopped by Garcia’s office and asked him to attend a staff meeting at 1:00 P.M.

1. What recommendations should Ron Garcia make, with what justification? Provide a detailed analysis with charts, graphs, and computer printouts included.

2. Discuss the need for temporary workers in the drawing department.

3. Discuss the plant layout.

4. Bringing in temporary workers in the Drawing Department would not help. Drawing is not a binding constraint. However, if these former employees could do rework, we could reduce our rework inventory and fill some of our backorders thereby increasing profits. We have about a third of a month’s output in rework inventory. Expediting the rework process would also free up valuable cash.

5. The plant layout is not optimum. When we install the new equipment, an opportunity for improving the layout could arise. Exchanging the locations for packaging and extrusion would create a better flow of our main product. Also, as we improve our quality and reduce our rework inventory, we could capture some of the space now used for rework storage and processing and put it to productive use. Our machine utilization of 63% is quite low. Most manufacturers strive for at least an 85% machine utilization. If we could determine the cause(s) of this poor utilization, we might find a key to a dramatic increase in capacity.