Eastern Gear Inc.

Eastern Gear, Inc.

        Eastern Gear, Inc. is located in Philadelphia, Pennsylvania. They manufacture custom-made gears that range in weight from a few ounces to over fifty pounds. The metal they use depends on the customer’s requirements; they have used forty different types of steel and brass alloys in the last year alone. Their prime buyers are engineering research and development laboratories and small manufacturers; therefore, the orders are usually small and the same gear is usually not ordered more than once. The president of Eastern Gear, Roger Rhodes, recently decided to start accepting some larger orders of gears one-hundred or more with lower prices accepted. However, these larger orders interfered with the normal time amount that the small order deliveries took, making them late.

        When a customer orders a gear, James Lord the sales manager and marketing vice president will take it, receiving all of the specifics using a blueprint or sketch including the type of material and quantity. When the order is correctly received, a copy is sent to Joe Irvine, the production supervisor, and Sam Smith, the controller. The raw materials usually take one to two weeks to arrive, and recently the production time has increased to four weeks, which arose concern to Irvine because that means that there are bottlenecks in the production process, and they change from week to week, which makes getting orders out on time difficult. Each work center has a common set of machines or processes and the materials flow from one work center to the next. Usually a gear blank will start in milling where the teeth are cut into the gear’s edge, then it is sent to drilling where the holes are drilled in. After that, it is sent to grinding where finish is put on the gear, then it may be sent to heat-treating. After the process, the gears are inspected, and shipped to the customer. The machines are grouped in the shop by similar type, yet the production process still runs into bottlenecks. An order usually spends ninety percent of its time waiting for a machine to become available while ten percent is spent processing the order on the machine, causing the orders to take about four weeks on average. Large and small orders are processed together with no specific work flow for different order sizes, with large orders being the reason why the shop is at full capacity.

        Eastern Gear has had quite successful business over the last several months with sales being up by one-hundred percent. It has been predicted that sales can be expanded in the next few years if the current delivery lead time is maintained and reduced. Matt Williams, an expeditor, has recently been hired to increase delivery lead times. He reviews the orders each morning in order to determine which orders are behind schedule, marking it with a red tag which means to rush it. He also looks for past-due materials, lost orders, and handles customers with late orders. The president keeps the contacts with some of the large customers, arranges the finances, and sits in on the weekly production meetings, which address scheduling problems, employee problems, and other production problems. Sam Bartholomew, the company engineer, designs the company’s products, handles procurement and maintenance of equipment, and oversees the supervisor. He also attends the weekly production meetings, spending about ten hours a week on the factory floor in order to converse with workers. The company is experiencing about a six percent return rate on completed orders from poor quality, with seventy-five percent of the cases being returned because they failed to undergo one or more operations or they were done incorrectly. Sometimes the company will receive rush orders, where it is sent directly to Rhodes for approval, where if approved, the raw materials are rush-ordered to be received the next day, and it is rushed through production in four days. This rush process is all accomplished by Fred Dirkson who is trusted and hand-carries the rush orders, with ten percent of their total orders being rush. Fifty highly skilled or semiskilled employees work at Eastern gear, they are unionized, and good labor relations exists with a family-type approach to the workforce.

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