Opeartions Management Assignment

The plant was established in 1960 and is the sole car manufacturing plant for Lotus. Recently, there has been a shift in ownership as Lotus was sold to a group of private investors and Proton Holdings Bertha, a Malaysian automobile manufacturer. Up until now, the plant has produced over 100,000 cars and currently does not manufacture more than 5,000 cars per year. This translates to an average daily production of 9 to 10 cars. Cars are only manufactured when orders are received. The plant employs a “no fault forward” policy where issues are resolved immediately at the point of identification.

The same production line is used for all types of cars, ranging from leisure to racing. In addition, the same team of people works on all cars as they are trained in all jobs, not just one particular niche job like other factories. There are 3 x 8 hours shift and no work on Friday’s. The Company builds all cars by hand and there is no presence of robotic equipment in the factory. The Company sources its materials primary from France and Ireland due to cost and technical specification demands.

Analysis of key competitive priorities and operational processes The manufacturing process begins with the car frame which was manufactured and delivered to the factory from France. Frames are then oilseed and colored through a white lighted room. It is then sent to the next station for coloring with other parts of the vehicle. Once the coloring has been finished, the parts are moved by a forklift to the production line for assembly. Upon completion of the build, the car is then put through a variety of performance and specification tests including water resistance and on- road performance.

If no errors were found, the car is then deemed good for sale and the title officially transfer from the production department to the sales department. Improvement areas and recommendations Flow of production Based on our observations, there wasn’t an apparent flow to the production. Manufacturing pieces are often transferred from one spot to another through the use of forklift and trolley. This created undesired interruption to the production flow and also made rooms for potential accidents and damages to occur on finished pieces (e. G. Ices that had been worked on may be damaged during transportation from one place to another) In addition, capacity is often consumed by changeover whenever a process is required to perform work on a different part or product model than the preceding one. Time consumed in changeover is considered waste and it educes the amount of resource capacity that is available to perform value- adding work. Given the small production volume that Lotus is experiencing it is not necessary at this point in time to create additional assembly line to handle different models.

Nevertheless, the operation flow could be better optimized by reducing the gaps between one work stations to another to form better transitions in production. Inventory management It is important that Lotus exercises more control over its inventory management to reduce waste and to track spending. Currently, employees have full access to all inventory parts (e. G. Knots and bolts etc. And no formal sign-out process of inventory is required. The issue with this approach is that there is no formal tracking on the usage of inventory and the purpose of what they are being used for.

Any defects in parts may also be overlooked as employees could simply toss the defective part away without recording the reason behind it. In addition, without formal tracking, it may be possible that inventory may run out and there is no replacement for it. As such, additional time may be wasted in waiting for the additional inventory orders to arrive. To better manage its inventories on the factory floor, Lotus should consider sing automatic inventory dispensers which require employees to key in his or her employee code and select which inventory parts are required based on car models.

By doing so, inventory could be better tracked and enabled for just-in-time replacement in case of shortage. Safety issues During the tour, it was noted that most of the factory workers were not wearing any safety gears. For example, when observing the coloring process of the car, most of the workers did not wear work-safety goggles or gloves. Given the amount of dust and presence and usage of strong glue, it could potentially pose injuries on the workers. Work injuries may cause down time and translate into reduction in productivity.

In addition, we came across a health and safety chart of the factory which displayed that there was a strong gap between the targeted sick leave vs.. Actual sick leave. In fact, in some months, the actual sick leave figures almost double the targeted level. While there is no direct evidence to corroborate our finding, we do suspect that this could be caused by the lack of safety measures where a clean and safe environment is enforced. It is therefore recommended that safety measures be enforced throughout he factory to ensure worker safety and minimize potential down time.

Next steps Lotus Factory Visit – Raw Notes No fault forward Different requirements for different countries (slightly different resin in US bumper bar) 5000 cars Max per year, 9-10 cars per day no robots – all hand built don’t make them until ordered same production line for all types of cars (same people doing all) workers are trained in all jobs (not just one particular niche job like other factories) forklift has to make sure the right materials are at the right place at right time 3 core models and 1 race car made (can change components in core models) robbers with sale in US because change in regulations re airbags (car too small) 3 x 8 hour shifts, no one works Fridays 14 week wait for car, takes 5 weeks to make owned by Venture Capital Company no one in factory knows who the car is for. White light shows up blemishes No one wearing any safety gear! Egg dust -? even though they Were supposed to and strong glue – usually done by robots in other factories done by workers here with no protective gear on! ) – injuries cost money Frames are made in Ireland and France because cheaper 2nd factory frames travel out of 1st factory outside to 2nd factory. Inspection of frames on arrival (white light inspection) Higher rate of fault in paint station because dust gets under paint Yellow post it notes on chases waiting in line! Could easily come off Carefully painted body parts leaning up against metal pylons with no padding on them. Lightweight nature of chase is very important to Lotus. They bought a company producing these (Lightweight Structures) and Gaston Martin also buys the chases from this company. This is a competitive advantage.

The body of chase is multipurpose – it is made for right hand and left hand drivers and also has other components of crash testing incorporated. Barbados on chases here to track. “Bible” – book on car to keep track of order and work on it. Not electronic again. Production line – 6 bodies waiting Lots of space around stations and cars required to be moved quite long distances in narrow spaces to next station. Induction of trainees – 3 months. Supervisor, 5 workers and supervisor for whole line Signs all handwritten – Egg which parts they are low on. Marked with orange card so forklift can see as going past. NO electronic track Of parts and wastage.

Wastage re inventory – other factories have hourly and daily deliveries whereas lotus has seats coming only every 2 weeks. When the deliveries are more regular, it saves time as there is no double handling – parts just get taken straight to the line they are needed. They probably have no idea what is in inventory as there is nothing electronic in whole factory. Checks – most factories have a check as the parts arrive from suppliers and then once when the car is leaving the factory. There are so many checks in the Lotus’ process- this must be because there are so many errors in the process. Wastage. Visitors allowed very close to finished cars – little scratches could easily occur and cause wastage in process.