Fall

Summer

Custom Molds Inc.

Martin Fletcher, Jill Carpenter, & Angela
Voedisch
Professor LaVigne
Operations Management
May 25, 2016

08
16

Custom Molds Inc. is a plastic and mold manufacturing company

in Tucson, Arizona. Tom Miller and his son Mason founded the company
in 1997 with the goal of supplying custom, high quality molds to
electronics manufacturers from which parts could be produced. For
each mold, one of the thirteen master machinists Custom Molds
employs would create a design schematic to assure the molds met
specific standards. As with any industry, markets began to adjust and
Custom Molds met the needs of the market by not only creating molds,
but also then producing the plastic parts with the molds. The company
was ahead of the curve in 2010, because in 2015 the electronics
industries changed. Rather than manufacturing their own plastic parts,
electronics companies went to companies like Custom Molds to
supplier the pieces as a low cost alternative to internal manufacturing.
Problems
Since 2015, Custom Molds has been experiencing problems with
their customers and production. Customers have been complaining
that the parts they order are taking four to five weeks to arrive as
opposed to the three weeks they are quoted. The company has also
been seeing bottlenecks during the production process and they are
unable to identify the source causing the bottlenecks to move from one
operation to the next. Custom Molds has been experiencing order
returns as a result of defects in orders that have been shipped out.
Internally it is noted there is a big issue of scheduling the workspaces

and its causing major inefficiencies. As a group we believe these

issues are the result of a lack of workforce flexibility, inefficient
workspace usage and an overall inefficient process. The current
processes are as follows:
Fabricating a custom mold is a skilled profession. When a new order is
received it is given to a design team, who consists of a design engineer
and a master machinist. The design team reviews the design
specifications, working with the customer to ensure final specifications
meets the customer needs. The final specifications are then given to
the master machinist from the original design team for fabrication of
the mold, and also the purchasing department. The purchasing
department then orders the raw materials and special tooling needed,
materials usually take three to four weeks to arrive. Once the
materials have arrived the plant master will schedule the original
master machinist for the mold fabrication. The fabrication of the mold
takes three to five days, however Custom Molds, Inc. quotes two to
four weeks for the total process. Once the mold is complete it is then
inspected and tested by making a small number of parts this process
takes one day to complete. If the mold meets the specifications
originally established then it would be sent for cleaning, polishing and
shipping which also takes one day to complete.
For plastic parts manufacturing a parts order may be received
along with the order for the mold. Custom Molds may also have

previously created the mold and will only receive an order for parts.
The design engineer reviews the part and raw materials specifications
of the order. Once the order is accepted the raw materials order is
placed and production is scheduled, the materials can take up to one
week to arrive. Once the materials are received the dry and wet mixing
of the chemicals begins. Once the chemicals reach the desired
consistency it is transferred to the injection-molding area and
deposited into tanks. The mixing process takes one day to complete.
The molds are taken from the existing inventory or the clean and polish
area if it was a new mold order and the parts are manufactured. The
injection-molding department has the ability to produce 5,000 parts
per day, however orders are taking an average of one week in this
department. Once complete the parts will be sent for cutting and
trimming to remove leftover flashing. If the parts do not require
assembly they will be taken to shipping and sent to the customer. If
they do require assembly this can take an additional three days before
the order is shipped.
Through these processes we can track many of the issues
Custom Molds faces. First off, Custom Molds is misquoting customers,
because it takes three weeks simply to get the materials required to
make a mold. From here it's a rush to get into the mold fabrication
center, and this stress is split among the thirteen machinists the
company currently employs. At this point its a big rush to push out the

parts, which accounts for the bottleneck in the production center.

They're trying to do all the projects at once and rush it out, which their
facility simply cannot handle. When the products get to the inspection
facility, they're quickly looked over before being shipped out the door
to make room for the next order. The inefficient scheduling and
material wait time in the facility can explain the late orders. Also the
defected products are most likely the result of rushing the final
products through inspection to make room for the other late orders
coming in.
Opportunities & Alternatives
From these many problems come many opportunities, we've
proposed just a few. First whereas the business is rapidly growing,
Custom Molds could expand or renovate their current facility to create
more working room for their employees. Another opportunity could be
working with material suppliers to negotiate speedy delivery or
acquisition. The company could also make its workforce more flexible,
for example, machinists could help with inspecting. These
opportunities come at a reasonably low cost and would greatly
increase productivity and efficiency within the plant.
There are some short term and long term alternatives that the
Millers could peruse. These short term alternatives include hiring
consultants and changing the layout plan in the shop. First off the
Millers should hire consultants to figure out the reason why the

bottlenecks are popping up all over the production line. Hiring a

consultant to come in and look at the problem could essentially help
their business. It will cost them money of course to do so but it will
make their business more efficient. Another short term alterative is
changing the layout plan in the shop. The Millers should have more of
an assembly line than just a shop layout. I think it would be more
productive for them this way because they have been receiving large
orders of plastic parts. Plastic parts are produced in high volumes, so
having an assembly line in order will make things more efficient and
run smoothly. It will also help them save more time and money. Some
of the key factors that the company would have to take a look at would
be if they can afford to change the layout to have an assembly line.
They would also have to look at the time frame of the installation, and
utilization of space.
Long term alternatives that the company could take into
consideration are phasing out custom molds, investing in research to
help the company grow, and expanding business. First off, Custom
Molds has been receiving high volume orders of plastic parts more than
Custom Molds. It would be a good idea for the company to start looking
into phasing out Custom Molds and just focusing more on plastic parts.
It could end up costing the company more money in the long run to
keep making these molds if they keep reducing. They should take a
look at the data that they have to see if this is a profitable choice for

them long term. Another alternative that would best benefit the
company would be invest in research that can help the company
expand and grow. If the company is receiving high volume orders now,
they are going to keep growing. They need to take this into
consideration and see how they can stay on top of their competition.
The last long term alternative that Custom Molds could benefit from
would be to expand it's company. A successful business always need to
expand. This would mean that they would have to consider the cost
involved in order to do this, as well as the time it will take. If it is
profitable and they can afford it they will have to consider, the cost,
time frame they would need to expand, where they would look to put
another building, and many more detailed decisions. Essentially these
long term alternatives are just ideas that could help the company
improve in order to keep growing.
Some relevant facts include:

Master machinists cost the company much more than the mold

pourers because its a highly skilled job

Custom Molds needs to introduce a line process for

manufacturing parts
Tom Miller with more than 20 years experience in the connector
industry with Amp, Inc.
Mason Miller has Degrees in Chemistry and Chemical Engineering
from Arizona State University.
Currently the physical plant is more easily used for the
manufacturing of parts and not for creating molds.

Case Study Questions:

1. What are the major issues facing Tom and Mason Miller?
The answer to this section can be found in the problems section
of the paper.
2. What are the competitive priorities of Custom Molds's processes
and the changing nature of the industry?
Competitive Priorities are:
A. Quality The molds should be top quality with no defects and
should also be consistent.
B. Lead-Time deliveries should be on time with the highest
development speed.
C. Low Cost They should have a low cost, ability to reduce costs
to at least the competitors cost, or if not lower to earn more of a
profit.
D. Flexibility customization of the mold.
Right now we believe that Custom Molds Inc. has competitive
priorities but is simply creating processes that don't nurture
them. The problems the Millers are facing are all failures to keep
up with their competitive priorities. For example, they are failing
at quality because many orders are being returned for defects.
They fail at lead time because many of the orders are being sent
out late and angering customers. They have achieved flexibility
in the customization of the mold but at a huge cost of time and
money. In terms of low cost, is seems they fail due to the results
of returned orders and the orders they have most likely lost. Not
to mention the astronomical cost of having thirteen highly
skilled, but expensive machinists. The changing nature of the
industry is there's starting to be less customization and more

manufacturing. Most companies have the parts, its simply just

making them. This can be seen by simply looking at Custom
Molds' sales. From 2012 to 2014 sales of molds have decreased
while sales of parts have grown over 140%.
3. What Alternatives might the Millers pursue? What key factors
should they consider as they evaluate these alternatives?
For the alternatives please refer to the alternatives section.
When considering the alternatives the most important thing the Millers
should look at it cost. Right now it seems as though Custom Molds has
an expensive and inefficient company. To change this either requires
renovations, research, or shutting down the molds division of their
business.
Our recommendation to Custom Molds Inc. is that shut down the
mold fabrication division and focus on the production of parts. We
suggest ending the mold fabrication division and strengthening the
plastic production division for a few reasons. First the plastic
production accounts for a majority share of business's income and the
production capacity could easily increase. Secondly the physical plant
easily lends itself to the line process manufacturing that the plastic
parts require. Currently the plant only has the capability to produce
5,000 parts per day but by eliminating the mold fabrication area there
are a few great advantages:

Also

A new storage area can be created to reduce the 1 week wait for
materials
An expanded injection area to produce more parts
Possibility of hiring more injectors
Less wait for materials means more time for inspection
if the testing and inspection area were possibly moved to a more

central location it would allow for easier communication with the

design team, testers and manufacturers so that problems that caused
the defective parts can be quickly fixed. Also not to mention the more
time-efficient transportation of goods throughout the manufacturing
process.
Beyond the advantages we've listed, ending the mold fabrication
division also lowers costs and solves the problems the Millers have
been facing. Mold fabrication was the leading cause of orders being
late, now that they dont fabricate molds they wouldn't experience
such delays. Also with the increased slack time from having some
materials on site and more workspace to produce parts, Custom Molds
can quote less time ultimately making them more competitive and
fitting that priority. The costs would also go down as the company
could order more supplies in bulk and hire less, expensive master
machinists. They would instead be replaced with the more cost
effective injectors and machines. There would a be a capital cost to
renovate but by buying machines there increasing the value of their
assets, and making the space more functional, which is priceless.