Andre, Seo, Thao, Wang,You 1
Nicholas Andre, Min Jung Seo, YerThao, Liping Wang, SeungHyup You
Team 7
Group Project 3
Four Challenges & Solutions for Avanti Cigar Company (Answers to Question 1-3)
1stchallenge: Making automation the whole processes
In general, most companies that makes cigar do those processes in manufacturing cigar by hand. The challenge for Avanti Company was that there were too many people making hand made cigars. An example would be in the rolling process which people had to make cigars by hand. Handmade cigar was factories’ only useful tools. In fact, making cigars by hands would be important and necessary in a company which produces premium cigars for rich. For example, Davidoff Cigar Company produce cigars by experts’ hands in the whole process. Each master produces each cigar and experts would only be the one with the knowledge on how to do that processes. However, Avanti Cigar Company is targeting variety of customers who hope to try cigars with low prices. Avanti Cigar Company needs to lower the prices by changing the manufacturing floor from hands to machines. For instance, their rolling process washandmade. The rolling process was not easy work because there were 3 steps to roll the cigar. The first step was to put the ingredients on the cigar leaf. The second step was to put some water glue on the leaf and the third step was to roll the ingredients within the leaf.
The challenge was that making handmade cigars took too much time in processes. This is an operational issue and also there are many technological issues in special process like rolling process.
Avanti Cigar Company made a machine that could do almost the whole processes in less time and less money. The processes which are needed to make a cigar were exchanged from by hands to using machines. By using machines, they could get low cost operations, consistent quality and wide kinds of customer. They can produce cigars with less money(lower prices). Specifically, standardization is the most important trait for mass produced products. For instance,out of theprocesses, the rolling process done by hand took at least 10 seconds a unit. It reduced the time for making one unit of cigar. This resulted in faster production for manufacturing the products. It could also reduce costs for using less labor forces in the process. In the past, companies hired people to hand make cigars for rolling process. The cost of hiring these employees would cost as much as how much they make by producing these cigars(variable costs). With the machine’s help and less employees to hand make the cigar; the company would have a fixed cost for just using machine.
2ndchallenge: Quality Management
Another major challenge is manufacturing the product and deciding how and what interval the product will be examined during the operation process. Managing quality of the product is very important because it is directly related to customer satisfaction. Furthermore, quality management is critical for company’s operation cost perspective as well. By maintaining high quality level during the operation, the company can save cost caused by defects. The advantage of discovering defects during the production compared to finding them at the end of the production is that it is less complicated and costly. When the defective products are found during the process, it can be reworked and this is relatively easier because it has to track down the previous processes before inspection. On the contrary, when the company wants fix the defects at the end of the production, it has to go through all the process from the beginning to the end and figure out when the problem has occurred.
Since inspection or quality management occurs during the operation and may modify the order of operation process by putting examination process in between, we can say that the nature of the challenge is operational issue.
The Avanti Cigar Company, do inspection during the operation process. What is interesting is that the company implements the inspection process for numerous times. Specifically they do it for three times. First, a worker examines complete cigars. Then, two other inspectors go through the products again. Examination takes place once more, and when defective products are found in this process, a worker will do a minor repair or eliminate them from the rest of the products that will go into the next step. By doingthese threeinspections steps during the process and not after the whole process, it is less costly and risky for the company.
3rdchallenge: Distinguishing large ingredients from small ingredients
The third challenge in manufacturing Avanti Cigars is distinguishing larger ingredients from proper ingredients for the use of manufacturing. To maintain the best quality of ingredients in manufacturing is a very important process for the fate of the company. Especially, for the industry of cigars, the ingredients are critic parts for consumers to decide what products they would use. Avanti Cigar Company needs to manage consistent quality of ingredients. The sizes of ingredients arevery important in whole processes because larger ingredients over the standard size could make error to take could affect the whole processes.
This challenge is a technological issue. Distinguish larger ingredients from standard size of ingredients can easily be done by employees picking out the wanted ingredients. However, it would take long time and lots of money for labor and low possibility of work (people would have limits in this process).
Avanti Cigar Company made a machine called ‘Shaker’ that can distinguish large ingredients from normal ones by shaking. It has many holes that would allow only large ingredients to fall down inside the shaker. The ingredients that are on the shaker while it is shaking are ingredients that would be too big to use. This can help distinguish what is needed byexpelling it from normal ones. From this machine, Avanti Cigar could get good and consistent quality of ingredients for making cigars.
4thchallenge: Specialization in processes
There are processes for manufacturing cigars specifically done by hands which need specialized labor workers for high quality of products. For example, inspecting errors, operating machines are those processes. The need for specialized labor workers is a challenge in the processes of cigars
This challenge is an operational issue that specialization is important in all over the processes. Avanti Cigar Company overcame this challenge by using workers who did the work over 10 years. They are experts in each job. By hiring those experts, they can make products well, quickly, and less errors.
Question 4
What are the recommendable features in their production floor? Why would you recommend this practice in other factory floor?
We could get some recommendable features from solutions that Avanti Company got for challenges they encountered. First, we would recommend automation to other factories. Of course, companies which produce premium cigars with top quality would not use this method, however, companies which target a variety of consumers would make factory environment automated. It would get competitive priorities of low cost operations and low prices for wide variety of customers.
Secondly, we recommend companies which have a concern of managing quality with low costs and reducing risks of low quality the 'periodic quality inspection' of Avanti Company. There are quality costs that companies would need to use for quality management. From those quality management costs, the most and worst costs are return costs and something that happen after the products are made. We recommend 'periodic quality management' to prevent errors so that companies would reduce costs after the products are made. This would get competitive priorities of low costs operations and consistent quality.
Thirdly, we would recommend using a machine ‘shaker’ to a company who has a concern of distinguishing best quality of ingredients. Avanti Company used this shaker so that they could get rid of bad ingredients from standard sizes of ingredients.
Finally, we can recommend Avanti Company policy of using specialized workers who worked more than 10 years in specialized parts in the supply chain. This policy would be needed to companies which have concern of inefficient work rates or companies which have lots of errors.
Question 5
Is there anything they should improve in production or in daily operations? How would you advise their company to improve their operations?
After watching and analyzing the video, we can clearly see that Avanti`s cigar manufacturing processes are too spread out. When a company has its manufacturing processes too spread out, it may cause loss of productivity, increase in the cycle time, loss of quality and increase in the total manufacturing costs. Avanti should redesign its manufacturing processes in way that they could gather the manufacturing processes to increase productivity and decrease the cycle time of the cigar manufacturing process.
Avanti is using a quality strategy of doing not only once, but many quality inspections during its cigar manufacturing processes in order to achieve a high quality standard in its manufactured cigars. However, Avanti is only using the inspection approach in order to achieve quality in its manufacturing processes. In order to the company achieve higher quality and improve its productivity, an implementation of the Jidoka(自働化)quality-control would be highly recommended. Avanti does periodic quality inspections during its manufacturing process, yet the company does not have any system or alternative plan to use when something goes wrong during its manufacturing processes.
The implementation of the Andon(行灯) system, that is one of the principal elements of the Jidoka(自働化) quality-control would be an appropriate system to implement in the case of an error during the cigar manufacturing process. If some problem occurs during a process, the worker will have the ability, and moreover, the empowerment, to stop the production when a defect is found, and immediately calls for assistance. As the machines being used in the Avanti`s manufacturing process are too old, the Andon alert could be implemented not in the equipment itself, but in a way that could be manually activated by a worker using a button or a pull cord in each workstation. Also a signboard incorporating signal lights to indicate which workstation has the problem would have to be installed. All the alerts could be logged to Avanti`s own database to that they can be studied as part of a continuous-improvement program.
In order to successfully implement the Jidoka(自働化) quality-control method, not only the detection of the problem (that is the first step of jidoka), but the process in which the problem happened should be evaluated and changed to remove the possibility of happing the same problem again. Here the company could consider an implementation of a poka-yoke device in its cigar manufacturing process in order to detect and immediately correct any problem that happened in its processes. There are three types or methods of poka-yoke for detecting and preventing errors in a mass production system. One of the methods of poka-yoke is the contact method that identifies product defects by testing the product`s shape, size, color, or other physical attributes. This type of poka-yoke method would be the most useful method to be used in the Avanti`s cigar manufacturing processes, as the company does periodic inspections during its manufacturing processes to check the if the cigars shape, size and other physical attributes does have any kind of defect. Errors are inevitable during any manufacturing process, but if the appropriate poka-yokes are implemented, then those mistakes can be caught quickly and prevented from resulting in defects. By eliminating defects at the source, the company could reduce the costs by reducing mistakes during its manufacturing processes.
Avanti could also implement the kaizen(改善) philosophy to focus on continuous improvement of its manufacturing process. Kaizen is founded upon five primary elements, quality circles, improved morale, teamwork, personal discipline and suggestions for improvement. Avanti`s managers should request personal feedback from each employee involved in the manufacturing process to ensure that that all problems are looked at and addressed before they become significant. Moreover, the managers could receive suggestions from the people who are directly working in the manufacturing processes in order to improve or maybe redesign a process. The concept of personal discipline is also an important factor in order to kaizen philosophy succeed in a company. Each employee must devote to not only doing its work during a process, but also to try to think and try to think how to improve the work that is being done. Avanti`s employers seems to be working for the company for many years. This personal discipline concept should be easy to implement as Avanti`s employers already have a certain loyalty to the company. The concept of team work should be implemented in a way that the managers and supervisors should always try to listen and understand to the employees involved in the manufacturing processes. Improved morale should be implemented in way that Avanti`s employers receive an extra bonus each time that succeed in the improvement of a process. This approach would give not only extra motivation, but also improve the morale of all employers. The last primary element of kaizen, the quality circles should be implemented as Avanti`s managers and supervisors make a regular meeting to discuss quality levels concerning Avanti`s manufacturing process. Each manager should not only bring it owns ideas, but also bring the ideas from the workers directly involved in the manufacturing processes. Lastly, Avanti should use the five gold rules for a good environment that is suggested in the kaizen philosophy, cleanliness (seiso), clean-up time (seiketsu), orderliness (seiton), tidiness (seiri) and discipline (shitsuke).