Dominique Mauer

Case Study 1
Part 1 - Task 3

What occurs to you?

Due to the financial crisis in 2009, each of the companies had a negative EBIT. Braunmeier
Plastics GmbH, however, is highly profitable and had positive EBITs in the years before the
financial crisis, whereas MPP and EKM already struggled before the crisis. Profitability of EKM
went down for several years because of high COGS, SG&A, R&D, high stock levels, long
production lead times and delivery times, indicating inefficient production processes. Braunmeier
had enough capital to survive the financial crisis in contrast to MPP and EKM, which went
bankrupt.

Was it a reasonable decision of Mr. Braunmeier to acquire the two companies?

Both companies had the potential to get more profitable if the production processes were adapted
accordingly. EBITs of both MPP and EKM show, that the efficiency of the processes improved after
the acquisition by Braunmeier. At first glance, it was reasonable to buy the already bankrupt
companies for a low price and to make use of synergy effects, leading to lower R&D and SG&A
costs.

Part 2 - Task 4
Which parts are A, B or C parts and why?

Total rev. Share of total cum. Revenue

Part type Sold parts Rev. per part
rev.

Undershield 192.639 31,02 5975661,78 27,62% 27,62%

Dashboard 154.171 35,22 5429902,62 25,09% 52,71%
Buffer bar 183.460 14,89 2731719,4 12,62% 65,33%
Radiator grille 2180287,86 10,08% 75,41%
210.047 10,38
panel
Gear wheels 606.813 1,89 1146876,57 5,30% 80,71%
Molding post 542.374 1,15 623730,1 2,88% 83,59%
Gear shift 148.295 3,98 590214,1 2,73% 86,32%
Housing 166.250 2,94 488775 2,26% 88,58%
End cap 1.805.555 0,26 469444,3 2,17% 90,75%
Packaging 804.983 0,48 386391,84 1,79% 92,53%
Toothbrush 1.330.000 0,28 372400 1,72% 94,25%
Blister 1.723.115 0,21 361854,15 1,67% 95,93%
Plastic cup 1.828.950 0,19 347500,5 1,61% 97,53%
Beverage crate 664.042 0,42 278897,64 1,29% 98,82%
Reflector 1.275.159 0,20 255031,80 1,18% 100,00%
A-parts make up the largest proportion of the total revenue, in this case up to 80% (green).
B-parts have a cumulated share in revenue of 5-15% (yellow) and C-parts have a cumulated share
of 5% (orange).

Which part (type) should be addressed in the first place when it comes to optimize the
production process? Identify the part and explain your answer.

All A-parts should be addressed as they make up most of the total revenue, with the Undershield
being the most important one with an overall proportion of 27,62%.

Part 2 - Task 6

What occurs to you? Which problems may arise from the given layout, resulting in the
material flows?

The machines are not arranged properly and its hard to keep track of the process from the
outside. A lot of time is necessary for transportation between the different fabrication steps.
Furthermore, there are unused tools wasting space and increasing transport paths. The utilized
tools are too far away from the buffer and stock zones. Finally, the process can be simplified by
clearing the second entrance for either raw material supply or the finished parts.

Part 2 - Task 7

Rearrange the machines aiming for an intersection-free material flow

Exhibit 5b: Value stream map Task 5

6 weeks 90, 60,

forecast 30 days forecast
Production
Supplier Control Customer
weekly fax daily order

Mon& Weekly Planning

Fri

Everyday

Composite Press Laser machining Quality Check Packaging

3200 700 200 2700

1 1 1 1
CT 40s CT 60 CT 10s CT 10s

Production lead
5d 3,5d 0,75d 2h 3d 12,33d time
Value-Added
40s 60s 10s 10s 120s time

Through put time: 4,25d, 2h 2min

Total buffer stock: 4100
Calculation

Cost of 8%
capital

Year 0 1 2 3 4 5

Initial -123.500,00 0 0 0 0 0
Investmen
t

Savings 0 50.400,00 50.400,00 50.400,00 50.400,00 50.400,00

Cash Flow -123.500,00 50.400,00 50.400,00 50.400,00 50.400,00 50.400,00

Present -123.500,00 46.666,67 43.209,88 40.009,14 37.045,50 34.301,39 77.732,59

Value

Part 2- Task 8

Chance:
Positive NPV (77732,59)
Amortization after 2,5 years
Increased process efficiency because of shorter ways, buffer times, etc.

Risk:
It takes time until new system is set up
Possible machine damage
Savings for feature periods always uncertain

The rearrangement is worth the effort and risk.

Part 3 - Task 9

Short throughput time (120s)

No buffer stock -> efficient capital utilization

Part 3 - Task 10
The laser machine cycle time (60s) limits the process
2 shifts equal to 16h of work
in order to produce 1200 pieces per day, a cycle time of 16h*60min*60s/1200 = 48s is necessary
=> Its not possible to produce 1200 pieces with the current equipment
new laser machine with a shorter cycle time of max. 48s can solve this problem
A

Part 3 - Task 11

Flow oriented processes are very inflexible, so it wouldnt make much sense.
 TASK 6
Finished parts
Exhibit 6: Plant map

Optical
control table Raw materials Thermo- Thermo- Thermo- Thermo-
OCT 1

Tools
Composite press forming forming forming forming
Buffer space for
CP 1 final check unit unit unit unit
B-OCT 1 TU 1 TU 2 TU 3 TU 4

Buffer space for

composite press 1 Buffer space for thermoformin units
B-CP 1 B-TU

Tools

Tandem- Tandem-
Laser
milling milling
machine
Tools

Feeding side machine machine

Composite press LM 1
TMM 1 TMM 2
CP 2
Buffer space for Buffer space for
Buffer space for
tandem milling tandem milling
laser machine 1
machine 1 machine 2
B-LM 1
B-TMM1 B-TMM2
Tools
Buffer space for
composite press 2
B-CP 2

Buffer space for

laser machine 2
B-LA 2
Buffer space for manual
control
Buffer 3
Laser machine Buffer space for
Manual control for
Buffer 1 Buffer 2 finished
LM 2 thermoforming parts thermoforming
Packaging
parts

Unused
entrance
Exhibit 5b: Value stream map
Task 9

6 weeks 90, 60,

forecast 30 days forecast
Production
Supplier Control Customer
weekly fax daily order

Mon& Weekly Planning

Fri

Everyday

Composite Press Laser machining Final Check Packaging

Raw warehouse
1 1 0,5 0,5
material 1d CT 40s CT 60 CT 10s CT 10s 900pc
ST 30s

Production lead
1d 0 0 0 1d 2d time
Value-Added
40s 60s 10s 10s 120s time

Through put time: 120s

Total buffer stock: 0