MBA 6151 unit II HONG 7 11 18(edit1)

Running head: OPERATION MANAGEMENT AT EASTERN GEAR, INC.

Operation Management at Eastern Gear Inc.,
Dang Dinh Hong
Columbia Southern University


OPERATION MANAGEMENT AT EASTERN GEAR, INC.

Introduction
This assignment is to analyze the Eastern Gear (EG) case, Each step in a business process
denotes a task that is assigned to a participant manufacturer of custom- made gears in the US. However,
the EG should do a revolution in processing selection and technology in order to improve efficiency in
production, thus increase the business’s performance. To find the problem the company is facing, then
analyze and propose suitable solution for the sustainable development of the company.
Current & future problems faced by Eastern Gear
Firstly, EG does not have oriented business for the further period. The company received orders
with diversified quantity and quality. This leads to disability in controlling the order, delaying time for
shipping and dependence in customers’ demand. In this case, the company accepts almost deal without
selection and calculation of effectiveness. Moreover, sometimes it receives the urgent order, thus
pointing out one separate staff to deal with. As a result, the process flow of other order could be
affected, leading to late shipment and low quality of the product. The lack of objectives in operation
should be the biggest problem which results in low productivity, unsatisfaction of customer and low
performance of business.
Secondly, EG faces with the in-effective layout of production. The company uses the manual
process, which each product shift from the order of stage in production. That is why the manufacturing
only uses 10% of capability; especially the bottlenecks make delay order for the customer (Schroeder,
Goldstein, & Rungtusanatham, 2013). In the future, EG should do operation research to find out the
right process selection and invest more in technologies. When the company receives the large scale
order, the automatic process will deal with smoothly, reducing cost in each product, as well as quality
improvement and due date shipping.

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OPERATION MANAGEMENT AT EASTERN GEAR, INC.
Thirdly, the organization chart of EG is family-type management, which is not suitable for high
volume of production. Each staff should play a clearer role, are responsible for each stage of process.
Moreover, the company is lack of quality controller. The completion of order is ship to the customer
without re-check the quality, even the order is returned to the manufacture.
Below is a compiling of process flow for Eastern Gear.
Receiving Department
Receiving and raw

Milling
(2)

material storage (1)
Finishing

finished goods

Shipping

storage (6)

department

Heat treating
and grinding center
(5)
(4)

Tool crib

Lunch room

Drilling (3)

(Schroeder et al, 2013)As mention in the chart, the process layout is due to functional that make
the worker takes time to move from other department to finish the production. Furthermore, the layout
can not utilize the capacity of each stage, only 10% of the time is actually spent processing (Cornell
Engineering, n.d) In the future, the company receives the large volume; this layout should be adjusted
to increase productivity.
Analysis on Eastern Gear’s modification in process selection and Technologies
In the equipment manufacturing, process selection and application of advance technologies play
a crucial role. In the EG case, each order is produced separately, passed over every department before
completion. This kind of flow is suitable for small volume and customized order, but when the
company changes its strategy, process selection should be shifted to batch flow to adapt to multiple
quality and quantity order. Moreover, the company can easily deal with urgent order;ensure the on time
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OPERATION MANAGEMENT AT EASTERN GEAR, INC.
shipment with flexible demands of customer. As mention in the case study, the labor force is 50
workers dealing with manual process. Applications of modern technology would make the process
automatically, reducing cost for staff and improve quality of the product as it identify and eliminate
bottlenecks in the assembly line (Reuven, 1994). There will be no longer late shipment or goods return,
vice versa, productivity will be increased, and thus the company gets high turnover and profit.
Recommendations on course of action for Eastern Gear
Research the market, the rivals, do
SWOT analysis, inorder to rebuild the
strategy of the company. Change from

1

Business orientation

small size customized order to large

Time

volume order to increase production and

Immediately

turnover.
shift to batch flow, re arrange the

(T)

department and staff:

Modification of process

-

Set up policy of order’s quality

-

and quantity
Set up policy of inventory,

2
3

flow
Technology

materials, capacity
Investment in automatic machines
Staff rearrangement: expediter should be

T+1 month
T+1 month

4

Organization

incharge of quality controller

T+ 3 month

Reference
Cornell Engineering (n.d). Operation Research and Engineering. Retrieved from
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OPERATION MANAGEMENT AT EASTERN GEAR, INC.
Reuven R.Levary (1994). Engineering application and operation research 72 (1), 32-42. Retrieved

from />Schroeder, R. G., Goldstein, S. M., & Rungtusanatham, M. J. (2013). Operations management in the
supply chain: Decisions and cases (6th ed.). New York, NY: McGraw-Hill/Irwin.

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