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Oak Hills Case

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Executive Summary

The Oak Hills facility is a manufacturing division of The Oil and Gas Service Company (TOGS). It manufactures special testing equipment used by the Exploration and Extraction (E&E) unit in the search for oil and gas. Oak Hills battled major internal problems which included high inventory levels and long lead times for both domestic and international orders, in spite of lowered demand. Oak Hills doesn’t utilize resources such as MRP to plan production, lacks in manager to employee communication, wastes time in set-up procedures, has an inefficient facility layout as well as idle time during lid manufacturing and lack of quality inspections in the production process. TOGS trusts that a supply chain team, through the implementation of a lean system, will resolve these issues.

Case Analysis

Oak Hills currently experiences different issues that will influence the conversion process to a lean system. The machines being used are outdated; creating a waste of raw materials. Because of facility layout, the sensor boards are far from the assembly line. This creates over processing, unnecessary wait, and movement waste. The workload for the quality control department is overloaded, creating further quality issues.This inaccuracy causes creation of scrap materials and rework. Additionally, Oak Hills lacks in the use of automation leading to excess manual quality control. An increasing concern is the unsatisfactory delivery of quality products on time. In terms of a short-term perspective, the company needs to focus on lean supply chain relationships with its partners to increase the speed and quality of its product development. Additionally, an inventory and setup time reduction program can decrease inventory levels by reducing production batch sizes, setup times and safety stocks. A waste reduction strategy

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