The Main Issue and the Sub Issues Faced by Silko-Scalece (Essay Sample)

Silko-Scalese Machine Corporation
Name
Institution
Silko-Scalese Machine Corporation
Silko-Scalese Machine Corporation was set up in the year 1969 by Allan Silko. Silko combined his first name with that of one of his high school shop teachers named Bob Scalese to come up with the name of this company. Bob Scalese later became one of the company’s minority shareholders. The company was set up after the dissolution of General Machine, a company which had been co-owned by Silko and Ciccarino. The two had full time jobs in this company. The company basically majored in the manufacture of replacement parts for production equipment through Silko’s contacts at Western Electric (Darden Business Publishing, 2015).
It is a company which had quickly established itself in the market owing to the quite progressive philosophy it followed. The philosophy entailed pursuing any chances presenting themselves no matter how difficult the particular tasks are. This is an aggressive strategy which gave the company the reputation of resolving any kind of problem in machines no matter how complicated it is. It used to produce very high quality parts capable of responding appropriately to the needs of customers. These are the good values which Silko brought to the new company after General Machine was dissolved. Although this company can be considered as having been highly successful, it was dissolved in the year 1969 owing to the Fact that the two co-owners held divergent objectives as far as the future of the company was concerned (Darden Business Publishing, 2015).
Silko in his new company pursued jobs which called for high-precision products. He targeted a variety of industries in the manufacture of these products. These industries included but not limited to aerospace and food processing industries. These are industries which basically required creative solutions for deciding the most efficient way to manufacture the parts. This paper seeks to identify the main issue and the sub issues faced by Silko-Scalece. The paper will then highlight the benefits and the disadvantages of purchasing SPC stations by this company from Harris Computer (Darden Business Publishing, 2015).
Allan Silko is currently faced with the dilemma of whether or not to make use of the Statistical Process Control (SPC). This is a tool based on the theory that all manufacturing processes are controlled by inherent variability levels attributable purely to chance. It is a tool whose goal is to define the variability level and determine when the processes go beyond this level. Going beyond this level is to the effect that the manufacturing process is considered out of control (Darden Business Publishing, 2015).
Allan Silko is concerned about the probability of this tool succeeding in a small company of Silkon-Scalese level. He is worried about the possible reaction his employees are likely to give to the introduction of this tool. His employees are not experienced in the use of statistics; something this tool entails. He is also worried about the reaction his employees are likely to give to the constant instructions from inspectors about when to do adjustments on their machines; something they are not used to. Moreover, Allan is concerned about the possibility that the new system may not be embraced by his employees. This would be to the effect that he would have used a lot of resources to finance a useless system. He has actually estimated that for the system to function effectively in his firm, a total of seven stations would be needed. This is a capital expenditure subjected to the 20% hurdle rate he applies to all projects (Darden Business Publishing, 2015).
Further, Silko is concerned about the possibility that his employees may get dissatisfied with the system; something which may lead to a decrease in the quality of the products they manufacture. This would make the company less likely to be chosen as a preferred supplier by Harris Computer. These are worries which make him wonder about the possibility of the existence of alternatives to this system. He considers his company as having a 15% chance of being selected as a preferred supplier by Harris computer in the event that it fails to embrace this system. On the other hand, given the nature of his employees, this system stands 25% chances of being accepted (Darden Business Publishing, 2015).
To achieve a better comprehension of this system, he decided to carry out a test run in one of the company’s existing orders with the Harris Computer. He instructed his inspectors to gather data on the specific parts which this computer company had expressed dissatisfaction with. The company had also encountered problems in fabricating a terminal block for a major aircraft producer. This is a part which had a slot milled during the last step of the construction process. This is a step characterized by a very high degree of tolerance. This high degree is attributable to the exact nature of the block’s application (Darden Business Publishing, 2015).
There are a number of benefits which the company stands to gain following its decision to purchase the SPC stations from Harris Computer. Firstly, the company would achieve an immediate decrease in scrap as well as in rework rates. These are reductions amounting to up to between 50 to 60%. This indeed would be a good achievement for the company. The rates of scrap and rework have historically stood at between 5 and 8%. This therefore means that the adoption of this tool would be a good thing for the company. The costs of raw materials would also be decreased following the adoption of the SPC program. The cost would specifically be reduced by 5%. The cost of labor on the other hand would go through a 10% decrease. These two reductions would be to the effect that the company’s expenditures reduce hence an increase in its profit margins. This would clearly be a good thing for the company (Hawkins, 2003).
Moreover, the adoption of this program would better relations between Silko-Scalese and Harris Computer. This would mean that Silko-Scalese would stand a better chance of being selected as a preferred supplier. This in effect is anticipated to occasion an annual growth of between 25% and 30%. This again as seen would be a key advantage for Silko-Scalese. This is expected to happen over the next five years following the adoption of the program. The program would also help define the natural manufacturing processes tolerance. This would enable engineers in Silko-Scalese develop manufacturing drawings as opposed to the development of engineering drawings. Further, this program would ensure that manufacturing personnel avoid investing too much time trying to meet drawing requirements which are largely impossible to meet through the application of the defined processes (Hawkins, 2003).
There is a processor, a plotter, inspection tools and suitable interfaces for each SPC station. As such, placing each station on the shop floor would enable a real time entry and analysis of the control charts. These stations would provide all the pre-requisite requirements for Silko-Scalese to become a preferred supplier for Harris Computer. The program also helps determine when manufacturing processes exceed their inherent variability hence out of control. This is quite good as it helps decide when to adjust the process to restore its control. SPC also allows engineers in the control of the quality of products. This would avert a situation whereby engineers are forced to respond to out-of tolerance conditions. It allows manufacturing personnel to continuously monitor and make adjustments to the manufacturing process. This ensures that the specific characteristics being monitored do not exceed the control limits. These are limits within the allowable tolerances. The program reduces scrap and rework costs owing to the fact that necessary adjustment are carried out before the occurrence of out-of-tolerance conditions (Hawkins, 2003).
Through the reduction of variability and defects, the adoption of SPC would enable Silko-Scalese come up with the manufacture of products of a higher value. The adoption would also be to the effect that the company acquires improved competitiveness hence more likely to stay at the top in its line of production....