CASE STUDY:

MCCALL DIESEL
MOTOR WORKS
(Need for a complete system for
production control)

To be submitted by;

ACOT, Amenolah
ACEVEDO, Goldie
CASTRO, Korina
CEPRES, Bernadette
CONDE, Kimberly
GAY-YA, Carla
LAURIO, Gela
POOYA, Jadery
To be submitted to:
DR. ROWEL E. ANTONIO

OVERVIEW
McCall Diesel Motor Works has been a pioneer in the manufacture of a particular
internal combustion engine. The plant is located on tidewater in the state of New
Jersey because the company originally built engines for the marine field, chiefly fishing
boats pleasure craft. Subsequently, its activities were extended to the stationary types
of engines, used primarily for the production of power in small communities in
manufacturing plants, or on farms.
The company has always been advanced in its engineering department and
design. The production phase, on the other hand has not been progressive. The
increasing popularity of diesel engines has brought many new producing companies
into the field.
About the Companys design, many of the engines designed were one-off
products and made specifically to order. Although this type of work still represent 60
percent of those manufactured, there has been a move towards standardizing many of
the component parts to reduce the variety of parts. This allows a degree of
interchangeability, especially for small components such as studs, bolts, and spring, or
as mechanical fasteners. There also has been reduction in the variety of engine sizes
available with introduction of a standard range of three sizes: 20, 40, and 60 HP
The company has always been advanced in terms of its product engineering, in
the development and design of their product. The production phase on the other hand,
has not been so advanced. The heritage of production in the type of job shop
operation persists, and despite the tendency of standardization, the company is still
continues largely on a made-to-order basis. The increasing popularity of diesel
engines meant that competition has been tight because it brought may new entrants
to the market.
High manufacturing cost and poor service have been reflected in the loss of
orders. Customer complaints together with pressure from sales department prompted
management to call in a consulting engineer to make survey of the Manufacturing
department and recommend a plan of action for improvement.
The engineer showed the report from the manufacturing methods, Machinery and
equipment, and production control. The senior management recognizes that in order
to service, there is an urgent need for change. However, they are having difficulty in
convincing the workforce of this and implementing any change. In the main, the
management sees the problem as the resistance of the workforce to change their
working practices. However, the workforce see the main problem as being the fact that
the senior management are essentially sales minded and dont understand the
problem of production planning and manufacturing.

I. TIME CONTEXT
Because there is no specific date in the case study, we conclude that the time
context of the study is at the present time.
II. VIEW POINT
The viewpoint of the study is the engineers.
Because they are the ones who make the surveys to know what is wrong with the
company and reasons why does the company are having a lot of customer complaints
and why are their sales are decreasing. The engineers also are the ones who
discovered the problem and have some recommendation.
III. STATEMENT OF THE PROBLEM
McCall Diesel Motor Works is currently going through where the current systems
have collapsed. They embody the main problems in the field of production
management. How will the McCall Diesel Motor Works can provide the need for a
general system of production control?
From the start of the case study, it was already stated to the title that McCall
diesel motor works need a complete system of production control. Also the engineers
also notice that the production planning and control of the company have no formal
system. In fact there is resistance from the production manager to implementing any
such formal system. The lack of any such formal system has resulted in high work in
process and failure to meet delivery times due to lack of work in process monitoring
and information on manufacturing lead times. Production planning has also failed to
take advantage of the economies of scale afforded by the use of standard parts. There
is also lack of formal approach to lot sizing and how the lots are processed through
the shop floor. This has led to lots being lost and the order being reissued only for the
lot to turn up.
IV. STATEMENT OF THE OBJECTIVES
Short range
To limit bottleneck area

 To continue produce quality engines for small stationary power plants for
small communities
To minimize the high production costs and low customer service
To minimize the customer complaints
To be able the General Superintendent not opposed the ideas of Engineers.
To increase sales of the company
Long range
To maximize efficiency and utilization of machine
To become the best manufacturer of internal combustion engine in the
country after 5 years.
To provide the need for a general system of production control
To ensure customer satisfaction by meeting the delivery date.

V. SWOT ANALYSIS

Strengths
Standardized parts
Knowledgeable workers
Advancement in engineering
development and design.
Pioneer in the manufacture
of a particular internal
combustion engine.
The companys operation in
its engines were largely
special-order jobs.

Weaknesses
Obsolete machines
Made-to-order type of
business
Failure of a piecemeal
manufacturing
Lack of definite sequence of
manufacturing operations for
a given part.
Lack of information regarding
overall manufacturing time
Arbitrary delivery dates by
the sales department
High production cost
Low-level of customer
service.
Failure to use proper lot
sizes, even when lots are not
broken up during
manufacture.
Absence of any record

Opportunities
Location that allows them to
have easy access to the
customer
Customer requires engines
that are made-to-order
The increasing popularity of
diesel engines.

concerning the whereabouts

of orders in the process from
their initiation to delivery at
assembly.
Failure of all necessary
component parts to reach
assembly at approximately
the same time.
Failure to meet delivery
promises or high production
cost due to rush or overtime
work
Difficulty in rendering
adequate repair service and
at the same time meeting
delivery promises.
The general superintendent
shows little enthusiasm for
the idea of a system of
production control; in fact, he
is opposed to such an
installation.
Top management of the
company was essentially
sales minded.
The production phase has
not been progressive.
Increasing number of
customer complaints.
Pressure from the Sales
Department.

Threats
Many new producing
companies into the field,
with a consequent
tightening of the competitive
situation.
Inordinate number of rush
order

 Calamities and other forms

of natural disasters.
Sizes of marine engines
have been standardized to
some extent.

VI. ALTERNATIVE COURSES OF ACTION

ACA #1:
Implement and organize a more advanced general system for
production control.
ACA #2:
Limit made-to-order orders and instead concentrate to the sale of
standard-line of the agricultural engine
ACA #3:
Set an exact delivery time/date for each product.

VII. ANALYSIS OF ALTERNATIVE COURSES OF ACTION

ACA #1:
Implement and organize a more advanced general system for
production control.
ADVANTAGES

DISADVANTAGES

Management will know the overall

manufacturing time, this will enable
them to estimate the time it will
take for the product to finish so that
it will be determined on time.

This may require changes in the

process that may not be readily
accepted by the workers.

This will determined possible areas

This in-process parts cannot be

easily
uses
the
service
department to supply for their

of bottlenecks thus, these will be

eliminated.

emergency repairs.

Reduce in process inventory of

parts.
Illustrate the essential role of the
human resource and its effective
integration into the manufacturing
system.
minimize the high production costs
and low customer service

ACA #2:
Limit made-to-order orders and instead concentrate to the sale of
standard-line of the agricultural engine
ADVANTAGES

DISADVANTAGES

This will greatly help in the This may result to decline in sales
simplification and standardization
as 60% of the companys sales are
of the production process
generated through made-to-order
engines

ACA #3:
Set an exact delivery time/date for each product.
ADVANTAGES

DISADVANTAGES

This will inhibit any disruption in the This may cause a customer
manufacturing process
dissatisfaction as rush order will
not be allowed

VIII. RECOMMENDATION
Though the engineer recommendation in the study is to have a simple,
straightforward program that would provide adequate control over production and
could be instituted gradually and logically, it still answer it because if we already know
the sequence, we will have an adequate control over the production.
We recommend the first alternative course of action which is to Implement and
organize a more advanced general system for production control. Which have the
goals of the following:
1. Provide world class quality and service to the customer.
2. Develop each employees potential, based on mutual respect, trust and
cooperation.
3. Reduce cost through the elimination of waste and maximize profit
4. Develop flexible production standards based on market demand.
IX. PLAN OF ACTION
ACTIVITY

BUDGET

TIME
FRAME

1. Assemble a cross-functional project team

with a respected project leader.

P8,000.00

A month

2. Understand why the organization needs the

system (i.e., define your business pain) and
why the pain exists (e.g., system issues
and/or business-process issues).
3. Define the scope of the system.

P1,000.00

2 weeks

P1,000.00

2 weeks

4. Establish phases for system implementation

P2,000.00

2 weeks

5. Gather and define the organizations

requirements of the system.

P3,000.00

2 weeks

6. Acquiring of new equipment and machineries.

P50,000.0
0

2 weeks

7. Installation of new equipment and

machineries.

P2,000.00

2 weeks

PERSON
RESPONSIBL
E
Manufacturing
Process
Engineering
Manufacturing
Process
Engineering
Manufacturing
Process
Engineering
Manufacturing
Process
Engineering
Manufacturing
Process
Engineering
Manufacturing
Process
Engineering
Manufacturing
Process
Engineering

8. Prepare the organization for change.

P1,000.00

2 weeks

9. Prepare people and data

P1,000.00

2 weeks

10. Manage scope creep

P2,000.00

2 weeks

11. Thoroughly test the functionality of the

system.
12. Run and refine the system.

2 weeks

P5,000.00

Years

Manufacturing
Process
Engineering
Manufacturing
Process
Engineering
Manufacturing
Process
Engineering
Manufacturing
Process
Engineering
Manufacturing
Process
Engineering

ACTIVITY #1: Assemble the Project Team and Leader Implementation

Requires assembling a cross-functional project team with constituents from all
business units likely affected by the new system. At the heart of this group is the
project team leader. Many personalities can fill this role, but good leaders always:
> Know when to say no or at least not right away.
> Possess the energy to question everything.
> Are part diplomat and part drill sergeant.
> Are disciplined and do what they say.
> Deal deftly (and swiftly) with whiners, nay-sayers, and bullies.
> Have enough authority to manage the project.
> Make or find the time to do the project right.
ACTIVITY #2: Define Your Business Pain and Why It Exists
Recording and defining pains allow an organization to justify the need for a new
manufacturing system, provided the underlying issues are indeed system-related. For
example, a company may fail to satisfy customers (pain) because it ships late, its
inventory is inaccurate, and its investment in inventory is too high or not enough
(issues).The company realizes it must better manage its inventories (business
objective) but first needs to understand the root causes of its inventory difficulties. Is it
a system problem? A new system must positively impact the issues that cause the
pain and help achieve business objectives, or it risks merely making old, mistakenladen processes run faster at higher costs.
ACTIVITY #3: Define System Scope and Implementation Phases

Scope is delineated by duration or phases, and, depending on the breadth of

your project and organization, the implementation could go live in a single day or
extend over months as various departments and/or physical locations turn on their
systems. Factors to consider in selecting a start sequence include ease of
implementation, site accessibility to the project team and partners, and location of the
best-prepared staff and most- thoroughly tested functionality.
Phase 1 financial modules to get the transactional elements in place that
impact inventory data;
Phase 2 planning functions, such as master scheduling to begin feeding
new data into the system; and
Phase 3 tactical functions, such as shop-floor scheduling where new,
accurate data is a system imperative.
ACTIVITY #4: Gather and Define System Requirements
Remember that a new system may be an antidote for an organizations pain, but
the implementation team is not a band of faith healers capable of miraculous
achievements. Managing unrealistic expectations and requirements is a critical step
and demands a rigorous review of all system and data requests. Too many
organizations bend over backward to accommodate old processes or reporting
methods that are archaic, wrong, or simply unnecessary. Successful project leaders
tie requirements to the established objectives e.g., standardization, real-time plant
data, or improved materials management and not to old processes. By limiting
system selection and design to requirements based on old processes and methods,
many companies unwittingly saddle themselves for another five years with inferior
practices and missed opportunities.
ACTIVITY #5: Structure the Implementation and Prepare for Change
Your implementation success will hinge less on technology itself than on creating
new, more efficient processes enabled by technology. As such, treat the system
launch like the most important strategic project youll ever manage because it
probably is. This will require a disciplined project-management schedule that includes
an aggressive timeline, quality checks and milestones, and mandated attendance for
team members at weekly meetings (all meetings, not just those that impact their
departments, in order to provide peer scrutiny and pick up best practices from other
departments).
ACTIVITY #6: Acquiring of new equipment and machineries.
The phases of a project will include some or all of the following:
Project commencement - the development of a specification and
identification of standards to be met.

 Pre-purchase inspection and assessment of prospective equipment

to decision.
Verification of selected supplier
Pre-purchase installation plan
Production of Contract
Placing of order
Post order project confirmation meeting
Inspection of equipment prior to arrival and when arrived on site
Preparation for delivery
Delivery and provision of manufacturers information.

prior

ACTIVITY #7: Installation of new equipment and machineries.

A risk assessment has to be undertaken. This assessment can only be effectively
achieved with the full participation of machine operators and maintenance staff, who
can bring practical expertise to the process. This task will best be performed during
trial running and before the installation/commissioning engineers hand the machine
over to production.
ACTIVITY #8: Prepare People
Before system training hits the front lines, the project team needs to be fully
trained as early in the implementation process as possible (immediately following
project planning).The project team members must be well-versed in order to design
the system, train end-users, and define system procedures.
All others affected by the system should receive some level of system training. How
much training is a matter of debate? While some companies opt for large-scale
training that includes an overview of the entire system with deep-dive breakouts for
specific modules, most organizations have trouble devoting the time or resources for
such exhaustive measures.
ACTIVITY #9: Data Integrity and Migration
Data migration is critical (i.e., garbage in, garbage out) and offers a tremendous
opportunity to ease the transition and improve process efficiencies going forward by
deleting unnecessary or redundant information. Data can be classified into one of four
categories prior to migration:
> Irrelevant data that can be left behind;
> Questionable data that should not be transferred but retained;
> Pertinent data that may prove useful and must be retained and
cleansed; and
> Priority data upon which the new system will rely and that must be
thoroughly scrubbed.
Successful implementations follow these migration steps:

1. Define the scope of the data migration;

2. Identify the amount of data cleansing required;
3. Clean the data to be migrated;
4. Map legacy data to the new system;
5. Develop necessary data-migration tools;
6. Conduct initial data migration;
7. Run data-integrity checks;
8. Perform data-migration tests;
9. Make necessary changes;
10. Retest; and
11. Perform final migration.
ACTIVITY #10: Manage Scope Creep
No implementation proceeds without suggestions to alter or expand the original
project. This scope creep requires a project team leader with both the authority and
strength to make original decisions stick and, where the scope creep is legitimate to
achieve business objectives, to revise the project. The steering committee is critical
when creep arises because it carries veto power.
In considering scope revisions, its vital that everyone understand what is native
in the system and which additional functionalities will require a modification or
integration with a third-party solution.
This requires two steps:
> Assess whether there is a gap between the new needs and the
current systems out-of-box capabilities.
> Determine if an alternative to modification or third-party integration is
possible, or if modification or third-party integration can be postponed.
ACTIVITY #11: Test the System
As the system launch grows closer, its important that users adhere to a testing
schedule and vigorously track and follow up on issues that arise from testing. This
testing must be thorough and as close to post-launch conditions as possible; one
successful method is the use of monitored sessions under the guidance of the
implementation team conference room pilots that simulate real-world usage. If
testing cant occur in pilots, team members must monitor individual testing sessions
and ensure that no integration issues exist.
ACTIVITY #12: Run and Refine the System
Once the system is up and running, the refinement process typically consists of
clean-ups to solve small problems, review of previous workarounds, a look at
postponed issues and new issues that may have arisen, and planning of subsequent

phases. Above all, make sure that a myopic focus on the system hasnt blinded you
and your staff to the need to deliver improved processes that achieve your business
objectives.
Dont Implement without Them
As you move forward with your implementation, make sure you follow the proven
steps. They have been proven many times in many projects and in many industries,
and theyll continue to lead to success, provided you start and finish every project with
the following must-have components:
> Strong-willed project leader with time and resources;
> Representative project team with time and resources;
> Well-defined list of business objectives;
> Rigorously critiqued list of system requirements;
> Realistic but aggressive timeline;
> Thoroughly documented system procedures;
> Partner that is the right strategic fit with industry, manufacturing, and
system experience; and
> Thorough testing that can uncover any problems and ensure a smooth
kick-off.
X. MANAGEMENT LESSONS LEARNED
1.
2.
3.
4.
5.
6.
7.
8.

Total Quality Management

Implementation of a Manufacturing system guidelines
Customer Satisfaction
Identifying Target Market
Planning
Communication in an organization
Standardization

9.