Discussion Questions
1. What are the major problems being faced by Eastern Gear?
2. What action should Mr. Rhodes take to solve his problems?
3. How can this case be related to operations strategy and process design concepts?
Eastern Gear is a company that traditionally produced custom gears in small lots, and has
recently been given the opportunity to begin producing larger volumes of gears per order.
This is a typical small job shop which is owner operated. In addition, Eastern Gear has
experienced a large increase in sales which is causing major problems in operations.
Because of the wide range of problems presented, the case permits an overview of a job
shop type of operation and practice at looking at the entire scope of operations including
objectives, capacity, production and inventory control, organization, and quality.
The purpose of this case is to allow students to examine a complex manufacturing problem
and the associated decisions in some detail. The case illustrates how problems are
interrelated and how objectives might be clarified before decisions can be made. It also
provides a fundamental understanding of what a job shop is like and the typical problems
faced in job shop management.
Analysis
Eastern Gear is experiencing a wide range of problems including:
1. Need for objectives in operations. It is not clear at the present time whether operations
should emphasize cost, flexibility, delivery, or quality. The desired emphasis on these
objectives needs to be clarified.
2. Lack of an order size policy. Eastern Gear has accepted a wide range of order sizes as
shown in Exhibit 2. Furthermore, Eastern Gear’s President has just decided to accept a few
larger orders. The two types of order sizes are best served by different operations strategies
and different process designs.
3. Lack of planning for growth. It does not appear that the company has a strategy or plan
for future growth. As a result, the company could experience cash flow problems, capacity
problems and other problems associated with rapid growth.
4. Production and inventory control. At the present time expediting seems to be the rule
rather than the exception. Twenty percent of the orders have rush tags on them. Production
processing time has increased from two to four weeks, and there does not seem to be a
production and inventory control system in place. Also, certain orders are being handled on
a rush basis and this may be disruptive to the smooth flow of production. Finally, Joe
Irvine has expressed concern about bottlenecks which are caused by the lack of effective
