CASE STUDY:
EASTERN GEAR, INC.
Eastern Gear, Inc., located in Philadelphia, Pennsylvania, is a manufacturer of
custom-made gears. Eastern Gear specializes in producing gears for engineering research
and development laboratories and very small manufacturers, which results in highly
customized orders. Until recently, all order sizes were comprised of less than 100 pieces
and the exact same gear is rarely ordered more than once.
The fist two years the company lost money, but has gained a small profit over the last few
months. Sales are up 100 percent and market surveys indicate that sales could increase to
$5-$5.5 million in 2012 if the company can maintain or reduce their current delivery
lead-time.
President and founder of Eastern Gear, Roger Rhodes over sees 50 employees. Most
notable are Sales Manager James Lord, Engineer Sam Bartholomew, Expediter Matt
Williams, Controller Sam Smith, and Foreman Joe Irvine.
1. There are a few major problems being faced by Eastern Gear. The first problem that
Eastern Gear needs to remedy is the time it takes for orders to be produced. From order
placement to order delivery, the average completion time is five to six weeks. Previously,
average completion time was three to four weeks. The cause of this increased delivery time
is because the company recently decided to accept orders over 100 pieces. This was done
in order to help pay the overhead, but it caused some deliveries of the smaller orders to be
late. To remedy this large problem, there are smaller issues that need to be addressed as
