BUSI 650 Week 2 ILP: Organizational Setting Example

Blue Ridge Precision Molding: The Organizational Setting for an Integrative Learning Project in Operations Management

Mission

Blue Ridge Precision Molding is a composite contract manufacturer in Forest, Virginia, that produces injection-molded plastic components for medical-device companies. Its mission statement reads: "We make the parts that let medical devices work the first time, every time, so that patients and caregivers can trust what is in their hands." For an operations analyst, that sentence sets two priorities. "The first time, every time" commits the company to consistent quality, and "so that patients and caregivers can trust" places reliability above cost. Meredith and Shafer (2016) emphasize that an organization's operations strategy should follow from its mission and competitive strategy; at Blue Ridge, the mission points toward quality as a requirement and dependable delivery as the way to win business.

Products and Customers

The company molds about 400 active part numbers for 14 device manufacturers. Its products include housings for glucose monitors and insulin pens, components for inhalers and single-use parts for surgical instruments. Most parts are small, made of medical-grade polycarbonate, polypropylene or cyclic olefin copolymer and produced in volumes from 20,000 to several million a year. About 60 percent of revenue, roughly $48 million in the most recent year, comes from four customers, a concentration that gives the company stable volume but also makes it vulnerable if one customer moves work elsewhere.

Processes and Facility

Blue Ridge operates a 120,000-square-foot plant with 38 injection molding presses ranging from 50 to 300 tons, eleven of them inside an ISO Class 8 clean room for parts that will contact patients. Its process mixes two of the types Meredith and Shafer (2016) describe. High-volume parts run in dedicated cells, where a press, a robot and automated inspection produce one part continuously, close to a flow process. Lower-volume parts run in batches on shared presses, which requires mold changeovers that take one to three hours. Secondary operations, such as ultrasonic welding, pad printing and assembly, take place in a separate area, and finished parts are packaged, labeled for traceability and shipped from an on-site warehouse.

The company also manages tooling. Customers own most molds, but Blue Ridge maintains them and manages new-mold projects with outside toolmakers, a process that typically takes 16 to 20 weeks from purchase order to approved first article. These projects are the company's main source of new business and require project management skills distinct from daily production.

People

Blue Ridge employs about 220 people across three shifts: process technicians who set up and adjust presses, operators who run cells and perform inspection, quality engineers and inspectors, maintenance technicians, tooling and project engineers and a small management team. Its quality system is certified to ISO 13485, the international standard for medical-device quality management, so training records and procedures are audited regularly. Process technicians are the scarcest skill; it takes about two years to train one fully, and turnover among them is the company's most serious workforce risk. The company pays above the local manufacturing average for technicians and runs an apprenticeship with a nearby community college, but it still lost four of its 22 technicians last year to other employers. Operators, by contrast, can be trained in a few weeks, and the company relies on a temporary staffing agency for about 15 percent of operator positions during peak periods. Supervisors are mostly promoted from the technician ranks, which gives them deep process knowledge but sometimes little preparation for managing people.

Competitive Position

Blue Ridge competes with roughly a dozen U.S. molders that hold ISO 13485 certification and with lower-cost suppliers in Mexico and Asia. It rarely wins on price alone. Customers choose it because its delivery record is strong, because its engineers help them design parts that can be molded reliably and because its clean room and validation experience shorten the time needed to qualify a new part. Customer surveys over the past three years rank on-time delivery and responsiveness to engineering changes as the company's most valued strengths, and price as its most frequent weakness. In the language of the textbook, quality is a qualifier that every competitor must meet, delivery dependability and engineering support are order winners, and cost is an area where the company must stay close enough to the market not to lose bids it would otherwise win. That position shapes the analysis ahead: improvements that lower cost without endangering delivery reliability or quality are the ones that fit the mission.

Suppliers

Resin is the largest purchased cost. Blue Ridge buys medical-grade resins from a small number of global producers through distributors, and many customers' specifications name a single approved grade, which limits substitution. Molds come from a handful of domestic and overseas toolmakers. Research shows why this concentration deserves attention: Hendricks and Singhal (2005) studied 827 announcements of supply chain disruptions and found average abnormal stock returns of nearly negative 40 percent for affected firms over the period from a year before to two years after the announcement, with little sign of quick recovery. A private company like Blue Ridge would not see a stock price fall, but the underlying lesson, that disruptions do lasting damage, applies. A single approved resin grade can turn one supplier's outage into a customer's line stoppage.

Performance

Blue Ridge tracks a short list of operating measures. On-time delivery to customer request was 96.5 percent last year. Customer-reported defects averaged 140 parts per million. Overall equipment effectiveness, which combines availability, performance and quality, averaged 68 percent across presses, with dedicated cells near 80 percent and shared presses near 60 percent because of changeovers. Inventory turned about nine times a year. The company has also introduced several lean practices, including 5S in the clean room, quick changeover methods on two presses and total productive maintenance on the dedicated cells. In a census-based study of U.S. plants, Shah and Ward (2003) grouped lean methods into four interrelated bundles, covering material flow, quality, equipment care and people practices, and found that the bundles together accounted for roughly 23 percent of the differences in plants' operating results once context was controlled. Blue Ridge's partial adoption gives the project room to assess what more could be done.

What the Project Will Examine

The Integrative Learning Project will use the course readings to describe Blue Ridge as a successful organization and identify where it can improve. The final paper will examine its operations strategy and competitive priorities, process design and capacity, lean practices and changeovers, its quality system, including statistical process control and Six Sigma projects, supply chain management and risk, new-mold project management and performance measurement. Each topic will be connected to the mission of delivering parts that work the first time, every time. The analysis will rely on the course readings, on research about the practices the company uses and on the company's own performance data, and it will identify both what Blue Ridge does well and where its practices fall short of what the evidence suggests is possible. Three questions will guide it: whether the company's operations fit its chosen competitive priorities, whether its processes and supply chain can sustain its delivery record as volumes and product variety grow and whether its improvement efforts are organized well enough to keep raising performance year after year.

References

Hendricks, K. B., & Singhal, V. R. (2005). An empirical analysis of the effect of supply chain disruptions on long-run stock price performance and equity risk of the firm. Production and Operations Management, 14(1), 35-52. https://doi.org/10.1111/j.1937-5956.2005.tb00008.x

Meredith, J. R., & Shafer, S. M. (2016). Operations and supply chain management for MBAs (6th ed.). Wiley.

Shah, R., & Ward, P. T. (2003). Lean manufacturing: Context, practice bundles, and performance. Journal of Operations Management, 21(2), 129-149. https://doi.org/10.1016/S0272-6963(02)00108-0