Case Study

MGMT$-3069-$ Operations Management $$ Winter $2024$

Mike & Bike Bicycle Shop

Case Background:

Mike & Bike is a bicycle workshop in Toronto that assembles bikes for customers of online suppliers as well as major retailers like Walmart and Canadian Tire. The shop was founded and is owned by Mike Tylor, who started this business in a small bike repair store before he expanded his operation to what it is today. With a stellar craftsmanship reputation among professional bikers, his shop also does major repairs to damaged racing bikes.

Most of the store$$s activity is in assembling newly purchased bikes. Operating all year round except for two weeks around Christmas, the shop assembles a wide variety of bicycles that can be classified into three types $(1$: Men$$s Bikes, $2$: Ladies$$ Bikes, and $3$: Children$$s Bikes$).$

A smaller portion of the shop operations involves repair services for racing bikes $($or adding special parts to enhance their performance$).$ While Mike is satisfied with his shop revenue, he sometimes gets upset about the backlog of orders and also about running out of parts, especially for repair services.

Assembly jobs usually come with all parts in the package, but occasionally, some universal parts, like hexagon nuts, are missing, so he keeps an inventory of these parts. In an attempt to resolve these problems and improve his operation, Mr$.$ Tylor has hired you as a consultant to examine the shop$$s operations and offer recommended solutions.

Last week, you visited his workshop and held a meeting in his office, where he provided the following operational details.

$$I am very picky about delivering scratch$-$free finished jobs, so all jobs come in our own crates and, when finished, go out in the same crates.$$ Mike continued, $$Upon arrival, crates will be inspected by our receivers to make sure they are all good. On average, this is done in about $10$ minutes. After that,$$ jobs would be divided into two categories: a$)$ assembly and b$)$ repair. All assembly jobs will go through three processes $($Frame$/$Wheel$,$ Top Mount and Adjustment$).$ Now, let$$s walk through the shop and see them done in action.$$ said Mike. During your tour of assembly operations, you noted that in the $$Frame$/$Wheel$$ station pedals and cranks were mounted on the frame first. Next cassettes and freewheels were added to the back wheel before it was mounted on the frame, and finally, the front wheel was installed on the frame. On average, the entire Frame$/$Wheel station was completed in $12$ minutes. During the $$Top Mount$$ process, the handle and seat were installed first and then brake and gear shift cables were routed and connected the brake pad modules to the front and back wheel rims. You noted that top mounting was completed in $10,8$ and $6$ minutes for Men$$s$,$ Women$$s and children$$s bikes, respectively. You also observed that all three bikes went through an adjustment station whereby the chain was installed with the right tightness, and the gap between the brake pads and the wheel rims were adjusted for ease of application and grip. These activities were averagely completed in $5$ minutes.

During your tour of the Repair Department, you noted that the module that needed repair was dismantled and disassembled first in $10$ minutes. Then, the repairability of the module was examined to determine whether the module could be repaired without replacing parts or if it needed to be replaced with a new module. You were told that repairing without replaced parts could be done in $10$ minutes and the repairs with replaced parts could be done in $5$ minutes. Repaired modules were then reinstalled in $15$ minutes, and the repaired jobs were sent for a final check.

At the end of your tour, Mike told you that they ensure all the assembly and repair jobs are carefully checked for quality before they are released to the customer. $$On average, we spent about $10$ minutes on each bike to make sure the brakes are working properly, seats are steady, gears shift easily and the tire shafts are centered and all joints are torqued to spec.$$ You asked him how many of each job order they receive. Mike said the number of orders changes at different times of the year, but ballpark $70\%$ of our business is in assembly jobs and $30\%$ in repair jobs. You asked about the breakdown of assembly jobs, and he said ladies$$ and children$$s assembly each form $30\%,$ and the rest goes to men$$s bike assembly.

Mike then invited you back to his office, offered you coffee and asked his foreman, Tom Moberlaw, to join in$.$ After coffee, he said: $$I am rather content with my business, but I am concerned that occasionally we might take more jobs than we can finish and that bothers me$.$ I don$$t know, and perhaps it would be helpful to have a map of our operation to figure out what gives us headaches and what needs to be done about it$.$ I also would very much like to know the shop$$s effective capacity per labour hour for assembly orders. I really don$$t know the average capacity of the store in