Chads Creative Concepts designs and manufactures wood furnit

Chad’s Creative Concepts designs and manufactures wood furniture. Founded by Chad Thomas on the banks of Lake Erie in Sandusky, Ohio, the company began by producing custom-made wooden furniture for vacation cabins located along the cost of Lake Erie and on nearby Kelly’s Island and Bass Island. Being an ‘outdoors’ type himself, Chad Thomas originally wanted to bring ‘a bit of the outdoors’ inside. Chad’s Creative Concepts developed a solid reputation for creative designs and high-quality workmanship. Sales eventually encompassed the entire Great Lakes region. Along with growth came additional opportunities.

Traditionally, the company focused entirely on custom made furniture, with the customer specifying the kind of wood from which the piece would be made. As the company’s reputation grew and sales increased, the sales force began selling some of the more popular pieces to retail furniture outlets. This move into retail outlets led Chad’s Creative Concepts into the production of a more standard line of furniture. Buyers of this line were much more price sensitive and imposed more stringent delivery dominate sales, accounting for 60 percent of volume and 75 percent of dollar sales. Currently, the company operates a single manufacturing process in Sandusky, where both custom furniture and standard furniture are manufactured. The equipment is mainly general purpose in nature to provide the flexibility needed for producing custom pieces of furniture. The layout puts together saws in one section of the facility, lathes in another, and so on. The quality of the finished product reflects the quality of the wood chosen and the craftsmanship of individual workers. Both custom and standard furniture compete for processing time on the same equipment by the same craftspeople.

As he reviews the progress of Chad’s Creative Concepts, Chad Thomas is pleased to note that the company has grown. Sales of custom furniture remain strong, and sales of standard pieces are steadily increasing. However, finance and accounting indicate that profits are not what they should be. Costs associated with the standard line are rising. Dollars are being tied up in inventory, both of raw materials and work in progress. Expensive public warehouse space has to be rented to accommodate the inventory volume. Thomas also is concerned with increased lead times for both custom and standard orders which are causing longer promised delivery times. Capacity is being pushed, and no space if left in the plant for expansion. Thomas begins a careful assessment of the overall impact that the new standard line is having on his manufacturing process.

QUESTION:

1. Provide an Operations Strategy of the company (minimum of 500 words. maximum of 100 words)

Solution

Operations strategy of the company needs to be answered before the formation. Here Chad thomas must make daily decisions , i.e short term as well as long term decisions for business. He has to decide marketing and sales operations affects pricing of the product. When thomas adopts standardized production system, he must calculate financial structure of the company. Forming operation strategy starts with forming daily production strategy along with sales, marketing and financial strategies.

When thomas takes daily operations decision for short and long term, he has to decide :

1. Layout of manufacturing processes , i.e. process layout/ product layout / job shop layout

2. Allocation of proper resources , i.e , men, machine and material allocation

3. Managing these resources

4. Job scheduling by following various priority rules i.e. by selection job scheduling methods such as LIFO,FIFO, etc.

5. Decide production schedulling and shipment scheduling to deliver products to each customers

6. Managing Inventory by adopting proper inventory methods

7. Develop appropriate forecasting methods to anticipate future demands.

8. Have to adopt flexible manufacturing system to reduce cost of production and increase quality of the product.

9. To decide appropriate on quality management system like JIT, Kaisen, Six sigma etc. that helps in reducing lead time for each order.

10. To develop value chain that connects suppliers\' with company instantly and hence develop strong bond between company and customer in terms of value products.