Chad's Concepts Essay

1318 words - 6 pages

To: Chad Thomas, President, Chad’s Creative Concepts
From: Consultant

Chad’s Creative Concepts located on the banks of Lake Erie in Sandusky, Ohio, designs and manufactures wood furniture. The company developed a solid reputation for creative designs and high-quality workmanship. They focused entirely on custom made furniture. Their customers specify the kind of wood that’s used to create the pieces they want. As the company’s reputation grew and sales increased, the Chad’s Creative Concepts began to sell some of its more popular pieces to retail furniture stores. This has allowed the company to produce a more standard line of furniture. These buyers however, are much ...view middle of the document...

Currently the manufacturing process is only being done in Sandusky; this is contributing to the backlog and lack of warehouse space. Sales and manufacturing areas need to look at a better way to streamline this process in order to avoid any customer delays. With the continued increase in sales, this area needs to be closely monitored to avoid dissatisfied customers and the potential of loss of revenue from lost sales.

In order for the company to continue to keep up with current and future demands recommendations are to open up another location that focuses on the standard line. This would alleviate any warehouse issues, as well as allow the company to meet the customers’ requirements as related to lead times. This would also save the company of the cost currently being spent on expensive warehouse space for inventory. It is also recommended that the company re-evaluates the layout of the manufacturing process and equipment configurations in order to reduce setup times. In doing so focus should also be pointed to the current resource allocation of raw materials. Do you have what is needed? Are the delays a result of waiting for materials? This evaluation will also help to determine if the company has the manpower needed to get the orders completed in a timely manner. Strategic decisions should also evaluate the long-term impacts and consequences to the company by developing forecast methods to understand the customer demands.

Krajewski, L., Ritzman, L., & Malhotra, M. (20103). Operations management: Processes and supply chains. (10th). Upper Saddle River, NJ: Pearson 

5-Step Critical Thinking Decision-Making Process Matrix
Step 1: Identify the problem(s) and uncertainties.
What exactly is the problem…
The company has had an increased volume in sales due to the standard line of furniture they sell, however because the custom line brings in more revenue, those standard line sales are pushed back to meet the demands of the custom sales. This is causing a delay in delivery, lack of warehouse space, and increase in lead times. |

The problem is this …
Do you have the correct manpower needed for the increase in volume? Are all raw material available to produce both lines of products |

This is an important problem because…
The delay in delivery and lead times can cause dissatisfied customers and a loss of revenue. |

The key question(s) that needs to be answered to solve this problem is…
Why are there delays?What is contributing to the delay in lead times?How much is required to be produced to keep up with demand?Are raw materials available or is this delay causing the backlog? |

Step 2: Obtain information.
The following information is needed to answer this question…
What type of decision must management make for the company operation to run effectively? |

Some important assumptions I am using in my thinking are…
How did sales and marketing affect operations when they began...

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