Rouen Business School, Operation Management, Logistics, Logistique, Chad's Creative Case
We saw in this example that Chad's team has always been focussing on the most profitable part of their product and neglecting the rest of it.
It is important for Chad to change this state of mind and to not forget that every single customer is important for its business.
On the daily scale:
First of all, Chad must implement a scheduling process in order to finish all the work in process and free some usable space in his warehouse. This key point will directly influence the others. As said before, (...)
[...] By doing so, Chad will considerable reduce the setup time of his company. Fourth of all, he might want to consider reviewing his staff allocation and think about hiring temporary craftspeople in order to clear the slates and start fresh with a high stock capacity. Fifth of all, Chad must use supply allocation process. He should review the daily raw materials budget in order to cut costs The last key point the owner should check is his inventory management, to stop producing more than required and start to forecast better. [...]
[...] Another decision that has to be made by Chad is to decide to expend his business by investing in new facilities. The business has a bright future regarding the figures, Chad must make strong decision in order to continue going on this path. As said in the first question, recruiting more staff can also help to reduce delays and higher the financial health of the company. Another solution can be team building and training that will increase craftspeople willingness to work and this will have a direct effect on the turnover. [...]
[...] We analyse this fact by saying that the front team is working good, but the manufacturing process in the back lacks of efficiency in order to answer the demand. Moreover, there is still a lot of work in process that higher the costs of inventories and blocks the companies growth. This is directly linked to the fact that Chad's company is only focusing on the on the custom line compared to the standard line. There is a big work to make on the standard line. How has the move to producing standard furniture affected the company's financial structure? [...]
[...] The first one is to finish all the work in process in order to free space, reduce its raw material costs and reduce its inventory costs. By doing so, Chad will see his finance go back to normal. In order to do so, he will need to implement a scheduling process and stop focussing on only one part of his business. The same priority should be driven to both lines (custom and standard). The other solution can be to relocate the warehouse. [...]
[...] On the daily scale: First of all, Chad must implement a scheduling process in order to finish all the work in process and free some usable space in his warehouse. This key point will directly influence the others. As said before, it will provide cash from the sales, and liberate space for stocks. This job scheduling should be accompanied by a production scheduling in order to forecast how much to produce. Second of all, Chad must start to specialize and divide craftspeople into two groups. One group focused on the custom made products and the other on the standard pieces. [...]
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