What kind of operating decisions are facing chad Thomas’s business today? Kindly

Question

What kind of operating decisions are facing chad Thomas’s business today? Kindly explain Read the case carefully and answer all the questions. Chad's Creative Concepts (Krajewski & Ritzman, 2002: 23) on the banks of Lake Erie in Sandusky, Ohio, the company began by producing custom- Chad's Creative Concepts designs and manufactures wood furniture. Founded by Chad Thomas Island and Bass Island. Being an 'outdoors' wanted to bring 'a bit of the outdoors" inside. Chad's creative concepts developed a sol reputation for its creative designs and high quality workmanship. Sales eventually encom type of person himself, Chad Thomas originally passed the entire Great Lakes region. Along with its growth came additional opportunities. Traditionally, the company had focused entirely on custom-made pieces of furniture, with the reputation grew and sales increased, the sales force began selling some of the more popular customer specifying the kind of wood from which the piece would be made. As the company's types of fumiture pieces to retail furniture outlets. This move into retail outlets led Chads Creative Concepts into the production of a more standard line of furniture. Buyers of this line were clients for the custom line. The custom-designed furniture continued to dominate the company's sales, accounting for 60% of the volume and 75% of dollar sales. Currently, the company operates a single manufacturing facility in Sandusky, where both custom and standard furniture much more price sensitive and imposed more stringent delivery requirements than did manufactured. The equipment is mainly general purpose in nature in order to provide bility needed for producing custom pieces of funiture. The layout groups saws together 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 the individual workers. Both the custom and the standard furniture pieces compete for processing time on the same equipment by the same craftspeople. During the past few months, sales of the standard line steadily increased, leading to more regular scheduling of this line. However, when scheduling trade-offs had to be made, the custom furniture was always given priority because of its higher sales and profit margins. Thus, schedule lots of standards furniture pieces were left sitting around the plant in various stages of completion. As he reviews the progress of Creative Concepts, 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 have indicated that profits aren't what they should be. Costs associated with the standard furniture line are rising. Dollars are being tied up in inventory, both of raw materials and work in process. 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 is left in the plant for expansion. Thomas decides that the time has come to take a careful look at the overall impact this new standard furniture line is having on his operations.

Explanation / Answer

Chad's creative concept designs and manufacturers wood furniture company grow sharply but with the company Buisness grow its important to considers operation management to make balance in company and to increase the company profit because with the buisness grow, responsibility and work also increase like the case of Thomas capacity is being pushed and no space left in the plant for expansion. So in this case operation managements is important . Operations management refers to manage the activity on daily basis which occurring in company and take quick decision related to production and quality of product to survive in long term Buisness so operational management take decision on three important key factor which are as follows :

Raw materials: raw material important thing and part of product like without raw material final product cannot be made for e.g Chad Thomas produced wooden furniture, to make furniture wood directly take from tree is necessary so wood is raw material and after cutting wood from tree , it makes shapes and polish , design, to convert into final product .

2. Manforce: Manforce is also key element in buisness operation decision without manforce productions can not be possible for e.g Labour or workers of Thomas give shape to raw material into final product which he sells in the market and earn profit, so if production is not done than what he sells so production is done by manforce. To optimum utilize of manforce in effective and effectively way it's important to take important decision without effecting cost of production , manforce use in optimum way.

Machinery : The third but not least important key element is machinery . To accomplish the desired goal of organization it's important to production done timely without delay so if company use man made method So It takes lots of time and increase cost of production so to saves time and money it's important to use machines . But operation manager make sure that to use these resources in optimum way, without wasting .

So operation management decision play key role to run business smoothly in a effective and efficient way, without wasting the resources and increased of production cost . In case of Thomas would concern about the capacity is being pushed and no space is left in the plant for expansion. Because product delivered on time is important thing . If company would not complete the order on time so it spoil the relationship with customer and affect to sales of buisness , directly affect company profit .for e.g Thomas got the order of 1000 unit of production by university and they give also some time bond with the order . And the place of order is too far away from manufacturers place so if Thomas workers complete orders on time with the use of machinery, manufacturing the furnitures in a hurry and delivered the product without quality check . So product delivered via delivery van which is not in good condition and need to repair so van broke down on way and fails to deliverd on times but after reaching the products at their order place , they may find out that some furniture is not enough strong and some are broken . It give negative impression on customers and affects future sales because of negative feedback . So after analyse the whole case Thomas find out to need of operation management and key concept which is following :

A. Total Quality Management : First and foremost step divide the operation management department into Total Quality Management which check the product quality , after checking the product quality then it pass to next process , so at the time of delivery it creates no problems and make good impression on customers regarding the products .

B.Kanban: Kanban is software development . With the helps of this software operation manager is able to make production time table chart . This helps to operations manager to find out the answers of these important question related to production like :

What to produce

How to produce

How much time is required .

This makes the chart table in which it's illustrates following things

Backlog

New product

In Progress product

Testing

Completing

C.Total Productive Maintenance : TPM helps to improve the productions functions. So the employees can do their works effective and efficient way without delaying the production . It works on three factor which is follow :

Preventative maintenance

Quality control

Employees contribution

It's helps to improve, control the process of production and also try to use the resources in most optimum way . So the performance and quality of product would increase and organization achieve their goal in time..

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