1. What types of decisions must Chad Thomas make daily for his company’s operations to run effectively? Over the long run?
To be best serve external customers, the types of decisions Chad Thomas must make daily for running the company’s operations effectively that are including capability planning, process improvement, managing production and project, managing and scheduling resources and quality control.
It is exciting to have the business expansion and increasing sales in order to gain profit. However, in this case, Chad’s Creative Concept does not have the capability to meet the soaring customer demand. Thus, identifying the company’s capability and production bottleneck are most important and must be considering at first. Secondly, design new processes to optimize the firm’s capability and maximize the production level thereby to shorten the lead time in order to lower inventory warehouse and handling cost. The third, project production plans in monthly, weekly and daily basis. The next, since the company’s resources are limited, therefore, Chad must make decisions on managing and scheduling the limited materials, equipment, other facilities and human resources. Allocate resources effectively to optimize the production process. Finally, to be best serve and satisfy customers, avoid defected products from the mass production process, the performance and quality control must be tracking. In addition, Chad might to think about to hire more staffs and rent a cheaper warehouse to handle the current problems.
Over the long run, Chad must make visionary corporation strategy and the following production strategy. Maintaining the company’s existing capabilities and develop new capabilities to best serve customers. Expand the business by hiring another production team to concentrate to the standard line of furniture. Expand the company’s facilities and managing resources, scheduling staff and make work plan. Measure the product quality, control the lead time and ensure to meet delivery schedule and customer satisfaction.
2. How did sales and marketing affect operations when they began to sell
standard pieces to retail outlets?
Due to limited capabilities of the company in the resource-poor setting, the operation of the company was affected by the sales and marketing when Chad Creative Concept began to sell standard pieces to retail outlets.
The company’s production capability cannot meet the increasing sales and marketing expansion. This result has been leading the company’s product lead time increase by both the custom and standard line furniture. In addition, the company has to deal with the in process materials, and unfinished products by renting the expensive public warehouse. This also will increase the company’s cost. Another factor that would affect the operation are the performance and quality control. This would be happened because the huge work load, tight production schedule and poor human resources, and this resulted in poor product quality and defected products.
3. How has the move to producing standard furniture affected the company’s financial structure?
Since the limited production capability is difficult to handle the increasing sales, order and huge customer demand. Many of the production plans cannot meet the schedule due to the shortage of experiences workers. There are more and more in process products and materials overstock in the plant and rented public warehouse which cannot meet the schedule to delivery to the customers. This result in a diminishing turnover of capital and therefore affect the company’s finance structure.
4. What might Chad Thomas have done differently to avoid some of the problems he now faces?
In order to avoid the current problems he facing right now, Chad might identify the plant’s production capability first and therefore to make an effective sales, order and production plan in the existing capability setting. The other alternative is to expand the business by purchasing more facilities, equipment and hiring more employees. Separate the custom and
standard line furniture by funding another production team to concentrate on the standard line furniture. Hire an independent consultant in the plant to make wise advice for him. Find an cheaper warehouse therefore to cut the cost.
