Creative Concept Essay

I. TIME CONTEXTThe slickness is analyzed when problems affecting the companions operation took place, store cost rises, and lead time for manufacturing bespoke and meter product absorb outgrowths. It was then that Thomas decided that its ab forth time to take a cargonful look at the overall impact the new monetary standard article of piece of article of article of furniture line is having on his operation.II. POINT OF VIEWChads inventive Concept started with a ho no.rable vision of producing practise-made wooden furniture for vacation cabins bringing a bit of outdoors inside. Gaining popularity, evidenced by the gain take up for their products,theyve proven themselves and earned the trust of their clients with subtle and elusive tastes. Opportunity came for the connection to venture into the production of a more standard line of furniture. This feat could have been great but such affected the corporations operations, securities industrying and finances.Alterations could have been done in the overall manufacturing ferment of the social club or conducting a marketing analysis could provide insights and bringing out the marketing segmentation on the potential contract for the standard line products. Most likely, the gild was non that untold ready to embark on this new line of furniture devising in terms of their managing their resources and making the most out of them. Consequently, problems arose and if this situation testament continue, additional investment in product cycle allow be low or compensate zero at some foreland of time. If this depart not be given much attention and priggish solution will gather matters worse.III. STATEMENT OF THE PROBLEMEnumerated below are the problems identified in the case of Chads Creative Concepts. How did producing standard furniture affect Chads Creative Concepts operations and its financial gain? How can the community operations or slow manufacturing process be modifyd to render market d emand for both furniture lines? What can the management do to sign on production cost while upholding guest satisf exertion?IV. OBJECTIVESThe hobby are the objectives the case proponent would like to achieve in stage the address the problems faced by Chads Creative Concept. To ascertain the operational and financial effects of manufacturing standard furniture. To determine ways on how to improve company operations to cope with the increasingly unconstipated demand for standard and custom-made furniture. To pass production cost without sacrificing product quality and customer satisfaction.V. AREAS OF CONSIDERATIONA. SWOT abbreviationSTRENGTHSThe company began by producing custom-made furniture and in a short period established a fixed reputation for creative designs and high-quality work upmanship. Growth of changes led into the production of a more standard line of furniture. asshole offer products at the last-place realistic price with utmost customer satisfaction. Pro ducing custom and standard furniture offer customers with more choices.WEAKNESSESSingle manufacturing process for both standard and custom furniture. Processing time on the same equipment and craftspeople are shared in manufacturing custom and standard furniture. The holding cost of the company is increasing with dollars buttoned up in inventory, both of blunt cloths and work in process.OPPORTUNITIES rock-steady reputation yields custom furniture sales to be strong and steady sales growth for standard line furniture.THREATSCustomer demands lowest possible cost with maximum satisfaction, in terms of product quality and speech requirements. Custom furniture is prioritized in making schedules because of its high sales and net wampum margin causes cargo area of finishing standard furniture. Costs associated with standard furniture line are increasing. Expensive storage or warehovictimization cost. change magnitude lead time for both custom and standard orders causing endless prom ised delivery times. Capacity is at its peak providing no space left hand for expansion.VI. ALTERNATIVE COURSES OF ACTIONIn order to address the issues faced by the management of Chads Creative Concept the next alternative courses of action may be implemented 1.Relocation of warehouse to an economical and cost prudence location. 2.Recruitment of additional staffs e.g., craftsman. By doing so, bothproduct lines will not debate for the same craftspeople. 3.Encourage existing staffs for overtime in order to reduce delay in manufacturing products, by providing night differential taps and hazard fees.4.Given that both manufacturing lines are in demand, commerce qualification maybe enlarged by enable more facilities to have processing of both product lines. 5. Employ inventory management. This includes developing a forecasting technique about product demand and making function layout and work flow process. Make scheduling purposes, entails how much to produce, to put one acros s sure there are not so numerous raw materials as work in progress status.VII. DECISION CRITERIAThe following criteria were used to evaluate the suitability of alternatives recommended in making the decision represent customer satisfaction and company reputation. It is important to note that decision must(prenominal) be based on this rationale because the longevity of a business may be determined by the patronage of its satisfied clients. Chads Creative Concept best marketing strategy is the quality furniture they produce for both product lines. Moreover, customers of standard furniture line impose more stringent delivery requirements, increased lead time for both product lines causes longer agreed delivery times which may garner dissatisfied customers and tarnish company reputation.Improve or at to the lowest degree maintain profitability. Finance and accounting disclosed that profits are declining because of be congruent with the standard furniture line. Priority given to cus tom furniture line delayed the generation of revenue for standard furniture line. A company even with a good reputation may not stay in the business if its sales cant stand company operation and administrative expenses. Reduction of cost through proper management of resources such as time, inventory and manpower, will increase profit margin. Hence, it is important at this point to base decisions on this criterion.VIII. DECISION ANALYSISALTERNATIVEPROS / ADVANTAGESCONS / DISADVANTAGES1Relocation of warehouse with a cheaper rental fee will lessen costs and increase profitability. may incur relocation cost.Since new warehouse is cheaper it may not be that big to accommodate raw materials and inventories.2Can manufacture more products and accommodate market demand for both lines and deliver the products on time maintaining client satisfaction. Thus, increasing sales and profit margin. Increase in salaries expense decreases profit margin.May spent time for training new recruits. Learn ing curve may be lower as they start off.3Can increase number of finished products and increases sales. Quality of work may suffer. Employees may rise exhausted for working overtime and tend to finish it at a shorter time than usual. Increase salaries expense and decrease profit margin.4Can speed up processing time since both lines will not compete for the same equipment. Hence, sales will be increased. Increase addition capital investment.There is no space left in the correct for expansion.Manpower should also be increased to operate new facilities which increase salaries expense and decrease profit margin.5Conceptualisation of right layout and work flow process suitable for both lines would expedite production process. maturation forecasting techniques in understanding demand of products will facilitate clock of procurement of raw materials ex. unless-in-Time Strategy which avoids too much investment on hanging raw materials and work in process inventory.Hiring intellectuals for making the right lay-out and for developing forecast will incur professional fees thus, increasing expenses or costs.IX. DECISIONBased on the information presented in the case of Chads Creative Concept, the case proponent would like to recommend that alternative no. 5 which entails inventory management address best the problems enumerated above and gatheres the criteria specified. Hiring an expert who will conceptualize right lay-out for work flow process will speed up manufacturing procedure and configure standard and customized so to reduce setup and changeover time and cope with the demands. Hence, delivery requirement will be met and customers will be satisfied in consideration of preserving company reputation. Moreover, results of forecast will be useful in the timing of procuring raw materials to avoid unnecessary expenditures such as holding cost which will boost up profits.As disclosed in the case, the plant capacity is at its full, plant has no space left for an expan sion, and costs associated with the standard line are rising because there is no active sale and the inventory is increasing in the form of raw material and work in process which is holding the investments of the company. It is recommended that the JIT system should be used. Just in Time (JIT) is an inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs which at this point is what the company needs.This inventory supply system represents a shift outdoor(a) from the older just in case strategy, used by Chads Creative Concept, where producers carried large inventories in case higher demand had to be met. Though hiring experts will incur cost still the benefits exceed costs. Bearing in mind this principle will further company success and the going concern of the business.X. STRATEGY OF IMPLEMENTATIONIn implementing the decision the following should be doneLay-o ut current manufacturing process. Hire experts who will make the forecasts techniques in understanding demand and conceptualise the layout and work flow process appropriate for both product lines. Lay-out developed should undergo dry campaign if it would accelerate manufacturing process and achieve the product quality desired. Such as Product layout for standard line product, usually used for large good deal products.Process layout for custom products is used when there arediversified products using broad-spectrum operations, varying volumes and varying rate of output. Properly laid out factory can ensure the smooth and rapid movement of materials, from the raw material stage to the end product stage. In implementing the new inventory strategy, Just in Time system, supply chain should be adequate and would match demand projected.