Reference no: EM133738461
Chapter 14 Case Study: Rory Thomas, Production Manager
Rory Thomas has been working as a production manager at YD Furniture Limited for the last six years. During his tenure, he has been part of teams responsible for designing and launching new products as well as for exploring new markets. The company is earning good revenue and has many happy customers. Recently, third quarter results for the year 2015 were declared. Rory was surprised to see the poor performance of one of their premier sofas in that quarter. The sofa in question was a small designer piece suited for a bedroom or living room. This sofa had contributed a big part of the revenue in the past; therefore, its poor financial performance in this quarter affected the overall revenue significantly.
Rory decided to look into the matter himself. He scheduled a meeting with the managers from different departments involved in the production and dispatch of the product. Unfortunately, he found that all managers were blaming each other for the delay. He asked his assistant to get him a few important documents from each department.
A thorough investigation revealed that the dispatch department was dispatching only one sofa every five hours, while the average demand was two sofas every six hours. Rory phoned the dispatch department, which complained that the inspection department was taking more than the required time, causing the delay. The inspection manager, when contacted, made it clear that the upholstering department was sending sub-par sofas that had to be rejected multiple times.
Rory was aware that manufacturing operations comprised three stages: fabrication of wood and metal parts, cutting and sewing of the cover, and upholstering (i.e., padding and webbing the fabric on the sofa). Overall, it took around three hours to produce one sofa. The slowest stage of the production was upholstering, which took around 56 minutes per sofa. When Rory made enquiries from the manager, he said although upholstering was a low skilled job, he did not have enough workers. The workers had to be trained for three months before they could be put to work. Seat upholstering, he explained, required considerable physical strength and some skills gained through months of practice. When Rory talked to a few experienced laborers from the department, they said that the cutting department did not cut the fabric properly and, therefore, the new workers were unable to learn upholstering quickly; they had to deal with improperly cut fabric.
When Rory contacted the manager of the cutting department, he explained that cutting is the most highly skilled job. A sharp eye and steady hand would be required to perform it accurately. Properly cut fabric was very important for ensuring high quality of the final product. The manager also explained that rework would be required if the fabric was not cut properly. However, he was unable to deliver properly cut fabric in a timely fashion as he had a limited number of skilled workers. As the demand and workload increased, he had to involve newly trained laborers for this work, which was causing problems. The manager had asked top management multiple times to outsource some of the more difficult work. However, management didn't respond in a positive manner. Before proceeding further, Rory wanted to evaluate potential trade-offs and process changes that might be required for the outsourcing decision.
The marketing manager complained that the premium sofa segment is so competitive that they need to get it into the market quickly. He claimed that the problems from the production department had made his job relatively tougher, leading to the loss of goodwill among customers and distributors. There had been many returns in past few months, reducing net sales as well. The engineer who was in charge of the service department claimed that complaints regarding this product have increased recently, causing an increase in workload for his team. Rory continued his investigation and found that production people were also frequently engaged with these kinds of repairs.
Rory needs your help to fix the current problems. Specifically, develop answers to the following.
Assignment
1. Identify the underlying problems here. Try to be as specific as possible.
2. What could be the best solution for these problems? Again, try to be specific.
3. Evaluate potential trade-offs and process changes that might be required for the outsourcing decision. What decision should be taken?
4. Suggest how continuous process improvement techniques or quality management could be applied to the identified problems.
5. If Rory can hire one more laborer, which department would you prefer the labor to join in the current situation?