Reference no: EM133283722

Case: Read the case and Use your expertise in operations strategy on topics such as order qualifiers and competitive priorities, and the need to match process arrangements and other operations investment decisions to product requirements.

Williams Brothers Case: Operations Strategy and Process Configuration

Williams Brothers, located in High Point, North Carolina, USA, has been manufacturing dining room furniture for several furniture outlets in the U.S. since 1969. Over the years, the manufacturer has developed an excellent reputation for high-quality dining room sets - tables, chairs, consoles, and sideboards - in which it has traditionally offered a lot of choices and allowed customization for dimensions, wood finish, upholstery, and fittings. The average promised lead time for their orders has been 8 weeks.

The managers at Williams Brothers pride themselves on their willingness to incorporate requests for changes until the last possible time until the order is released to production. Their manufacturing operation is set up by departments. Wood cutting, upholstery storage and cutting, assembly, hardware fitting, polishing, finishing, inspection, and packaging are organized as separate mini-shops, and furniture makes its way in different sequences through these departments as needed.

Until recently, Williams Brothers had been able to provide delivery within the promised due dates for 99% of orders with an occasional slipup causing orders to be at most 5 days late. However, in the past 2 years, over 33% orders have been over 3 weeks late leading to several complaints from their customers.

There has been a shift in the mix of orders for Williams Brothers. Compared to 2 years ago, the number of orders for 1 to 5 dining sets of one type have been reduced to half of what they used to be while the number of orders for 45 to 50 dining sets of one type with no customization has nearly doubled. In addition, the customer mix for Williams Brothers now includes more retail chains, different from the boutique stores and interior designers that constituted most of their older customers.

As a sign of this increasing trend of more standardized orders, one of Williams Brothers's major customers, Elm and Spruce Dining Rooms, recently contacted them with a potential order of 125 dining room sets of 1 type for their newly expanded stores and warehouses in the Midwestern U.S. This order is for one of the cheaper sets that Williams Brothers makes and requires no customization other than two wood finish types. Until now, Elm and Spruce's order quantities for any one set had been quite small, with the largest order size being 5, even when the total order, including different types of dining sets, was for a larger quantity of up to 100. For the current large-volume order, Elm and Spruce is demanding a shorter lead time of 6 weeks and is pushing for a discounted price citing the large quantity of the same set as a reason. Such demands for price discounts have also been made recently by buyers for several other furniture outlets although it has never been an issue in the past.

The production manager for Williams Brothers, Annie Vasudevan, is in a fix. On the one hand, there is the potential for increasing sales by accepting large orders of identical sets albeit at discounted prices. On the other hand, Annie has longstanding customers of customized sets complaining about slipping on delivery dates and workmanship. She is also not sure how she can provide the high-volume orders at shorter lead times. The marketing manager, Mahtab Jones, believes that customers deserve the quantity discounts for larger orders and does not see why Annie is not able to extract efficiencies from large volumes of the same sets as well as provide products more quickly than before.

Annie believes that there are some long-term operations strategy decisions, including changes to process arrangements, that need to be made. She has scheduled a meeting with the marketing manager, Mahtab Jones, and the managing director, Imani Wong, to explain the issues.

Annie has requested your help to prepare for this meeting. Using your expertise in operations strategy on topics such as order qualifiers and competitive priorities, and the need to match process arrangements and other operations investment decisions to product requirements, please help Annie Vasudevan put together information to address the following questions:

Why has customer service at Williams Brothers slipped? Discuss the causes of the current delivery date problems and the challenges in accepting more recent orders with the current process design.

What type of process would align with the requirements for the newer types of orders? Propose a process arrangement and at least two other matching operations investment decisions in areas such as technology choice and employee skills that would be suitable for the newer types of orders.

How can Williams Brothers serve both types of customer requirements simultaneously? Propose a solution, including at least two process design aspects, for the manufacturer to continue to serve the high customization requirements of its traditional customer base while also succeeding in fulfilling the newer high quantity standardized orders to the satisfaction of customers.