Reference no: EM132826871

Scaling-Up an Up-Scale Customer Furniture Business

This activity is important because there are many different types of businesses that must consider how to manage their operations. This activity highlights the challenges faced by a small custom furniture business in trying to produce enough supply to meet the growing customer demand. Supply is defined as the number of products that businesses are willing to sell at different prices at a specific time. Demand represents the number of goods and services that consumers are willing to buy at different prices at a specific time. In this example, the demand for a product has surpassed a company's ability to supply the product, and the owner must decide how to manage operations to produce more supply.

The goal of this exercise is to demonstrate your understanding of operations management, including planning operations systems and managing the supply chain.

Read the case describing the needs of a small scale custom furniture business, and consider the possible changes in operations management to address the needs.

Bruce could only attribute his company's success to luck. His business started as a side project to sell handmade dining room sets at a local farmer's market. He had created a special finish made from a mixture of varnish and oils, and finished in a high temperature in a special industrial oven. The furniture had a unique look, and he originally pursued the business in his spare time.

Partially due to Bruce's gregarious personality, and partially due to a featured article in a local design magazine, Bruce's furniture was in high demand by regional customers, and was starting to get requests from national and international designers. He could charge more and service custom orders for international clients, but he also wanted to be able to provide affordable furniture to local customers. After all, it was the loyalty of local customers and designers that built his business, and he wanted to be able to continue to fulfill their needs.

He found himself embarrassingly behind in order fulfillment. That is, during the summer months when there were frequent orders from individuals seeing his work at the Farmer's Market, he hated to turn down business. He found himself taking as many orders as he could, then being unable to deliver on his estimated times for completion.

Bruce hired a team of craftsman so that he could produce more furniture, but still found himself unable to meet demand. The craftsman were in short supply-he needed individuals who were able to lift heavy equipment and pieces, but also able to do the delicate work necessary to complete the furniture. While he was able to find capable people, many of them needed extensive training in carpentry and woodwork, especially to complete the breadth of tasks necessary to see a piece of furniture built from beginning to end.

In addition, Bruce felt like he had to have complete oversight of the purchasing process. For the process to work, it was necessary that the right types of varnishes be paired with the appropriate types of wood. Bruce had trouble making sure that he had the supplies he needed so that his craftsman could move quickly on fulfilling orders.

Bruce was grateful for the popularity of the furniture he produced, but struggled with how to create enough supply to meet his customers' demand.

Even for custom pieces, Bruce recognizes that several components are pretty standard across pieces. In order to increase the speed of production, Bruce should consider in which type of manufacturing process?

Multiple Choice

• standardization
• modular design
• customization
• computer-assisted design