Reference no: EM133366306

Questions:

1 Why is operations management important in CDS?

2 Draw a four Vs profile for the company's products/ services.

3 What would you recommend to the company if it asked you to advise it in improving its operations?

CASE STUDY Design house partnerships at Concept Design Services I can't believe how much we have changed in a relatively short time. From being an inward looking manufacturer, we became a customer focused "design and make" opera- tion. Now we are an integrated service provider. Most of our new business comes from the partnerships we have formed with design houses. In effect, we design products jointly with specialist design houses that have a well-known brand, and offer them a complete service of manufacturing and distri- bution. In many ways we are now a "business-to-business" company rather than a "business-to-consumer" company." Source: Alamy Images Michail Tolstoy (Jim Thompson, CEO, Concept Design Services (CDS)) CDS had become one of Europe's most profitable home- ware businesses. Originally founded in the 1960s, the com- pany had moved from making industrial mouldings, mainly in the aerospace sector, and some cheap 'homeware' items such as buckets and dustpans, sold under the 'Focus' brand name, to making very high-quality (expensive) stylish prestigious design houses. This sort of business is likely to homewares with a high 'design value' grow, especially in Europe where the design houses appre- ciate our ability to offer a full service. We can design prod- The move into 'Concept' products ucts in conjunction with their own design staff and offer The move into higher margin homeware had been mas- them a level of manufacturing expertise they can't get terminded by Linda Fleet, CDS's Marketing Director, who elsewhere. More significantly, we can offer a distribution had previously worked for a large retail chain of paint and service which is tailored to their needs. From the custom- wallpaper retailers. er's point of view the distribution arrangements appear to Experience in the decorative products industry had taught belong to the design house itself. In fact they are based me the importance of fashion and product development, even exclusively on our own call centre, warehouse and distri- in mundane products such as paint. Premium-priced colours bution resources.' and new textures would become popular for one or two years, The most successful collaboration was with Villessi, the supported by appropriate promotion and features in lifestyle Italian designers. Generally it was CDS's design expertise magazines. The manufacturers and retailers who created and which was attractive to 'design house' partners. Not only supported these products were dramatically more profitable than did CDS employ professionally respected designers, but those who simply provided standard ranges. Instinctively, I felt also it had acquired a reputation for being able to translate that this must also apply to homeware. We decided to develop a difficult technical designs into manufacturable and salea- whole co-ordinated range of such items, and to open up a new ble products. Design house partnerships usually involved distribution network for them to serve up-market stores, kitchen relatively long lead times but produced unique products equipment and specialty retailers. Within a year of launching with very high margins, nearly always carrying the design our first new range of kitchen homeware under the "Concept" house's brand. brand name, we had over 3000 retail outlets signed up, provided This type of relationship plays to our strengths. Our with point-of-sale display facilities. Press coverage generated an design expertise gains us entry to the partnership but we enormous interest which was reinforced by the product place- are soon valued equally for our marketing, distribution ment on several TV cookery and "lifestyle" programmes. We soon and manufacturing competence.' (Linda Fleet, Marketing developed an entirely new market and within two years Concept Director) products were providing over 75 per cent of our revenue and 90 per cent of our profits. The price realization of Concept products Manufacturing operations 's many times higher than for the "Focus" range. To keep ahead All manufacturing was carried out in a facility located we launched new ranges at regular intervals.' 20 km from Head Office. Its moulding area housed large injection-moulding machines, most with robotic mate- The move to the design house partnerships rials handling capabilities. Products and components Over the last four years, we have been designing, manu- passed to the packing hall, where they were assembled facturing and distributing products for some of the more and inspected. The newer, more complex products often