Chad's Creative Concepts

Table of contents

Summary: 2

Question 1: 3

Question 2: 4

Question 3: 5

Question 4: 6

Summary:

Chad's creative concept is a company producing and manufacturing wood furnitures. The company builds up a good reputation for creative designs and high-quality workmanship.

In the beginning the primary idea of production was custom-made furniture and eventually the whole company was entirely focused on that. The customers specified their wishes and preferences of the kind of wood. The reputation and the sales were increasing with the same speed, quite quick. Chad's creative concept starts selling to the retailer furnitures outlets which slowly moves the production to a more standard line of furniture. The buyers start demanding more strong delivery requirements than the clients from the custom line. However, the customer designed furniture was more profitable.

Now a day the company is manufacturing both custom and standard furniture. The quality of the finished product reflects the quality of the wood chosen. Both custom and standard furniture compete for processing time on the same equipment by the same craftspeople. During the past months the sales of standard furnitures have progressively increased, which lead to more precise scheduling of this line. But because of the higher sales and profit margins, the custom line holds the priority of production.

As a whole, the company has grown. Sales of custom furniture are quite strong and stable, but on the other hand the sales of standard furniture are continuing to increase gradually. But still the costs of standard line are rising as well. This is caused because of the raw materials; work in process, expensive public warehouses. The problem is also with the custom line as well, especially with the longer promised delivery time. The capacity is being pushed. Now Thomas needs to make a careful look at the whole impact of the standard line in the operation.

Question 1:

What types of decision must Chad Thomas make daily for the company's operations to run effectively. Over the long run?

Having the information that the case provides we found out that the company operates a single manufacturing facility, where both custom and standard furniture is manufactured. This is the first and the biggest problem on which they need to pay attention. What they should d is first separate the work (to cut across the department lines) and provides machines for each line, independently. Moreover they also have to have warehouse to store already made goods. Also they can consider outsourcing some part of their work to another party, in order to reduce the costs. These are all factors they need to pay attention in the long run of the company. We can define them as strategic decisions because they have long term sequences.

For the daily operations, we could advise the manager to use more tactical decisions because they are more routine repetitive and have short turn consequences. The manager needs to focus more on the separate department, teams and tasks individually. One of the tasks which they can think about is finding cheaper warehouses. Another one is trying to avoid the longer delivery time and for example hiring new personal. Considering both, long run and short run decisions, the whole company can work more effectively.

Question 2:

How did sales and marketing affect operations when they began to sell standard pieces to retail outlet?

As a firm grows in size or sales, different departments must be created that assume responsibility for certain clusters of processes. Often these departments are organized around functions (sometimes called functional areas). An operation is one of several functions within an organization. In organization, the operations (or production)