Padua International Furniture

TABLE OF CONTENTS

EXECUTIVE SUMMARY 1

I. INTRODUCTION 2

Mission 16

Goals and Objectives 16

2. KEY STRATEGIES 17

3. KEY PROGRAMS 18

II. OPERATIONS AUDIT 27

A. PRODUCTS/SERVICES 28

B. PROCESS DESIGN 32

C. LOCATION PLANNING 44

Tangible Costs 46

D. CAPACITY PLANNING 49

E. FACILITIES LAYOUT 53

F. WORK SYSTEMS 57

G. SUPPLY CHAIN MANAGEMENT 61

H. QUALITY MANAGEMENT 65

I. OPERATONS SCHEDULING 67

J. PERFORMANCE MANAGEMENT 73

A. KEY FINDINGS 77

B. PRIORITY RANKINGS 81

C. RECOMMENDATIONS 83

Major Recommendations 83

1.A LAYOUT 84

1.B WORK CELLS 86

2. WORKING CONDITIONS 88

Minor recommendations 90

JOB DESIGN 90

TRAINING 91

WORKSTATIONS 92

QUALITY MANAGEMENT 93

PERFORMANCE MANAGEMENT 93

PRODUCT DEVELOPMENT 94

E. Implementation Plans 98

1. TIMETABLES 98

2.RESPONSIBILITY ASSIGNMENTS 99

3. MONITORING PLAN 99

DEPARTMENTAL MEETINGS 100

IV. CONCLUSION 103

APPENDIX A 104

105

106

APPENDIX B 107

Executive Summary

The furniture industry of the Philippines is a diversified combination of Filipino culture as well as Western influences. This advantage allowed local firms like Padua Furniture Inc. to permeate the global market like the US and solidify the position of the Philippines as part of the top ten exporters of furniture in countries like the US. Although the furniture industry faces competition from China and Vietnam due to their capacity for mass production, the Filipino edge comes from its unique designs and high quality products.

Padua Furniture Inc. is a company that produces high quality furniture and accessories for the sophisticated global market. The company's main strategy with respect to its production management is implementing a "lean and mean production"; which provides only what the customer wants and when the customer wants it. Therefore, everything is just a response to the preference of the market. It follows a high variety but low volume production. With such a strategy, Padua International's ROI is 2.27%.

Given all these characteristics of Padua Furniture Inc. the group discovers plenty of areas for improvement. Although production is stable due to its demand-responsive nature it may get better with the introduction of some improvements. The group recommends that the company focus on improving their layout and the working conditions of their employees.

I. Introduction

A. Company Profile

Short History

Padua International Corporation is a Filipino company that prides itself with its consistently lauded, modern, sleek and sophisticated furniture and furnishings that caters not just to the tastes of Filipino people but to international clientele as well. First known as Padua Gallery, it was originally established to be an antique furniture and collectibles trader way back in October 1986. Despite being highly successful in the antique furniture industry, the company decided to diversify into other avenues of the furniture industry. This diversification came in 1998, when Padua Gallery decided to realize its plans of broadening its business horizons by manufacturing and joining furniture fairs.

Due to its outstanding design aesthetics and quality, the company soon became a major player in the industry. Then in August 1999, Padua once again decided to explore new business heights, this time by manufacturing and exporting its designer furniture and accessories to the global market. Renamed as Padua International Corporation, the company's avant-garde pieces have reached all corners of the world from European counties such as France, Spain, Germany, Netherlands, Portugal, Denmark, United Kingdom, Austria and Belgium, to our fellow Asian neighbors Japan, Australia, Singapore and Hong Kong, and of course to Canada and the United States of America.

Padua International Corporation has gone from being a marvel in the local antique furniture industry to now being globally competitive by manufacturing and exporting its contemporary pieces to people all over the world there by consistently stunning them with a taste of Filipino ingenuity and craftsmanship.

Ownership

According to the Securities and Exchange Commission information sheet dated March 29, 2004, Padua International Corporation has 250,000 authorized common shares at P100.00 par value per share. Only 62,500 shares are authorized to five stockholders. All five of the stockholders are filipino citizens and are directors or officers of the company. Vicente O. Padua, the president and CEO of Padua International Corporation holds the most number of