Research Proposal on "Operation Management Stickley Furniture Production Processing"

Research Proposal 14 pages (3995 words) Sources: 4

[EXCERPT] . . . .

Operation Management

Stickley Furniture

Production Processing

The management at Stickley Furniture is committed to delivering the highest quality products to their organizational customers. They are however also focused on reducing costs, alongside with achieving an increase in operational efficiency. All these desiderates have been integrated within the company's production processing, which basically resembles the traditional processing model, in which raw materials are being inputted and finished products are being outputted. In the case of Stickley, the input consists of logs, glues and other materials used in the manufacturing process and the output is represented by the pieces of furniture resulted in the process.

The predominant processing model is the continuous one, meaning that the manufacturer produces relatively large volumes of standardized products and the flows are in straight lines (Fredendall and Hill, 2001). This is true for Stickley as they mainly produce line items, rather than unique or limited pieces of furniture. Foremost, their working processes occur on continuous basis as one manufacturing stage is closely followed by the next. This feature also means that Stickley Furniture employs the concepts of repetitive production processing, a model in which each organizational unit performs the same given set of tasks, repeating these chores for various products.

The employees' work may at times become redundant with the usage of continuous and repetitive processing models, and this might generate two primary effects. First, the employees could begin to lose their desire and motivation to work due to the lack of stimulation and challenges in the process. Secondly, and this is more to the liking of the management and the overall well-being of the company, they could become extremely good at what they are doing, managing to increase their performances, and consequently the operational efficiency.

Stickley is also using batch processing. This refers to a type of processing operations in which the computer performs several chores without needing the assistance of humans. The most relevant example in this sense is given by the measurements and cuts performed by the computerized system. The new computer-controlled optimizer "determines the optimal set of cuttings, given the location of knots and other defects, and standard lengths needed for subsequent operations" (case).

2. Keeping Track of Job Status and Location

The manufacturing processes at Stickley Furniture are extremely complex and it is vital that each employee is familiar with and able to perform its assigned chores. In this line of thoughts then, it is important for the management to have a well established process of controlling the job status and location of each employee and task throughout the entire production processes.

The concept of production control is mostly met within manufacturing organizations and it has generated wide responses from the scholars' community, with various sources indicating various responsibilities. While some indicate that the process should simply verify and report progress and status, others believe that production control is also in charge of planning and scheduling. A most comprehensive and representative definition of production control is offered by the online version of the Business Dictionary (2009) and states that the concept refers to "methods and procedures employed in handling materials, parts, assemblies and subassemblies, from their raw or initial stage to the finished product stage in an organized and efficient manner. It also includes activities such as planning, scheduling, routing, dispatching, storage, etc."

Each economic agent establishes by itself the methodologies of ensuring process control. At Stickley Furniture, the control of production is ensured at various stages of the process, including the sequence of the job, sizes of the lots or the actual jobs of the employees. The sequence of jobs is generically determined through an analysis of the processing time and the remaining inventory (in terms of days supply on hand). In controlling the lot sizes, the managerial teams analyze the demand, the setup expenditures and the costs of carrying out the tasks - the average size of a lot is of 25 to 60 pieces (case).

Controlling the actual status and location of each job is a more challenging task and this can be explained by the simple fact that an increased numbers of jobs are being performed simultaneously. In order to however cope with the mission of controlling these jobs, the management at Stickley Furniture has assigned a code to each job. Whenever the employee completes his chore, he will send the code to the management's office, where it will be processed and introduced into the computerized system. This approach ensures an efficient control of job status and location. The case explains: "each job is accompanied by a set of bar codes that identify the job and the operation. As each operation is completed, the operator removes a bar code sticker and delivers it to the scheduling office where it is scanned into the computer, thereby enabling production control to keep track of progress on a job and to know its location in the shop."

3. Processing Information for an Order

Considering that the organization received an order for 40 mission oak dining room sets, they would give this order the utmost attention. The first reason as to this increased attention is based on the desire to produce high quality items that generate high levels of customer satisfaction. Secondly, the more personal reason is that the company's main production line (next to 50%) is composed from mission oak furniture, onto which the company's reputation has historically been built and which still constitutes a large part in the organization's image.

Having established the necessity of paying increased attention to the mission oak order, it is now vital to reveal the features which must be assessed in the respective situation. First of all, the company has to assess the requirements of such an endeavor. Amongst other things, the following questions will have to be answered: does the company possess sufficient staff capacity to complete the new project on time? If not, is it sustainable to hire more employees at this stage, without the certainty of having work for them in the future (how does the company feel about temporary employments or the 'borrowing' of skilled personnel from other similar organizations who are confronted with reduced demands of their products?).

Stickley's management must also consider its sources of raw materials to be used in the manufacturing of the 40 dining room sets. Do they currently own sufficient commodities and if not, can they acquire them efficiently (rapidly, cost-efficiently and at high qualities) from their suppliers? Provided that their regular suppliers cannot satisfy the immediate need for commodities, what alternatives does Stickley have? Can they still complete the project within the time limits given the commodity shortage?

Then, does the company possess sufficient financial resources to afford the purchasing and manufacturing of the products ordered? How will the payment from the customer be made? Could it be possible to pay an advance to cover for part of the initial costs? Is the endeavor worth in terms of technological efforts, considering that the computerized system and the manufacturing techniques will be exploited and reductions in their values will be registered?

As the previous lines have shown, the concerns raised by the new order refer to resource constraints, including labor force, technologies, capitals and raw materials. However, the management at Stickley must also assess the benefits derived from serving the 40 mission oak dinner set order. The main advantage lies in the insurance of a sustained working process, which consequently ensures organizational profits. Then, the second and most important reason is that this new order could strengthen Stickley's competitive position within the market and generate several additional and indirect benefits, such as advertising and new orders.

Otherwise put, the most appropriate manner to consider the launching of a new project is that of conducting a cost-benefit analysis. This could be completed with financial analyses which reveal the project's cash flows as well as the time it will take for the investment to generate a satisfactory return.

4. Benefits and Limitations Associated with the Level Production Policy

The results of numerous economic agents are influenced by time periods, which influence the resource and budget allocation, but also the demand for their manufactured products and/or delivered services. The demand which is influenced by time is called seasonal demand and sees that the buyers are only interested in purchasing the respective items during a particular time of the year. Ice-cream and cold refreshments can be seen as a relevant example in this sense as the demand for them is significantly stronger during summer time that it is during the winter seasons.

The furniture industry is also another relevant example of a seasonal demand. "Furniture, typically, has a very seasonal demand pattern. The cost of raw material is not as high as other manufacturing companies; also the material is readily available with below average lead times compared to other hi-tech or metal-cut manufacturers. Although, the carrying cost & transportation cost of the finished product (the furniture) is high because of the volume and labor intensity" (Vaishnav, 2003). Therefore,… READ MORE

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