Introduction
The following analysis explores the production and operations management approaches employed Hudson’s Alpine Furniture. This critical evaluation would give some detailed account on some of the production and operation management issues that adversely affected the profitability of Hudson’s.
Therefore, it could be argued that the company made serious management strategy of adopting its new line of furniture business. Though, the sales were increasing the costs of holding stock rose to a bigger margin. The applicable approach to this case analysis is the use of theory of constraints, which is very critical in the production and operations management of Hudson Alpine Furniture Company (Steyn 2000 p.363).
The constraints theory is relevant in the production and operations management of this company since it would help in solving the issues witnessed in adopting the new commercial furniture deal. Under this theoretical approach, Hudson’s performance could be evaluated based on its production output in terms of sales revenue earned, inventory, and operational costs.
The variations in these three measures would be critical in assessing the performance of the company. The incorporation of this theory of constraints would be important in assessing the rate at which the company is capable of generating money through its furniture sales against the amount of money invested in producing the furniture inventory and the operational expenses.
These theoretical approaches to the production and operation management principles are essential in determining the necessary conditions, which ought to be reached first. In this case, it can be ascertained that its goal is that of making profit, which is the necessary condition (Steyn 2000, p.367).
Therefore, it is important to understand the most applicable procedures that are necessary in making the best financial decisions, which are based on the sales revenue earnings, operating expenses as well as the inventory (Schragenheim, Dettmer & Patterson 2009, p.220).
Technical Analysis
Productions as well as Hudson’s processes involve the use of one manufacturing facility that is subdivided into different departments, which deal in different processes. The processes include the production of custom furniture as well as the standardized commercial ones. The factory’s layout has grouped its equipment according to various functions.
For instance, cutting processes are carried under the cutting department, where cutting tools and equipment are place. Another production process that is carried out in the company is lathing, and this has been grouped differently from other others.
Jointing processes also take place under a different section of the company’s production facility. Finally, there is the assembling process, which is strategically stationed next to the production facility (Linhares 2009, p.121).
Problem definition
The new commercial venture undertaken by Hudson’s impacted very negatively in the company’s operations. The capacity of the company was seriously strained since both the types of furniture could not have adequate room for storage.
Therefore, this made the company to incur a lot of money in terms of the stock holding costs. On the other hand the operational efficiency was greatly reduced since the new commercial furniture was intended for specific buyers who were price sensitive, and could not purchase the entire stock at once.
Moreover, the overall effectives of Hudson’s plant was greatly reduced since it operated beyond it capacity. In such situations, the operational and maintenance costs would rise significantly. There are also high possibilities of machine breakdowns once the plant facility is overworked (Linhares 2009, p.128).
Apart from the constraints theory, inventory models such as Economic Order Quantity model could be used in calculation total costs, order cots, and holding costs for the furniture stocks.
This information gathered from the use of economic order quantity would be crucial in making important decisions on the inventory. This inventory control model is important in determining the optimal quantity of stock to be produced by the company (Schragenheim, Dettmer & Patterson 2009, p.220).
Even though, Hudson’s Alpine Furniture Company produced quality furniture, still there is need for the management to some quality improvements so as to make sure that there products and services are the best in the entire industry since this is the only way to attract many potential customers to purchase both the custom and standardized commercial furniture.
The company should carry out the production implementation that makes sure that quality improvements are incorporated. Once all the designs of quality have been made, then these become the practical stage where all the processes are fully and strategically fixed for the company’s benefit.
The production quality improvements include the environmental needs, which include all the components of the custom and standardised commercial furniture specifications that facilitate implementation process.
At this point, the machine that the other workers use is independent of the test (Schragenheim & Dettmer 2000, p.342). This is the part of the implementation process that needs to be undertaken effectively. The implementing production management team must also be available.
The team should be of high professional value with experience to analyze the provided tools effectively. This will ensure quality in the furniture production processes. There must be business analysts and standardised commercial furniture testers who should be part of the development and the production team.
The development team should also be able to manage the various changes that might be required in the implementation or operation process. These changes must be in line with the quality standards and the legislative framework in particular countries (Schragenheim 1999, p. 209).
In deed, the quality assurance has become the systematic application of all the planned activities since it ensures that the process is applied to meet the set standards. Therefore, good quality management that the management of the company should apply in the production process involves training of the production team on various technical assignments they are intended to perform.
This goes together with the fact that the stakeholders should be able to test expected results as early as possible in order to ensure maximum quality. The set furniture standards must be met in regard to the whole production process.
The three quality components that that should be met include quality planning, quality assurance, and control. When facilitated these are implemented, they would give the required logistics in addressing the issues appropriately (Goldratt 1990, p.72).
Daily operational issues
Hudson’s Alpine Furniture Company’s management should carry out daily stock taking to ascertain the number of furniture unsold. This would help in ascertaining the values of stock not yet sold as well as the cost of holding such stocks.
Such inventory control procedures are very important in the sense that the company would be in a position of knowing the re-order level and quantity of material to purchase for the production processes. In addition, the calculation of the company’s lead time is essential in the sense that it improves efficiency in productions, facilitates faster processes and delivery.
Such calculations would incorporate the use of flexibility index, which facilitates the faster processing. Moreover, the company can as well increase its daily productions on the custom furniture that have stronger sales than the commercial furniture.
It is also important for the company to clear all the work in process daily so as to reduce the capacity constraints witnessed in the facility spaces. Quality control is also practiced in monitoring results for the production and this must be practiced in implementing the whole.
Essentially, the management team should implement this in order to eliminate all the risk factors that could cause failure of the production (Dettmer 2003, p.302).
Organizational issues
The broader issues witnessed in the company were mainly as a result of the operational problems. These problems mainly came as a result of adopting the new line of business that dealt in the production of commercial furniture, which was intended for specific consumers.
This approached adversely affected the financial structure of the company. Even though the sales rose by significant margin, the profitability of the company was on the downward trend since the operational costs incurred were more than the revenue realized.
These high operational expenses were as a result of stockholding cots that rose by significant margin. Besides, the company’s lead time also increased thus “delaying the whole production processes of the company, and this would mean more costs for handling the stock as well as processing the supplies” (Dettmer 2003, p.302).
The capacity of the company was seriously overstretched and the company was forced to incur more costs for expansion since there was not enough room to accommodate all the stock. In fact, these high costs came as a result of the management’s failure to calculate the optimal quantity of furniture that the company’s production facility could easily accommodate.
Therefore, it can be argued that the company failed to incorporate the proper application of constraints theory in managing its production processes (Dettmer 2007, p. 413).
Moreover, under the constraints theoretical models application, Hudson’s company failed to ascertain some of the production constraints that would hinder the company from achieving its intended goal on profitability within the scheduled time of the business operations.
The company’s production management team, to some extent, failed to identify some of the operation constraints, and how they could get the best and optimal results from such constraints.
In fact the company’s production management team failed to come up with timely changes that could facilitate breaking of the system constraints (Dettmer 2007, p. 413). Other organizational issues could be witnessed in attaining the highest quality requirements on the furniture produced.
The commercial furniture must have quality standards, some of which must be from the input of the stakeholders, general establishment and management plan for the required quality. In fact, conforming to this provision is very instrumental in ensuring good achievements.
The company’s achievements might be realized in terms of project results, which could be either in the short or long term. The major areas of achieving this is when major objectives of the new commercial venture such as identification of responsibilities pertaining testing the standard specifications of the commercial furniture.
The specific components of the standardised commercial furniture are also identified and tested before any further analysis. The other basis for quality outcome is that the furniture should be of highest quality.
The quality is to ensure full support of the intended business consumers, who make sure that the future success of the production management in general. In addition, there is need for a very comprehensive standardised commercial furniture coverage testing plans for the same (Fredendall & Zhu 2002, p.191).
Undertaking effective and thorough test plans can also meet quality requirements, which integrate the production system to be development in the most applicable way that the management team, could make use of. The management team should also ensure that the quality production plan involves the already established procedures that guide the business operation.
Monitoring the production processes, if they conform to the required specifications in the standardized commercial furniture project aspects is necessary. The specifications in this case, include all the processing requirements that reinforce quality as the benchmark for the furniture consumer protection issues.
The internal or external test standards are handy in determination of these organizational standards. The standards are the laws or rules legislated by the professional bodies in order to avoid any compromise on the quality that had been set in all the aspects of business production processes.
These processes must meet the requirements of the ISO 9000 furniture production standards. This ensures quality in all the application of the project in major areas of concern. However, these issues were not outlined in Hudson’s production and management procedures (Fredendall & Zhu 2002, p.194).
The quality production management methods and other techniques that must be met in the process while facilitating production processes are necessary. According to production management professionals, quality is the processes of many small elements, which are designed in meeting expectations of the customers.
Delivery in time is one of the ways in which the company can achieve these management principles that enable the products to be of highest quality. Arguably, there are various ways in accomplishing this production strategy, that is, by replying to the transaction mails, telephone calls and other requests promptly.
This is referred to as quality in responsiveness. Secondly, there is on time delivery. Under this approach, the products and services that touch on the production processes must be delivered on time. There is also quality in methodology. The methods that are used in doing the exercise must also be qualitative.
The furniture production processes will demand that appropriate information technology skills are integrated into the system. This ensures that all the skills and experiences are encountered in the project delivery process. Identification to this effect must be proved effectively for the management systems to be very efficient.
The management also should have involved the “accountability in the furniture production processes” (Cox & Goldratt 1986, p.32). The accountability aspect will ensure that what is presented for use is understandable by the clients and this ensures their responsibility in the operation process.
Focusing on the quality management and production system, the production managers would be able to operate the management systems that have documented procedures for evaluation of the technological market aspects.
Market evaluation on the company’s clients would help in database management and other prospects such as event managements, evaluation of the technology market and establishing specialized team to facilitate the whole production process. In essence, all these production and management principles could ensure that quality, which is the cornerstone of production process, is taken into account (Cox & Goldratt 1986, p.42).
Conclusion
In sum, Hudson’s production strategy to adopt the production of the new commercial furniture did more harm to the company than good. This was witnessed when the company’s production efficiency dropped significantly as a result of the increasing costs of holding stock against the revenue earned.
The company’s operating capital was tied up in the slow moving inventory that made it nearly impossible for the company to expand its storage facilities. In addition, the lead time of the company’s processes took longer than expected, thus delaying the delivery of the suppliers to the respective customers. Consequently, the profitability of the company fell by a big margin.
However, these production and operations management challenges could be addressed through the application of constraints theoretical practices.
The constraints theory is important for the company to come up with its necessary condition, which is critically evaluated on the financial performance of Hudson’s company based the revenues earned from the sale of furniture, operating expenses, and the costs associated with the inventory. Finally, it could be important for the company to employ the use of economic order quantity model as a method of inventory control management.
On the assessment of the company’s production, the lessons drawn from this quality management process is that various improvements must be made in areas that the process did not pass the quality test or where the needs of the customers were not fully satisfied.
This would involve documentation o the production, distribution plans and the orders in which the workers responsible for the processing are outlined. Therefore, the management must ensure that the parties delegated to deliver on certain areas are informed sufficiently to avoid delay in delivery of quality processes.
Finally, the approval should be done to the effective production work on furniture that has the best quality outcome. This approval must be undertaken by the professionals who have understood Hudson’s technical challenges, and they should be able to provide guidance on the most effective quality management.
References List
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