Essay Preview: Manufacturing Case
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the fixed cost is too high. The better option would be to have a lesser loss. This is also shown in the spread sheet of 2006 for Product 101. It can be seen that total Contribution is more in case when the selling price is kept the same at $24.50, when they sell 750,000 products. The total contribution is $ 17,602,500.00, when the selling price is $24.50 and the total contribution is $12,212,000.00 when the selling Fold Rite furniture Co. is a Chair manufacturing company which manufactures three products which are Cloud Chair, Alstrong and Green Comfort. The company had a growth from 1987 to 2006; however a decline was seen from year 2006 onwards. The decline was mainly due to the loss of productivity and yields. The main reason was also considered to be the steep demand of the cloud chair during specific months of the year.
Although the company had enough workers to produce all the three chairs during whole year, it does not have enough workforce to meet the demand during the seasonal peak for cloud chair.
Further, the report delineates solution and few recommendation which FoldRite furniture should consider The approach used for this case is to review the company situation, provide working (calculations) and reasoning, and recommend a course of action for meeting a surge in forecast demand for the middle months of 2010. Bearing in mind the company history and constraints, the four major goals have been considered and used to guide the recommendations developed for this case.
The first challenge would be to provide the products to customers within the specified lead-time, which is two weeks. If this goal is not met, there is more chances of orders been cancelled and competitors take advantage of this opportunity. As a first step the current lead-time needs to be measured and set improvement targets for products to pass the value stream. If the lead times are not measured, it cannot be improved. Another aspect would be changing the organization from functional to product-oriented organization to utilize the resources efficiently and to be physically close together. Also, cross training the personnel also provide flexibility and increases adoption of skilled workers to perform multiple functions for rapid response manufacturing. It also reduces the job classifications and establishes a multi skilled team to perform duties. In addition, providing power of ownership to the lowest level of hierarchy, who are operators, to reduce cost, increase quality and reduce delivery timeframes will empower working teams and add value to entire value stream. Similarly, reducing the product badge size within production teams decrease work-in-progress inventories and ensures