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The management at Stickley Furniture revealed that the demand for their products tends to increase during the first and third quarters, whereas it reveals descendant trends throughout the second and fourth quarters. Given these fluctuations then, the organizational leaders have striven to develop a level production plan that ensures steady output and steady labor force. The plan sees that "during the second and fourth quarters, excess output goes into inventory; during the first and third quarters, excess demand is met using inventory. The company's policy of level output coupled with seasonal demand patterns means that prior to peak demand periods, excess output is used to build up inventories, which is then drawn down when demand exceeds production capacity during periods of peak production" (case).
The plan is simple and logic, yet it is met with some limitations. A first of these limitations is given by the changing needs of customers and fashion. In this order of ideas, customer demands and fashion trends in furniture might suffer changes from one season to the other. The products in the inventory built might then not comply with the emergent requirements and might as such generate reduced levels of sale and financial losses. Then, another disadvantage is given by price fluctuations: the costs of producing the items might be increased in the inventory building period, but the retail price might have to be reduced during the high demand season. The main benefit of this approach is however that it generates uniformity and stability throughout the entire year.
5. Suggested Changes
The new managerial team Stickley Furniture has achieved major mile stones and proof of this stands the single increase in employees from 20 to more than 1000. Despite the fact that their efforts are to be praised, some changes could occur in their business approach, with the aim of further strengthening the financial and market position of the furniture manufacturer. A first such change would revolve around the introduction of the job shop production process. This would generate increased costs, but these would return as the manufactured items would be sold at higher retail prices. They would be labeled 'limited edition', which has often proven successful in attracting the attention of wealthy consumers.
Then, as the pictures in the case have shown, the organization mostly produces furniture with classic styles and designs. However today, this market faces the risks of becoming a niche sector. In this order of ideas then, it would be advisable for Stickely to approach more modern designers and create new product lines. The new pieces of furniture would be more efficient, lighter and even multifunctional. Technologies would have to be replaced and some training would have to be offered, but the overall costs would be reduced as the modern furniture is easier to produce.
The Case of the Mexican Crazy Quilt
1. Appropriateness of the Project Organization Adoption
The developing features of the international market, amongst which of most notoriety are globalization and market liberalization, allow organizations to expand their operations internationally. Corporations open manufacturing plants in various regions of the globe in order to benefit from the comparative advantages of these regions. Some of the most notable comparative advantages include cheap labor force or an abundance of resources. This was the case of Linderman Industries when they decided to open a subsidiary in Mexico. However, just like any other multinational, Linderman Industries was faced with the challenge of running a complex plant, delegating responsibilities, forming teams and ensuring an adequate transition to a local managerial team. The latter task is an extremely challenging one, and in spite of the large amounts of theoretical information, each company must develop its own plan, based on the unique characteristics of each business. Issues to be taken into consideration when addressing the transition to another managerial team include the employees' resistance to change, the ability to form the proper managerial teams, the technological and training implications of the modifications, the resources required to ensure the project, the timeline or the desired efficiency of the process.
Linderman Industries considered that the best approach to achieving its established desiderates would be the adoption of project organization. This endeavor generated intense turmoil and internal frictions. The appointed Operations Manager Carl Conway faced major challenges in forming the team he desired. The reasons in this sense were highly complex, some generated by a simple resistance to and fear of change, whilst others were based on managerial decisions of not letting the employees move to another division. Conflicts also aroused in terms of decision making, with situations in which the parties shared opposite ideas relative to the approach of an issue. In spite of these issues however, the project was completed with success. "Despite these problems, and many more of a similar nature, Project Mexicano was successful, and the transition to Mexican management was made in just little over two years" (Reeser and Loper, 1978). Ultimately then, it can be affirmed with certainty that the adoption of project organization was an appropriate approach to getting the Mexican subsidiary started.
2. Getting the Desired People
The success of any endeavor is directly dependent on the abilities and efforts of the people involved in the project. This is always true, but even more so when the project has a magnitude such as the one of the transition to another managerial team. Given the high risks and complexity of the issues, it was only natural for project organization, run by operations manager Carl Conway, to be composed from the best staff members the company had produced by that time. However, putting up this team was an extremely challenging task and some subtasks had not led to the desired result.
Getting the desired people raises a crowd of multifaceted questions, whose answer may well determine the composition of the final team. Otherwise put, when selecting the desired people, the team manager has to consider the following issues:
What are the job characteristics and the skills required from the occupant of the position?
Does the individual targeted possess the skills required to do the job?
Is s/he interested and motivated to take on this new chore?
Is s/he able to engage in the project, and if not, what are the elements that restrain him/her? (for instance, the current boss does not want to let them go from their current job)
What are the incentives and perks of becoming engaged in the proposed project?
What is the future of the individual who decides to join the team, provided that the role of the new team is a limited one? Does it offer the employee any security for the future?
The reasons behind the impossibility to get the people Conway wanted are complex, but they should not impact his judgment or enthusiasm. The operations manager has to be able to comprehend that he might be met with refusals and should not take them personally - it's just business. However, Robert Linderman did announce the divisional managers that Conway could ask for some of their people, further more entitling him to select (and get) those he wanted. In this context then, the question that arises refers to the refusals received. Some motivators of this refusal could revolve around the following:
Conway only wanted to get the best employees in the division; divisional managers were not willing to let their best employees leave
Divisional managers might be preparing their subalterns to take on the task of running the division themselves one day
Divisional managers might be reticent to change and might not want to modify the structures of their teams
Personal conflicts - divisional managers might have a personal agenda against the operations manager and will not let their employees leave just to spite him
Divisional managers might fear that the overall performances of their department would decrease with the loss of a pivotal member
3. Turning down the Chance to Project Organization
The previous section has been focused on revealing the reasons which might prevent Conway from getting the people he wanted. These reason were however independent from the targeted individual and depended more on the decisions of the divisional managers currently employing the respective individuals. There are however situations, when, despite the approval of the divisional manager, the employee will refuse to join the team. A relevant example in this instance was constituted by Bert Mill. He was offered the position of managing production planning, and however he did not turn it down on the spot, he later on refused it. After a consultation with his wife, Mill decided he was at a point in his life and career where he did not want to take any risks. or, Operation Mexicano raised the question as to what would the team members do with the completion of the project. Bert Mill declined the offer as his priorities at that time were focused on job security, rather than opportunities for career advancements or other perks the…[continue]
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Stickley Furniture Page | Case Study- Stickley Furniture Case Study-Stickley Furniture Operations Management Best Practices type of production processing at stickley furniture Production process of the stickley production proceeds by converting inputs into marketable outputs. The two main components involved during the process are transforming resources and transformed resources. The transforming resources are the agents that carry out the transformation process like building, machinery, computers and people. The transformed resources are the main inventory or
Other important information for each item is also available such as details of the suppliers, lead-time, and lot size policy. The inventory record also contains changes in order that may result from withdrawals, canceled orders, stock receipts, or similar events. 4. What benefits and what problems would you expect given the company's level production policy? The company's policy of level output works in such a way that prior to peak demand