Executive summaryCase study 1: craft shop or factory? Classics Cabinets Pty Ltd was a company founded in 2001. It started out as a crafts shop, but with time, the shop grew into a great company that specializes in good quality kitchen furniture. The crafts shop was owned by two siblings, Chinh and Anh Chu. Chinh specialized in cabinet making while Anh was a master in interior design. As the reputation of the company grew, so did the number of customers. With time, the company grew and the roles of the siblings as well changed to accommodate the rising number of clients.
Chinh became the operations and productions manager and while Anh became the overall manager he was responsible in finance section. Traditionally, the company focused on custom made kitchens cabinets. Anh, on the other hand, assisted in the decorations this is because; custom made cabinets had greater demand as compared to the standard made ones. This is because; the customers delighted in custom made designs because they were unique as compared to the standard made ones. This increase in volume of sales resulted in the company creating a limited selection of kitchen cabinets that were in small, manageable batches.
Since the company had only one warehouse to operate from, they made both custom and standard made kitchens from there. However, the standard kitchen cabinetry was in most cases abandoned partially complete due to the high demand of custom made ones. Due to this, the store was crowded with accumulated incomplete furniture. In estimates, 60% of the cabinetry made in the store was custom. They accounted for 75% of the company’s revenue.
However, the demand for standard made kitchen cabinetry has been increasing. This means that the company will have to adapt a mechanism to cope with this change in the market (Kraft maid). The factory has been using general-purpose tools to make its cabinetry. This is because; the general-purpose tools can be used to make almost everything, especially the custom made cabinetry. This means that this general purpose machinery is flexible. The layout of the factory is also well organized. This is because all equipment is organized based on their function. For example, the saws and the cutting tables are grouped together and placed at the same lace.
This is done in order to ensure that the factory operations are running smoothly. In addition to that, this arrangement prevents the risk of accidents caused by workers crisscrossing each other. This confusion is dangerous in the workshop (SC weir Cabinets). To cope with the increasing number of customers, the factory has introduced a system where scheduling trade offs are used to prioritize the orders. In these schedules, custom made cabinetries are given the first priority. This has resulted in a great number of standard cabinet parts being left lying around the factory.
This is responsible for the loss in the company. This is because; so much raw materials and capital have been tied up in these standard cabinets yet they are left lying around in the factory. To cater for the increasing number of cabinets in the factory, the company has rent a warehouse where the excess inventories are stored. This has been a good move, as the factory is now more spacious and workers can operate with ease.