Chinh and Anh Chu - Classic Cabinet - Case Study Example

Classic cabinets Name Course Tutor Date Classic cabinets In the contemporary society, we have various opportunities that businesspersons can take up and make numerous gains. However, we are living in dynamic, complex, and confusing environments. The rate at which the society is changing is so fast that mangers are eventually liable for making logic of their business efforts. Over the years, furniture has been the center stage of home and office decoration as they give the first impression of the place. This combined with other beliefs and customs have prompted so many companies to enter into various fields of the industry hoping that they will be the best in the market. Others start as small individual businesses before growing up to regional, national, or even to international producers and manufactures (Gold et.al, 2001, pp 66) Many entrepreneurs achieve success because of their dedication, commitment, creativity, innovation, and outward look of the management team and the individual desires. Most of the small-scale crafts persons enter into this business as a way of survival and once they get their daily satisfaction they do not want to put more efforts and creativity into the business to make expand. On the other, some few-focused individual enter into this enterprise with well-defined goals of being a producer of scale furniture and cabinet accessories. This group will always succeed since almost every new building need these items and there is no day that the furniture will lack the market. It is therefore, appropriate that focused entrepreneurs pay close attention to the incident and market trends, which are directly associated to the organization’s capacity to compete. A strong management will always endeavor to support the initiative that workplace multiplicity offers cost savings, pulling, and preserving talent and propelling business growth (Williams & McWilliams 2010, pp. 45, 56-57 & 247). Classic cabinet is one of the companies that started as a craft shop. Its initial objectives were to undertake and address the needs of the enlarging Vietnamese community in the Southeastern Suburbs of Melbourne. Chinh and Anh applied the first resources to the production, which were their skills and capabilities. Chinh was a master cabinetmaker while Anh was a professional interior designer. These were the skill necessary for initial execution of the venture since they were able to handle few basic concepts on the manufacturing processes. These system of using the available resources in business leads to cost advantage in production since there will be less expenses incur on salaries and wages. As the company’s reputation increased there was, need to change the production systems and include economies of scale whereby the operation was to increase in production volumes. This strategy led to customers requesting for more personalized and reduced priced products. The company had the ability to adapt quickly to customer’s request. The company has employed short customer response, high flexibility in production planning and control (PPC) into their system to increase their efficiency and handling processes. The flexibility is visible from the way the two managers handle their operation. From the skills they had, each has some other specific roles, which came as a by the way and no one they are comfortable their derived roles. This ensures smooth organization, management, and coordination of activities enabling the industry to increase its efforts focused on individual production (Stich et.al, 2009, pp 4). A competitive advantage is therefore, achieved from the individualized products manufactured almost at the cost of mass production. This system of production is aimed at reducing the workload, inconsistencies in production, and try as mush to eradicate wastes. To achieve economies of scale the production system is highly recommended resulting top little cost per unit and was attained by the simply division of labor, high rate of repetition work, a linear flow of items and consistent procedures that follow a standard skill. On the other hand, since classic cabinet undertakes a single manufacturing capacity, the cabinet-making tools comprise largely of multipurpose machines to increase flexibility required for creation of a large range of custom-modeled cabinets. The factory set up is equipped with several types of tools put together. For proper accessibility, saws and cutting tables are in one area; shapers and routers in another; lathes and other tools that are not used regularly are stored away from the working area. Furthermore, assembly sections are strategically located in the allover the factory. Finished products are separated and kept safely in a rented warehouse awaiting collection by the customers. These ultra modern designs enable the efficiency and lessen time waste moving from one area to another (Stich et.al, 2009, pp 7). Usually, the company starts its operations with specific objectives and time limit of accomplishing each of the laid out target. However, as the company progresses new inventions emerge that require close attention and time from the management. From time to time, the organization will be forced to switch from one activity to another in trying to accomplish all the tasks. Without the addition of a qualified labor force, not all the activities will be accomplished since the workload has increased while the workers remain constant. Generally, that is when the company starts experiencing challenges since they get pressure from customers as well as trying to achieve their objectives of satisfying the customers always (Thomas & Mason, 2010). Challenges are part of the business and they help it to be strong in future and unforeseen factors. The diversification by classic cabinet from customs kitchen to new builders’ kitchen line was the beginning of real problems. First, these agreements needed classic cabinet to produce a restricted variety of kitchen cabinets in small batches. The issue her was that classic cabinet was now under specification by customers and had little say on why there was restriction. However, since they were in need of finances, they never hesitated to carry out the tasks as required. It made the Anh, the company’s accountant to be quick in receiving money without considering the implication of what it would cause to the company. The required batch size for these builders’ kitchen line varied from single kitchen to even more than five kitchens. The advantage of this was that the company inflicted more strict delivery conditions that enabled the company to finish on time and they were charged a bit higher than the custom-made kitchenware. This increased their profits, but the custom-made cabinetry persists as the main contributor of the majority sales (Staw, et.al 2000, 17). Because of increased revenue from the builders’ line, Chinh and Anh saw a progressive increase in sales volume. This altered the management strategy resulting to more frequent scheduling of this line of operation. This form of challenge poses a threat to the company’s center of concentration. This will automatically lead to administrative problems since the two were not used to handling duties outside their means. However, due to need for more money, the two managers had to take up the challenge and handle productions as though they were able to manage everything. Since they had different specialization, now they were forced to work together in this line of production, which reduces individual’s efficiency. In addition, there is also competition for utility resources by the two lines of productions necessitating shifting of resources from one division to the other. This move definitely created rivalry and management problems between the units. In such a situation, warning should always be practiced before entering into a business line that looks promising, specifically if the administration team has no experience or knowledge in the new area of production. Evaluation of the business should be done to avoid unnecessary inefficiencies in the main area of production (Thomas & Mason, 2010). Other effects due to introduction of new builders’ line of production include the extended period of accomplishing task. So many unfinished items lay throughout the work place in an un-orderly manner. This state of too many structures increases waste since not one item is dealt with until completion. Not all the workers can estimate precisely the amount of work remain on a job. Instead, they can underestimate the work or over estimate. This inaccurate approximation leads to unnecessary cost being incurred by the company hence minimizing profits. The unfinished goods also made the company rent another expensive warehouse. Customers would have collected their products as soon as they are ready but too much work lead to these situations, thus increase operational cost of which initially was not visible to the management. Without some type of strategic planning, the joined performance of the single unit will definitely not surpass the performance of the units functioning separately. In fact, joined operations with limited labor can depreciate due to controls put on single units by the key business. It resulted to slow rate of decision making because of anticipated periods and complex accounting systems Gold et.al, 2001, pp. 69) Companies efforts to expand and coordinate their operation well has to make daily adjustments and ensure they update their systems to remain functional all thorough. More often, these adjustments are based on the decisions of the management team and their strategic analysis of the business. This involves creation of both long-term and short-term decision that will be used to drive the company towards achieving their goals. To remain effective in production, Chinh Chu had to make various operational decision, which maintained the company’s production and satisfactory of customers. Some of these decisions include how to use material, plant facilities, and in-house capabilities of the company’s work force. These short-term decisions need the approximation of costs related to several production and manufacturing practices. The cost gives the framework of creating a successful enterprise and planning future objectives. All these factors were the main concerns of Chinh as he undertakes the daily activities of the company. On the other hand, he had to determine the economic analysis and expansibility of the organization. This was based on differential cost for the option being undertaken. For instance, Chinh had to choose between specializing in custom-made cabinets and manufacture builders’ line once there were special assignments from clients. This decision led to increasing sales of fast moving items and at the same time retaining clients from both lines of productions (Staw, et.al 23). Since Chinh Chu was the production and operation manager of the company, he had to ensure everything was working according to the targets. Despite there being no official identification of duties, he ensured that the business was moving and expanding. He imposed the stringent delivery requirements when he realized how the company was expanding and the growing demand for the builders’ line was about to hinder the production of custom made cabinets. This decision was reached after the consideration of sales volumes that each line of the operation was contributing. As a manager, everything depended on his decisions and therefore, he had to ensure constant flow of raw materials that was used by the company. This was not an easy task for him since coordinating the supplies and at the same time ensuring smooth day-to-day activities, function well needed the efforts of a determined person. All these he provided without contemplating on his decisions. He also ensured that all the necessary tools was accessible and in good working condition (Holmen et.al, 2002). To satisfy customers’ needs, Chinh Chu established a mechanism of ensuring all products are manufactured with the right quality i.e. finished products was portraying some high esteem. This was achieved by putting into practices the right skills, and hiring professional artisans. On the other hand, when orders increased and all of them fight for processing time, Chinh laid down a well-illustrated work schedule that was used to beat deadlines and ensure full utilization of available resources. This was successful because Chinh prioritize activities as per their urgency, sales and profits margins, and availability of raw materials. In addition, successful companies ensure efficient means of communication and teamwork. This aids in sharing ideas and developing mechanisms of handling crisis. Chinh ensured that he work closely with Anh the company’s accountant. They shared ideas on how to carry out the various functions of the organization without duplication of duties. Each had a role to play and keep each other informed of what was happening. Without teamwork, realization of goals and objectives would take long since there is no standardization and approaches of taking tasks vary considerably. This coordination of activities spearheaded the company’s objectives and thus its efficiency, effectiveness, and success in the operation of day-to-day activities (Thomas & Mason, 2010). Subsequently, classic cabinet had various effects on the company’s financial structure on the move to producing builders’ kitchens. The initial decision of choosing this line of production is usually to increase the company’s profits and expansion. This is seen as a progressive development and the management of any company will struggle hard to try to ensure that there is at least some growth on the company. Chinh and Anh Chu entered into this line of operation with the intentions of increasing revenue and improving the company’s financial structure. Whilst the custom-designed cabinetry persisted to account for the bulk of the organization’s sales, the builders’ kitchens were beginning to gain its momentum in terms of bringing in large revenues and thus improving the image of the financial structure (Holmen et.al, 2002). The diversification of the societies has brought so many changes to today’s organizations and the need to expand is coherent in all companies. The success of the company is measured in terms of how good its financial structure is and how well the inflows are established in relation to the company’s production capacity. To improve their assets, the company decided to introduce this line of operation with the expectation of capacity development and subsequent gains that will be derived from indulging in such areas of production. People observe the company’s financial structure and systems when they want to invest or make contracts. This obviously for the classic cabinet was one of their indicators to the outsiders that the company was growing and was worth to other shareholders’ interests. As the financial structure improves, the organization should be prepared to increase personnel, application of technology, advanced equipments, and seek for other sources of finances like loans, mortgage, and grants (McNamara, 2010, 248). Company’s activities depend on its financial position. When an organization has sufficient funds, its operation will improve as well and will even be more efficient. Therefore, the diversification of classic cabinet to this line of operation would mean a lot in terms of operating expenses, cost of production and other miscellaneous activities, which are all geared towards the success of the company. The staff will be forced to work under pressure since the company has to beat the deadlines and when that happens, the company will as well dig deeper into its savings to gather for the pressure. Therefore, despite the fact that there will be increased revenue, the company will also be spending a lot. For instance, when classic cabinet joined this line of operation, there were increased contracts leading to scheduling of activities. However, there were still some unfinished contracts at the end of the day. This led to using some other resources in hiring the external warehouse, which the uncollected and unfinished products would be stored (McNamara, 2010, 252). Company projection is one of the major cornerstones that will propel the organization and drive it to greater heights. Although not all organizations are the same, they almost go through the same stages of development. The managers are the ones to determine the destiny and approaches that the organization will use to achieve its targets and objectives. Determination, dedication, innovation, and creativity are some of the factors that differentiate a successful company from the other. Managers should strive to diversify their company and be prepared to meet its associated demands and cope with the rising market opportunities. Chinh and Anh Chu for instance transformed their business from a small-scale craft shop to one of the most fast growing factory because of their flexibility and the desire to succeed (Morgan, 2010, pp 64). References: Gold, A., Malhotra, A., and Segars, A. (2001). Knowledge Management: An Organizational Capabilities Perspective. Journal of management information systems. 18 (1) pp. 65-107. Holmen, M., Knopf, J., and Peterson, S. (2002). Trading-off Corporate Control and Personal Diversification through Capital Structure and Merger Activity. Retrieved from Lau, L. (2005). Managing business with SAP: planning, implementation and evaluation. USA: Idea Group Inc. publishers. McNamara, C. (2010). Organizational Change and Development (Managing Change). Human resource development international. 7 (4) 247-262. Morgan, P. (2010). Capacity Development and Public Private Partnerships. Retrieved on March 25, 2011, form St. John, C., and J. Harrison, "Manufacturing-Based Relatedness, Synergy, and Coordination." Strategic Management Journal 20 (1999): 129–145. Staw, B., Sutton, R., and Sutton, L. (2000). Research in Organizational Behavior. USA: Elsevier publishers. Thomas, J., and Mason, W. (2010). Diversification strategy. Retrieved on March 25, 2011, from Read More