Delta Glass Company Case

Delta Glass Company

66

INVENTORY MANAGEMENT

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In 1982 Chip and Don Walker established the Delta Glass Company, a closely held contract glass company operating in the southeastern United States. Before starting the company, Don received his engineering degree from Georgia Tech and worked at PPG Industries. Don's younger brother, Chip, received his business degree from the University of Georgia and was a project manager for a large contract construction company in Atlanta. In 1980 their father suffered a serious stroke, and Don was anxious to move closer to his family. Don was impressed with the growth in commercial activity that had taken place in Georgia. He also knew that economic forecasts predicted continued growth for the southeastern United States. With Don's knowledge of the glass industry and Chip's contacts with commercial construction, the brothers decided to create Delta Glass, specializing in the installation of glass windows and doors for commercial and institutional buildings.

The reputation of Delta Glass Company is based on quality and completing work on sched¬ule. Timely completion of jobs is a critical factor for contractors who face stiff penalties for project delays. The brothers currently divide the operation's management according to their personal skills. Chip works with contractors and is responsible for bidding jobs and managing on-site installation. Don is responsible for general business oversight and home based production management. The brother's work styles are compatible, and the division of labor has resulted in a smooth operation.

The company has grown dramatically since its inception with an extended scope of operation. With a growing regional reputation, Delta Glass acquired other companies and now covers a large service area. Some of the acquisitions provided machinery and inventory needed to grow the busi¬ness, but most new sites provided an expanded local base of operation. Each local business has a con¬tract glass unit that handles new construction and major renovations in its service area. Large jobs are bid out of the central office, but local managers are allowed to bid jobs under a stated threshold. Glass is a large inventory item for Delta Glass. Each location maintains stock in different types of glass required for retail sales. Tempered or insulated glass is costly and cannot be cut; therefore, this inven¬tory is kept small and is ordered to specification after a job has been contracted. However, periodic errors in measuring or sizing result in excess inventory, which is kept for potential future projects.

As demand grew, Delta began experiencing problems with filling orders in a timely fashion. Aluminum is the most common type of framing used in commercial installation of windows, and suppliers