Ops Management

Chads Creative Concepts is a company founded by Chad Thomas that designs and manufactures wood furniture. The company began by producing custom-made furniture and within a short duration developed a solid reputation for creative designs and high-quality workmanship. As company’s reputation grew and sales increased, the sales force began selling some of the pieces to retail furniture outlets, which led them into the production of a more standard line of furniture. Buyers of standard line furniture were much more price sensitive and imposed more stringent delivery requirements. Custom designed furniture, however, continued to dominate sales, accounting for 60% of volume and 75% of dollar sales. Currently, the company operates a single manufacturing facility where the equipment is mainly general purpose in nature for providing flexibility to custom made furniture. Both custom and standard furniture compete for processing time on the same equipment by the same workers.

Problems

 Corporate strategy is not clearly defined

 The sales expanded but they company didn’t take corrective actions to support the sales expansion

 Custom and Standard line used same equipment and workers

 Deliveries for both custom and standard orders were delayed

 Costs associated with the standard line are rising

o Inventory kept increasing which led the company rent public warehouse

Recommendations

At the core of Chad’s problem is an undefined corporate strategy. Without considering a completely defined corporate strategy the company has no direction. It is evident in the case that management