Introduction to Operations Management
Case Study: Natural Designs Inc.
1. What types of decisions must Jim McMaster make on a daily basis for Natural Designs to run smoothly? What kind of decisions must he make on a long-term basis?
Depending on sales volume Jim has to decide how many orders need to be satisfied daily, which includes production and distribution of the products to customers. As orders are received and updated real-time with the help of the internet, daily production targets should be updated. Jim will also have to decide on a daily basis how many employees will work on customized feeders depending on the volume of sales orders. Because orders vary per season, he can train other employees from other departments/products for the skills needed in producing the customized bird feeders. These employees can work on the customized bird ...view middle of the document...
He can trim down his product offerings or hire additional employees. But since Jim may currently be having problems with cost control, trimming down the company’s SKUs may be more beneficial.
2. Describe the operations strategy for Natural Designs. Has this strategy changed as a result of the custom bird feeder operation? If yes, how?
The original operations strategy for Natural Designs was response or time/delivery. As the business expanded, he made use of the internet to make the order process real quick and provided his customers a 1-week delivery promise and with the entry of the customized bird feeder product, the company’s operations strategy has shifted to differentiation or flexibility. Adding the customers’ information made his product unique. The company’s shift in operations strategy is also evident in its product range of 500 SKUs, which means they are offering a wide range or variety of products. Jim built his business with strong interactions with his customers through presentations and talks making him provide his products to customers right away.
3. What might have been done differently to facilitate the offering of custom bird feeders?
Jim could have increased the workforce for the production of customized bird feeders. Assess which colors are saleable to customers and have enough stocks of these ready for carving. He can develop proper costing for activities related to production of customized bird feeders to ensure that it is really profitable. Lastly, he can review activities related to production that will cut production time like replacing carving with pre-cut letters or utilize machines for carving instead of carving it manually.
4. How should McMaster analyze the alternative expansion options? Which would you recommend: a second facility or a move to a single, larger facility?
McMaster should analyze the alternative expansion options by moving to a single, larger facility. This would ensure customer satisfaction by delivering products as promised.