Evaluating Strengths and Weaknesses in Making Choices - Case Study Example

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CONCEPT DESIGN SERVICES By Concept Design Services 1.1 Contents Executive Summary …………………………………………………………………….3 1.2 Understanding Objectives and Context……………………………………………. 3 1.2.1 Strategic Planning, Marketing and Competitive Advantage…….……… 3 1.3 Analysis of the Situation………………………………………………………….. 3 1.3.0 Analysis of the Products………………………………………………….. 4 1.3.1 Analysis of the Industrial Market…………………………………………. 4 1.3.2 Analysis of the Marketing Position……………………………………….. 5 1.4 Implementation of Analyzed Situations………………………………………….. 6 1.4.1 Implementation of Marketing Position……………………………………. 6 1.4.2 Implementation of Manufacturing Operations…………………………………… 7 1.4.3 Implementation of Supply Services……………………………………………….. 7 1.4.4 Determining Options……………………………………………………………. 7 1.5 Determining Marketing and Operations Options……………………………….. 8 1.6.2 Evaluation and Choice………………………………………………………….. 9 1.6.1 Evaluating Strengths and Weaknesses in Making Choices……………………… 9 1.6.2 Making Latest Development Choices on Evaluation…………………………….. 9 1.7 Recommendations………………………………………………………………. 10 1.8 Conclusions………………………………………………………………………… 10 1.9 Reference List…………………………………………………………………… 11 1.2 Executive Summary Strategy is part of strategic planning. It inculcates commitment of a firm like CDS’s resources which are not easily reversible in affecting the long term future of the firm. Strategic planning of CDS would require the use of practices that are strategic to that those that are merely tactical. Traditionally, a company like CDS would be strategically placed if it had a balance between itself and the environment. This report outlines the viewpoint of a newly appointed consultant to operations at Concept Design Services (CDS) in manufacturing the operations of the company in ensuring its growth and continuity. The report is based on the findings from analysis of the organization. 1.2 Understanding Objectives and Context 1.2.1 Strategic Planning, Marketing and Competitive Advantage CDS would analyze its macro and microenvironments and develop a strategy to make the fit based on its capabilities and objectives. However, this viewpoint on strategic planning would not work for CDS given the erosion nature of competitive advantage. A strategic plan that may serve the business well at one time may be obsolete in a short while. The following scheme shows an intricate relation in CDS. 1.3 Analysis of the Situation James Thompson, the CEO of Concept Design Services (CDS), knew his colleagues shared his confidence. After all, it was a common belief of CDS to be one of Europe’s most profitable plastic household products (home-ware) businesses. Originally founded in the 1960s as Focus Plastics, the company’s growth had come initially from the manufacture of complex injection-molded plastic components for large industrial customers. Following the acquisition of the company by a large consumer products group, it had rapidly extended its range to include popular household items such as washing up bowls, pedal bins, baby baths, buckets and dustpans. These sales took place under the Focus brand name, initially through wholesale distributors and then increasingly to large national do-it-yourself (DIY) stores, often referred to as “sheds” (Bownass 2013, p.64). 1.3.0 Analysis of the Products The Supply Services Department of the company regarded as being at the heart of the company’s customer service drive. Its purpose was to integrate the efforts of design, manufacturing and sales. Essentially, it had two functions: firstly to plan and schedule production in order to maintain appropriate inventory availability, and secondly to plan the distribution of products from the warehouse to customers. Sandra White, the Supply Services Planning Manager, was responsible the scheduling of all manufacturing and distribution of products from the warehouse to customers. Sandra White, the Supply Services Planning Manager, was responsible for the scheduling of all manufacturing and distribution and for maintaining inventory levels for all the warehoused items. Supported by three other staff, she also prepared performance reports, monitoring the utilization of equipment, output rates for each product and scrap rates. As a leader in the provision of household plastic equipment, Concept Design Services needs to ensure continued strategic planning in product development, marketing and operations. The facts available present sufficient evidence that the company has the capacity to make better sales and stay in the lead in the industry with just a little adjustments. By 1989, the company produced around 200 home-ware stock –keeping units (SKUs), and had developed a reputation as a reliable source of supply of consistently high-quality products. The company took a decision at this point to withdraw from the complex and cyclical industrial moldings market in order to concentrate on developing the more profitable household products business. 1.3.1 Analysis of the Industrial Market The company recognized that the industrial markets were becoming more difficult and much less profitable. In the large white goods and automotive markets, order sizes (and therefore batch sizes) were getting smaller, and it was losing some larger contracts as production moved abroad. Many of its industrial customers were just too hard to continue doing business operations together. There were always changing their schedules, and at the same time they would not guarantee long-term continuity of business. In the end, it decided that the industrial business did not fit well and was particularly difficult to plan and control alongside household products. Even in the Sales Office, it was felt that the commercial relationships with household product wholesalers and DIY sheds were clearer and under control, whereas business with the industrial customers was unpredictable and unstable. Schedule changes in quantity and delivery date were an everyday occurrence that disrupted the office and caused most internal communication problems (Halme 2012, p.78). 1.3.2 Analysis of the Marketing Position Launching of its first new range of kitchen items was in 1992, under the “Concept” brand name. Within one year, it had over 3000 retail outlets signed up, and provided each with point of sale display facilities and high-quality brochures. Illustrated feature articles in well-targeted magazines and newspapers generated an enormous interest from the public, underpinning by the use of its products on several TV cookery programs. Within one year, it had developed an exclusively new market. It was at this time that it changed the name of the company to reinforce its change of direction. “Concept” now provides over 70% of its income and the bulk of its profits. The prices and margins that CDS can achieve with Concept are many times higher than for the Focus range, so it has proved that the market appreciates the value inherent in its designs (Lerner 2000, p.17). 1.4 Implementation of Analyzed Situations 1.4.1 Implementation of Marketing Position So far, the marketing strategies of the company have worked well in allowing it to achieve its goals. The decision by the company to employ an individual with prerequisite experience in the field of marketing gave it an edge above its competitors. With her experience, Linda Fleet knew how to balance the changes in taste of the market from one color texture to another. The company’s strategy to advertise its products as decorative objects rather than normal kitchen equipment has been a major breakthrough in maintaining a market lead. So far, there is no flaw in its marketing strategies. CDS achieved all the desired goals and advertising its kitchenware for their aesthetic value is sure to give it a market lead. 1.4.5 Implementation of Manufacturing Operations All manufacturing took place in a large, leased, modern facility, which was located approximately 20km from the Head Office. The factory had areas for receiving and holding raw materials, and the molding area included 24 large injection-molding machines. The most recent had robotic devices to remove finished products from the machines and to place them on conveyors leading to the packing area. Adjacent to the molding area was a large tool store with a capacity to store about 200 moulds on racks, and a small mould repair section with skilled artisans. Products, and individual components of products, shifted to the packing area, where they was assembly, and/or labeled (where required), inspected, packed in bags or cartons and palletized. Finished goods went to an adjacent large, Narrow-aisle warehouse with high-level racking and special forklift machines. In one corner was an order-assembly and dispatch bay, with a platform access to load delivery vehicles (Meroni & Sangiorgi 2011, p.24). 1.4.6 Implementation of Supply Services The Supply Services Department of CDS is the heart of the company’s customer service drive. The supplies department of CDS has successfully managed to schedule and plan production in order to maintain proper inventory availability. Further, the company has been able to plan the distribution of its products from its warehouses to its clients. Although the company has received average performance in performance reports, output rates for every product and scrap rates, and monitoring utilization of reports, there is need to review the of Supply Services Department for more efficient production. There is a need to increase the batch size to increase average utilization. The factory needs to be scheduled for weekend production, albeit Saturday and save maintenance of equipment to Sunday. The pick rate will improve from 92% to 100% or close to perfection. Although the organization chart showed Sandra White reporting directly to Marketing, Linda Fleet did not often feel the need to intervene in the day-to-day workings of the department, preferring to concentrate on the more innovation orientated activities of the Marketing Department. This relative autonomy allowed Sandra to optimize the planning throughout the internal Supply Chain. 1.5 Determining Options 1.5.1 Determining Marketing and Operations Options Because the company’s multi-cavity moulds are large and technically complex, mould changes take around three to four hours, so careful scheduling is important to maintain utilization. The factory did not have schedules for weekend production, and maintenance took place on Saturday mornings. Over recent years, the general reduction in batch size has regrettably brought down typical utilization, but with the wider merchandise assortment, now at about2500 SKUs, this was predictable. However, CDS’s pick rate, which measures the accessibility of finished goods record, remained steady at around 92%. This means that, on average, there is one in twelve chances of the company not being able to supply any one SKU from stock. CDS quickly learned that the retailers liked the idea of a coordinated range of items. Customers could buy a few items to start a collection, and progressively add to this. The company’s research indicated that some customers kept its products on display in their kitchens as objects of beauty or as tokens of symbols of their way of life rather than hiding them away in cupboards. CDS exploited this idea its advertising, and guaranteed to provide retailers any item 6 in any color for at least four years. To keep ahead, it continued launching new ranges and colors at habitual intervals. (Lindahl & Sakao 2009, p.89). 1.6 Evaluation and Choice 1.6.1 Evaluating Strengths and Weaknesses in Making Choices It may be that CDS is seeing a fundamental change in how it does business within the industry. It has always seen itself primarily a company that satisfies end consumer desires by providing good service to retailers. The new partnership arrangements put the company more into the “business to business” sector. There is no problem with this in principle, but there is a little anxiety as to how much it gets the company into areas of business beyond its core expertise. The company has expanse advantages in its selection of staff and the strategies it uses to stay ahead in the kitchenware industry. Its strategies of giving staff bonuses based on their output is a sure way to enhance its production every passing day. It has qualified staff, including Miss Linda, the Marketing Officer. Qualified and experienced expertise has kept the company relevant in all that it undertakes. Additionally, the company has superior technology for producing its merchandise. It has trusted suppliers of machine parts in addition. However, CDS has a major problem with its time management. Its strategic plans do not concentrate on time management. So far, the company waits for up to four months to get new moulds. Changing moulds take 4 hours, and this could be detrimental to production outputs of the company. 1.6.2 Making Latest Development Choices on Evaluation The introduction of “Concept Office” brand was in late 1999, and perceived as a very successful entry into a new market, employing many of the marketing ideas developed with the Concept household range. Concept Office items comprised filing trays, storage boxes and a range of desk items – all innovatively styles and in seasonal colors. Users were encouraged to change the color in use every season to provide variety in drab, open-plan offices. Concept Office branded products sold through specialist office-equipment contractors and retailers. James Thompson, the CEO summed up his view of the current situation. Viability of CDS’s New Product Development The company’s new product process is an elaborate one that holds a lot of production advantage to the CDS. The company uses high quality drawings of designs from Design Office managed by the Marketing Department. The process of importing moulds from a company in South Korea is good for the future of CDS given the fact that the company looks for quality of the moulds above pricing. It is a double-coincidence of advantages to the company since the Korean Company produces the highest quality moulds and the most affordable in the market. However, there is a problem with the strategy the company takes in approaching the time issue in issuance and change of the moulds. Time is an important factor in productivity of the company. Waiting for a total of 4 to 5 months for a new mould could be detrimental for the company if it is in a rush to change a product. In addition, taking 24 hours to change a mould for the next product manufacture could be considered a waste of time. There is need for the company to look for an alternative strategy of reducing these time frames. CDS needs to concentrate on quality and pricing as well as time effectiveness of the production of new products. 1.7 Recommendations Design house partnerships usually involved relatively long lead times but produced unique products with very high margins, nearly always carrying the design house’s brand. Linda Fleet was enthusiastic about these developments. This type of joint venture relationship plays to its strengths. CDS’s design expertise gains it entry to the partnership; it is soon valued equally for its marketing, distribution and manufacturing competences. The company is so far doing well in its strategies. The marketing is superb and CDS needs to continue in the same line of its marketing. It needs to, however, change its focus from quality and pricing to include time management as well. 1.8 Conclusions In conclusion, it is evident that the approach taken by Concept Design services is the appropriate one especially considering its position in the market, as well as, the target consumers who purchase their products and services. This is a strategy aimed at eradicating its growing irrelevance in the market, but helps it to develop major market strategies and competencies. References List Bownass, D. 2013, Building Services Design Methodology: A Practical Guide, London, Routledge. El, T., 2005, Service-Oriented Architecture: Concepts, Technology, and Design, Prentice Hall, Upper Saddle River, New Jersey. Halme, M., 2012, Sustainable Consumer Services: Business Solutions for Household Markets, Routledge, London. Hariss, M., 2006, Managing Health Services: Concepts and Practice, Elsevier Australia, Sydney. Kim, D. & Hariri, S., 2001, Virtual Computing: Concept, Design, and Evaluation, Springer Publishers, New York City. Knapp, D., 2009, A Guide to Help Desk Concepts, Cengage Learning, Stamford, Connecticut. Lerner, M., 2000, Middleware Networks: Concept, Design and Deployment of Internet Infrastructure, Spriger Publishers, New York City. Lindahl, M. & Sakao, T., 2009, Introduction to Product/Service-System Design, Springer Publishers, New York City. Meroni, A. & Sangiorgi, D., 2011, Design for Services, Gower Publishing, Ltd., New York City. Robert, G., 2007, Bringing User Experience to Healthcare Improvement: The Concepts, Methods and Practices of Experience-Based Design, Radcliffe Publishing, Boston. Read More