As of 2015, Loganville window treatments were conducting a batch-process type of manufacturing in its line of production. Batch processing involves producing one or several forms of a product or batch. The batches are of a given quantity, and further production of new batches relies on how fast the stock is depleted. The Loganville window treatments would produce 500 -1000 batches of the interior shutters and hold the end products in their stores awaiting an order. The new orders would receive supply form the stored batches and only after depletion of the batches would the company start production of the new batches.
The company was conducting low level of customization of its products. This is because it supported a limited mixture of standard products in order to benefit from scale economy. The interior shutters produced by Loganville Window treatments involved six different styles that were further offered in five predetermined sizes. This meant that the manufacturing line would produce 30 different and customizable products that the customers could choose from at any one time. Furthermore, there was limited amount of contact with the end customers but rather the company dealt with the decorators in the market.
Prior to 2016, Loganville Window treatments used to have no form of contact with the customers. Information about their products was given to different decorators in the country and region, and these decorators would then interact with the customers in regards to the demands of the customers and pricing. According to figure 3.12, this type of contact with the customer in regards to the service package is a characteristic of low customization. Furthermore, the company deals with physical items and not the intangible items hence the service package expected is different. Subsequently, as described in Table 3.2 the service package of a manufacturing line dealing with primary physical activities, greater emphasis should be put in managing the physical assets. This has proved to be a challenge for Loganville Window treatments prior to 2016 since it left such activities to the decorators.
According to the table, whenever the customization level is low, greater emphasis should be put in controlling closely the process and further improving the productivity. This was a major managerial challenge since the company failed to improve the manufacturing activities and reduce the cost of production. Furthermore, they lacked information on the needs and changing preferences of their market base since they failed to interact with the customers. They did not participate in managing their customers and understanding their needs. The low degree of contact with the customers meant that they did not have information about the changes taking place in the market. They heavily relied on the decorators, and when the decorators had a chance to purchase the same products from China at a lower cost, then the company was left flat-footed.
Chuck Keown is proposing a make-to-order form of manufacturing process. This manufacturing process would require increased contact with the customer and contact or interaction. The make-to-order will reduce the amount of stock stored at any one time by the company but will increase the waiting time for the customers. Since the shutters will be highly customized, the raw materials will be different at times, and this will require special sourcing. Subsequently, the raw materials that will be used in the new manufacturing process must be sourced in good time preferably suppliers must be identified early and prequalified. This will ensure that any purchases required are attained in good time to avoid waiting time for the customers.
Loganville Window treatments will be providing a high level of customization that is characterized by high contact with the customer and varying modifications of the end product. The styles of the shutters will be the main customization as they will correlate with the needs of the customer. The different styles of the shutters will ensure that the customers get what they desire, but it means delayed deliveries.
The service package will change in that there will be increased contacts with the customers in order to understand their special needs. The company will also have to increase its emphasis in managing the customers, an intangible activity. Managing the customers will mean understanding their preferences and informing them about deliveries. Sometimes raw materials may be delivered late, and this will affect the waiting time for the customers. It is important that Loganville Window treatments manage the expectations of the customers, especially during such instances. Furthermore, service packaging must shift from the back room to the front room due to increased contact with the customer. Such a change will enable increased service layout for the customer. This will create a managerial challenge since the company is not used to personalized marketing. There will be a need to grow the marketing department to accommodate the new challenges. The customization will be at a high degree, and this will require flexibility and increased responsiveness to the needs of the customer. The challenges that will come with this customization include reduced cash flow and efficiency. The company will also have to continuously source for raw materials based on demand since the style of the shutters will change based on the customer.
I. Communication channels with customers must be changed to suit the convenience of the customer.
II. The sourcing of materials will be reduced since it will be based on the needs of the customer.
III. The service package will have to focus on both physical and intangible activities.
IV. Response rate to customers must be increased, and this will require growth of the marketing department.
V. The process of customization must be made more flexible through reduced control on the same. The needs of the customer must guide the production.
VI. The working hours of the manufacturing unit must be changed to hourly in order to reduce costs incurred during idle time when the manufacturing line lacks work.
VII. Prequalified suppliers must be listed and the terms reviewed in order to allow for quick orders.
VIII. The amount of warehouses will be reduced since the amount of inventory stored will be highly reduced. Such a move will bring down the cost of such a unit or warehouse.
IX. An increased internet presence of the company must be enhanced whether through websites or social media. This will allow for increased interaction with customers and market presence.
This model will be more difficult to manage since the number of people being managed in regards to the customers will be higher. Furthermore, the cost of managing clients and their needs will grow drastically. The supply chain will be difficult to manage since the raw materials will be different for every client and bulk sourcing will not be applicable.