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what type of manufacturing process did LWT appear to be using? What level of customization was it offering? Where was the point of customization?

what type of manufacturing process did LWT appear to be using? What level of customization was it offering? Where was the point of customization?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Answer Questions 1,2,and 4 : 1. As of 2017, what type of manufacturing process did LWT appear to be using? What level of customization was it offering? Where was the point of customization? 2. UsingTable3.2andFigure3.12asguides,howwouldyou describe the service side of LWT’s business prior to 2018? What were the managerial challenges? 4. Using Table 3.2 and Figure 3.12 as guides, how will the service side of the house change in 2018? What will the new managerial challenges be?
CASE STUDY Manufacturing and Service Processes: Loganville Window Treatments Introduction For nearly 50 years, Loganville Window Treatments (LWT) of Loganville, Georgia, has made interior shutters that are sold through decorating centers. Figure 3.20 shows some of the various styles of shutters LWT makes. Past Manufacturing and Service Operations: 2017 Traditionally, LWT supported a limited mix of standard prod- ucts. At any particular point in time, the mix of products might consist of six different styles offered in five predeter- mined sizes, resulting in 30 possible end products. LWT would produce each of these end products in batches of 500 to 1,000 (depending on the popularity of each style/size combination) and hold the finished products in the plant warehouse. When a decorating center called in with an order, LWT would either FIGURE 3.20 Sample Products Made by LWT meet the order from the finished goods inventory or hold the order to be shipped when the next batch was finished. LWT's products were sold through independent decorating centers located across the United States and Canada. LWT would send each of these decorating centers a copy of its f its catalog, and the decorating centers would use these catalogs to market LWT's products to potential customers. It was the responsibility of the decorating centers to work with customers to price out the shutters, make sure the correct size and style were ordered from LWT, and resolve any problems. As a result, LWT almost never dealt directly with the final customers. Manufacturing and Service Operations: 2018 By 2017, the influx of low-cost shutters made in China had forced LWT to reconsider its business model. Specifically, because of the low labor costs in China (20% of LWT's labor costs), Chinese manufacturers could make exact copies of LWT's products for substantially less and hold them in ware- houses across the United States and Canada. LWT's traditional CHAPTER 3 PROCESS CHOICE AND LAYOUT DECISIONS IN MANUFACTURING AND SERVICES 73 198 customers the decorating centers-were turning more and more to these alternative sources. LWT decided to fight back. As Chuck Keown, president of LWT, put it: The only permanent advantage that we have over our competitors is that we are located here in the United States, closer to the final cus- tomer. So from now on, we will be a make-to-order manufacturer. We will deal directly with customers and make shutters to whatever spe- cific measurements and finish they need. This means we can no longer count on producing batches of 500 to 1,000 shutters at a time and holding them in inventory. Rather, we will need to be able to make a few at a time in one-off sizes, if that's what the customer needs. On the service and marketing side of the house, we will now take orders directly from the customer. We will reach them through the Internet and through catalogs. We will work with them to de- termine what style best suits their needs, and to take the measure- ments needed to make the shutters. When there is a problem, we will work directly with the customer to resolve them. Yes, this will require dramatic changes to our business. But it also means we will be able to charge a premium for our products and create a relationship with the customers that our Chinese ri- vals will find difficult to emulate. As I see it, this is the only way we can survive. Questions 1. As of 2017, what type of manufacturing process did LWT appear to be using? What level of customization was it offering? Where was the point of customization? 2. Using Table 3.2 and Figure 3.12 as guides, how would you describe the service side of LWT's business prior to 2018? What were the e managerial challenges? 3. What type of manufacturing process is needed to support the changes proposed by Chuck Keown? What level of customization will LWT be offering? Where will the point of customization be? 4. Using Table 3.2 and Figure 3.12 as guides, how will the service side of the house change in 2018? What will the new managerial challenges be? 5. Develop a list of 8 to 10 things that must happen in order to accomplish the changes Chuck Keown envisions. Will the new business model be more or less difficult to man- age than the old one? Justify your answer.
Transcribed Image Text:CASE STUDY Manufacturing and Service Processes: Loganville Window Treatments Introduction For nearly 50 years, Loganville Window Treatments (LWT) of Loganville, Georgia, has made interior shutters that are sold through decorating centers. Figure 3.20 shows some of the various styles of shutters LWT makes. Past Manufacturing and Service Operations: 2017 Traditionally, LWT supported a limited mix of standard prod- ucts. At any particular point in time, the mix of products might consist of six different styles offered in five predeter- mined sizes, resulting in 30 possible end products. LWT would produce each of these end products in batches of 500 to 1,000 (depending on the popularity of each style/size combination) and hold the finished products in the plant warehouse. When a decorating center called in with an order, LWT would either FIGURE 3.20 Sample Products Made by LWT meet the order from the finished goods inventory or hold the order to be shipped when the next batch was finished. LWT's products were sold through independent decorating centers located across the United States and Canada. LWT would send each of these decorating centers a copy of its f its catalog, and the decorating centers would use these catalogs to market LWT's products to potential customers. It was the responsibility of the decorating centers to work with customers to price out the shutters, make sure the correct size and style were ordered from LWT, and resolve any problems. As a result, LWT almost never dealt directly with the final customers. Manufacturing and Service Operations: 2018 By 2017, the influx of low-cost shutters made in China had forced LWT to reconsider its business model. Specifically, because of the low labor costs in China (20% of LWT's labor costs), Chinese manufacturers could make exact copies of LWT's products for substantially less and hold them in ware- houses across the United States and Canada. LWT's traditional CHAPTER 3 PROCESS CHOICE AND LAYOUT DECISIONS IN MANUFACTURING AND SERVICES 73 198 customers the decorating centers-were turning more and more to these alternative sources. LWT decided to fight back. As Chuck Keown, president of LWT, put it: The only permanent advantage that we have over our competitors is that we are located here in the United States, closer to the final cus- tomer. So from now on, we will be a make-to-order manufacturer. We will deal directly with customers and make shutters to whatever spe- cific measurements and finish they need. This means we can no longer count on producing batches of 500 to 1,000 shutters at a time and holding them in inventory. Rather, we will need to be able to make a few at a time in one-off sizes, if that's what the customer needs. On the service and marketing side of the house, we will now take orders directly from the customer. We will reach them through the Internet and through catalogs. We will work with them to de- termine what style best suits their needs, and to take the measure- ments needed to make the shutters. When there is a problem, we will work directly with the customer to resolve them. Yes, this will require dramatic changes to our business. But it also means we will be able to charge a premium for our products and create a relationship with the customers that our Chinese ri- vals will find difficult to emulate. As I see it, this is the only way we can survive. Questions 1. As of 2017, what type of manufacturing process did LWT appear to be using? What level of customization was it offering? Where was the point of customization? 2. Using Table 3.2 and Figure 3.12 as guides, how would you describe the service side of LWT's business prior to 2018? What were the e managerial challenges? 3. What type of manufacturing process is needed to support the changes proposed by Chuck Keown? What level of customization will LWT be offering? Where will the point of customization be? 4. Using Table 3.2 and Figure 3.12 as guides, how will the service side of the house change in 2018? What will the new managerial challenges be? 5. Develop a list of 8 to 10 things that must happen in order to accomplish the changes Chuck Keown envisions. Will the new business model be more or less difficult to man- age than the old one? Justify your answer.
< All iCloud 27 December 2022 at 7:18 PM PART II ESTABLISHING THE OPERATIONS ENVIRONMENT TABLE 3.2 Managerial Chal- lenges in Service Environments Nature of the service package Degree of customization Degree of customer contact FIGURE 3.12 A Conceptual Model of Service Process Primarily physical activities --> Greater emphasis on managing physical assets (airline, trucking firm). Lower customization --> Greater emphasis on closely controlling the process and improving productivity (quick-change oil shop). Lower contact --> More of the service package can be performed in the back room. Service layout, location, and hours will be based more on cost and productivity concerns (mail sorting). High CHAPTER 3 PROCESS CHOICE AND LAYOUT DECISIONS IN MANUFACTURIN Contact Package Service Low Physical Intangib Primarily intangible activities --> Greater emphasis on managing people and knowledge assets (law firm, software developer). Higher customization --> Greater emphasis on being flexible and responsive to customers' needs (full-service car repair shop). Low Higher contact --> More of the service package must be performed in the front room. Service layout, location, and hours must be designed with customer convenience in mind (physical therapist). Customization High
Transcribed Image Text:< All iCloud 27 December 2022 at 7:18 PM PART II ESTABLISHING THE OPERATIONS ENVIRONMENT TABLE 3.2 Managerial Chal- lenges in Service Environments Nature of the service package Degree of customization Degree of customer contact FIGURE 3.12 A Conceptual Model of Service Process Primarily physical activities --> Greater emphasis on managing physical assets (airline, trucking firm). Lower customization --> Greater emphasis on closely controlling the process and improving productivity (quick-change oil shop). Lower contact --> More of the service package can be performed in the back room. Service layout, location, and hours will be based more on cost and productivity concerns (mail sorting). High CHAPTER 3 PROCESS CHOICE AND LAYOUT DECISIONS IN MANUFACTURIN Contact Package Service Low Physical Intangib Primarily intangible activities --> Greater emphasis on managing people and knowledge assets (law firm, software developer). Higher customization --> Greater emphasis on being flexible and responsive to customers' needs (full-service car repair shop). Low Higher contact --> More of the service package must be performed in the front room. Service layout, location, and hours must be designed with customer convenience in mind (physical therapist). Customization High
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