Chad's Creative Concept

Summary:

Chad's Creative Concept is a manufacturing company producing custom-made wooden furniture for cabins in the Great Lake area. The company was successful, increase its sales and decided to sell some products to retail furniture outlets.

Problem Statement:

Despite the company growth, the company is experiencing some difficulties. In fact, it's not doing the profits it should, production costs are rising and inventory is also a problem.

How Chad's Creative Concept ends up in this bad business situation while at first the business idea was good and supported by a demand?

First Business Strategy:

Vision ==> a "bit of the outdoors" inside, wooden furniture for vacation cabins

Mission ==> unique, custom-made and quality wooden furniture for a hard to please clients

Thomas had to elaborate a strategy in order to accomplish its business goals.

Regarding the product, the "how to do" process to transform the input process into an product.

For his business he needs different inputs:

Very qualify workers

Good and wide range of raw materials

Facilities adapted to its manufacturing process

Responsible and business environmental aware Managers

Right equipment

Energy

All this process and each step will add value to the product.

Thomas needs to check on the process and level of execution to know if it creates a competitive advantage.

Other aspects to check are: the supplier relations (one of the most important cost of the company), the inventory (lower inventory levels up the company working capital but also reduce warehousing costs), general process planning (have as more efficiency as possible), and consumer satisfaction (on time delivery, high quality service make a difference).

From an insight view of the company, 3 points are of high importance and interrelated:

Finance, Operation and Marketing.

Any decisions will have an impact on the process; so every decision has to be thought before putting them in action.

The sales force of Chad's Creative Concept made a decision by selling some products to retail furniture outlets. Of course the demand was there but the question is "does this action is respectful of the company strategy?", "does the company's processes are effective for this activity?".

This decision was a huge change regarding the operations of the company. The company has been thought for custom-made furniture, which require a "slower" process:

Workers will have more time to manufacture the product in order to compile every clients needs and to get to the highest quality. Because of this hard work, final products are sold to a high price. The layout and line of manufacture had to be shared between the custom and standard furniture, which does give Chad's Creative Concept a poor process planning, inventory management and higher costs.

Going to standard furniture has affected the company's financial structure. Chad's company was good in managing its custom furniture process but by adding a standard line process,