Question : CASE STUDY Manufacturing and Service Processes: Loganville Window Treatments Introduction : 3168
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 var ious styles of shutters LWT makes Past Manufacturing and Service Operations: 2015 Traditionally, LWT supported a limited mix of standard prod ucts. At any particular point in time, the mix of products might consist of 6 different styles offered in 5 predetermined sizes, re sulting 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 decorat ing center called in with an order, LWT would either 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 decorat ing centers located across the United States and Canada. LWT would send each of these decorating centers a copy of its cata log, and the decorating centers would use these catalogs to market LWT's products to potential customers. It was the re sponsibility of the decorating centers to work with customers to price out the shutters, make sure the correct size and styl were ordered from LWT, and resolve any problems. As a result, LWT almost never dealt directly with the final customers. Manufacturing and Service Operations: 2016 By 2015, the influx of low-cost shutters made in China had forced LWT to reconsider its business model. Specifically, be cause of the low labor costs in China (1/5 of LWT's labor costs) Chinese manufacturers could make exact copies of LWT's products for substantially less and hold them in warehouses across the United States and Canada. LWT's traditional cus tomers-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 Chinese competitors is that we are located here in the United States closer to the final customer. So fr om now on, we will be a make-to-order manufacturer. We will deal directly with cus tomers and make shutters to whatever specific 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 hold ng them in inventory. Rather we will need to be able to make if that's what the customer a few at a time in one-o Sizes 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 determine what style best suits their needs, and to take the measurements 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 r our products and create a relationship with the customers that our Chinese rivals will find difficult to emulate. As I see it, this is the only way we can survive. Questions 1. As of 2015, what type of manufacturing process did LWT appear to be using? hat level of customization was it of fering? Where was the point of customization? Using Table 3.2 and Figure 3.12 as guides, how would you describe the service side of LWT's business prior to 2016? What were the managerial challenge 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? Using Table 3.2 and Figure 3.12 as guides, how will the service side of the house change in 2016? 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.