FoldRite Furniture Company Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

FoldRite Furniture Company Case Solution

Introduction

Fold Rite Furniture Company was established in Colorado, USA in 1987. The company initially dealt banquet tables, the product line then extended to stack able chairs and folding tables. The company has a strong product demand, especially in summer and holiday seasons. The company has stable growth rate of 3.5% and net revenue for the company is 60.3 million for the year 2006.

Fold Rite serves different market segments and the proportion of its products for different market segments as per revenues generated are listed as follows:

Hospitality market 62%
Corporate offices, Government offices, Schools, Colleges, Hospitals, and Clinics 29%
Individual consumers 9%

Main products of the company are ‘Al strong’, a folding table in which the aluminum is used instead of plastic, ‘Green Comfort’ that is a stack able and washable chair, and‘ Cloud Chairs’ a folding chair that is in high demand, which is basically a folding chair with different body shapes and provides comfortable seating for overweight people.

Problem statement

Jose Ramos is the vice president of manufacturing and Martin Kelsey is the production manager, both were responsible to make a production plan for the company’s next six months. The upcoming months’ demand will be high and there is a possibility that the company cannot meet such demand with its current resources and capacity. A plan is needed to be made, which might mitigate such risk and ensures that the company can meet the demand with the same quality products and steady manufacturing.

Company’s internal analysis

Internal Factors

The company has incorporated green policies in its products and operations.
There is skilled labor that increases the operational efficiency and quality.
The company has changed its production strategies and focuses on customization and innovative design products.
The production and manufacturing process has competitive lead time.
The product became attractive due to depreciation of American Dollar.
The market demand diversified and modern new products came up, which were efficiently identified and tackled with.

Reason behind Increase in demand

Several strategic changes have been made, that lead to significant increase in demand for the company’s products. The company has abandoned few of its product lines, such as stack able furniture and traditional folding chairs. These traditional products were already overflowing in the market, as these products are manufactured by other low cost foreign companies as well. Thus, Fold Rite focused on new innovative and modern technologies in this business segment. This increased the demand for company’s products. The new products are greener, innovative, comfortable, and portable.

Alternative strategies

There are three strategies to formulate the upcoming production plan for the company. These strategies will help to meet the high demand of products. The strategies are analyzed and discussed as follows:

Existing workforce with variable working hours

This option suggests that during the production plan, the workforce will be required to increase their working hours and do overtime. The increased demand will be satisfied by the increased working hours. The worker swill be required to work on non-working days, such as Friday. The overtime payment will be 1.5 of the basic pay, including benefits. However,this will be against the company’s strategy to be a low cost producer and might have some negative affect on the competitiveness. Besides this, the employees that will work overtime might lose efficiency due to the tiresome long working hours. The workforce will become highly demotivated and might compromise the quality of work being done. They will start focusing on making products and meet the demand with less effort on making quality products. The wastage might also increase, which will increase costs....................

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