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

FoldRite Furniture Company Case Solution

Introduction

FoldRite Furniture Company was established in 1987, in Colorado. The company started with the production of banquet tables mainly for small school and church functions. Later on, the company adopted the innovative strategy and started to make stackable chairs and folding tables. The customers extend to government offices, businesses, hotels, schools and colleges. The revenue of the company increased significantly from 1999 to 2006. The total revenue for the year 2006 was $60.3 million. The annual growth was averaged at 3.5%.

However, the company faced different problems during the year 2006 as well as it faced financial crisis. The primary reason for this crisis was the reduction in the productivity and yield, mainlybecause of the high turnover ratio which led to quick recruitment. The new hired workers were not equipped with the right skills to generate same efficiency in the production. The lead time was increased which resulted in cancellation of orders. Another reason for the company’s poor operating performance was the company’s strategic acquisitions of small companies, which resulted in cash outflow and divert the attention and efforts of the management from the company’s core business.

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, in anticipation of high demand. The decision will require numerous changesin order to achieve such high demand with limited production capacity.

Problem statement

The market demand for FoldRite products has increased and is expected to be increased to a level, where the company’s manufacturing facility might fail to produce enough products to meet the demand of the market. Therefore, the VP, Jose Ramos, and production manager, Martin Kelsey, have to make a production plan for the upcoming six months to meet the challenges. The production plan should be made in a way that the manufacturing resources can be used in an efficient way without compromising the quality and speed of the production process.

Increased Demand driver

Last year, the company made a strategic decision and replaced the product line which was producing the simple folding, stack able furniture. The replacement was made as these furniture products were being manufactured by many other foreign competitors at low cost because of their economies. Thus, these simple common products were replaced by more modern and innovatively design products, including the new cloud chair that is highly comfortable and has sleek stylish design.

Restructured Operations

As earlier discussed, the company has been hit by the financial crises; the new private investors rescued the company. They bring new capital to the business and have made some major changes including the change of the CEO. Epstein was appointed as the new CEO, who then appointed Ramos as the Vice president manufacturing. Both have formulated a strategic policy for the company which sets the following:

There will be continued innovation employed in the production as well as system and procedures
The current manufacturing will be revised to the lean manufacturing principles
The skilled workforce is a key to the company’s profitability, therefore their retention is important.
Quality should be maintained in the products that will brings customer satisfaction and market share

In addition to these goals, two more strategic implementations were made which are:

The number of products offered by the company was reduced and only the core products were focused. As a result, the manufacturing resources were effectively used and this resulted in low cost manufacturing of the core quality products.
Moreover, the manufacturing facilities were consolidated, which brought in synergy in operations and low cost of production. The saved costs were then reinvested in the business which positively affected the company’s operations................ This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.