CASE STUDY: GUARDIAN

WOOD FURNITURE

SUMMARY
Designs and manufactures wood furniture

Initially focused on custom made

Reputation for creative designs and

workmanship Now entered into retail outlets Custom made-60% of volume and 75% rupee sales

Contd....
More priority to custom made

Standard line goods left unfinished

Money being tied up with inventory Profit is not up to the expected level No space for further expansion

ISSUES
Single manufacturing process
Priority to custom made Improper layout

Less labor force

Retail outlet problems

1.stringent delivery requirements 2.price sensitive

Contd.
No space for further expansion

Semi finished goods

Inventory cost is high Cost for standard line increased Increased lead time Profit not up to the mark

STRENGTHS
Higher sales and profit margin for custom

furniture Innovative designs as well as creative High quality workmanship Good reputation for custom made Flexibility of equipments

WEAKNESS
Not able to control the price of standard

line Costs associated with standard line increasing Single manufacturing process Standard line furniture left incomplete No space for expansion Money is being tied up in inventory Same labor and machinery for both process

Contd
Increased lead time

Priority to custom made

Improper layout

OPPORTUNITIES
Increase labor and machinery efficiency Money tied up with inventory can be reduced Control production of standard according to market demand Capable to capture market with their reputation

THREATS
No space for expansion

Over stressed labors

Improper layout Time constraints Profit spend on inventory

SOLUTIONS
Increase labor forces

Provide shifts in work

Proper time utilization Proper layout

EFFECT OF SALES AND MARKETING

Customer demand increased

Sales increased
Cost associated with standard line

increased Price associated with standard line not increased Increased delivery time

ISSUES FACED BY THE COMPANY

Production process:

1.Same production process 2.Same labor force for both 3.Increased lead time Layout 1.More space required 2.Production bottlenecks 3.Work in progress increases 4. Production control difficult

Contd
Financial problems

1.Increased inventory cost 2.Cost associated with standard line increased 3.Cost associated with semi finished goods 4.Profit is not what they expected

FINANCIAL STRUCTURE
Cost of standard line increased

Price of standard line cannot be increased

Profit is not up to the mark Inventory management cost increased

MANAGERS DECISIONS
Introduce shift for employees

Reduce semi finished goods

Maximum utilization of labor and machinery Maximum time utilization Money tied up in inventory can be reduced Decrease lead time

SUGGESTIONS
Increase labor and machinery efficiency Recruit more labors Allow separate time schedule for both Better production control Overcome the problems faced by plant

layout Set up a new plant when profits increase

CONCLUSION
Maximization of profit for Guardian is possible by implementing these suggestions

GROUP MEMBERS
AJITH

DEEPAK
JITHU NITHIN ARCHANA DEEPTI SHYMA