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Introduction

NATURAL DESIGNS, INC. 1. What types of decisions must Jim McMaster make on a daily basis for Natural Designs to run smoothly? What kind of decisions must he make on a long-term basis? Short-term Decisions (Infrastructural) * In terms of workforce, Jim has to decide on a daily basis on how many employees will work on customized feeders depending on volume of sales orders. Since orders vary per season, he may train other employees from other departments/products for the skills needed in producing the customized bird feeders. These employees can work on the customized bird feeders product during peak season and go back to their original job function or product on low-volume seasons. * Still depending on sales volume, Jim has also to decide how many orders to be satisfied daily. This includes production and distribution of the products to customers. As orders are received and updated real-time with the help of the internet, daily production targets should likewise be updated. ...read more.

Middle

* In terms of capacity, Jim might want to review his current product range since 500 SKUs maybe large enough for a company with only 15 employees. He may trim down his product offerings or hire additional employees. But since Jim may currently be having problems with cost control, trimming down the company's SKUs may be more beneficial. 2. Describe the operations strategy for Natural Designs. Has this strategy changed as a result of the custom bird feeder operation? If yes, how? Natural Designs' original operations strategy was response or time/delivery. Jim built his business with strong interactions with his customers through presentations and talks making him provide his products to customers right away. As the business expanded, he made use of the internet to make the order process real quick and provided his customers a 1-week delivery promise. With the entry of the customized bird feeder product, the company's operations strategy has shifted to differentiation or flexibility. ...read more.

Conclusion

* Assessed which colors are saleable to customers and have enough stocks of these ready for carving. * Develop proper costing for activities related to production of customized bird feeders to ensure that it is really profitable. 4. How should McMaster analyze the alternative expansion options? Which would you recommend: a second facility or a move to a single, larger facility? Keeping in mind one of the company's operational strategy of time/delivery, I would recommend moving to a single, larger facility. This would ensure that they would be able to deliver their products as promised since there is only one source of production. Other benefits of this option are as follows: * Quick response to customers in case of complaints and returns * Easy to manage or oversee. Jim can still be conveniently hands on to operations * Less expensive in terms of labor cost for management - can do away with individual managers for each facility. * Less transportation cost in terms of shipping inventories from one facility to the other. ?? ?? ?? ?? - 1 - ...read more.

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