The substantial increases in the cost of electricity and the present conflict in Ukraine have prompted many South African households to reconsider their energy needs. Heating houses in winter using electricity is, for many families, becoming prohibitively expensive. Wood and coal burning stoves have been in use for hundreds of years but over the last century havesteadily lostfavourdue to their smoke and other emissions that contribute to urban air pollution.

Major improvements in wood pellet burning stove technology have produced a new generation of "clean burning" domestic stoves. The stoves produce little to no smoke and the carbon dioxide (CO₂) produced can be sequestered by rapidly growing trees that are harvested to produce more wood pellets for burning.

ASouth Africancompany wishes to diversify its businessandmanufacture wood pellet burning stoves sincethismoderntechnologyis now freely available(i.e.no patent protection limitations).We'll refer tothis proposed new division of the companyas'New Heat' (not its real name).The stoveswill be assembled from 3modules.The first module comprises the inside components of the stovethataremanufactured from solid cast ironand the second module comprises the outer stove housing and is made from steelsheets.The third module includes an insulated chimney pipe and connecting rooftop fitting.

The parent company ofNew Heatis a sheet metal works manufacturing one-off products for a range of industrial customers.Sheet metal fabrication is the process ofdesigning, cutting, bending, shaping, andassemblingproducts from sheets of metal. The company mainly manufacturers customised metal storage boxes, for example storage boxes used in the construction industry, telcoms and even for off-road, 4WD enthusiasts.

The cast iron internal stove components (thefirst stove module) are cast from molten iron heated in a large furnace. Several South African companies make their own cast iron components but, increasingly, companies find that cast iron can be outsourced more cheaply to companies in China.New Heat plans to produce 3 different internal modules comprising a 5.5kW stove for small homes, a 9kW stove for medium sized homes and a 12kW stove for large homes.

Fabrication of the second modulesheet metal components(outer stove housing)can be insourced or outsourced and these components represent the style and outward appearance of the stove. An infinite number of different outerstovedesigns is possible. Some examples are illustrated below.

The insulated chimneys are a standard design and are cut to the required length to suit the buyer. Thechimneyrooftopfittings come in 3 standard designs. New Heat could manufacture its own chimneysand rooftop fittingsor buy from a number of different local or international suppliers.

Final assembly of the stoves could be done by New Heator outsourced.

Assume you have been appointed Operations Manager of New Heat

QUESTION

Describe the process strategy or strategies that would bein line withthe business strategy that yourecommend. Describe the layout of New Heat's stove manufacturing division.