This is the full case study and the questions

ACTIONS TO CANDIDATES e read the case below carefully and answer the questions that follow (30 marks to account for 20% of the grade for the course). DESIGN HOUSE PARTNERSHIP AT CONCEPT DESIGN SERVICES I can't believe how much we have changed in a relatively short time. From being an inward-looking manufacturer, we became a customer-focused design and make' operation. Now we are an integrated service provider. Most of our new business comes from the partnerships we have formed with design houses. In effect, we design products jointly with specialist design houses that have a well known brand, and offer them a complete service of manufacturing and distribution. In many ways we are now a 'business-to-business' company rather than a 'business-to-consumer' company.' (Jim Thompson, CEO, Concept Design Services (CDS)) CDS had become one of Europe's most profitable homeware businesses. Founded in the 1960s, the company had moved from making industrial mouldings, mainly in the aerospace sector, and some cheap 'homeware' items such as buckets and dustpans, sold under the 'Focus' brand name, to making very high-quality (expensive) stylish homewares with a high design value'. The move into 'Concept products The move into higher-margin homeware had been masterminded by Linda Fleet, CDS's Marketing Director, who had previously worked for a large chain of paint and wallpaper retailers. 'Experience in the decorative products industry had taught me the importance of fashion and product development, even in mundane products such as paint. Premium-priced colours and new textures would become popular for one or two years, supported by appropriate promotion and features in lifestyle magazines. The manufacturers and retailers who created and supported these products were dramatically more profitable than those who simply provided standard ranges. Instinctively, I felt that this must also apply to homeware. We decided to develop a whole coordinated range of such items and to open up a new distribution network for them to serve up-market stores, kitchen equipment and specialty retailers. Within a year of launching our first new range of kitchen homeware under the 'Concept' brand name, we had over 3,000 retail outlets signed up, provided with point-of-sale display facilities. Press coverage generated an enormous interest which was reinforced by the product placement on several TV cookery and life style' programmes. We soon developed an entirely new market and within two years Concept products were providing over 75 per cent of our revenue and 90 per cent of our profits. The price realisation of Concept products is many times higher than for the Focus range. To keep ahead we launched new ranges at regular intervals.' The move to the design house partnerships Over the last four years, CDS has been designing, manufacturing and distributing products for some of the more prestigious design houses. This sort of business is likely to grow, especially in Europe where the design houses appreciate our ability to offer a full service. We can design products in conjunction with their own design staff and offer them a level of manufacturing expertise they can't get elsewhere. More significantly, we can offer a distribution service which is tailored to their needs. From the customer's point of view the distribution arrangements appear to belong to the design house itself. In fact, they are based exclusively on our own call centre, warehouse and distribution resources.' most successful collaboration was with Villessi, the Italian designers. Generally it was CDS's sign expertise which was attractive to design house partners. Not only did CDS employ professionally respected designers, it had also acquired a reputation for being able to translate difficult technical designs into manufacturable and saleable products. Design house partnerships usually involved relatively long lead times but produced unique products with very high margins, nearly always carrying the design house's brand. This type of relationship plays to our strengths. Our design expertise gains us entry to the partnership but we are soon valued equally for our marketing, distribution and manufacturing competence.' (Linda Fleet) Planning and distribution services The distribution services department was regarded as being at the heart of the company's customer service drive. Its purpose was to integrate the efforts of design, manufacturing and sales by planning the flow of products from production, through the distribution centre, to the customer. Sandra White, the Planning Manager, reported to Linda Fleet and was responsible for the scheduling of all manufacturing and distribution and for maintaining inventory levels for all the warehoused items. 'We try to stick to a preferred production sequence for each machine and mould so as to minimize set- up times by starting on a light colour and progressing through a sequence to the darkest. We can change colours in 15 minutes, but because our moulds are large and technically complex, mould changes can take up to three hours. Good scheduling is important to maintain high plant utilization. With a higher variety of complex products, batch sizes have reduced and it has brought down average utilization. Often we can't stick to schedules. Short term changes are inevitable in a fashion market. Certainly better forecasts would help ... but even our own promotions are sometimes organized at such short notice that we often get caught with stockouts. New products in particular are difficult to forecast, especially when they are 'fashion' items and/or seasonal. Also, I have to schedule production time for new product mould trials, we normally allow 24hours for the testing of each new mould received and this has to be done on production machines. Even if we have urgent orders, the needs of the designers always have priority.' (Sandra White) Customer orders for Concept and Design House partnership products were taken by the company's sales call centre located next to the warehouse. The individual orders would then be despatched using the company's own fleet of medium and small distribution vehicles for UK orders, but using carriers for the Continental European market. A standard delivery timetable was used and an 'express delivery service was offered for those customers prepared to pay a small delivery premium. However, a recent study had shown that almost 40 per cent express deliveries were initiated by the company rather than by customers. Typically this would be to fulfill deliveries of orders containing products out of stock at the time of ordering. The express delivery service was not required for Focus products because almost all deliveries were to five main customers. The size of each order was usually very large, with deliveries to customers' own distribution depots. However, although the organization of Focus delivery was relatively straightforward, the consequences of failure were significant. Missing a delivery meant upsetting a large customer Adapted with modification from Nigel, S. Stuart, C. and Robert J. (2007) Operations Management. 5 Edition. Financial Times Prentice Hall. Mestions 1. Why should operations management be important to CDS? (4 marks) 2. What did CEO Thompson mean by the statement from being an inward-looking manufacturer, we became a customer-focused 'design and make' operation" Which aspect(s) of operations management can help an organization achieve this? (8 marks) 3. Discuss the concept of 'line balancing with respect to Sandra White's statement that we try to stick to a preferred production sequence for each machine and mould so as to minimize set-up times by starting on a light colour and progressing through a sequence to the darkest "(6 marks) 4. What four suggestions would you recommend to the company if you were asked to advise CDS on improving its operations? Please explain your suggestions in the context of CDS and what improvement (especially areas) they can bring. (12 marks)