Foldrite furniture company

Foldrite Furniture Company based in Aurora, Colorado is in the process of changing its production strategy based on a surge in demand for the current product line. It is also considering a change in product offering based on current market trends. Based on the new sales forecast, they want to come up with a production plan for the next six months.
The organization aspires to realize the fourmajor goals viz.
• innovation in products and processes
• enhancement of customer responsiveness
• achieve lean manufacturing
• retention of workforce
1.2 System Overview
1.3 Appeal as an interesting problem
The case of Foldrite furniture company is compelling since it details the journey of the company across
two decades and provides and insight into its early fruitful years, its reputationas an innovative company, the
Phase 1 – Foldrite Furniture Company
style with which it took over competitors, then its gradual decline and tryst with financial turmoil, ambition to
be big by buying smaller players and its eventual buyout by a group of private investors.
Across the two decades and these phases, Foldrite was faced with fisting with various issues such as
seasonal changes indemands, financial turmoil, workforce turnover, etc. In each scenario, the team at Foldrite
has come up with innovative and organized production plans to maximize the utilization of work force,
machinery, resources, etc. and to generate good revenue at the end of year by implementing various
strategies. Thus Foldrite comes to us an interesting problem due to its potential of providing an insightinto
various different scenarios & challenges and system behavior in all situations.
A particularly interesting problem of Foldrite is to develop the right production strategy to fulfill the
expected demand for Cloud Chair (due to its current buzz in the market). This is intriguing since in order to
cater to expected demands, should the inventory be stacked, it’d come at the cost of productdevelopment
and R&D Budgets. Additionally, if hiring is done for the same, there will be the added expense of the process
and training. And finally, should the design change be made such that it saves a minute on assembly line, it’d
still demand a one time cost of $15,000.
1.4 Team’s Exposure to the System
Having had a taste of Services sector, our team is curious about the knitty-gritties ofmanufacturing
sector and product based companies. In order to be able to make wise technical and operational decisions in
our careers, irrespective of industry, we’d like to gain an understanding of variety of industries and processes.
2. Environment
2.1 Users
1. Sales for details on current sales & future forecasts
2. Finance - credit report, budget, salary processing etc.
3. Human Resources– hiring & training
4. R&D for continued innovation and improved designs
5. Operations – production schedule, inventory calculation & estimates for raw material
6. Purchase – communicate with the Contractors for acquisition of raw materials
7. Delivery Department – Customization of user orders & Delivery guarantee
2.2 Nature of Current System
The system of Foldrite manufacturing is a medleyof closed/mechanistic and open/adaptive processes.
Department Behavior
Sales closed/mechanistic
Phase 1 – Foldrite Furniture Company
Ankit Mittal, Sailee Latkar, Shefali Budhwani Page 4 5/25/2011
Finance closed/mechanistic
HR closed/mechanistic
R&D open/adaptive
Operations open/adaptive
Purchase closed/mechanistic
Delivery closed/mechanistic
Marketing open/adaptive
3. Narrative of theExisting System
Principal Inputs:
1. Credit Reports from Finance
2. Sales Forecast
3. Employees’ details from HR Department
4. Design details
Processes:
1. Determination of Production Strategy
2. Estimation of raw materials
3. Production
4. Delivery
Outputs:
1. Production Schedule
2. Raw Material order
3. Final product
4. Shipment to customer
4. Hierarchy of Organizational...