STICKLEY

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 Abstract

In the traditional approach of operation management, cost, time, quality and service
were used for determining the performance but today the innovative concepts,
issues and measures have been identified to achieve sustainable growth in
operation function. The current trends are not only to implement innovative
processes, globalization and latest technologies but also to integrate the impact on
environment in operation management. In the paper below we will analyze the
various factors which influences the operational management processes in U.S.
based furniture company Stickley where globalization and computerization have
been introduced to reduce production costs and improve efficiency.

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 TABLE OF CONTENTS

1. INTRODUCTION…………………………………………………………………………….5

2. OPERATION MANAGEMENT AND CHANGE PROCESSES IMPLEMENTED…….6

2.1 Techniques for Designing and Improving Operations……………………6

2.2 Approaches Used for Forecasting……………………………………………7

2.3 The Problems of Forecasting2.4 Role of Operations Manager………….7

2.5 The Issues Faced By Project Managers……………………………………..8

2.6 Principles of Supply Chain Management……………………………………9

2.7 Risk Management………………………………………………………………..10

2.8 Waste and Lean Management…………………………………………………11

2.9 Global and International Issues………………………………………………11

3. OPERATION MANAGEMENT ISSUES AND THE STICKLEY APPROACH……….11

3.1 Production Process at Stickley……………………………………………….12

3.2 Project Management……………………………………………………………14

3.3 Complexities of Operation Management……………………………………15

3.4 Challenges Faced by White Goods Industries…………………………….15

3.5 Implementation of Changes in Stickley……………………………………..16

3.6 Global Effects……………………………………………………………………18

4. FUTURE STRATEGIES……………………………………………………………………18

4.1 Core Competencies……………………………………………………………18

4.2 Implementing Globalization………………………………………………….19

4.3 Diversification and Quality……………………………………………………20

4.4 Automated Processing………………………………………………………..20

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 4.5 Concentrated Buying………………………………………………………..21

4.6 Forecasting……………………………………………………………………21

4.7 Competition…………………………………………………………………...22

4.8 Environment Performance………………………………………………....22

5. CONCLUSION……………………………………………………………………………22

6. REFERENCES…………………………………………………………………………...24

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1. INTRODUCTION

The company L. & J.G. Stickley was established by Leopard Stickley and George
Stickley in 1900. Stickley is situated near Syracuse, New York. The company
produces mahogany, white oak and cherry furniture. The company started re-
manufacturing oak based furniture in 1980s currently; more than 50% of the sale is
of oak furniture.

Stickley in 1970s - At one time, the company employed more than 200 employees
but in 1970 it was on the verge of bankruptcy. During the time only 20 full time
employees were working with the company.

In 1974, the company was sold by Leopold Stickley's widow Louise to Alfred Audi
who was a regular customer of the furniture company and also Audis were long time
dealer of Stickley furniture. Although furniture companies were using outsourcing to
reduce labour costs, Stickley continued to hold the employees at home till 1974,
when the company was acquired by Audi.

Post Acquisition

Audis provided effective management and leadership to Stickley, and the company
grew.

Currently, there are 14 Stickley stores across the country.

The company employs 1,350 workers and owns five retail showrooms in New York,
Connecticut and Carolina, and the furniture produced is sold by 120 dealers.

At Stickley, the goods production is concentrated to the New York and there are
many large showrooms in the city opened mainly around the High Point in 2000 to
attract the attention of local market and the semi-annual furniture market.

The global debate is mainly about product cycle where considering the effects of
migration of industrial sites in developed countries such as England and U.S.,
applies to outsourcing as seen in the furniture industry in the 21st century.

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To understand furniture industry, we need to look at the history of furniture
companies in 19th century. Boston was an early centre of American industrialization
and it boasted 28 furniture plants in the year 1875. After 15 years, Cincinnati became
a centre of furniture manufacturing companies, hosting more than 130 furniture
companies and employing 3000 workers. By 1920, Michigan hosted 54 furniture
businesses. Soon economic depression and depletion of raw materials damaged the
furniture manufacturers and the companies started looking for locations having
abundance of lumber, low cost labour and low production cost.

Stickley introduced one of its most popular collections “Cherry Valley Collection” in
1920s which was honoured for craftsmanship and the craft remained popular till
1950s to 1970s when the company faced uncertainty. Audi passed away in 2007 and
Stickley still remains the legacy of son Edward and wife Aminy.

Stickley invested multimillion dollar into technology. At the Stickley factory, a giant
assembly line has been built and workshops have been manufactured. At the work
station, different operations are performed by craftsman from across 36 countries.

2. OPERATION MANAGEMENT AND CHANGE PROCESSES IMPLEMENTED

The main purpose of the paper is to examine the various constraints and issues
faced by the furniture company in various stages of operation management. In
operation function, operation strategies are used for designing techniques and
improving operations. The main aim of operation management is to acquire
capabilities to tolerate product propagation, relate the operation to market, and
develop procedures to enhance learning.

Mostly, the under-examined state of logistics on distribution links enables or

constrains the global networks at faraway production units. A need for considerable
consideration of all the production operations, demand forecasting, queuing,
inventory management and item production, efficiency, quality handling and
multimodality practices is required.

2.1 Techniques for Designing and Improving Operations

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Operation management uses certain business functions to plan, control and
coordinate the resources which are required to deliver products or services (Slack
N., 2009). The main determinants of processes (or set of activities) involved in
operational management are volume, flow and variety. The various types of
processes and operating systems are continuous flow system which is characterized
by streamlined flow; and process industries are based on processes mainly found in
manufacturing units. Implementing various other principles of operation management
helps resolve the issues faced by the organization (Mitra, 2005). The industrial
organisation are characterized by the monopolistic tendencies, competition, barrier
to entry, and bargaining power ( Grant,1991) and firms can make use of the industry
analysis to determine positioning strategies (Porter, 1990).

1. Mass Production Design

There are many continuous and streamlined flows in manufacturing

systems, and in mass production, the volume of production is very high
and the process design can be visualized at two levels - at overall level
and within each department.

2. Intermittent Flow

To assess the demand forecast, the operation manager requires

assessing the market demand. In the last few years, it has been observed
the competitive dynamics and expectations of customers are changing and
companies try to tune their operations to fulfill the competitive needs.

2.2 Approaches Used for Forecasting

 Panel Approach - A panel acts as a focus group in panel approach and its
drawback is that it can be difficult to reach consensus.

 Delphi Approach - Delphi method is a formal method which uses

questionnaires which are replied by the experts and the process is repeated
several times to get forecasting. Delphi assumes the forecast made by
structured group of people is most accurate as compared to unstructured
group.

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  Scenario Planning (for Long Term Production Planning) - Scenario
planning is the method which is used to make flexible long term plans and it is
based on creative processes which are used to get future views. The object
helps to create many plausible features and assess how the enterprise would
fare in various conditions. It helps to assess the risk associated with the
decision being considered.

Normally, long term forecasting is used in scenario planning and the panel
members devise a range of future scenarios.

Forecasting Approaches

The approach used for forecasting are -

Time Series Analysis - There are two methods used in time series analysis- one is
Time Series and other is called Causal Modelling.

 Time Series helps to plot a variable over time which has no underlying
variation and it looks at the past behaviour to estimate future.

 Casual Model is a complex model which helps to get the strength of

relationship.

2.3 The Problems of Forecasting

 Forecasting can be unrealisable

 If the data provided is not adequate, the forecast can be unreliable.

 The historic pattern may continue into the future but the random changes are
difficult to predict through forecasting.

Dependent Demand and Independent Demand

 Dependent demand is very predictable and it is a known factor.

 On the other hand, independent demand is basically a type of

demand wherein the supply demand from customers is not known and
the operations take various planning and control decisions, which are
based on past experience.

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2.4 Role of Operations Manager

There are mainly three phases of project management -

 Work Breakdown Structure - Work breakdown structure is a methodology

which splits the project in non-overlapping activities.

 Organization Breakdown Structure - Organization breakdown structure

helps to execute the tasks which are mentioned in the work package.

 Cost Breakdown Structure - Cost breakdown structure provides the links of

individual elements and compares it to the dimension of cost. CBS helps the
project manager to set up a monitoring system of the project and to design
control mechanism.

2.5 The Issues Faced By Project Managers

There are many activities which a project manager has to handle including the set of
activities involved in a project.

1. The project manager determines the number of activities and the time frame
for the completion of these activities.

2. The project manager should be able to execute and monitor activities of

project.

3. The project manager requires a number of elements which are scheduled and
has to determine the costs of implementing the project.

4. The project manager also determines the progression of project.

In the case of new product launch, the activities which a project manager has to
define are:

 Identify the needs of market

 Create conceptual design

 Create marketing infrastructure

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  Create a detailed design

 Plan production

 Reach markets

Production Control

Planning and control operations require reconciliation of demand and supply in terms
of timing, quality and volume. The planning of control activities includes sequencing,
loading, scheduling, monitoring and controlling.

Inventory Management and Capacity Management

Inventory refers to the resource which can be used. There are many different types
of inventories - seasonal inventory, decoupling inventory and cyclic inventory. The
inventory planning is determined by the timing of demand, uncertainty of demand
and timing replenishment. The inventory cost is determined by the inventory carrying
cost, cost of ordering and the cost of shortages.

Capacity refers to the total number of units which can be produced per unit time in a
manufacturing company and capacity management makes the decision to design
strategic dimensions which directly influences the cost of goods and services.

Economies of scale are the principle which shows relationship between cost of
goods and the level of capacity built. A firm can benefit from the low cost by
operating at a low predetermined level.

2.6 Principles of Supply Chain Management

Supply chain refers to the network of entities which supplies components and raw
material to the company as well as distributes the finished goods to the customers
through proper channels.

Distinguishing Sub Sectors in Furniture Value Chain - The trade data can be
revised and plastic, wood and metals are some of the sub sectors of furniture
industry. The largest trade in furniture was in dining room, living room and shop
furniture followed by wooden seats (FAOSTAT data, 2005). Hence, the furniture

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companies aimed to manufacture furniture which is made specifically for these
purposes.

Quality

Quality management helps to design improved quality which is aimed to satisfy

customers. The various quality assurance systems are based on top management
strategies, parameters, tools, techniques, documentation for continues learning and
mistake proof operation.

2.7 Risk Management

The process of risk management helps to identify the risks, highlights the concept of
risk and provide approaches for risk management.

Some of the potential causes for failure are

 Technology and facilities

 Quality

 Price

 Time to market

 Faulty design

Failure can happen due to “Customer failure”, due to misuse of products or

environmental failure happening outside the operation control set up. Some of the
potential causes for failure are supply failure, wrong faulty components and timing of
supply. Human failure (such as errors and violations) and operational failure
(including procedures, processes, structure and culture) can also cause production
failure.

Preventing Failure

For risk mitigation, planning for all possible failures is identified and appropriate
mitigation actions are identified. The economic mitigation requires actions such as
insurance and spreading the financial risks.

To stop failure from spreading to other parts of the company, a policy is identified.

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A loss reduction method is implied to reduce the severity of consequences.

Post Failure Analysis

 Need to understand the cause of failure

 Presenting failure occurring

 Fail safeguarding

 Automating systems (to prevent human mistakes)

2.8 Waste and Lean Management

A series of technology changes have been implemented in the last few years to
ensure lean management in furniture companies. Lean manufacturing is the concept
which was initially adopted by Hickory Chair, LM which integrated the process
techniques and the team work through computerized machinery to improve
production.

2.9 Global and International Issues

The global production network of production chains extends to the stages, locations,
value added processes of extending, and the locations which are suitable for various
steps. In the supply chain, the complex arrangement of the management of supply
chain considering the variations caused by the political context at the national, local
individual and global, also involves the social economic relationship.

Globalization and changes in economic situation, standard of people has given the
furniture industry a drastic impact (Xu, 2010, pp. 92). Globalization also promotes
tourism and the hotel industry, which is further beneficial for furniture industries
(Johansson & Thelander, 2009, pp. 200).

3. OPERATION MANAGEMENT ISSUES AND THE STICKLEY APPROACH

Operation management helps to provide systematic approach to resolve all that is

required for transformation, for enhancing revenue earned by the organization. The
various inputs to operation management are capital, labour and material. For any

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conversion, you require process design and product. Adequate supply of material is
required and right mix of material, appropriate process, and delivery systems are
determined. The list of supplier of materials, the arrangement to place orders and
receive the material is designed. In operation management, the primary focus should
be to identify the resources, plan material and its capacity to implement real time
changes.

3.1 Production Process at Stickley

Production facility of Stickley is based at a large rectangular building having 30 foot

ceiling and the furniture industry is mainly labour intensive. The tools used for
making furniture are saw, sanders etc., and the electronic cost per month on an
average is $60,000. The company owns a tool room where the tools are sharpened
and production of replacement parts take place.

The skill set of worker ranges from low skilled labours to high skilled craftsmen.

A master cabinet handles the orders.

The process starts with sawing operation where the wooden boards are supplied by
the lumber mills which are cut into small size.

Automation of Process

Recently, the company bought a computerized system which improved the

efficiency, productivity and eliminated a great amount of waste.

Quality

The workers are responsible for assessing the quality of wood. The workers try to
locate the marks and defects on the lumber pieces and the lumber was then supplied
into the saw.

The computer then:

 Defines the set of cutting

 Locates the knots and the defects

 Defines the standards for lengths for the subsequent operation

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The number of boards cut each day is about 20,000 board feet and the computerized
operation also provides additional cuts for other jobs.

Glue is used to join the pieces and make table, chairs, chair backs and other items
which were used in various shaping operations.

Sanding Operation

The sanding operation is used to remove excess glue from the sections, and level
the surface of glued pieces and other rough pieces.

The company owns a numerically controlled router which can be programmed to get
specified cuts and grooves.

The workers have to assemble the various components into sub-assembled systems
and sometimes, it can be assembled into other parts directly for designing completed
pieces. Subsequently, each item is stamped with the production date.

The various furniture items are stamped to identify its location and records are
maintained to ensure repair can be provided to the furniture owner in case of
damage.

The records of repair is also maintained which helps to ensure the prices are
stamped properly and complete instructions are provided to closely match the
original pieces.

Then the furniture is moved to the section of white inventory from where it is moved
to the finishing department.

The workers at the finishing department apply linseed oil or other forms of finishing
items on the furniture to send it to goods inventory.

From the good inventory, the items are shipped to the stores and then to the
customers.

Inventory

The company has inventory of furniture and white inventory, small finished goods
and partially assembled items are stored. The two main functions of inventory are -

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to reduce the amount of time required to respond to customer’s demands and ensure
smooth production.

Due to successive automotive operations, the workstations lack time to work. The
operations are used to build sub-assemblies and the pieces which are built have
flexible sequencing which allows having similar set up and produce in-sequence. It
reduces the total time and cost on production as well.

There are many long-term and short-term issues in any organisation in operation
management. Some operation management decisions take four to five years to be
taken and some operation management decisions are taken in 2 to 3 years. Majority
of design decisions takes 5 to 10 years, and it requires a long multiple level of
decision making, long lead time and a big capital outlay. Additionally, some capital
decisions are taken once in a year.

Quality Management

Customer care and quality are two major challenges faced by the industry.

Long Lead Time and Order Fulfilment

Manufacturing companies take a long lead time to fulfil orders. Long lead forces the
companies to keep large inventories and it may produce something which may or
may not be as per market demand. This may further increase the cost, cause poor
delivery reliability and reduce market share.

Low Productively Due to Labour Issues

Stickley employed local labour and the cost of labour was high. Poor employee
training is another reason for poor productivity.

Management Systems

Systems offered many benefits such as advanced logistics, real time inventory
control, Just In Time restocking and analysis of sales patterns to identify the product
for seasonal periods (Curtis, G., Cobham, D., 2005).

3.2 Project Management

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At Stickley, the production control process and the job sequences are determined by
the processing time, the inventory and days' supply on hand. The lot sizes are
worked out by getting the factor in demand and then setting costs and the carrying
costs.

The size of lot varies in the range of 25 to 50, and bar codes stickers were pasted on
the lot for identifying the subsequent operation and the job. Once operation is
complete, the bar code sticker is removed by the operator and he handles the output
to the production control which helps to keep a track on the progression of job and to
get the location when it is sent to the shop.

The company has a level output that is mixed with seasonal demand, which means
before the peak demand time, the excess output is created to build up the
inventories and then it is regulated when the demand becomes more than the
production capacity during the peak production.

Queuing Theory

The waiting line models was used which used to analyse the problems of capacity
planning. The fundamentals of queuing theory is length, waiting time, effective
utilization of resources and making alternative choices on operational measures.
Automated systems at Stickley ensured improved operating systems.

One of the important implications of the theory is that the low level of utilization of
resources reduced the waiting time and had faster turnaround for demands. Hence,
the customer got better quality of service.

3.3 Complexities of Operation Management

1. In any manufacturing process, the flow may change from continuous flow
to streamlined flow pattern and in extreme cases, the operation
management has to deal with the long lead times and the high degree of
uncertainly.

2. Secondly, planning is required for scheduling and production.

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 3. Third, the number of stages in the production is different from the process
flow pattern and stages may increase with the size of problem, leading to
complex operation management.

4. The major complexity of operation management arises from the variety in

the product lines, specific variation and varieties in product families.

Other complexities are scheduling of operations with machines and predicting the
nature of disruptions such as machine breakdown and tool breakdown.

PERT is used to assess uncertainly. It relies on the subjective expertise of

managers, expected time of an activity, beta distribution, variation and duration.

3.4 Challenges Faced by White Goods Industries

Furniture manufacturing companies are facing a number of challenges which

increases competitiveness in market. Some of the challenges are -

1. Falling Prices Of White Goods - While the price of plastics, woods and metals
has increased in the past few years, the price of white goods decreased.

2. The Problem Of Installed Capacity - The growth in demand per year also
decreases every year which further raises concerns and the condition results
in a stagnated market. The firms producing white goods are trapped in low
volumes, over capacity and falling prices.

3. Diversified Portfolio - Companies stress to have diversified portfolios as it

provides business and operational advantage, and provide scheduling and
assembly line versatility.

In such circumstances, the need to have sound operation management is felt

strongly which include

 Cost cutting measures

 Improving planning and scheduling

 Improving productivity and scheduling of operations

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  Equipping the operations with assembly flexibilities and better supplier
management.

3.5 Implementation of Changes in Stickley

Diversification

Stickley followed industry practice of diversification to fit the product price range and
with the less expensive and high carved antiquities lines it made in Vietnam.

Both the logistics and furniture industries are highly concentrated geographically and
it reflects the specialization in the trust and the kind of goods carried through long
term relationship.

Along with the advance of mechanized manufacturing and cheap particle board
material in in the IKEA processes, Stickley furniture upholstery in North Carolina was
identified for its high skill and high cost, which was relevant for the other
manufacturers.

Lean Management

The company plans to reintroduce innovation in lean manufacturing.

Demand Forecasting for Stickley

The demand for Stickley furniture is maximized during the first quarter and third
quarter of the year and during the 2nd and 4th quarter; the excess output is stored at
the inventory while the excess demand in the first and third quarter is met by using
this inventory. The production scheduler schedules the various activities of
production and it is set for eight to ten weeks.

Other Changes in Operation Management of Stickley

Stickley delivered high quality furniture and the operation management is committed
to the following-

1. To deliver high quality production

2. To reduce costs

3. To get high operational efficiency

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 4. The production model resembles a traditional processing model where the
raw material is the input and the finished goods are the output.

5. The input includes glues, logs, wood, and the final products are the pieces of
furniture.

Repetitive Processing Models

The processing models are based on continuous processes where the manufacturer
produces large volumes of standard products. Stickley uses the concept of repetitive
production where the organizations perform the same number of tasks and repeats
the set of activities to deliver the final products.

The repetition of processes can have two effects - either the employee loses interest
and motivation to do the work due to the lack of challenges and stimulation or the
employees become very good at their work, which increases the performance and it
also enhances the operational efficiency.

Computerized Batch Processing

Stickley uses batch processing where the processing operations are controlled by
computers and it performs several activities without the help of manual intervention.
The most effective example is the process of cutting, where the measurements are
computerised and it does not require human assistance. The computer controlled
optimizer uses preset cutting standards to determine the cutting, location of knots,
defects in wood and standard length and operation.

Keeping Track of Job Status and Location

The various processes of Stickley are complex processes where the employee
works on pre-designed processes and hence, it is important for the management to
ensure proper process of controlling is used to ensure the job status.

Quality Control

Workers are responsible for ensuring the quality of work and the material received
from the operation and they have to report the efficiencies to the concerned
authority. There are also many other means of checking the quality and quantity of
operations, and there are many stages of inspections which are carried out by

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professional people too. The TQM method of quality control is being considered by
the company.

Sometimes, clusters of one type of companies are located in one advantageous site.
There are mainly three categories in furniture quality- the lowest end (which helps to
prioritize economies of scale and mechanization), the middle end (which can be
used to prioritize labour cost reduction) and the high end type which ensures high
reliance on economies of scope and efficiency.

Stickley is famous for high end type of furniture where the furniture is designed
through high quality standards. As the need for rapid reaction and customisation
increased in the high end products, the upholstery remained, and in the last two
years Stickley added a mid range casual dining division which was bought by the
company from a Massachusetts company (Established in 1700).

3.6 Global Effects

The global operations include:

 Outsourcing - Today more and more companies are outsourcing

business operations. The main motivation for a firm to outsource some
of the processes are - cost, core competency and capacity.

 Collaborative Commerce - It is also an emerging trend and some of

the traditional methods of operation can either be supplemented or
replaced by new procedures through the electronic methods.

Stickley did not outsource, in fact, built a factory in Vietnam and China-based
contractors were hired. Aminy Audi once said that they were very protective of our
patents. Mrs Audi believed the company’s outsourcing to China created the risk of
losing their control over intellectual property.

4. FUTURE STRATEGIES

The furniture company requires upgrading activities which should be based on the
following:

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4.1 Core Competencies

The first focus should be on core competencies (Hamel & Prahlad, 1994). Core
competencies can become core rigidities and part of the work is to upgrade to make
use of past expertise (Leonard- Barton, 1995).

Enhance dynamic capabilities which is closely related to core competencies ( Teece,

Pisano & Shuen, 1997a).

The main elements of value chain understand the upgrading levels. To implement
change, the firm should not only define the competitiveness as per other individual
firm, but also be competitive in context of buyers and suppliers and those who will
deliver the final product to the customers.

4.2 Implementing Globalization

The furniture industry has now globalized. According to the latest forecast of 2008
and 2009, the emerging furniture competent countries are Brazil, Poland, Russia and
Turkey (CSIL, 2008) and these locations provide low cost labour and lumber while
the government of these countries is eager to promote exports. The global
competition during the end of 20th century impacted many furniture companies. A
range of logistic factors which included the shipping costs, delivery time, market
niche and the agencies which were the individual actors, formed the crucial part of
geographical location decision.

The success of industry logistics and production lies in the ability to quickly and
creatively respond to the changes which are affecting the supply chain, which helps
to create nimble sourcing decisions (SCDE, 2008). With the introduction of global
concept, the terminology for production chain and global production networks should
be defined.

Domestic market supplier networks in the US has reduced as more and more
businesses are going abroad or getting relocated through manufacturing affiliation.

Upholstery still remains the most suitable option in furniture process as it is sensitive
to design changes and finishing, especially in the high end market. In 2008, the
Swedish companies opened a furniture factory in Virginia in U.S. and the reason was

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to reduce sourcing cost, currency exposure, lead time, securing implies and reducing
transportation to grow in furniture market

Today most of the American models are based on global structure.

Government programs also hinder specialized skills to utilize in employment and

today unemployment is increasing in the U.S also. Instead of providing lengthy
unemployment benefits, job opportunities are required which will be fulfilled by
reopening industries.

With the new changes and increased consumption of wood and lesser number of
competitors in furniture, follows a fierce Darwinian reduction.

With the recent downturn, further diverted attention to supply and logistics costs is
required. For high end furniture - to provide highly reliable and customized furniture,
Stickley should continue to operate in U.S.

For targeting the low end market and for high mechanization, low transport cost, high
process, quality control and location close to market, the manufacturing location
should be in US, China, Vietnam and Europe.

For targeting medium-end market, to benefit from low cost labour and for cost
stability, Stickley can target the less developed furniture manufacturing locations
such as Latin America, Indonesia and Vietnam.

4.3 Diversification and Quality

Today about four companies represent more than one-fourth of the total U.S.
furniture industry revenue which is a bit more than southeast region's 25% and 38%
in North Carolina. Leading furniture brands such a Grand Rapids and Keeler Brass
faced issues due to low quality copies of the furniture and the subcontractors.

Price of furniture is measured in terms of cost insurance and freight which also
includes the shipping and duties, and there has been a great fall in price of furniture
in the last few years after globalization. The highest fall in price was seen for
upholstered wooden seats and office furniture. With the emergence of new entrants
and rising price pressure, the company should plan to manufacture furniture which is
in high demand and has a cost effective price.

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The supplier value chain can serve as an important tool to strengthen a furniture
company where the linkages are determined by policy, technology and education.

4.4 Automated Processing

Automation in furniture manufacturing process has many advantages.

Technological innovations promote globalization and it also helps producers to

reduce costs significantly.

Computer controlled woodworking helps to enhance productivity, reduce waste, and

facilitate time to market and speeds up modular production.

Computer aided design and manufacturing system can be used by manufacturing

firms to connect to related units and to improve quality and productively, which is
centrally maintained by an automated systems.

The delivery of products will improve if the system is automated because when the
order is placed by the customer, the supplier and production unit can immediately
responds to new demands.

RTA is the method which can be used by furniture companies to design standard
shapes, size and volumes, and it allows factories to take benefit from the design for
manufacturing processes and also reduces the total cost.

Further automation can promote the concepts of Made-To-Order and Just-In-Time

which can be integrated to the distribution system to reduce inventory.

Manufacturer and service providers who wish to make continuous improvements in

business performance, improve quality and reduce cost while increasing productivity
are using automated processes in production.

4.5 Concentrated Buying

The growth of concentrated buying in market spans many areas of market of final
consumption (Feenstra & Hamilton, 2005).

4.6 Forecasting

The forecasting should be designed in three levels -

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 1. Forecast developing the forecasting logic

2. Establishing the control mechanism

3. Incorporating managerial consideration

The source of data for forecasting comes through - Sales for estimate, Point of sales
data systems, Forecast from supply chain partners, Trade/industry association
information, media, Economic surveys, Portals/internet and other market places,
Economic survey and indicators and finally, Subjective knowledge.

Through the choice of parameters for forecasting, you can make the system more
responsive to the latest changes and trends, and this will provide information which
will help to plan operation processes for future demands.

4.7 Competition

The competition globally during the last phase of the 20th century affected many
furniture companies. A variety of factors formed the crucial part of geographical
location decision.

The success of industry logistics and production lies in the ability to quickly and
creatively respond to the changes which are affecting the supply chain, which helps
to create nimble sourcing decisions (SCDE, 2008). With the introduction of global
concepts, the terminology for production chain and global production networks
should be defined.

4.8 Environment Performance

Environment performance should be taken as one of the objectives of operation

management.

5. CONCLUSION

Some of the key factors required for the survival of company are effective leadership,
program ownership, support of employees, multifunctional participation, reducing
wastages, tracking types of material and costs associated to it, measurements and
effective progression. The introduction of computerized operations, batch processing

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and automated demand forecasting further strengthened the position and
competitiveness of Stickley.

The product cycle theory, the regional advantages from the low tech and low cost to
the high end customisation and the scale shift can happen within the same industry
with the introduction of education, training, technology, processes and logistics
improvement, which ultimately improves efficiency and reduces cost. Stickley
introduced automated systems which ultimately introduced the concepts of lean
management, reduced wastage, improved efficiency and reduced the overall cost of
processes. Large multi-store retailers provide technical upgrading as compared to
the smaller sized buyers (Kaplinsky, Morris and Readman, 2002). Mainly there are
two sets of evaluation to manage operation management and the factors for
innovation (Berry, Hill and Klompmaker, 1995).

The company has operation functions based on aggregate production planning

model which was started by exploring the alternative ways of modifying demand and
arriving at the period by period net demand during the planning phase. This method
is beneficial in many ways and on this basis, the various decisions at the level of
inventory is carried out during each period, and the rate of producing the goods and
number of people engaged are determined. In aggregate production planning model,
the demand fluctuation, capacity fluctuation, difficulty level in altering production
rates and multi-period planning can be designed.

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