Journal of Business Case Studies-November December 2012 Volume&,Number6 0 2012 T
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Journal of Business Case Studies-November December 2012 Volume&,Number6 0 2012 The Clute Insairute http://www.cluteinstitutc.com 585 Sunrise Medical And The Quickie Wheelchair Lisa M. Houts, California State Univernsity, USA ARSTRACT This case profiles the Quickie Wheelchair, first developed by a groap of entreprencurs in Fresm, Calyfornia and now stralegy, prodact design, locarion planning, quality control, and just-in-time systems im by Sunrise Medical, the world's leading manafacturer of customized lighnweiht wheelchairs Topics sach make this case switable for use in a production and operations management cowrse Keywords: Lean Production; Just-In-Time; Operations Management: Entreprencurship: Wheelchair THE QUICKIE WHEELCHAIR'S BEGINNING Afler Marilyn Hamilton was involved in a tragic hang-gliding accident in 1978, she suddenly found herself wheelchair bound. Weighing 50 pounds, her new steel and vinyl non-adjustable wheelchair was heavy and hard to maneuver. Hamilton, still wanted to pursue her love of sports and an active lifesty le. She thought that by using lightweight materials, like aluminum tubing and nylon found in hang gliders, she could build a more responsive, high-performing chair. Two friends who had previously built hang gliders created her the l first new wheelchair, and they dubbed it the "Quickie. Amazingly, in 1979, ss than a year after her accident, Hamilton and her friends, Jim Okamoto and Don Helman, formed Motion Designs and started making and selling wheelchairs out of a shed in Fresno, Califormia. Revolutionary design made the Quickie the firt and who wanted to maintain an independent lifestyle. Soon a market also grew for a "sports" chair among wheelchair-bound Rapid growth followed and by 1985, Motion Designs had annual sales of about S?S milion Starilyn Hamil on. 199) By sold for $1.450. It was well-suited to the needs of its target market, typically 18-30 year-olds who had athletes who sought the Quickie's easy maneuverability and lightweight, foldable design (Case Study, 2009) been active December of 1986, sales were reported at $21 million and Motion Designs had becoeme the U.S. leader in its product categories of custom, ultra-light rehabilitation and sports wbeelchairs. Later that year, the owners sold Motion Designs to Richard H. Chandler, founder, chairman, and president of Sunrise Medical. Sunrise, which Chandler began in 1983 (Case Study, 2009), designed, manufactured and marketed health care products. These included power wheelchairs, scooters, beds, crutches, canes, commodes, and bath and pool lifts for the handicapped (Dangerfield, 2012). The Motion Designs acquisitioe added ultra-light and sports wheelchairs to the product line. Chandler's vision was to create a company that could serve the rapidly aging population and the growing demand for wheekchairs and home health care products that would follow (Case Study, 2009) THE INTRODUCTION OF JAPANESE MANAGEMENT TECHNIQUES AT SUNRISE By 1986, profits were faltering and Chandler took steps to reposition and strengthen the business. During a trip to Japan, he studied Japanese management styles and visited companies like Toyota and Matsushita, Upon returning to the United States Chandler stopped the expansion-via-acquisition strategy, streamlined the business by divesting umprofitable lines, and reorganized Sunrise employees into autonomous, self-directed tcams. At this time, he also began to revamp inventory control, with a goal of keeping only enough parts for the current day's production. In addition, once the products were compieted, they were shipped immediately to dealers and customers. These efforts to streamline inventory laid the foundation for Sunrise's transition to a just-in-time inventory. In fact, there are seven types of waste, or "muda", that a J-I-T system tries to minimize. One of these is unnecessary system (Derdak, 2011). A just-in-time system, however, involves much more than just streamlining time spent waiting. An interesting example of minimizing this type of waste relates to sales and manufacturing at Sunrise When a dealer called in a product order, there was an average wait time of four and a half minutes before a live sales representative could answer the phone. About 23 percent of callers grew tired of waiting and hung up before pilacing an order In response, Sunrise redesigned the process and reduced the hang-up rate to just two percemt. That year, sales grew by 30 percent; in part, the growth was due to better customer service and reduced call-waiting times. At the same time, a unique corporate culture was shaped to improve relationships between employer and employee and to redace other kinds of waste, In addition, production techniques improved so previously expensive wheelchair options became affordable standard features and customers responded positively. They were also excited about the many variations of back height, seat depth, seat widh and color choices from which they could choose. By the end of 1989 the fruits of these labors were paying off, and revenue had grown to over $152 million (Derdak, 2011).Explanation / Answer
1.Sunrise medical uses differentiation strategy. Production and design choices to support this strategy are based on quality and customisation. Premium products are customised for customers based on functionality , appearance and durability. The product line includes manual wheelchair, paediatric positioning product, sports wheelchair and power chair.
2. Elements of just in time seen in sunrise medical
Sunrise uses pull system ordering parts and produce products only when an order is actually placed.
Notice is sent to supplier only when the order is placed.
Lead time within the facility is strictly monitored and maintained so as to avoid delay
Demand pull system is regulated by kanban or signals.
3 in order to monitor the quality production employee verify their work before Quality Assurance specialist will give quality certificate for the product. After the manufacturing of wheelchair is completed it is tested by person who drives it around and test all features and its components.
4. Just in time strategy interfere with issues of quality as every part is ordered when it is needed which require frequent transportation it may damage the parts. The good thing is that because of low inventory cost, best quality wheelchair is produced at lower cost
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