Dream Desk Company is a major supplier of office desks for home and business. Th

Question

Dream Desk Company is a major supplier of office desks for
home and business. The company has been in existence since
1875. After serving an apprenticeship as a cabinet maker in the
east, George Dreamer had a violent disagreement with the shop
owner and quickly decided it was best to move west. He opened
up his own shop for making custom desks for homesteaders,
ranchers, and small businessmen who could not afford expen·
sive imported desks. The company is still run by the Dreamer
family and has maintained a niche in the middle-priced home
and small business office furniture market. Dreamer furniture
has a good reputation for value. This reputation has been built
on sturdy construction including tongue-and-groove corners,
good customer service, and strong regional marketing.
The company has three basic grades of desks, each with
several styles. The grades are solid oak construction, solid pine
construction, and oak veneer. All together, there are fourteen
standard material-style desk combinations. Two styles, the contemporary
and frontier, have accounted for 65% of sales in the
past two years. The oak veneer-frontier model represents approximately
25% of sales. Pine-frontier and oak-contemporary
each account for another 10% of sales. Tn addition to the standard
styles, customers occasionally request a custom order of
special design. Custom orders account for approximately 20%
of sales and 40% of profits. Last year, Dream Desk sold 81,450
desks for a revenue of $15.7 million. Orders vary in size from
five to 500 desks, but most orders are for 50 desks or less. Sales
are seasonal with about 70% of deliveries requested for August
"'"through November, but Dream Desk has always tried to maintain
a constant workforce. Overtime is used during peak seasons
and machine maintenance, skills cross-training, and development
of new models is scheduled for the slow season. The
demand for desks also follows the 3 to 5 year business cycle.
Currently, we are entering an upswing and the local market is
expected to grow 20% over the next 18 months. Dream Desk can profit from this market growth if prices can be he1d in line
and quick delivery can be promised.
Dream Desk operates a 250,000 sq. ft. manufacturing facility
in Casa Petite, TX. The plant cunently employs 160 fulltime
workers of which 125 work in production. Recent j:l'essure
from increased wood prices and more aggressive marketing
from eastern manufacturers has made it clear to Jim Dre<~mer,
Plant Manager, that the company needs to reduce its manufacturing
cost and delivery lead time. Dreamer has considered developing
a new production and inventory control system with
some of the features of the just-in-time system he gained knowledge
of at a recent seminar.
Tire Production Process All desks go through similar production
sequences. The desk is essentially comprised of a frame
and drawers. Drawers are assembled from a front, handle, two
sides, back, and bottom. Veneer drawers have a two-piece front.
Each piece is rough cut from stock and then one or two edges
are sanded to provide a reference surface for fixturing on machines.
Other edges are then sawed and sanded. During this
stage, the patented Dreamer top (rounded tops to drawer sides
and engraved pictograph on the top of the drawer front) is added.
The priceless Dream trademark seal is then applied to the left
side of the drawer. For drawers with a lock, the hole is punched
and the top of the door grooved during drawer part construe~
tion. Historically, drawers were made by sending them through
a series of saws, drills, routers, sanders. Parts then come together
at an assembly bench for fitting and gluing. A new $1
million automated system has been installed that can fabricate
parts automatically with rapid changeover between styles. The
previous arrangement was a process layout with three saws,
three drills, four routers, six sanders, and six assembly stations.
These machines still exist, and, with the exception of assembly,
require approximately 30 minutes to changeover between part types. Over time, the market has demanded more of the
six-drawer desks, and this department had become the bouleneck
in production, The new system increases capacity about
80% while requiring only one additional operator. (It was fell
that the new system would also improve quality and reduce the
need for overtime.)
Frames are made in a separate department Legs are cut
from bar stock and sanded. The contemporary styles require a
turning opemtion on one of the three engine lathes. The other
styles require a shaping operation after culling. Both six and
eight leg versions of desks (drawers on one side or both sides)
are produced. Desk tops, sides, and backs are cut and sanded.
In each case., the reference surface is created first. The contemporary
styles have elaborate detail on the sides and require
extensive router time, The veneer models have the details engraved
onto the veneer coverings which are then glued onto the
plywood frames. Both manual and automated gluing stations
are available with the manual stations being used for short runs
because setup is quicker. All together, the frame department has
20 first shift direct~line workers with five saw operators, six
routers, four gluing workstations, five shapers, and two lathe
operators.
All parts and frames visit the paint department. Drawers
are hung on a conveyor and frames ride on pallets. The first
step is an air spray to remove dust and particles. Two coats of
finish are then added followed by a clear lacquer coat. Parts require
two hours to dry between each coat. The paint department
requires 24 workers when operating at full strength. Turnover
has been a problem in the paint department. As a result, Dream
Desk has recently increased the wages in this area by
$0.20/hour. Temporarily, this has solved the turnover problem.
Material handling is mainly conducted by workers pushing
carts. A cart can hold 40 drawer parts (sides, backs, bottoms,
or fronts), 40 desk legs, or ten desk parts (sides, tops,
backs). Frames are moved on flat carts, one frame per cart or
on overhead conveyors. Up to 12 drawers can be stacked on a
flat cart for transport.
The final step is an assembly line. Here, the table top is
hand waxed, caps are added to the bottom of legs, locks are inserted and screwed tight, drawers are added to the frame, the
fmish is checked for blemishes, and then the desk is boxed and
moved to the shipping warehouse. Any required flt adjustments
and cosmetic repairs are performed by line workers. At full
speed, the line takes 12 line workers and completes one desk
every 90 seconds.
Dream Desk has historically hired unskilled workers. As
experience and training arc acquired, wages and responsibility
increase. Currently, workers have an average loaded cost of $14
per hr. On average, a desk requires four hours of labor. The
plant usually operates a full first shift and a partial second shift,
both shifts operate five days per week. The plant shuts down
for the first two weeks of July. During this time, major machine
overhauls and changes in machine layouts may be implemented.
Project Scope As plant industrial engineer, you are charged
with putting together a team to design and implement a new
production and inventory control system for this plant. The main
objective is to reduce cost and WIP inventory. You should determine
how the facility will be arranged and the procedure for
controlling the flow of orders through the shop. For example,
will you use a process layout, cellular layout, or product layout?
What material handling load size will you use for moving
patts between workstations (i.e., move one part at a time to the
adjacent machine or move an entire batch at a time)?You should
specify which items should be kept in inventory and which items
should only be produced when ordered. You must specify production
batch sizes for items made~to-stock.
The first step is to list the products and parts via a bill of
materials. Document this in a flow chart. You may then decide
which parts will be made-to-order and which will be made-tostock.
Using an economic criterion, select appropriate batch
sizes for make-to-stock items. Document the procedure for selecting
the part to produce at each stage and for authorizing
production. Likewise, document the material handling system,
including part transfer quantities and move equipment that will
be used. You may assume ample warehousing space is available

Explanation / Answer

This is finished instance of Operations Management. For this situation taking after issues are talked about.

Generation Planning

Generation control

Work Management

Fabricating cost

Material Handling System

Stock issues and approach

Set up time

Item Variety

Format

and so on.

Presently in the event that we read the case in points of interest, we will come to realize that this case needs some thorough arrangement. The organization is doing phenomenal . However, the administration which required while developing the association that is deficient.

Taking after are the focuses that organization needs to examine.

Kind of Lay out : In this organization different sorts of Desks are getting produced .Desk may change in size , shading , shape , office and so on. So in this being a medium assortment , the sort of creation is Batch generation. Generally for Batch generation process design is utilized. In procedure design the divisions are orchestrated according to the sorts of operations.

Ex. On the off chance that there are 5 guidelines operations , A , B, C, D, E

At that point Layout will be

A B -C- D E

Assume If item X needs just three operations A , C, D then that item will move to just three divisions. So for this associations Process format is valuable.

Material Handling System : Being an immense necessity and interest , likewise by considering developing position of the organization this appears organization needs to Automated Material Handling System. This Automated Material Handling System(AMHS) will guarantee

Low working expense

More profitability

More Output

Adaptable

Less tedious

Zero conditions on Labor

Stock Issues and Policy : Its hard to put resources into stock when organization is confronting an issue of working capital. As said in issue most ideal route is to receive the Just In Time strategy. Build up a supplier base with legitimate bolster so sellers can supply the things on perfect time. Order the material according to the class like

A class thing

B Class Item

C Class Item

Bill of Material : Develop an adaptable BOM , which can undoubtedly produced and put in the request to seller quickly.

Make to Order and Make to stock : After setting up the BOM , figure the expense of the considerable number of things. Check which things is having minimal effort , which things is having more cost . What number of parts are moderate for us to make inside house. This financial matters helps us to settle on the choice on Make to Order and Make to stock.

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