Transformations of Concept Design Services - Essay Example

?This paper is an evaluation of the Case Study of Concept Design Services as they transformed and redefined their corporate mission, products and distribution systems. I will address the issues of operations management, using the transformation model to demonstrate decision points in the organization’s change. I will address the four dimensions of operations to the organizational revitalization:volume, variety, variation and visibility. I will discuss specific issues facing Concept Design Services in regards to supply and demand of their products. I will conclude with an analysis of the operational and strategic planning oversights exemplified in the case study. According to CEO James Thompson, operations management within Concept Design Services “totally transformed our outlook, our resources, and our prospects” over a ten-year period, resulting in a phenomenal unanticipated financial success (Chambers, 2003, p. 46). Management assessed Concept Design Services original growthelement, industrial plastic components, and noted the decrease in sales and the unreliability of the market in both purchasing the product and requesting larger orders. As Concept Design Services diversified into household goods and plastics, the demand for inexpensive household products expanded. At this time Concept Design Services was faced with the issue of an increasingly competitive pricing market from smaller manufacturers that could produce a duplicated item within a tightly controlled overhead. Even while these items appeared to be duplication, they were not the quality of the Concept Design Services items. Concept Design Services evaluated their product line, deleted the less profitable industrial enterprise, and developed a niche market with a new designer and a new concept. Designer household plastics became the “it” item for new homebuyers and those with a desire for fashionable home decoration. While developing the new product line, Concept Design Services created a new distribution network that brought the product closer to the consumer and the point of purchase. Placing their designs and color coordinated products at eye level in retail markets and chain stores, Concept Design Services launched their products with enhanced publicity by providing visible merchandise on television cooking shows, color magazine advertisements, newspaper articles and advertisements, and point-of-sale color brochures and self-service displays (Chambers, 2003, p. 48). As a first step in transformation, Concept Design Services changed their inputs, by changing the direction and gaining control of the process that transforms resources. Next in the transformation process, Concept Design Services changed the physical design of their product, changed the customer base for their product, and changed the information available to customers to market a chic, new product. At this time Concept Design Services changed the distribution process, or output, so that the customer had better service and a quicker turnaround time for product availability. While enacting the new focus for Concept Design Services, operations management utilized the four dimensions, of operations management in the following ways: Volume-The company concentrated on providing a high volume product (plastic housewares) and abandoned the low volume product (industrial plastics). The new high volume product required an entire new division of designers, colors, marketing, and increased the cost per unit of the new plastic housewares. This change was capital intensive as it required paying royalty payments to Italian designers in return for the endorsements and designs, an operating cost that was not previously anticipated (Chambers, 2003, p. 53). Variety-The Company moved from a low variety (only specific models of industrial plastics) to a high variety (plastic housewares with multiple colors and designs). The higher variety brought a more complex set of circumstances requiring more mouldings, more tooling changes, more color changes and more waste of the product (Chambers, 2003, p. 50). Variation-Concept Design Services wisely chose to create a demand for their new product by opening a niche market with fashion designer input. This variation change required flexibility within manufacturing processes, and a quick response to customer demand. When the customer demand exceeded warehousing volume, the line moulds were changed from the scheduled tasks to supplement the production of the missing product. The result was scheduled maintenance and test model production fell behind in their desired goals. Visibility by customers-Concept Design Services placed their new products front and center in the marketplace, in magazines and prints and on well-viewed cooking shows, modeling usage of the new products through demonstrations with cooking. As the popularity of the products increased through massive publicity, the requirement for better service and excellent customer satisfaction became essential. These tasks were associated with higher costs as the demand for the goods outgrew the supply in stock and Concept Design Services was paying premium shipping costs for on-time delivery to perform routine re-stocking. The Supply Services department tried to schedule minimal set up times with optimal use of the colors to eliminate color changes. For example, when changing the color of the products, the colors were scheduled to be used from light to dark, so that adding color would increase the dimension of the paint and not necessitate a total color change. Management set the maintenance times for Saturdays, when production crews were not working. Unfortunately, this is the same time scheduled for new mould productions for quality testing, and the two arenas were at odds trying to use the same machines at the same time. The issues of quality within the organization must be examined by first defining what quality is. Tum (Management of Event Operations, 2006, p. 260) states that quality is “a well-planned, contrived and controlled event which meets the original specification and matches the expectations of the customer. For Crosby (Evans & Lindsay, 1999, p. 109), quality is “conformance to requirements that are clearly stated”. Non-conformance is therefore analogous to poor quality. Requirements are the form of communication between the customer and the provider; setting firm requirements means good communication.For Crosby, 100% compliance was the only accepted standard, there was no “settling” for imperfection (Hartman, 2002, p. 8). For Juran (Janakiraman & Gopal, 2006, p. 71), quality is observed as “fitness for use, meaning that a customer should be able to count on a product to do what he wanted when he needed it.” Juran incorporated quality of design, quality of performance, availability, safety and field use in his understanding of a quality product. Quality issues for Concept Design Services were most noticeably evident when they had to hire an express service to deliver their promised stock, cutting highly into their profit and delaying their R&D experiments. This specific concern was amplified by the constraint of minimal warehouse space, so that even if they had the machinery available, they still did not have a suitable storage space for warehousing and stockpiling (Chambers, 2003, pp. 50-51). Sandra White, Supply Services Planning Manager, did not embrace the Crosby ideal of quality, 100% (Bagad, 2008, p. 31)as evidenced by her comment, “there is always some restraint that prevents us from achieving higher availability [than 92%].” Verweire (Verweire & Van Den Berghe, 2004) stated a proper evaluation should take into consideration quality objective, time-based objective and cost objective. These aspects are lacking in the above example of quality failure. After assessing the re-organization of Concept Design Services, I see the following areas that should be clarified and streamlined through quality and strategic planning: 1. Address the warehousing issue. Concept Design Services should have enough funds available to lease or build a suitable warehouse for stockage and over-runs. 2. At a 92% rate, there is a 1 in 12 chance the customer will not receive his anticipated merchandise in a timely manner without tremendous transportation costs incurred by the company. Real time studies should be analyzed as to product flow, which are the most popular products, anticipation of the peak and flow of seasonal merchandise, and a proper maintenance schedule for the production machinery. Each of these issues causes a stop in production performance and an unsatisfactory customer experience, whether the customer is the purchaser, the public, or an internal department waiting on results. 3. Short-term unplanned changes need to cease. If this standard is compromised, the entire production schedule is no longer a valid tool. Build in an extra machine, or machine time for “emergency” orders, and charge extra to the customer to fill this order to make up for the unanticipated downtime for the line change. 4. Focus deliveries of the household product should be just as important as Concept deliveries of the designer product. Each customer and purchaser is a point of quality assurance. One product should not be promoted over the other, instead, delete the inferior product or make room for the anticipated sales. 5. Product trials should not create sleep deprivation for the staff and employees. In an organizational culture that demands employees work around the clock, they will see more turnover, more disgruntled employees, more accidents and possible terminations and lawsuits. Manage the employees more respectfully and schedule product trials accordingly. 6. Employee compensation should not suffer when R&D and product trials interrupt the regular production schedule. This causes resentment between employees and management, and also opens the door for union organization. Management should utilize helping behaviors to foster interdependence between production and Research and Development. Helping behaviors and sportsmanship have a significant impact on employee relations and relationships within an organization (Podsakoff, Ahearn, & MacKenzie, 1997, p. 262) 7. Retailer services should develop a branch of its own for marketing and customer consumption data. As this is a new responsibility that could bring a much larger profit to the company, the management of this area deserves to be accorded the best analysis and marketing information. Concept Design Services took a small idea and translated it into a great company growth experience. In some ways, they literally “stumbled” into a ready-made market for consumer plastics. They did not utilize any market studies, or projected growth patterns in the plastics industry; they just took what was going well for them and looked for ways to expand their market. In spite of their unpreparedness, they made a financial success of the new start for their company. If their income has increased exponentially with the non-planning event of their new line, imagine the financial success it would be with careful organizational management and planning. Utilization of the important organizational tools could yield even more positive results for Concept Design Services. Preparation and planning could result in a 100% quality product with an innovative company that is willing to take risks. Bibliography Bagad, V. S. (2008). Total Quality Management. Pune: Technical Publications Pune. Chambers, S. a. (2003). Concept Design Services. In R. Johnston, Cases in Operations Management (pp. 46-54). FT Prentice Hall. Evans, J. R., & Lindsay, W. M. (1999). The Management and Control of Quality 4th ed. Cincinnati: South-Western College Publishing. Hartman, M. G. (2002). Fundamental Concepts of Quality Improvement. Milwaukee: ASQ Quality Press. Janakiraman, B., & Gopal, R. K. (2006). Total Quality Management: Text and Cases. New Delhi: Prentice-Hall of India. Meier, K. J., & O'Toole, J. L. (2002). Public Management and Organizational Performance: The Impact of Managerial Quality. Journal of Policy Analysis and Management (21). Podsakoff, P. M., Ahearn, M., & MacKenzie, S. B. (1997). Organizational Citizenship Behavior and the Quantity and Quality of Work Group Performance. Journal of Applied Psychology, Vol. 82, No. 2, 262-270. Tum, J. N. (2006). Management of Event Operations. Amsterdam: Elsevier. Verweire, K., & Van Den Berghe, L. e. (2004). Integrated Performance Management: a Guide to Strategy Implementation. Sage Publications (CA). Read More