Staff Analysis Statement of the Problem Carded Graphics (CG) is a medium-sized competitor in the $160 billion U.S. folding carton industry and specializes in smaller, highly customized orders. CG, along with other players, grew to dominate the small-order niche very early in its lifespan due to its ability to provide a seamless information infrastructure linking client specifications to final products and its speed to market and quality. Despite its early success, CG saw growth stymied from 2007 to 2008, with the tightening of margins that resulted in a reported loss for the year. By 2009 sales had exceeded 2008 sales levels and operating margins had returned to the 2007 level, however, net income had not improved at a pace proportionate to sales. Now, in 2009, to alleviate this stagnation and to exploit efficiencies, CG is determining whether to augment its current sheeting process with a new sheeter that has higher capacity. Until the 1800s, product packaging was rudimentary at best and was used for only a select number of items on the market. Today, it is rare to find any product without some form of folding carton packaging. Thus, demand for cartons is driven by commercial activity. To stay competitive in their pricing, folding carton companies must take advantage of operational effectiveness, focusing R&D primarily on greater production efficiencies. Along these lines, CG operates two parallel systems, a paper and information process, which ensures a high degree of
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DG has a current competitive advantage within its industry that is maintains through a unique cost-efficient approach. This low-cost structure is apparent through low inventories, low advertising costs, and location of stores in rural areas. Though profitable in the short-run, DG's current advantage is not
Costco buys the majority of its merchandise directly from manufacturers for shipment either directly to Costco’s selling warehouses or to a consolidation point where various shipments are combined so as to minimize freight and handling costs. As a result, Costco eliminates many of the costs associated with multiple step distribution channels, which include purchasing from distributors as opposed to manufacturers, use of central receiving, storing and distributing warehouses, and storage of merchandise in locations off the sales floors. (1)
In turn, manufacturers are able to avoid this labor- intensive activity of breaking down larger packaging and delivering in smaller batches. O&M also tracks and monitors the prices and contractual agreements between customers and suppliers, including verifying agreed-upon pricing arrangements for a variety of different customers. This is a time-consuming and labor-intensive activity, which sometimes involves facilitating rebates and debits.
After evaluating capacity, Team A turned our attention towards an analysis of the throughput time of the Littlefield factory to determine the optimum customer contract to offer. During the first 50 days, Littlefield management elected to accept purchase orders with a quoted lead time of 7 days at a price of $750. Littlefield was able to obtain 100% expected revenue during the first 50 days of operations and averaged a throughput time of 1.64 days (St Dev: 0.91). In order to increase the overall profitability, Littlefield can increase
Founded in 1975, Custom Molds Inc. is the producer and supplier of bespoke molds and plastic connectors to the electronics industry. Building on its reputation, the company expanded in-house operations in the 1980s to include the limited production of plastic parts geared towards R&D based initiatives. During the early 1990s, the company realized that the shifting structure and market environment of the electronics industry was starting to impinge on the company’s manufacturing processes. This created a host of issues.
Second, costs could be reduced by consolidating deliveries so as to eliminate the additional cost of transporting less-than-full truck loads. Additionally, packaging could be standardized so as to reduce changeover times on the production floor. Should none of these options (or any appropriate combination of them) be acceptable, Kemps may need to consider discontinuing the relationship with the customer.
The purpose of this paper is to illustrate three technology opportunities associated with the transportation and logistics industry. With today’s constantly evolving business environment, consumers are placing demand on businesses of all industries, and they want products and services faster, with more added value, and delivered immediately. Nevertheless, customers are smarter by requiring more quality, innovation, and choice, and at the same time wanting to spend less money and effort. Consequently, every transportation business has to remain highly competitive in researching and developing innovative cost-cutting techniques in order to save money.
Based on performance indicators for picking and order preparation, central distribution centers provide a more cost efficient option. Performance for picking and order preparation efficiency is specified by accurate, cost efficient, and timing on picking and preparing the orders. Picking and order preparation efficiency in a store is low and endures high labor costs per order (Agatz, 2009). With a higher volume demand, distribution centers provide a high picking efficiency, whereas stores provide only a low picking efficiency (Boyer & Hult, 2005).
The evolution of the express mail industry had become a quick on-time shipping and delivery of packages. The service had become effective, reliable, and prompt, which most of the top companies could deliver on these guaranteed promises 96-99% of the time. But, delivery services were only a portion of the services being offered to their customers. Carriers had mastered information management that they shared with their customers. Customers were now able to fill out labels, track the route of their package, and assisted in billing using both via carrier provided software or the Internet.
To this end, the initiative managers at Kraft created collaborative teams of experienced middle management across the board; members of the teams were chosen because of their proficiency in cash flow management. These teams of specialists help resolve situations that local managers may be unable to handle. Hence, the initiative team can be credited with creating an efficient protocol that has ensured all within the division are getting the adequate support needed to meet the company’s cost containment goals. Another area of value chain match up worth mentioning is, the tactics for paring down inventory, this process is also known within the Kraft organization as the “repetitive flexible manufacturing." The tactics optimizes the use of manufacturing lines that produce high-volume items at a regular frequency and in fixed quantities, Instead of responding daily to changing demand (Cooke, n.d.).
Chabot is in a difficult position because retailers are pressuring Chabot to maintain lower in-store inventory levels while consumers are pressuring Chabot to adequately provide a wide selection of wallpaper. Chabot is creating demand by providing a wide selection of wallpaper that appeal to consumers, but may be providing too large of a selection that production lead time suffers. More wallpaper patterns are slowing down the manufacturing process because changing over from a line pattern increases lead time by up to 2 hours. Chabot is constraining itself to produce patterns in one batch run which builds up the amount of production time necessary to complete the rest of the wallpaper patterns. Chabot is also wasting a lot of time and money on creating separate packaging, labels, and SKU’s for each retailer. Chabot is also wasting possible storage space at DC’s.
Case Analysis Success in the folding carton industry Pitts has been extremely aggressive in positioning Carded Graphics within the folding carton industry. This industry prints and cuts paper and glues it in a way that allows subsequent unfolding and filling by the customer. The industry is facing ever shorter lead times and must satisfy even more complex customer requests, particularly regarding printing capabilities. The large printers have secured the ultra-high-volume noncustomized business (printing boxes for commodity products), and Carded Graphics must be able to fill the customized small-run business. Pitts took a major step in purchasing a state-of-the-art printer. It is the main feature of Carded Graphics’ operations, putting the company ahead of
In order to make this concept real, Staples has to build competitive advantage through finding the right management team who are experienced in this area, looking for the right location to open their stores in order to be close to the target customers, deciding on how many staffs needed in a store to be effective, establishing a distribution channel where suppliers will cooperate according to their operations, choosing the selection of the product required and the amount inventory to keep, managing costs and be efficient all the time, and communicating their value to the target customers. A key organizational capability that Staples realizes instantly is to have an information system that can help them to manage the process better in place, which greatly contributes to increase Staples' efficiency. Such system is able to help Staples to get the right merchandise mix in order to be profitable through monitoring customers' needs, and attain low cost structure by making sure that the inventories turnover accordingly. In sum, Staples is successful in building most of its intangible and tangible asset and develop organizational capability
The amount of overhead allocated to the three product categories is not reasonable. From previous question, the solution are showed that unframed prints get the highest amount of overhead due to the volume is large but actually the activities required for unframed prints are much less. Framed prints require more activities as well as skilled labor and labor hours but get a much lower share of overhead costs because its lower volume than unframed print.
Furthermore, the ACC strategy of offering increased variety requires shorter production runs which inherently increases the cost associated with each product and packaging, as idle time due to process changeover would increase between each product production (4.8% of time com-pared with 2% for DJC). The strategy of increased variety and production runs by the ACC would also affect labor in a number of ways. Direct labor costs would go up due to a larger amount of idle time associated with process changeover and the chance of increased problems associated with the