The cyclone furniture case study
A) Describe the operating structure of cyclone furniture. Draw a structure diagram and discuss the improvements that can be made.
Answer - operating structure of cyclone furniture has three broad categories: 1. Domestic furniture 2. Export furniture 3. Office furniture
Each section has its own dedicated setup. Semi-finished furniture from these dedicated setups moves to single furnishing unit where activities like staining and polishing are performed by specialists. However, workers in three manufacturing units are interchangeable.
STRUCTURE DIAGRAM OF CYCLONE FURNITURE
/-- Domestic Furniture O \
V -- Export Furniture O --- Finishing O Upholstery O V C \--…show more content… They are not concerned about organization as whole.
D) Discuss the advantages and disadvantages of outsourcing of manufacture to Indonesia. What would be cash flow implication?
Answer- (Main points have been referred from http://operationstech.about.com/od/outsourcing)2
The advantages of outsourcing manufacture activities of Cyclone Furniture Co to Indonesia.
Focus on core activities: Here the owner seems to be more involved into retail operations of the business and exports.
Cost and Efficiency Savings: When the factory is taken close to the raw material sourcing point there will definitely be cost saving in terms of transportation. Labour is cheap.
Reduced Overheads: Back office overheads will get reduced, lease rentals of machinery and factory space can be utilized for alternate revenue generation.
Operational Control: No inventory of unutilized finished stock will be there.
Staff Flexibility: The staff at factory back office will be better utilized.
Control and Risk Management: Employee turnover at factory and uncertainty of inconsistency of operations will not be there.
The disadvantages of outsourcing manufacture activities of Cyclone Furniture Co to Indonesia.
Loss of Managerial Control: The contract will be there but there will be a loss of managerial control. The outsourcing company mat not be able to drive the same standards and mission that are driven by Cyclone.