Case Title: Austin Wood Products
The Role of the responder:
Dave Pope, the plant Manager.
Objective:
The purpose of this report is to review Dave Pope’s concern about the company’s lumber stockroom operations. The stockroom situation was interfering with the productivity. To add with this, the President announced that the production levels would increase by 20% during the next month. Our objective is to fix this stockroom problem so that Dave would be able to meet the President’s demand of increase in productivity.
Key Issues:
* Stockroom operations.
The company’s lumber stockroom operation was a big concern. There was in no way to know what was available before you get to the storage area. Because of that the metric was only a 50% chance of obtaining the needed lumber for the job. The stockroom situation was also interfering with the inventory.
* Organizational structure.
The company’s organizational structure was another issue. The company was organized in an old way and needs to be reorganized for better performance.
* Maintaining Inventory records and changing demands.
AWP did not have any formal inventory management system in place to maintain raw materials and finished goods. The inventory count is done manually and takes two days. They were completely not maintaining any inventory record whatsoever. The nature of demand also was difficult to predict as it varied from one year to the next. The metric was that the inventory turnover which relates inventory levels to the product sales volume was turned one and three-quarter times each quarter.
Analysis
As Austin Wood Products is a well established firm, there are still various problems in different departments and also with the approach of upper management to deal with the inventory problems. Company is competing on the basis of its ability to provide deferent type of doors, flexibility for products