Inventory Management
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NARRAGANSETT YACHT CORPORATION
Narragansett Yacht manufactures fiberglass sailboats which range from 18-foot day sailors to 50foot ocean racing yachts. The company was founded in Newport, Rhode Island, a hotbed of sailing activity, but high labor costs forced it to move its manufacturing operations to Corpus Christi, Texas, in 1990. The boat-building industry is very competitive and highly labor intensive, and profitability depends on getting the maximum efficiency out of the labor force. Narragansett has managed to keep its workforce nonunionized; this means that all of its employees can be shifted from task to task, and
Narragansett can thus maintain flexibility. However, the price for this freedom has been a relatively high basic wage rate and a no-layoff policy. The no-layoff policy, in turn, makes it essential that the workforce is kept productively employed; this means that Narragansett simply must not run out of the various parts that go into the assembly of a boat. Therefore, a good inventory management system, which must track a large and varied inventory of parts ranging from inboard diesel engines and masts costing thousands of dollars each to screws and rivets costing only pennies each, is essential.
Sailboats are built in sequential steps. First, the major fiberglass components are laid up in molds. To begin, each mold is cleaned and inspected, and if no damage is found, the mold is waxed with an agent which facilitates lift-out of the finished work. Then gelcoat, the cosmetic outer layer, is sprayed into the mold and left to dry. If the gelcoat layer shows any imperfections, it must be destroyed, resulting in losses to Narragansett of $50 to $500, depending on the size of the mold. If the gelcoat layer is good, fiberglass strips are hand-laid on top of the gelcoat and bonded with liquid resin until the desired