Operations Management 4.709
Individual Assignment

Table of Contents:

1. Question 1 (a)................................................................
2. Question 1 (b)................................................................
3. Question 1 (c).................................................................
4. Question 1 (d).................................................................
5. Question 1 (e).................................................................
6. Question 2 ...............................................................
Reference ................................................................

Describe the balance between customer service and resource utilization at Cyclone. What are the operating objectives of the business? What are the key success factors?
Cyclone Furniture as a company is well established with its retail stores located at major cities of New Zealand which provides end-to-end business which majorly functions on warehousing, manufacturing and retailing.
They are currently focused on the customer service but have overlooked the resource utilization at the domain operations level and have less control over the manufacturing unit which is causing major problems for the company at the current situation. The major portion of Cyclones furniture that is 75% of the total production in their factory is exported to Australia of which part of it is high quality office furniture. The following are the issues that have resulted in 25% excess raw material stored in the warehouse which leads to leased warehouse storage space, Over budgeted sales, Overstaffed factory workers and employees, Possible overstaffing in the operations office staff, Excess machinery and stock leased Excess stocking of finished goods in anticipation of future order, No visibility and audit of cash flow, Lack of any updates in financial statement for trading until mid-year. Reputation and company’s good will ,By delivering the orders within the customers scheduled time, by delivering products with high quality with 0 % error policy and consistently competitive costing and by increasing the reputation of the company.

Source: Class handout by Mr. Ray Ninow

Operating Objectives of Cyclone Furniture Company:
Product Specification: Cyclone Furniture Company provides high quality and exclusive, exceptional furniture’s that attracts specific customers for international and national market. Their products meet customer’s high expectations and quality.
Time management: To meet the customer demand, they have great customer orders for the product. Cyclone is alleged for delivery on time so to keep up the company standards, Rangi indicated that they had four month’s finished goods produced in advance.
Cost efficiency: With high quality maintained Cyclone is positioned as the company that provides furniture’s that is exclusive, high quality henceforth cost is in elevation. Customers who would pay for the quality are loyal enough to place orders weeks in advance.

The key factors for success of Cyclone:

Timely delivery and Customer Satisfaction: They have added customer satisfaction by providing high quality products within the assured time lines and at reasonable cost.
High level of workmanship and manufacturing unit near retail showroom: Have 3 committed and contented teams at the industrial unit for precise line of production like Export, Retail and Commercial.
Positioning of retail showroom: They have maintained high standard in terms of ambiance by providing classiness and superiority which has maintained the reputation of the company

Describe the operating structure of Cyclone Furniture. Draw a structure diagram and discuss improvements that can be made.

The operating structure at Cyclone furniture

Source: From Operations Management Handouts – By Ray Ninow

The main target markets of cyclone are classified to three which are
Domestic market: Established retail stores setup in major cities in