Four Star Case Study
Four Star is a mattress manufacturer known for a focus on quality, productivity and customer service. In order to meet market demand from customers as well as competition Four Star increased proliferation of mattress varieties offering a total of 230 different model types at one time. This change caused Four Star to experience operational issues and bad inventory management, resulting in low profitability and productivity.
Of the many problems faced by Four Star, proliferation of mattress varieties and its impact on operations and inventory management is their biggest issue. This has had a major impact on the things that Four Star once prided itself on: quality, productivity and customer service. Having 230 product variations created extremely long order fill rates resulting in a loss of customers and created a great deal of customer dissatisfaction. There was also added pressure placed on Four Star employees to fill orders. Having so many unsatisfied employees put Four Star at risk for loosing employees which would add additional stress to the production process. In addition, large dealers who would typically sell and inventory Four Star products began limiting the number of mattresses stored due to their inability to predict which of the 230 varieties a customer would purchase. Instead, LDs would wait until a customer placed an order to request inventory from Four Star. Upon order placement LDs expected fast inventory arrival which is the level of service they were used to getting but due to the stress placed on the Four Star manufacturing operation they were having trouble filling orders. This resulted in dealers no longer committing to placing orders with Four Star. Four Star took on the burden of carrying inventory which was an additional expense for the organization placing added stress on the overall manufacturing process. Four Star soon began to see decreased sales revenue.
Sia Meng considered several options to smoothly manage its operations. The first
Of the many problems faced by Four Star, proliferation of mattress varieties and its impact on operations and inventory management is their biggest issue. This has had a major impact on the things that Four Star once prided itself on: quality, productivity and customer service. Having 230 product variations created extremely long order fill rates resulting in a loss of customers and created a great deal of customer dissatisfaction. There was also added pressure placed on Four Star employees to fill orders. Having so many unsatisfied employees put Four Star at risk for loosing employees which would add additional stress to the production process. In addition, large dealers who would typically sell and inventory Four Star products began limiting the number of mattresses stored due to their inability to predict which of the 230 varieties a customer would purchase. Instead, LDs would wait until a customer placed an order to request inventory from Four Star. Upon order placement LDs expected fast inventory arrival which is the level of service they were used to getting but due to the stress placed on the Four Star manufacturing operation they were having trouble filling orders. This resulted in dealers no longer committing to placing orders with Four Star. Four Star took on the burden of carrying inventory which was an additional expense for the organization placing added stress on the overall manufacturing process. Four Star soon began to see decreased sales revenue.
Sia Meng considered several options to smoothly manage its operations. The first