Four Star Industries
Four Star Industries:
Problems faced by the firm
Four star Industries private Limited is a mattress manufacturing company in Singapore specialized in Pocketed spring mattresses.
Competition in Mattresses industry stirred up multiple problems to Four Star. To sustain the competitive pressure and match customer’s demand, company increased mattress models from 13 to 230 within few years.
This remedial measure to withstand competition aggravated the problems by slowing down the production process, increased inventory cost and complicated order fulfillment process.
Four star distribution is heavily dependent on Dealers. Increased competition empowered dealers who dictated terms to Four Star with respect to inventory, models and order fulfillment.
Four Star increased the models with variations in number and size of springs, quilt materials etc. It had to maintain cycle stock of quilts and springs due to MOQ restrictions from suppliers.
Order fulfillment process became complicated. To meet fluctuating demand (moving during weekend, festivals etc.) the company has to back ordering and expedite manufacturing. The demand variability is low for fast moving mattresses and high for slow moving products.
Problems proliferated and effected the company’s manufacturing, production scheduling, inventory management and Human resources. As a result company incurred operating losses and is at the verge of losing its loyal employees.
Options considered by Management:
1. Reduce the no. of models
2. MOQ for dealers
3. Reducing the safety stock
4. Relocating the manufacturing
Objective: To come up with responsive and cost effective operations model.
Recommendations:
Conduct survey to understand the customer and retailer views and wants regarding mattresses, accordingly forecast and standardize the products. Analyze the trend in orders placed by LDs and SDs.
Product Design: Standardization - Reduce the number of varieties of springs, quilts and foams used. I.e. 2-3 varieties
Problems faced by the firm
Four star Industries private Limited is a mattress manufacturing company in Singapore specialized in Pocketed spring mattresses.
Competition in Mattresses industry stirred up multiple problems to Four Star. To sustain the competitive pressure and match customer’s demand, company increased mattress models from 13 to 230 within few years.
This remedial measure to withstand competition aggravated the problems by slowing down the production process, increased inventory cost and complicated order fulfillment process.
Four star distribution is heavily dependent on Dealers. Increased competition empowered dealers who dictated terms to Four Star with respect to inventory, models and order fulfillment.
Four Star increased the models with variations in number and size of springs, quilt materials etc. It had to maintain cycle stock of quilts and springs due to MOQ restrictions from suppliers.
Order fulfillment process became complicated. To meet fluctuating demand (moving during weekend, festivals etc.) the company has to back ordering and expedite manufacturing. The demand variability is low for fast moving mattresses and high for slow moving products.
Problems proliferated and effected the company’s manufacturing, production scheduling, inventory management and Human resources. As a result company incurred operating losses and is at the verge of losing its loyal employees.
Options considered by Management:
1. Reduce the no. of models
2. MOQ for dealers
3. Reducing the safety stock
4. Relocating the manufacturing
Objective: To come up with responsive and cost effective operations model.
Recommendations:
Conduct survey to understand the customer and retailer views and wants regarding mattresses, accordingly forecast and standardize the products. Analyze the trend in orders placed by LDs and SDs.
Product Design: Standardization - Reduce the number of varieties of springs, quilts and foams used. I.e. 2-3 varieties