Project #1 – A Case Study In Total Quality Management
You are an expert in Total Quality Management (TQM) and have been hired as a consultant to improve the profitability of Advanced Laminated Products (ALP), LLC. ALP designs and manufactures furniture using polymer impregnated laminated pulp products, both sheet and dimensional lumber. The primary use of the products is in outdoor living spaces at both homes and at commercial properties such as hotels and restaurants. ALP has been in business for 10 years, during which time they have grown from a garage operation to 30 employees in a 10,000 square foot fabrication shop with 1000 square feet of office space. ALP had gross income of $5,000,000 in 2013 and expenses totaling $4,500,000 including $100,000 building lease, $1,500,000 employee salaries, $24,000 utilities, and $2,000,000 in material cost.
In the first 5 years of business, ALP focused on custom fabrication to customer requirements using the best materials. The founder of the company is a master carpenter with 25 years of work experience who fabricated and assembled each item. With the growth in business, the founder was required to hire administrative staff to handle business operations, computer operators to design products, and additional shop personnel to fabricate and assemble products. A shipping department was also added, and a full suite of computer equipment was purchased and outfitted with financial software, design and drawing software, and shipping software. The company founder frequently changes completed product designs, and remakes furniture to correct perceived quality issues.
ALP has received competitive pressure from new outdoor furniture being manufactured in Indonesia. The new Indonesian furniture is far cheaper than ALP products. ALP employees have examined the furniture from Indonesia to determine how ALP products compare. They find that the Indonesian furniture is made from standard dimensional lumber, uses standard steel hardware, and is only available in a handful of
In the first 5 years of business, ALP focused on custom fabrication to customer requirements using the best materials. The founder of the company is a master carpenter with 25 years of work experience who fabricated and assembled each item. With the growth in business, the founder was required to hire administrative staff to handle business operations, computer operators to design products, and additional shop personnel to fabricate and assemble products. A shipping department was also added, and a full suite of computer equipment was purchased and outfitted with financial software, design and drawing software, and shipping software. The company founder frequently changes completed product designs, and remakes furniture to correct perceived quality issues.
ALP has received competitive pressure from new outdoor furniture being manufactured in Indonesia. The new Indonesian furniture is far cheaper than ALP products. ALP employees have examined the furniture from Indonesia to determine how ALP products compare. They find that the Indonesian furniture is made from standard dimensional lumber, uses standard steel hardware, and is only available in a handful of