Case Study:
Haggard Mattresses (HM) is a small, family-owned company whose main production facility is located in Oildale, California. The company produces a range of mattresses and sells pillows and bedframes through partnerships with local companies. HM sells its products directly to customers from two storefronts (one in Bakersfield and another in Los Angeles; they do not sell their products via otherretailers). HM has recently begun shipping mattresses directly to their customers, but the bulk of their products are delivered via one of their storefronts. Lately, thanks largely to the introduction of a new line of mattresses and improvements to their online ordering system, the company has seen a large increase in demand for their products.
You work for Cash Consulting, and have been contracted by HM to evaluate their manufacturing process. HM has requested that you make recommendations for ways in which they can make shortterm increases their capacity without a large capital investment. In your first conference call, Merle (HM’s CEO) said, “Small-scale changes are possible, but with the new products and changes to our web presence, we’ve depleted most of our available capital for the next couple of years. I’m not complaining about the uptick in our business, but – if you ask me – my son-in-law shouldn’t have hired his friend to do our web stuff. I’m sure he over charged us for what he did. We could really use your help so folks don’t go elsewhere. We’ve been talking, and we’re looking to add another 8 teams to our bagging line to speed things up.”
In a follow-up call, Merle had an additional request: “Say, talking to you got me thinking. Since our folks have been extra busy lately, we’ve noticed more warranty calls. We can’t change our warranty – it’s been our calling card and promise since the company was founded in the 30’s. Is there any way you can help us figure out where things are going wrong?”
The Process Haggard uses a multi-step process to transform raw materials into mattresses. Each line performs quality checks on their own work and fixes any defects before the output goes to the next step in the process. Each line currently has one dedicated forklift that delivers materials (raw materials, modules, sub-assemblies, etc.) to the beginning of the line and another that transports the product from the end of the line to the beginning of the next step in the process, or to storage. Each forklift can transport approximately 75 crates per hour; each crate contains 3 units (or equivalent). In the first process line, frames are bent and springs are welded to the bent-steel frame. The process is labor intensive, but thanks to an investment in new welding equipment a few years ago, the frame line now has an average output of 300 frames per hour. Next, the frames are surrounded by a fabric bag with built-in padding to prevent the frame from tearing the outer surface of the mattress. The frames must be inserted into the bags and sewn shut by hand. The process requires 2 personnel working together in a team. Currently, the line has 8 teams and, on average, each team can finish 30 assemblies per hour. The bagged frames then proceed to the padding line, which uses machinery to cut and apply memory foam padding to the top of the mattress before it is transferred to two finishing lines that run in parallel. In the finishing lines, outer coverings are attached, tags are applied, and mattresses are wrapped in plastic. Finished mattresses are placed in storage until they are delivered to the storefronts or shipped directly to customers. The padding line can process 280 mattresses per hour, finishing line 1 averages 130 mattresses per hour, and finishing line 2 averages 175 per hour. Haggard Mattresses currently works one shift (8:00 – 6:00), five days a week.
The CEO of Cash Consulting (Johnathan) is a long-time friend of Merle, and wants to review your recommendations before they are sent to Haggard Mattresses.
Q1. Generate a flow diagram for the process as it is, label the parts, and identify whether any bottlenecks exist in the process.
Q2. In a letter to your CEO, describe your recommendations to address Merle’s requests, including:
a. Briefly summarize the project as you see it
b. Suggest how you would increase HM’s capacity and remedy any bottlenecks in their process with the least amount of costs to the company for the short-term
c. Suggest how you would increase HM’s capacity and remedy any bottlenecks in the process with the least amount of long-term costs to the company
d. Be sure to address all of Merle’s concerns
e. Include your flow diagram and any required calculations as an addendum to your letter
Your letter should be formatted as a memorandum, and should be no more than two (2) pages long (not including your addendum).
Your answer must be typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.