FURNITURE MANUFACTURER USES MRP II O CUT DELIVERY TIME
In 1988, Harpers, Inc., an office furniture manufacturer located in Cali1omia, was expenencmq sustained growth in
sales, but profits continued to fall. To reverse the downward trend in profits, management determined that it would have to reduce manufacturing costs by 15 percent, reduce product delivery y times from six weeks (which was the industry ‘standard) to three weeks, and reduce the new product time-to-market from three years to six months. At the same time, Harpers recognized the need to focus its efforts on one segment of the office furnitLjre market, which was “custom furniture solutions. To this, Harper needed a flexible manufacturing system that would allow customers to change the features of any furniture configuration. The heart of its manufacturing system was centered around an MRP n system that would “integrate our.enqineenng, and simultaneously engineer and deliver those custom products,” said Joe-Wisniewsl< and general manager afHarpers. The system was installed and running by 1990, and by the end of 1991, 20 percent of the company’s furniture was shipping within two weeks, with the remaining orders shipping in four weeks.
resources. The S&OP review process is typically performed on a monthly basis, with a rolling planning horizon of 18 to 24 months. The outputs of the S&OP process include (a) revised sales plan, (b) production plan, (c) inventory levels, and (d) customer lead times or backlogs. A key goal of the S&OP process is to balance the firm’s resources with customer demand. which frequently involves the decoupling of demand from supply. As we learned in the chapter on aggregate planning, a firm can manufacture products in different volumes nd time periods than that requested by the customer in order to maximize the overall efficiency of the process. Therefore, in decoupling supply from demand, some of the decisions to be made include (a) producing to order or to inventory, (b) adjusting customer lead times or backlogs, and (c) changing capacity. such as working overtime or adding another shift.