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Four Star Industries

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by

SONIA HARB

on 21 November 2013

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Transcript of Four Star Industries

Dealer
Customer
Four Star
Manufacturer

Product Yield
Four Star
Number of SKU's increased
3rd Party
Logistics

Current State
The Shift
Focus on Core Competency
Singapore geographic location
Reduction in capital investment on trucks
Reduction in operational cost
3rd Party Logistics
Case Study
Issues
Increased competition --> New models to market --> Increased inventory --> Decline in order fill rate as a result of changed preferences.
Matching Supply to Demand
Order Fill Rate Decreased
Bullwhip Effect
Unpredictable demand caused by dealer promotions
Sia Meng's Ideas
Sia Meng
Reduce the number of mattress models
Minimum order quantity by dealers
Reduce safety stock
Relocating facility overseas
Recommendations
Company History
Founded in 1966- First local mattress manufacturing companies in Singapore
Used state of the art equipment
Been in the mattress manufacturing business for nearly 3 decades
As purchased frozen weight
4 ounces
Baked at 350 F
for 30 minutes
Edible Portion
3.25 ounces
This pre-made chicken patty should have a higher yield
Total lost in preparation: 19%

As Purchased Cost: $1.89/lb
Summary
Recommendations
Spaghetti
Distribution
Monitor
Loading time/temp: 1 pm/36 F

Arrival time/temp: 1:30 pm/38 F

Received time/temp: 2 pm/38 F
Change
requires
Communication
Double the vegetables

Elimination of diets

Texture Modified name changes

Elimination of snacks for morning and afternoon
Current State
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Acute Experience
Two parts of the kitchen
Patients
Customers

Cook chill from San Francisco
Generates a lot of waste

Change from 33 foodservice workers to 18
Costing more money and increased waste
Compost
Change requires Communication
Big Changes

California is the Nation's leader in managing solid waste.
50% of waste does not make it to the landfill
Waste is diverted and recycled, composted, reused
On October 6th, 2011 Governor Brown approved an initiative to divert 75% of waste by 2020, it will start taking effect on July 1st, 2012.
According to California Chamber of Commerce
According to Cleveland State University
•Banana Peel: 3-4 weeks
•Paper Bag: 1 month
•Cardboard: 2 months
•Wool Sock: 1 year
•Tinned Steel Can: 50 years
•Aluminum Can: 200-500 years
(But if recycled, it can be reused within 6 weeks!)
•Disposable Diapers: 550 years
•Plastic Bags : 20-1,000 years
•Plastic Jug: 1 million years
•Glass: 1-2 million years
•Styrofoam: 1+ million years
Spring Mattress
YUN CHAO CHEN
SONIA HARB
WAJIHA NAQVI
DANIEL SEGARRA
HUAWEI SONG
YANG WANG
Excess inventory is not being sold therefore inventory holding has increased.
New orders are difficult to process due to lack of storage space. Inventory is unable to meet demand
Shift in inventory holding from Retailer to Manufacturer
Market competition has intensified
They make a fundamentally good product that meets customer expectations, but..

Need to reduce the number of model designs
Thereby reduce :
the number of gauge thicknesses
the variety of quilts
The number of foam thicknesses
Moreover...
The company needs to move away from tiny batches towards larger ones
Decreasing the number of models will help but it requires order planning and JIT manufacturing
Order planning is necessary to consolidate orders make sure that resources are available
It would likely to be beneficial to increase the number of quality check points
Resources
Before they start their modifications

Need to understand what the retailers and end consumers want and need!

Surveys and interviews effective
Sia Meng's Ideas
The ultimate plan is to move to a responsive but cost efficient

Sia Mengs Idea's are:
1. To reduce the number of models to 1996/1998 levels
2.Insist that dealers order a minimum number of mattresses
3. Reduce the safety stock for finished mattresses
4. Relocate the manufacturing to a cheaper overseas location

Sounds more like desires than courses of action...
Not all feasible, all of them require that other actions are taken in conjunction with them
The future
Huge room for improvement

Unchanged practices will lead to bankruptcy

Need to understand the consumer

These changes will lead to lower costs and increased sales
Information sharing between dealers
Four Star-Transparency
Integrate forecast from dealers
Optimize MRP
Postponement Strategy
Create a responsive supply chain
Reduce mattress SKU's
Categorize mattress models into ABC Model; slowly phase out category C
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Questions?
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C
Full transcript