Case Four Star
Team M
Team M
Four Star Industries Case Study
Case Study Anaysis
Four Star Industries Case Study
Case Study Anaysis
Table of Contents
Background
Current Situation * Market * Production * Manufacturing * Order Process * Inventory Management
Issues
* Model Proliferation * Inventory and Demand Mismatch * Poor Order Management
Analysis
* Safety Stock Analysis * Warehouse Rent Analysis * MOQ v/s EOQ * Production /Assembly Line Analysis
Recommendations
Conclusion
Background:
Four Star Industries Private Ltd is the manufacturer and wholesaler of the renowned Four Star Pocketed spring mattresses which was founded by Neo Gim Sin in 1966. Its business is aggressively and exclusively focused on servicing the local market and until recently, the company has enjoyed tremendous growth and recognition – becoming a leading manufacturer of pocketed spring mattress (PMS) and winning the Grand Prix for International quality. Four Star sells directly to large dealers (LDs) and small dealers (SDs) who then sell to consumers. Current situation:
Market:
Mattress models grew rapidly from 13 to 230 models between 1996 and 2002, while sales has been experiencing steady decline within the same period. Decline in mattress sales can be attributed to various factors such as; increased competition, seasonality and volatility of the mattress market, supply and demand mismatch, poor production scheduling and focus on high-end mattresses.
Production:
Four Star’s manufacturing process was based on the traditional assembly-line with four departments i.e. spring unit, quilt panel, assembly and warehouse. Available production capacity for the spring unit and quilt panel assembly is more than adequate to meet demand. However, significant setup times were needed for both these processes with the spring unit producing in batches of 100, and the quilt panel producing in batches of 50.
Manufacturing:
Mattress manufacturing begins at the spring unit and the quilt panel
Team M
Four Star Industries Case Study
Case Study Anaysis
Four Star Industries Case Study
Case Study Anaysis
Table of Contents
Background
Current Situation * Market * Production * Manufacturing * Order Process * Inventory Management
Issues
* Model Proliferation * Inventory and Demand Mismatch * Poor Order Management
Analysis
* Safety Stock Analysis * Warehouse Rent Analysis * MOQ v/s EOQ * Production /Assembly Line Analysis
Recommendations
Conclusion
Background:
Four Star Industries Private Ltd is the manufacturer and wholesaler of the renowned Four Star Pocketed spring mattresses which was founded by Neo Gim Sin in 1966. Its business is aggressively and exclusively focused on servicing the local market and until recently, the company has enjoyed tremendous growth and recognition – becoming a leading manufacturer of pocketed spring mattress (PMS) and winning the Grand Prix for International quality. Four Star sells directly to large dealers (LDs) and small dealers (SDs) who then sell to consumers. Current situation:
Market:
Mattress models grew rapidly from 13 to 230 models between 1996 and 2002, while sales has been experiencing steady decline within the same period. Decline in mattress sales can be attributed to various factors such as; increased competition, seasonality and volatility of the mattress market, supply and demand mismatch, poor production scheduling and focus on high-end mattresses.
Production:
Four Star’s manufacturing process was based on the traditional assembly-line with four departments i.e. spring unit, quilt panel, assembly and warehouse. Available production capacity for the spring unit and quilt panel assembly is more than adequate to meet demand. However, significant setup times were needed for both these processes with the spring unit producing in batches of 100, and the quilt panel producing in batches of 50.
Manufacturing:
Mattress manufacturing begins at the spring unit and the quilt panel