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Tyndall Furniture case

study
Marketing Strategy
Strategy Rationale
Widening product range To build image as full
through Diversification. service manufacturer
To meet customer
expectations
To increase market share.
Growth expected from
bedroom and Upholstered
segments
Securing future market Improve visibility among
outlets esp. furniture the general public.
galleries Total segment sales are
large
Ensure homogeneous
marketing
Lower customer Pressure
Limited number of
galleries available in the
future
Marketing Strategy

Strategy Rationale
Limited sales to mass To spread the risk
merchandiser involved

Push sales and enroll To create balanced


small chains and large portfolio
independents Reduce dependency
on mass
merchandiser

Not to Focus on Mom Mom and Pop format


and Pop format stores are declining
and little future
prospects
Manufacturing
Strategy
Strategy Rationale
Automate processes To reduce direct labor cost
Increase output levels and
productivity
Maintain consistent quality
Greater control over scheduling
Reduce dependence on
suppliers
Link number of WIP reduction
processes together Reduction in Cycle time
within a series Improved production capacity
Continuous Reduce process time and
improvement in increase effective capacity
process.
In-house production of To have better control on the
components product quality.
Focus on Scheduling to To reduce waiting time
avoid delays To minimize Overtime
Implications of the marketing decisions on
production and vice versa?

Tyndalls furniture range can be positioned between the Batch


Process and Mass Process.
These processes are characterized by:
Assembly lines Or Jumbled but a dominant flow.
Low to medium product variety
Implications of the marketing decisions on
production and vice versa?
Marketing Implications on Remarks
Strategy Production
Introduction of Modify the production line Throughput per hour of
new products to add provisions for new diversified products are the
products lowest :
B Category chairs (which are the
Calls for reduced diversified products) accounting
Automation for 7% of the total units sold are
Shift more towards Batch consuming 36% of run time.
A category items (which are
processes primarily bedroom range
Increase the product products) accounting for 7% of
variety resulting in the total units sold are
increased inventory. consuming 20% of the run time.

Push into Pressure on Chairs Invest in new technologies


segments where leading to increased lead that will increase
they are times. productivity and quality to
performing well . Since order losing criteria meet future expansion plan
is Delivery the increased
lead time may affect
market share
Limited sales to Limiting mass In terms of assembly line
Implications of the marketing decisions on
production and vice versa?
Production Implications on Remarks
decisions Marketing
Proposal to invest Reduction in product Automation leads to
in a new range due to automation less variety and high
automated rough Enhance its competitive volume as per volume
mill position in a price- variety matrix.
sensitive market The rough mill would
Increase delivery increase the net board
reliability to little extent feet capacity per day,
as minimize supplier reduce manufacturing
dependence. lead times and provide
cost savings in material
and labor.
Reduction in Positive impact on sales As all these will reduce
process time, Get market for high price and delivery time due
Increase volume (reduced on time to low Work in process
throughput, delivery) inventory and lead time
ensure quality,
improve
scheduling to
Data Analysis
25000000

High sales
20005636
volume
20000000 19417109 contributor Continuous
18162589 increase-
High Focus
area
15000000
Reducin
g
volume-
10307532 Current year-2
10000000 Low Current year-1
8534630
7655279
focus Current year
6813000
6242400
5576000
5285000
4921200
5000000 4288000

1841000
1742000
1504000
1468848
1389077
1188189

Microsoft Excel
Refer Excel sheet for calculations Worksheet
Contribution Margin for Products
Defects
Average
per Contribut Produc Produc
Item Wholes Average Unit Average Sales Contributi
1000 ion tion tion
Numb ale List Selling Varible Inventory Order on
units Margin/U Units / Units/
er Price Price cost (Units) Backlog Margin/Hr
Shipee nit 8 Hr Hr
(Units)
d
B2089 $419 $384 $267 74 349 69 $117 133 16.63 $1,945.13
B2126 $100 $96 $60 18 735 179 $36 675 84.38 $3,037.50
B2241 $356 $357 $178 140 12 21 $179 190 23.75 $4,251.25
C2313 $494 $485 $378 11 20 53 $107 145 18.13 $1,939.38
B2474 $219 $202 $126 283 65 36 $76 130 16.25 $1,235.00
A1073 $418 $384 $138 19 23 11 $246 126 15.75 $3,874.50
A1085 $272 $198 $113 8 29 345 $85 222 27.75 $2,358.75
A1106 $66 $51 $23 0 73 1806 $28 1400 175.00 $4,900.00
A1024 $209 $144 $87 15 459 824 $57 281 35.13 $2,002.13
A1145 $119 $102 $69 0 30 14 $33 30 3.75 $123.75
A1126 $99 $74 $43 2 1078 11132 $31 1100 137.50 $4,262.50
C2201 $159 $159 $130 0 476 370 $29 300 37.50 $1,087.50
C1221 $359 $346 $210 0 66 100 $136 160 20.00 $2,720.00
C1424 $279 $239 $135 0 29 1 $104 165 20.63 $2,145.00
C1544 $190 $170 $98 0 38 2 $72 175 21.88 $1,575.00
C1457 $303 $250 $119 0 29 1 $131 90 11.25 $1,473.75
C1567 $192 $158 $105 0 31 1 $53 115 14.38 $761.88

Product A1106 and A1126 are chairs having highest CM/hr. So we need to
focus on improving the production of these items
Volume Variety Matrix

A110
6, Chair Marketing Initiative is
s
A112 to target this segment
AA
6 -2 A108
5, Table
A102 s,
Volum

4, Ches B208 Tables,


C220
A1- t 9,
Chairs,
B212
3 Dresser
e

Efficient 6,
C231 s,
Production Chest
3,
B-
A114
5 B224
5, 1,
C122 Table, B247
1 Chest, 4,
Sales Backlog SALES Headboar
Case 1590 A107
Case 585 d, 3,
4659
Chair 13231 Chair 5 Footboar C142
Table 1249 Table 3489 d 4,
C
C154-
Variety 7
4,
C145
CEO Recommendations
Manufacturing :
Increase the capacity of chair plant or work
towards increasing the productivity of chair plant.
Top line is affected by restricted production
capacity of chair, which is not addressed by any
production initiatives.( Lead time 44 days, Highest
Contribution margin/ HR, highest sales backlog)
Reduce lead time for all products. This is Order
loosing criteria (QQ) for most of the products with
all most all customers.
Focus on utilizing existing capacity for high CM
products .
CEO Recommendations
Marketing :
Marketing should focus on volume growth
rather than variety growth as automation in
plants does not suit the marketing initiatives
involving newer variety.
Need to focus on customer relationship
building, as it is a order loosing criteria. (QQ)
Explore better selling channels (Galleries) for
high CM products
Introduce new products carefully as higher
batches will results in higher lead time
THANK YOU