Hawkesbury Cabinets: Designing And Manufacturing Assessment Answer

Answer:

Introduction

Hawkesbury Cabinets is a company that deals in the designing and manufacturing of kitchen’s both standard and custom cabinets. The enterprise was founded in Mulgrave in 2008 with a vision of serving the needs of the growing Chinese community in the Hawkesbury. Initially, the company focused on custom-made kitchen cabinets production. However, the company grew and gained popularity and made contracts with several companies to engage in the manufacture of high-quality standard-made cabinet production.  This was also made possible by the acquisition of a high-quality general-purpose machine that offers flexibility in the production of the cabinets and the specialization of equipment in the industry that has increased the production quantity and quality output (Fairtrading.nsw.gov.au. 2016).


Current production systems

A technical analysis of the current production processes and systems used by Hawkesbury Cabinets is a trading measure that determines the company's securities and analyzes the company's future movements. It does this by taking a direct focus on the statistics gathered from Hawkesbury Cabinets trading activities such as the volume and the price changes (Lo, Mamaysky, and Wang, 2000)

Hawkesbury Cabinets over the past few months has experienced an increase in sales of the builders' line of kitchen cabinets courtesy of a high-quality general-purpose machine. This device offers flexibility in the production of the cabinets hence enabling the production of a wide variety of custom design cabinets (Virginia, 1959). This has also been made possible by the adopted system of the grouping of equipment together and creating the factory layout in a manner that enhances the different stages of production of the cabinets such that the volume of work has been increasing, and that explained the increased amount of output from the company (B. Lele, 1982).   

This measure by Hawkesbury Cabinets has a positive effect in the industry as more regular scheduling of work has been adopted in the kitchen department.  The custom kitchen cabinets are always given priority due to the high sales and profits margins as a result of strong demand for the commodity (Nicholls, Donovan, and Roos, 2007). The company, boosted by the high profits margin of the sale of the custom kitchen cabinet, has grown. However, there has been a concern by the accountant that the profit margins should not be as they are. The auditor pointed out that the costs associated with standard builders were rising as an enormous amount of capital was being used in the purchase of the raw materials, the work in progress and the finished cabinets. This was supported by the fact that a nearby warehouse was being rented to accommodate the raw materials used in the production of standard builders’ line (Evans, 1969)

Effects of the new builders’ kitchen line

With the introduction of the new builders’ kitchen line on Hawkesbury Cabinets’ services, it has brought in many benefits like organization in the scheduling of work and improvement of quantity and quality produced. However, the new builders’ kitchen line has brought in several adverse effects. In the case of trade off the custom, kitchens were always given priority because of the high sales and the high marginal revenue it brings to the company (Beecher, 2001). This system, however, leaves components of the standard cabinets sitting in the various stages of the production lines awaiting completion as the new builders’ kitchen line has brought in the incorporation of stages of production in the company. This has turned the previously spacious working area into a clogged up factory with partially completed work in various stages of the production processes. The adoption of the new builders’ kitchen line despite increasing the volume of output and sales has also brought in a rise in costs associated with standard manufacturers’ line (CLARK, 1985).  The accountant noted that in spite of the elevated profit margins there was an increasing amount of capital being tied up in the raw material inventory, the work in progress and the finished products.  For example, to accommodate the increased volume of inventory there arose a need for a new warehouse to be rented (Edwards, 1983).  There was also the problem of the lead times for both custom and standard orders as it was resulting in a longer promised delivery times. There was also the effect of the manufacturing capacity being pushed to the limit leaving no room in the factory for expansion as a result of the adoption of the new builders’ kitchen line (Ward, Hemingway, and Daniel, 2005)

Effect on financial structure of the company

The effect of increasing the new builders’ kitchen line on the financial structure is quite straight forward. Despite an increase in sales in the company which has consequentially led to a more scheduled work, there have been several adverse effects on the company’s financial structure about the organizational issue of the company caused by the operational problems. One of them is that as a result of the introduction of the various stages and points of production arising from the grouping of equipment together (Doherty, and King, 2001). Like having the cutting tables and saw on a section shapers and routers in another section and whilst lathes and other less frequently used machines in another section has caused the lying of the custom and standard cabinets in the various stages of production in case a trade-off was scheduled. Particularly with the custom kitchens because of the increased level of production leading to high sales and high profits margins (Knezevic, 1994).  This has been an effect as it poses as an example of stoppage manufacturing process. The introduction of the new builders’ kitchen line has also ensured specialization and division of labor. This has an effect as this submission of the production stages has increased the volume of work and in the process has change the previously free and spacious manufacturing area into a heavily clogged up place with partially done and incomplete work in the factory (Valqui Vidal, 1986). This has had an effect on almost every section and despite the fact that the profits margins are increasing the accountant argued that the profits margins were not up to their optimal potential. He saw that the standard builders’ line there was an increasing in their costs requirements. The accountant further described that a capital associated with raw materials inventory, the work in process and the finished cabinets was constantly on the rise. This cost has also been linked to the increase in the volume of stock as a warehouse nearby had to be rented for its space to be utilized by the company. An increase of production and sale has attracted even more customers, and the company has had a good profit margin as a result of the adoption of the new line of production systems (O’Brien, Sweet, and Sagdic, 2005). However, on the other side, this poses as a weakness as the company had a problem in the delivery of the products to the increasing number of customers making them increase the length and number of times they have to make promises of the delivery of their products to their clients (Downey, 2005)

Conclusion

Hawkesbury Cabinets company rose from the production of small scale custom-making carbonate company to a big company. This was mainly aided by the fame the company got from the production of high-quality kitchen custom and the company made several contacts with other firms to engage in the production of high standard kitchen cabinet which made 40 percent of the company’s volume of production and earned it a 25 percent revenue of the total sales (Rodrigues, 2012). The expansion of the company was mainly spearheaded by the acquisition of a high-quality general-purpose machine that offers flexibility in the production of the cabinets and the specialization of equipment in the industry that has increased the production quantity and quality output. Though difficulties have been experienced as the company tries to expand proper management and record keeping practices could help the company grow (Murphy, 1986).

References

Lele, S. (1982). Fundamentals of production/operations management. European Journal of Operational Research, 9(1), pp.98-99.

Beecher, M. (2001). Promoting the "Unit Idea": Manufactured Kitchen Cabinets (1900-1950). APT Bulletin, 32(2/3), p.27.

CLARK, R. (1985). Safety cabinets and AIDS. Nature, 315(6021), pp.626-626.

Doherty, N.F. and King, M., 2001. An investigation of the factors affecting the successful treatment of organizational issues in systems development projects. European journal of information systems, 10(3), pp.147-160.

Downey, G., 2005. Are engineers losing control of technology? From ‘problem-solving to ‘problem definition and solution engineering education. Chemical Engineering Research and Design, 83(6), pp.583-595.

Edwards, J. (1983). Quantitative production management. European Journal of Operational Research, 12(3), p.316.

Evans, M.G., 1969. Conceptual and operational problems in the measurement of various aspects of job satisfaction. Journal of Applied Psychology, 53(2p1), p.93.

Fairtrading.nsw.gov.au. (2016). NSW Fair Trading - home. [online] Available at: https://www.fairtrading.nsw.gov.au/ [Accessed 13 Aug. 2016].

Knezevic, J. (1994). Determination of Operations/Production Downtime for Group Replacement Maintenance Policy. Int Jrnl of Op & Prod Mnagemnt, 14(7), pp.18-26.

Lo, A.W., Mamaysky, H. and Wang, J., 2000. Foundations of technical analysis: Computational algorithms, statistical inference, and empirical implementation. The journal of finance, 55(4), pp.1705-1770.

Murphy, J.J., 1986. Technical Analysis of the Future's Markets. Prentice Hall Press.

Nicholls, D.L., Donovan, G.H. and Roos, J., 2007. Consumer preferences for kitchen cabinets made from red alder: A comparison to other hardwoods. Wood and fiber science, 36(3), pp.432-442.

O’Brien, E., Sweet, R. and Sagdic, Y. (2005). Greening Kitchen and Bath Cabinets. Housing and Society, 32(2), pp.63-80.

Rodrigues, P.C.C., 2012. Independent Journal of Management & Production.

Valqui Vidal, R. (1986). Decision systems for inventory management and production planning. European Journal of Operational Research, 23(3), p.412.

Virginia, M.H., 1959. Disappearing and slid able step-chair for kitchen cabinets and the like. U.S. Patent 2,881,040.

Ward, J., Hemingway, C. and Daniel, E., 2005. A framework for addressing the organizational issues of enterprise systems implementation. The Journal of Strategic Information Systems, 14(2), pp.97-119.

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