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was one of the principals), and partly because of special payment terms. These
were in recompense for Gregory’s design contribution to the new machine’s
development. You are not entirely satisfied that that investment was properly
scrutinized. Worse still, you have yet to be satisfied that it was in reality a good
deal for the company, since it does not seem to be producing the savings prom-
ised. You will need some persuading that further costly expenditure on produc-
tion systems can really help the firm.

>> JAN PETTIGREW: OPERATIONS DIRECTOR
In a few minutes, you will be attending a meeting of a working group chaired by
Alex Rheingold (your MD) to discuss the possible adoption of an ERP system in
Oakland. The meeting will include a consultant’s presentation. Since you started
way back as a shop-floor lathe operator, you have always worked in the furniture
industry. It is unique and distinct, partly because of the heterogeneity and special
character of wood (the major material) and partly because of the design/fashion
element and the resulting intensity of craft skill. Wood is a natural material so
one piece is never quite the same as the next. It is also hydroscopic (absorbs and
retains moisture), causing it to swell and shrink with obvious implications for
production. This offers certain problems for mass production. Fewer problems
are offered by the manufactured items such as blockboard and chipboard. These
are also used extensively, faced with veneer and finished with suitable edgings,
to make surfaces and panels.
The manufacturing process follows a fairly logical path. First a range of
furniture is designed, and drawings, dimensions and the appropriate fabrication
processes specified. Prototypes are made up in the craft area with visits to the
appropriate machine lines, to ‘prove’ the design. This information is then passed
on in standard paper forms to the machine shop and assembly processes when
the production schedule requires. You have been on an IOM (Institute of Oper-
ations Management) course on ERP, but would it really work in Oakland? How-
ever, the improved production planning and control claimed for these systems
is certainly very attractive and you know at present you do have problems with
inventory levels, quality control and scrap. This is in part because you are fight-
ing a running (but friendly) battle with the Chief Designer, Rowan Gregory.
Rowan keeps fiddling about with the product specifications for no good reason.
These changes necessitate slightly different machining operations and mean that
the shop floor has to be continually given new instructions. It also means that
a plethora of different piece parts exist, ostensibly for the same bit of furniture.
This is a monitoring and control nightmare, and has caused some horror stories:
once a batch of tables was assembled with the wrong legs! You also know that
Sam Newton, the Sales and Distribution Manager, puts in inflated sales forecasts
to try to speed up the assembly process and hence delivery times to customers.
This unfortunately causes huge inventory holding costs, and so you do not take
Sam’s sales too seriously. It is better to keep the shop floor busy and working
on reasonable-sized batches. The present company monitoring systems do not

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