Question

Wearwell Carpet Company is a small residential carpet manufacturer started by Don Stegall, a long-time engineer and manager in the carpet industry. Stegall began Wearwell in the early 1990s after learning about ABC, JIT, total quality management, and several other manufacturing concepts being used successfully in Japan and other parts of the world. Although it was a small company, he believed that with his many years of experience and by applying these advanced techniques, Wearwell could very quickly become a world-class competitor.

Stegall buys dyed carpet yarns for Wearwell from three different major yarn manufacturers with which he has done business for many years. He chose these companies because of their reputation for producing high-quality products and their state-of-the art research and development departments. He has arranged for two carpet manufacturing companies to produce (tuft) all of his carpets on a contractual basis. Both companies have their own brands, but they also do contract work for other companies. For each manufacturer, Stegall had to agree to use the full output of one manufacturing production line at least one day per month. Each production line was dedicated to producing only one style of carpet, but each manufacturer had production lines capable of running each type of carpet that Wearwell sold.

Stegall signed a contract with a large transport company (CTC), which specializes in carpet-related shipping, to pick up and deliver yarn from the yarn plants to the tufting mills. This company will then deliver the finished product from the tufting mills to Wearwell’s ten customers, which are carpet retailers in the ten largest residential building markets in the country. These retailers pay the shipping charges to have the carpets delivered to them. Wearwell maintains a small sales staff (which also doubles as a customer service staff) to deal with the retailers and occasionally with the end customers on quality problems that arise.

Wearwell started selling only one line of carpet, a medium-grade plush, but as new carpet styles were developed, it added two additional lines, a medium-grade berber carpet and a medium-grade textured carpet. Three colors are offered in each carpet style. By selling only medium grades with limited color choices, Stegall felt that he would reach a very large segment of the carpet market without having to deal with a large number of different products. As textured (trackless) carpets have become more popular, sales of plush have diminished substantially.

Required: Discuss some of the challenges that Stegall will have trying to apply JIT to regulate the levels of control at Wearwell. Suggest changes that might be necessary to make JIT work.

Answer 1

Q.1. Discuss some of the challenges that Stegall will have trying to apply JIT to regulate the levels of control at Wearwell.

Answer: Following are the challenges that Stegall have to face while applying JIT production strategy:

• Challenges on part of Supplier:
  • Delay due to weather conditions,
  • Maintenance of Quality on part of supplier,
  • Timely delivery, etc
• Challenges on part of Sales workers:
  • Long working hours,
  • Have to Multi- task,
  • Less incentives, etc
• Challenges on part of Shipping company:
  • Timely transportation of yarn to tufting mills,
  • Also timely transportation from tufting mills to retailers,
• Challenges on part of customers:
  • Making product available at right time, to right location, etc
  • Forecast customer needs properly etc

Q.2. Suggest changes that might be necessary to make JIT work.

Answer: Following are the changes that are necessary to make JIT work:

• Make contract with experience and trust supplier who can deliver products even in problematic situation which will avoid delay in delivery,
• Retain talented employees and increase workforce to ensure work efficiency and avoid overloading of work on minimum workforce so that they can deliver quality product and service to customers leading to customer satisfaction,
• Maintain optimal level of inventory to avoid wastage and will lead to cost-reduction,
• Eliminate medium-grade plush from market as the product is in decline stage, further production of this product will lead to loss for company,