Essay About Somerset Furniture Company And Product Lead Time

Somerset Furniture Company Case
Case Study 11.1Somerset Furniture CompanyMichael KeisterQSO 600: Operations ManagementSouthern New Hampshire UniversityNovember 19, 2015Case Problem 11.1         For the Somerset Furniture Company described in Case Problem 10.1 in Chapter 10, determine the product lead time by developing a time line from the initiation of a purchase order to product delivery.  Discuss the company’s possible transportation modes and channels in China and to and within the United States, and the likelihood of potential problems.  Identify and discuss how international trade specialist (s), trade logistics companies, and/or Internet exchanges might help Somerset reduce its product lead time and variability (Russell & Taylor, 2014).   Product Delivery Lead Time ChartAlso attached is an excel document with chart and process flow chart for review.Variable Lead Times Chart     TaskMinimum TimeMaximum TimePurchase Order1225Process  Purchase1020Manufacturing6060Transport To Shipping Port114Shipping Documents510Possible Container Delay17Security Authorizations721Load Cargo36Shipment2828Clear Customs714Transportation to Warehouse13Accept at Warehouse130   Totals136238        Based on the above chart the minimum lead time from the start of the process to delivery at the warehouse for the Somerset Furniture Company is 136 days at the minimum and 238 days at the maximum (worst case scenario) with an average total lead time of 187 days.  With such long lead times Somerset will need to plan accordingly to have ample supply of stock to sell while maintain reasonable storage costs as some furniture may take over six months to sell after initial billing is done.  Somerset would do well to utilize an Enterprise Resource Planning system.  ERP is software that organizes and manages a company’s business process by sharing information across functional areas (Russell & Taylor, 2014).  Sales & Marketing, Accounting, and Manufacturing will need to work together closely to ensure accurate forecasting and production so the company is producing furniture that will sell quickly after it arrives to free up capital to invest in future shipments.