As the nature of their business is in the niche area, the company's profit and performance were very vulnerable to the unexpected and inexplicable change in the quality/cost of raw materials, and other variable factors. Due to the restrictions of the government on the logging of old growth forests, where the bulk of their raw materials came from, they were faced with an increased cost of good quality hardwood, an increase in their overhead costs and the retirement ofSense's experienced and skilled tradesman who plays an Important role for the top quality pieces.
Jensen decided to outsource their manufacturing to other countries where the cost of labor and overhead costs were significantly lower. After months of sourcing and negotiation, Jensen decided to work with Century Furniture located In Vietnam who owned a new plant and had a track record of supplying furniture to retailers. Both parties signed a contract indicating the requirements which they train the workers in Century for them to achieve the expectations. Things did not go well as planned.
Raw materials were being held in custody that caused the delay in the delivery of the materials to the plant. Training was extended for a longer period, substandard final products that don't conform to the standards of Jensen were being sent back to Australia after weeks of delay which led to Jensen losing the deal with their major customer. Jensen suffered a significant sum of monetary losses and reputation due to the venture. 2. Open System Model: Current and Desired State We first need to determine where the organization is and what the problem areas that are affecting the organization and so we use the Open Systems Model.
The input would determine the awareness for a need to change, where the companies would be exposed to their current state. Once the problem is identified, the organization would need to transform itself, by exploring and testing for new ways of doing things to improve its current situation. The action will then be taken to reach the company's desired state, also known as the output (Eden 2010). Current state - Sense's business was failing and reasons were due to increasing costs of raw materials due to government restrictions, increasing power and insurance costs, the decline of ales due to economic status of customers.The company focused on a niche market, catering to the rich and not budget conscious, retirement of Sense's assets who were responsible for the quality of top end pieces and loss of reputation due to Montague order. In order to reach the organization's desired state, two actions will be taken, namely Concept Fan and Mind Maps.
Desired state - With its current state, Jensen felt that it was vital to regain their once established reputation. They wanted to regain their reputation as a niche manufacturer of high quality furniture, focusing on a niche market catering to the ICC.They also wanted to ensure that there are quality staffs; in order to maintain the quality of furniture established by their old school tradesman and most importantly recoup their monetary losses due to the venture with Century in Vietnam. 2 3.
Root Cause and Symptoms identified in Jensen Fine Furniture 3. 1 Primary Problem - Poor Management of Network Development Primary problem with Sense's offshore implementation is attributed to be poor management/governance since there seem to appear to have no proper guidelines, and other exchanges of experiences when implementing the offshore outsource unit.There was minimum preparatory education for managers of their service provider - Century Furniture. In our perspective, it is this absence of definition and comprehension that is a huge underlying driver of numerous different issues.
Planned or standardized. Simply put, Jensen Fine Furniture (the client) and Century Furniture (service provider) are not functionally arranged to cooperate once agreement is formalized. There was a considerable measure of repressed interest and/or prerequisites that need to be met presently when the execution date inaugurates.The primary run of equipment would be dining tables and chairs for a significant retail establishment, Montague. This signified a fresh project for Jensen as they generally provided lesser works to authorized dealers. Moreover, Century Furniture's employee has a deficiency in skill with hardwoods and Sense's projects were more intricate.
Then again, the courses in which the new activities were prioritize, assessed, assessed, affirmed, booked and performed were all done amidst change during move to the new outsourcing model. It was apparent that there was failure to meet repressed interest for administrations.This brought about a pig attempting to fit through an arrangement hose"; Just a trickle of interest was satisfied until the new model was set up. The outcomes were that administrations basically weren't performed, execution exercises got stalled, Sense's shareholders and Century' employee were both disappointed, and the whole timetable for attaining expected business profits were postponed. 3 Queries concerning money related, contractual, and administration conveyance methods and choice rights must be addressed and imparted to suitable participants in Jensen and Century establishments.The subcontracting agreement was not expected to be (nor if it be) a processes guide; hence extra work was obliged to plan and impart changes.
3. 2 Secondary Problems 3. 2. 1 Secondary Problem #1 : Sense's retained team not in place With this subcontracting execution, Jensen did not set up and put in place a retained group to deal with the subcontracting usage and continuing operations. They only sent their senior foreman - Dan Donnelly to supervise the training.
There was an absence of a characterized management group.This created concerns in execution on the grounds that there is nobody "regulating movement" to handle both the volume and intricacy. Jensen assumed that since they are subcontracting the work to Century, their subcontractor will deal with everything and they can "wash hands" of on-going administration obligations, bringing about an absence of legislation staff. 3. 2. 2 Secondary Problem #2: Sense's retained team lacks required skills and poor knowledge transfer Regarding national/local inhibitors, dialect and the understanding of nuances in verbal, non-verbal and composed interchanges can be dangerous.
The only liaison for Century who spoke good English was its account clerk, Jimmy Pam. However, he was not always available to interpret when required. While Jensen presence in the offshore premise, was their senior foreman - Dan Donnelly, who was briefly betrothed for information handover to Century throughout the execution. Obviously, Jensen only considered existing staff within their organization with the finest specialized and/or business procedure experience.Dan had expected this overseas assignment non-availability of interpreter -Jimmy which resulted in disruption to 4 training schedule. Dan did not prepare to extend this overseas assignment.
Knowing that without Dean's vicinity, the first shipment for Montague would not be conveyed on time. Sense's supervisor traveled to Vietnam to arrange straightforwardly with Century and persuade Dan to stay on to regulate the creation of the first shipment for Montague. It was apparent that both Dan and Jimmy had some major difficulty doing the switch between performing or dealing with the normal work.Both Jensen and Century employee were not properly motivated and did not efficiently and effective transfer the required knowledge, this created diminished productivity in administration conveyance and conceivably presents operational danger. Obviously, this issue posed a significant problem to Sense's operation since it was not adequately addressed.
3. 3 How this identified companies affected the company? Subcontracting has demonstrated to be powerful strategy; however, it brings noteworthy perils that must be perceived and oversaw.In subcontracting, an organization is depending on another person to run certain business capacities. If the subcontracting dangers are not appropriately overseen, they might contrarily influence organizations' operations and clients. On account of Jensen Fine Furniture, a percentage of the negative results include: On-time conveyance execution and end-customer fulfillment levels weakened due to offers at subcontractor. Deferrals were brought about by numerous elements that are outside the control of the subcontracting organization.
Cases incorporate customs delays.As evident in the case study, the supply of crude timber for the Montague request was sitting in a compartment at Dad Nag Port and was Just discharged after little monetary token properly made. Quality of Service and Product declined in subcontracting, influencing client fulfillment. Jensen did not identify, hand-picked, and effectively deal with their subcontracting accomplice - Century to guarantee that quality does not decay.
There were inadequate changeover phases and/or corresponding assembly, nor presence of compelling cross training between Jensen and Century.These angles could be dismissed in view of expense saving deliberations. The subcontracting changeover period disastrous as agendas and costs were not accomplished due to inadequate preparation and equipment. The subcontracting was a substitution of Sense's service and production capacities, and these capacities had an immediate bearing on the organization's capacity to reach its responsibilities to clients and stakeholders. 4. Intervention Plans for Jensen Fine Furniture In view of the above, the following intervention plans are being proposed: 4.
Concept Fan Concept Fan is a toolkit that was designed by Edward De Bono in 1993. It is a provisioning tool that is designed to find different approaches to a problem when all other obvious solutions have been exhausted. It is based on the principle of "taking a step backwards" to gain a broader perspective of the problem. There are several advantages of using Concept Fan.
It can be used to refine the proposed solutions as well as for the identification of primary problems that are official to identify and developing remedies to the problem. However, Concept Fan is not without its weaknesses.By using the Concept Fan framework can lead to a large number of proposed solutions, it is difficult to identify the best solution. As a result, further use of other organization development toolkits such as Six Thinking Hats, might need to be used. 6 There are four steps to using the concept fan toolkit: 1) Draw a circle on a piece of paper and indicate the problem in the circle. 2) After which, lines which represent possible solutions are drawn on the right side of the circle.
) It is possible that ideas obtained may not be practical or does not solve the problem fully.As such, take a 'step backwards' in order to have a broader view of the problem. Draw a circle to the left of the first circle, and a wider definition of the original problem is written inside it. The first and second circles are linked to each other via an arrow. 4) Use this new circle as a new starting point to generate other ideas.
If this still doesn't work, "take another step backwards" until the main problem is identified. 4. 2 Mind Maps Mind maps (also known as Spider Diagrams) are diagrams that aid to visually organize information through data mining, sorting and storing.This technique was popularized by Tony Abuzz in 2005. Mind maps do not make use of the same format as conventional note taking; instead it combines images, colors and visual-spatial arrangements. A good mind map always consists of the shape of the object, the relative importance of the individual pointers as well as the way the pointers are related to one another.
Some of the key characteristics of a mind map are the usage of colors, curved lines, symbols, key words or images and ideas radiate out from the centre of the mind map. Deter understanding of the subject and the way the ideas are related to one another.They are also useful for providing an overview of the subject, consolidation of information, and the summarization of information. 7 There are no main weaknesses for mind maps, except being limited by each individual's creativity. There are 4 steps to creating a mind map: 1) The first step is to start in the centre of a blank page.
This is because the ideas that are generated will radiate out from the main subject in all directions. 2) The second step is to identify the main subject. Use key words, phrases or images to describe the object. ) The third step is to use colors, key words or images throughout the mapping. This is to show the organization of the subject. 4) The fourth step is to connect the branches to the subject, and then to further connect the sub branches to the branches before it.
Repeat this process until all information has been exhausted. 5. Recommendations As the concept fan allows the user to "take a step back" to look at a broader perspective, Jensen will be able to identify the problems causing the most obvious problems and in the end identify the primary problem.Any other problems that are identified in this process are secondary problems or symptoms.
Jensen will also be able to use the concept fan to identify potential solutions to each problem. As identified by our group, secondary problems are that the retained team was not in place as well as the lack of expertise and training of the retained team, which in turn led to the identification of poor management as the primary problem. Through the use of mind maps, Jensen will be able to identify potential solutions to the primary problem, as well as thinking about possible issues that can be related to the primary problem.Possible issues related can also have branches that indicate the potential solutions as 8 well as any other issues that will arise from them. Mind-mapping will enable Jensen to have an overall view of the whole subject.
The recommendation for the first secondary problem would be to ensuring that a team of well-trained team is being put in place to specialize in outsourcing implementations as well as managing on-going implementation.Although Dan Donnelly was Sense's senior foreman and was in-charge of supervising all the training in Vietnam, he was not supported by a team of weltering personnel. He would be unable to facilitate the entire implementation of the venture without the support from Sense's management. The recommendation for the second secondary problem would be to ensure that the outsourcing venture. This will ensure that right operations and decisions are made in the best interest of the company.The recommendation for the primary problem would be to ensure that management was chosen based on capabilities and that the employees share the same company's vision and the mission.
This will ensure that the employees are certain of what the company wants to achieve. It is natural for people to resist change, even for senior position employees in the organization, despite change being the only constant. It is important for management to let the employees know of the changes that is going to take place within the organization and reason and how they could benefit from the change.Jensen will be able to identify existing and possible member organizations that are best placed to achieve the collective objectives by using the transplantation model, bringing potential network members together to determine whether the network is worthwhile and feasible in terms of the costs and benefits, developing the exchanges and structures that promote interaction between the network members as well as their individual roles, and finally assessing how the network is performing by identifying problems and resolving them. 9 6.
Conclusion The main problem in Sense's case was that there is poor management who adopted the wrong approaches when they are outsourcing their manufacturing processes. Different cultural problems were encountered and it is not feasible, relying on an experienced foreman to ensure that all productions processes went well. A proper team should be set up to ensure that all aspects of the venture were being monitored well and on track. Lack of proper communication in terms of required expectations was also one of the factors that attribute to the current state of business.
Current human resource strategies were not sufficient to cope with changes such as retirement of skilled works-men. At the same time, they were lacking of reliable suppliers that could back them up. If both parties are able to understand well the expectations, such problems wouldn't occur and the organization's work output and effectiveness will be enhanced.
