88

PART

ll

Establishing the Operations Environmeni

CASE STUDY
MnruurncruRrNc AND SERVToE
PnocessEs: LocANVTLLE Wrr.roow
TneRrnltents

The only permanent advantage that we haye oyer our Chithat we are located here in the United
States, closer to the fnal customer. So from now on, we will
be a make-to-order manufacturer. We will deal directly
nese competitors is

with customers and make shutters to whatever specific

Introduction

measurements and finish they need. This means we can no

longer count on producing batches of 500 to 1,000 shutters

For nearly 50 years, Loganville Window Treatments (LWT) of

Loganville, Georgia, has made interior shutters that are sold
through decorating centers. Figure 3.20 shows some ofthe various styles of shutters LWT makes.

at a time and holding them in intentory. Rather, we will

need to be able to make a few at a time in one-0ff sizeE if
that's what the customer rleeds.
On the service and marketing side of the house, we
will now take orders directly from the customer. We will
reach them through the Internet and through catalogs. We
will work with them to determine what style best suits their
needs, and to take the measurements needed to make the
shutters. When there is a problem, we will work directly
with the customer to resolve them.
Yes, this will require dramatic changes to our business.
But it also means we will be able to charge a premium for
our products and create a relationship with the customers
that our Chinese rivals will find dificult to emulate. As I
see it, this is the only way we can suryive.

Past Manufacturing and Service Operations: 2011

Traditionally, LWT supported a limited mix of standard products. At any particular point in time, the mix of products might
consist of6 different styles offered in 5 predetermined sizes, resulting in 30 possible end products. LWT would produce each
ofthese end prodqcts in batches of500 to 1,000 (depending
on the popularity of each sryle/size combination) and hold the
finished products in the plant warehouse. When a decorating
center called in with an order, LWT would either meet the order from the finished goods inventory or hold the order to be
shipped when the next batch was finished.

LWT's products were sold through independent decorating centers located across the United States and Canada.
LWT would send each of these decorating centers a copy of its
catalog, and the decorating centers would use these catalogs to
market LWT's products to potential customers. It was the responsibility of the decorating centers to work with customers
to price out the shutters, make sure the correct size and style
were ordered from LWT, and resolve any problems. As a result,
LWT almost never dealt directly with the finai customers.
Manufacturing and Service Operations: 2012
By 2011, the influx of low-cost shutters made in China had
forced LWT to reconsider its business model. Specificaliy,
because of the low labor costs in China ( 1/15 of LWT's labor
costs), Chinese manufacturers could make exact copies of
LWT's products for substantialiy less and hoid them in warehouses across the United States and Canada. LWT's traditional
customers-the decorating centers-were turning more and

Quesiions
l. As of 201 1, what tlpe of manufacturing process did LWT
appear to be using? What level of customization was it offering? Were was the point of customization?
2. Using T abl,e 3.2 and Figure 3. 12 as guides, how would you
describe the service side of LWT's business prior to 2012?
What were the managerial challenges?
3. What type of manufacturing process is needed to suppod
the changes proposed by Chuck Keown? What level of
customization will LWT be offering? Where wrll the point

olcustomization

3.2 and Figure 3.12 as guides, how will the

service side of the house change in 2012? What wili the
new managerial challenges be?

5.

more to these alternative sources.

LWT decided to fight back. As Chuck Keown, president of
LWT, putit:

Figure 13.20

be?

4. Using Table

Sample Products Made by LM|I

Develop a list of 8 to 10 things that must happen in order

to accomplish the changes Chuck Keown envisions. Will
the new business model be more or less difficult to manage

than the old one? Justifu your answer.