Factory Management

Factory management covers topics as diverse as business strategy, production scheduling, management structure, and creating motivated employees. Each of these topics is briefly discussed below.

Business Strategy

An early decision must be to answer the question: "What business are we in ?" The broader view of much of North Carolina's Wood Products Industries can be seen in the attached schematic. Focusing in on the furniture supply chain however, we can distinguish six roles in the design, manufacture, and distribution of furniture:

• Furniture Design
• Furniture Engineer
• Wood Component Manufacturer
• Furniture Manufacturer
• Furniture Distribution
• Furniture Retail

These roles can be combined into many variations to meet the needs of the market. Some functional and profitable business models include:

The independent designer that creates designs and sells it to the manufacturer.

The design-build company that receives customer input to design and then builds the furniture product on site.

Production Scheduling

What makes a good production schedule? Do you know if your factory will be profitable this month? If you cannot answer "yes" to these questions, please continue to read.

A powerful tool for any manufacturing manager is to schedule production for the factory based on historical productions of work rate. Once a schedule is established, it can be used to estimate profitability. Profit management uses budgeted factors for weekly labor and overhead costs, and job material costs to estimate weekly expenses based on a production schedule. The schedule provides an estimate for sales revenues based on product prices and sales quantities. Using these estimates for revenues and expenses, weekly profitability can be estimated.

Management Structure

Our modern manufacturing factory will employ a flat management structure. This will be possible because there will not be a large number of typical middle management layers that adds to the indirect overhead costs of the traditional factory. Factory floor paperwork will be eliminated using multiple computer stations that use a simple information system (as contrasted to complicated MRP or ERP systems) to display and track the company's production system. By sharing real time production information among employees the company will benefit as information is transferred much faster and easier with fewer interruptions or losses.

Self Directed Employees

The flat management structure described above means that the best, self-directed people are hired and paid a rewarding and retaining wage. This adequately paid, empowered, and self-motivated workforce will be able to create a flexible factory with minimum support or management supervision.