Case Study #8

ACCENT OAK FURNITURE COMPANY

Accent Oak Furniture Company has been in business for more than 30 years, serving

customers in Chicago and the surrounding area. The business consists of three different

divisions composed of a bannister division that manufactures and installs quality

oak railings, a custom furniture division that manufactures such crafted items as dining

room suites, and a kitchen cabinet division.

Each division reports to a vice president who in turn reports to Frank Johnson,

the president and founder of the company. Total sales for all three divisions arc projected

to reach $8 million for the current fiscal year.

Frank has been quite pleased with the performance of the custom furniture

division and the kitchen cabinet division, which together account for more than 85%

of the sales revenue. He does, however, have some concerns about the bannister division.

This concern is based on last year’s profit performance and the first week of

August’s sales report for the installation crews (see Figure 1).

It is now the second week of August and the new installation market is just

starting up. Bannisters are installed in new homes in the fall when the homes are

nearly finished and ready for sale. There is some demand for bannisters throughout

the year for renovations. However, this business is also concentrated in the fall and

quickly dies off before Christmas.

On Monday, Frank met with Tom Smythe, the vice president of the bannister division,

and voiced his concerns. Frank suggested that they meet again on Friday to discuss

some further actions to get back on track. Tom felt the concerns were a bit premature but

agreed grudgingly. Tom felt that some of his key people should attend, so Hank Strong,

the manufacturing supervisor; Brian Coulter, the sales manager; and Pete Harburg, who

was in charge of the five two-man installation crews, were invited to attend.

During the meeting, Tom asked each one of his people to describe their individual

concerns about the past week’s installation report.

Hank began by giving a brief outline of the manufacturing process that he was

responsible for in the plant.

Handrail Area

1. The oak was purchased in 16-foot lengths and inspected for any flaws or excessive

knots to ensure it was #1 grade.

2. Any rejects were sent to the cabinet division to be used for interior shelves or to

make spindles.

3. The approved boards were run through a multihead mill that planed the bottom

side and shaped the top and sides of the handrail.

4. They were inspected again for rough grain and any knots that could cause quality

problems. Any rejects were then cut into shorter usable lengths for shorter

handrails or spindles.

5. The handrails were then sent to the drilling machine where the holes were automatically

spaced and drilled by the operator on an industrial quality drill press.

Occasionally the operator inspects the dimensions of the holes using a dual

purpose go-no-go gauge. On one end of the gauge is a metal rod that is inserted

in the hole to measure the depth. The rod has a hatchmarked area that has

PASS stamped into the metal. If the top of the hole is in the PASS area, then the

hole dimension is considered okay. The other end of the gauge is long and

round and has three steps cut into the circumference. This makes the rod get bigger

around at about inch from the end and inch from the end. If the first part

goes into the hole but not the middle, the hole is undersized. If the second step

but not the third enters the hole, the hole is of the correct diameter. The third

step indicates oversize.

6. The handrails are then sent for sanding and varnishing. A final inspection is

performed for appearance and finish. The handrail sections are then sorted by

length for full size and shorts.

Spindle Area

1. Oak is purchased, inspected, and cut to length. Approximately 5% also comes

from the handrail area.

2. Sections are placed on a planer and run through twice to give the square end

dimensions. Pieces are then placed into a pattern lathe, which provides the

product with the spindle design and tapered top end. The operator also lightly

sands the spindle while it is on the lathe.

3. An occasional inspection is performed using a go-no-go gauge. The inspection

procedure requires the operator to fit over the end of a spindle a gauge, which is

an aluminum bar with a specified hole size. The spindle will pass inspection if

to inch of spindle protrudes through the gauge. The gauge is actually

marked with red paint outside the limits to assist the operator when inspecting.

4. The operator sets the preangled cutter to maintain the desired size of the spindle

end.

5. The approved spindles are then sent to final sanding and varnishing and final

inspection.

Hank felt that his people did the best job possible given the wood and

machinery available.

Brian Coulter, the sales manager, felt that his people were certainly doing their

jobs since sales had increased at a rate of 15% over the last three years. One major

concern that Brian did have was the increased number of complaints from his major

customer, Lincoln Homes, for the quality of the installations. It has already told Brian

it will take its business elsewhere if the quality does not improve immediately.

Pete was the most vocal of the group, since his area was always getting the flack.

He felt his crews were being pushed as hard as possible but just couldn’t keep on plan.

Accent Oak bannisters are designed to be easily installed in the field even for custom

work. However, crews seem to have to refit every other piece and spend time chasing

defects. Pete recently started having his crew keep track of reasons why they were

over or under budget on each job.

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7156 1 1,100 1,127 Waited 1/2 hr for customer

7157 2 985 1,154 Fit problem with spindles

7158 5 1,200 996

7160 4 1,500 1,854 Recalled for loose spindle

7163 2 850 1,854 Two split spindles

7166 5 1,200 1,385 Fit problem with spindles

7167 1 1,450 1,620 Customer changed design refit

7168 4 1,800 2,254 Spindle shims needed

Job# Crew#

Budget

$

Actual

$

Figure 1 Installation Department Monthly Report—August 8.

Comments

7169 5 1,100 1,080

7171 2 980 1,200 Handrail rough finish

7172 4 1,560 1,860 Loose spindles

7174 1 1,200 1,650 Not to drawings

7175 2 975 1,320 Handrail cracked

7177 4 1,400 1,875 Fit problem spindles

7179 3 2,250 3,200 Recalled for loose bannister

7181 5 1,900 2,520 Fit problem spindles

7182 3 1,800 2,260 Fit problem spindles

7184 3 1,750 1,780 Customer changed design

TOTAL $25,000 $30,000

Frank angrily told his people that he didn’t care whose fault the problems were,

he just wanted them fixed yesterday and stomped out of the room.

Tom and his group had just recently completed a quality management course,

and all agreed that they might as well see if it could help them solve the problem and

get Frank off their backs.

Inspection Report—Spindle

Figure 2 shows the specified depth and allowable tolerance for the pilot study on

spindle fit using the knife-edge gauge designed for this purpose. The following 50

readings have been taken and recorded as of August 14.

Case Analysis

1. Analyze the customer complaints using Pareto analysis to identify the largest cause of

complaints.

2. Construct histograms of the spindle and hole data to see if there is assignable cause to

the problem.

3. Complete the three following office memos with your recommendations.

INTEROFFICE MEMO

TO: Lead Hand—Handrail DATE: August 17

FROM: Hank Strong

SUBJECT: Customer Complaints—Bannisters

INTEROFFICE MEMO

TO: Lead Hand—Spindle Department DATE: August 17

FROM: Hank Strong

SUBJECT: Customer Complaints—Bannisters

INTEROFFICE MEMO

TO: Tom Smythe DATE: August 17

FROM: Hank Strong

SUBJECT: Customer Complaints—Bannisters

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