The document discusses Vijay's operational challenges in his furniture business and suggests adopting a process layout for flexibility and efficiency. It emphasizes the benefits of a functional organizational structure to manage both customized and standard furniture operations effectively. Additionally, the document outlines the major internal and external factors impacting the business and indicates that Vijay can operate in both markets despite facing certain challenges.

1. Vijay’s Dilemma
Thanks to: Dr Raju M. Rathod
Presented by: Amit Singh
Omkar Mishra
Saurabh Makwana
Mayur Fofandi
Nitish Kumar

2. 1. What could Vijay have done
differently to avoid some of
the problems he was now
facing?

3. SOLUTION FOR HIS PROBLEMS
• Flexibility: Changes in operations as well as their order can be made
without disturbing the existing layout.
• Lower investment: General purpose machines which are usually of low
cost are used. Duplication of machinery is avoided. Further general
purpose machines do not become obsolete as rapidly as special purpose
machines.
• No stoppage of production: In case of breakdown of any machine, the
whole process does not come to a standstill.
• Scope for expansion: New machines and labor can be added without
upsetting the existing order of arrangement.
• Full utilization of equipment: General purpose machines are used in
each department which can perform a variety of jobs.
• Better supervision: Because of specialization in operation, an efficient
and Better supervision is possible.

4. 2. What type of layout should
Vijay adopt in the new
facility and why?

5. PROCESS OR FUNCTIONAL LAYOUT
• In a process layout similar machines and equipment of the same
functional type are arranged in one department.
• The processes are segregated and the machines of each process
are kept together while each process is kept separately.
• The process layout is suitable in the case of job order
production
• For example: All the milling equipment would be arranged in
the milling department, all the grinding machines in the
grinding department and welding machines in the welding
department. It requires large amount of specially designed plant
operated by a small workforce.

6. DISADVANTAGES OF PROCESS LAYOUT
• Inefficient material handling: Materials have to be carried
forward and backward quite frequently. Mechanization
of material handling becomes difficult.
• High space requirement: More storage space is to be
provided around machines for waiting material to be
processed.
• High investment in inventory: Due to the lack of continuous
flow of production there is high in-process inventory.
• High supervision cost: The number of employees per
supervisor is less resulting in reduced control.
• Longer production time: Time required for production is
more in the case of product layout.
• Skilled labor required: Skilled labor needs to be employed to
perform variety of operations in general purpose machines.

7. Vijay should adopt process or functional
layout in the new facility, because :
• Flexibility in operations
• Lower investment in production
• No stoppage of production
• Scope for further expansion
• Full utilization of equipment
• Better supervision

8. 3. Can Vijay do both customized
and standard furniture
operation under one
organization structure?

9. Organizational Structure
• It is used to define a hierarchy within an
organization.
• It identifies each job, its function and where it
reports to within the organization.
• A structure is then developed to establish
how the organization operates to execute its
goals.

10. Functional Organizational structure
• A functional organization structure is a hierarchical organization
structure wherein people are grouped based on their area of
specialization. ... This helps the organization control the quality and
uniformity of performance. These various departments are
sometimes referred to as “silos.”
• It’s a way to avoid centralization and excessive specialization in
tasks in your area.
• Today this is the most used structure in many companies and
organizations.
• This organizational structure example is suitable for small
companies, such as manufacturing, hotels, medium-sized car repair
shops, medical clinics, or other types of business where informal
structures allow functional control over employees without
generating conflicts between managers.

11. FUNCTIONAL ORGANIZATION
STRUCTURE

12. Yes, Vijay can do both customized and standard
furniture operation under one organization
structure by following ways:
• Attainment of objectives through proper coordination of all activities: It
has a built-in system of “checks and balances” so that the progress towards
the attainment of objectives is evaluated.
• The conflicts between individuals over jurisdiction are kept to a minimum:
Since each person is assigned a particular job to perform, the responsibility
of performing that job rests solely with him.
• It eliminates overlapping and duplication of work: Since a good
organizational structure requires that the duties be clearly defined and
assigned, such duplication of work is eliminated.
• Communication is easier at all levels of organizational hierarchy: Since the
lines of communication and flow of authority are clearly identified on the
organizational chart, the intercommunication is both clearer and easier and
it eliminates ambiguity.

13. 4. How does the task of
customized operation differ
from standard operation?

14. Standardized products Customized products

15. 5. Identify the major factors
influencing furniture
business given in above
case?

16. Major factors influencing furniture
business
Internal factors
• The brand image of Elegant furniture is strong.
• The company used its existing machines for the production of both
types of furniture. As they were using same machinery for both the
products, so the processing time naturally increased.
• Separate workers were engaged for standard products at lower
wages. So there might be chances that a conflict may arise between
employees.
External factors
• The cost associated with the standard products has increased
considerably.
• Standard product were given low priority.
• Time to produce furniture has increased because of increased
processing time.

17. 6. Is it possible for Vijay to operate
in both customized and
standard furniture market? If
yes, how and what are the
challenges? If no, why and give
reasons?

18. Yes it is possible for Mr. Vijay to operate in both customized
and standard furniture market. Ways in which Mr. Vijay can
operate in both market are as follows:
• Higher customer retention since products have options and
are tailored to personal tastes.
• Fewer unfinished goods need to be stored, reducing
overhead costs.
• Quick, efficient production process from start to finish.
• A higher price point for customized products, which means
higher profits.
• Economics of scale is achieved through higher production
and standardization of products.

19. Challenges involved in operating both customized
and standard furniture are as follows:
• Impossible to build up stock ahead of time.
• Forecasting trends/spikes in sales more difficult due
to wide range of options.
• Difficult to plan for surge in product demands.
• Affects the flow of supply chains with 3rd party
business partners.
• Wait time from order placement to shipment to in-
hand increases.
• Increased costs to maintain a variety of machinery
that can produce different product colors, shapes,
etc.

20. 7. Can Vijay sustain and survive
for longer period in this
situation?

21. Yes, Mr. Vijay can sustain and survive for a long
period by following ways:
• Since every product is identical, it is possible to
standardize, customize, mechanize, and automate
the process.
• Both machines and workers are able to work much
faster and more efficiently if every part is identical.
• Hence, it can use the more efficient
Flow production.