Operations Analysis

Departmental Manager Interviews

To solve the problems at Better Bikes, you’ve conducted interviews with the departmental managers. Here are the records of their responses to help you brainstorm solutions for the company. There are interviews from managers in the following areas:

• Accounting
• Inventory Management
• Supply Chain
• Production
• Data Analysis/Reporting Systems

Accounting

Our department has two main functions: we pay vendors and employees, and we bill and collect payment from customers. What’s tricky is that we use lots of different suppliers. The people who make the handlebars we use for one bike may not make the handlebars for another bike, and the same is true for the many different parts that make up a bike.The issue here is that we get bills from different suppliers at different times, and they could be from bikes we made last week or bikes we made six months ago—and they often are for more than one bike part that went on different bikes! It’s really confusing, and we aren’t always able to tell which bike cost how much money, or even if we’ve paid for it all.

Inventory Management

Because we make custom bikes, each one is individualized to the customer. That’s great and we’re happy that we’re able to do that, but what it means is that we end up with inventory issues. When we have to special-order a part—like a particular set a customer wants—and we don’t have it in stock, that could take three to four weeks, and our customers might just end up going somewhere else. What happens is that we end up with really long wait periods, which can make customers cranky. Then, accounting is upset because the customers don’t want to pay or want discounts.

Supply Chain

Our department’s job is to track the bicycles from start to finish, from the time the customer places the order until we deliver the final product. The main issue that we have is that we never know how long a particular bike will take to make. If we have all of the parts in stock, it could take a week. If we don’t—and we usually don’t—it could take six to eight weeks.We also have a hard time finding out information from different departments. It’s almost like they’re afraid they’ll get in trouble for taking so long with their task, but we just need to know how far along they are in the process.

Production

We have great people working in production; our problem is just that it takes so much time to find parts—if we even have them in stock. There are just so many different options that we offer our customers—50 paint colors, 20 seat types, 12 handlebars, 7 gear combinations, 10 different wheels—that going through our warehouses to see what we have and what we need (let alone taking the time to physically collect it) is a lengthy process that changes depending on what type of bike we’re making.

Data Analysis/Reporting Systems

We have a lot of information about our consumers and the types of bikes they buy. What we’ve found generally is that customers are unhappy with how long the process takes. They know that custom bikes take a long time, but they’re frustrated that we can’t be more specific about exactly when they’ll get their bikes. Our surveys show that almost half of our clients would not come back and 75 percentwould not recommend us to a friend or family member. Word of mouth can really hurt a business, and ours is not great.

Read the prompt and enter your response in the space provided.

After considering the responses from the Better Bikes departmental manager interviews above, describe your solutions to the company’s problem on which you chose to focus.

• Select a department from above
• Describe the problems the department is facing. How do these problems affect Better Bikes?(at least five sentences)
• Describe your solution to the department’s problems. Provide a detailed solution for each of the problems the department is facing. (One-two paragraphs with 5-7 sentences each).