James Cowart started making and selling outdoor furniture in 1984. He built up the business to 300 employees and $28 million in sales in 2005. SunBright operates a single factory in northern Florida, where it fabricates and assembles a wide range of outdoor furniture, including tables, chairs, umbrellas, and matching accessories. SunBright’s major production tasks include extruding the aluminum furniture parts, bending and shaping the extruded parts, finishing and painting the parts, and then assembling the parts into completed furniture. Cloth and leather upholstery, glass for tabletops, wood finishing, and hardware such as screws and bolts are purchased from outside vendors.

Running this business was an almost 24-hour-a-day job for Cowart, because manufacturing or sales problems arose constantly. Cowart seemed to be the only person who could solve them. In 2005, Cowart decided to hire a general manager to run the manufacturing and sales department so he could have more time for other interests, including his grandchildren. To his good fortune, he was approached by Eva Rucker, who offered to invest in the business and grow it from a regional manufacturer to one that sold to major national retailers. Rucker had excellent experience in sales and understood manufacturing. After a few months of getting to know each other, Cowart sold Rucker 25 percent of the business and installed her as general manager. Cowart retained for himself the position of president. Although he would not be at work full time, he would retain final authority on major decisions.

After just two months, Rucker started adding salespeople, with the goal of doubling the sales force in one year to reach new regional and national retail accounts. As sales began to increase, she also hired additional support staff, including a purchasing agent, two furniture designers, and an accountant. By the end of Rucker’s first year, SunBright was carried by three national retail chains on a trial basis. However, new problems started to surface. SunBright was missing the delivery dates promised by sales reps and a few orders had been returned for not meeting
quality standards. With the consolidation of retail stores into fewer chains, the national retailers had the power to demand high quality, low prices, and rapid delivery from SunBright or they would order outdoor furniture from other suppliers.

At the end of her first year, Rucker was struggling to improve operations to meet the demands of national retailers, but with little success. She invited a consultant to evaluate SunBright’s operations. The consultant’s report contained the following elements.

1. Cooperation among departments is minimal or nonexistent. For example, the purchasing manager changed to a new supplier for paint because it saved a few cents per gallon. But the paint had to be applied in a thicker coat to wear as long in outdoor use. The additional labor and paint actually cost more than the few cents saved in purchasing, and no one in the manufacturing department had been consulted.

2. Salespeople frequently run promotions and promise sales delivery dates that are impossible for manufacturing to meet. The department head of manufacturing emphasizes that it takes time to work out the bugs when introducing new products or increasing production levels.

3. The accounting department reports that productivity for the plant is low. Equipment utilization is too low. The operation is not lean enough to make acceptable profits.

4. The comptroller reports that inventory is too high. Too much capital is tied up in raw materials. Too much capital is also tied up in excessive in-process inventory waiting at machines to be finished and processed for delivery to customers.

5. Salespeople want to use the Internet to publicize Sun- Bright product information and to make routine sales, freeing them to call on new customers. This approach would entail hiring people who could design and manage a sophisticated SunBright Web page. Eva Rucker discussed these six issues with the consultant and agreed with the report’s findings. She met with Jim Cowart to report the findings and ask for his support and financial resources to make corrections. Cowart listened to the presentation and then said he had some other things to attend to. “I don’t think it’s as serious as you say,” he told Rucker, “but you can have a meeting with the department heads if you want to discuss it with them. Remember that our production problems are no worse than our competitors’ issues. You don’t have to fi x everything overnight. Things worked pretty well before we started to grow so fast, and I’m sure they’ll work well again.”

Questions

1. Which of the problems outlined by the consultant do you consider the highest priority? Second priority? Why?

2. If you were the consultant, what types of information systems would you recommend for Sunbright? Explain your reasons.

3. If you were James Cowart, how would you have responded to the report from Eva Rucker? If you were Rucker, what would you do now?