Challenges and Strategies for Jungle Furniture Limited

This report discusses the challenges faced by Jungle Furniture Limited and recommends strategies to overcome them, including competition, forecasting, servitization, and make-to-order production.

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PROJECT MANAGEMENT
Executive Summary
In operational management, every decision made is critical to the success or failure of the
project. Depending on the type of project being undertaken, certain factors determine the
decisions made. For the case of a business, all these are aimed at ensuring the firm makes
maximum profits at the lowest possible cost of production.
Before any project or business is started, an analysis is done to investigate the
profitability of that venture. The cost of operations is critical to this analysis. Also, it is important
to confirm the availability of a forms of resources required to for a project. If it is a business,
availability of ready market and the distribution strategy are of importance.
Other areas of consideration include resource utilization, staff management (where
applicable), production planning, risks involved, competition and expected rate of return.
This paper will put all these factors into consideration and explain them, taking Jungle
Furniture Limited as the reference point.
Introduction
The objective of any business is to maximize profits and minimize cost. To achieve this,
it is very critical that the business lays down very effective structures. This is a joint
responsibility for both the management and the company staff. As such, coordination and
teamwork among the parties involved are very important for this to be achieved.
Jungle Furniture Limited is faced with a number of challenges that basically hinder their
operations. In the long run, these challenges may pile up and cause the firm to close down. This
is the main reason why the new management seeks to find solutions to these problems early
enough.

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The firm mentioned above is not only facing external threats but also having internal
challenges that are affecting its efficiency in delivery. The ability of a firm to maintain its clients
is dependent on the quality of service it offers them. The services should be timely, of good
quality and should be aligned to the needs of the customers. When customers are happy, they
tend to buy more, thereby increasing sales for the business.
Internally, the firm is facing issues with conflicts among the top leadership of the firm
and unwillingness by the staff members to work extra hours. These acts result in reduced
efficiency. Externally, the firm is facing very stiff competition from a similar business. Another
challenge also experienced by the firm is the unreliable supply of raw material used in the
production process.
This report is aimed at expounding on these challenges and recommending the most
suitable approached to contain these situations. The first challenge to be addressed would the
stiff competition from similar businesses.
Competition
Jungle Furniture Limited is facing very stiff competition from similar products imported
from Thailand and Malaysia. These products from the two countries are fairly cheaper, therefore,
more affordable to the general public who the customers are. Since the target customers are the
same, JFL products are bought by fewer people as the majority are drawn to cheap products.
This calls for JFL to shift focus to ways of retaining their existing clients and to
encourage them to refer new customers to the firm. This can only be achieved if the company
makes the customer experience very enjoyable for these clients.

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Some of the ways to achieve this are by customizing their products to meet the specific
requirements from the clients. This is achievable through effective design and the use of either
assemble-to-order or make-to-order production strategies. These three strategies allow for the
customer to suggest how they would want their furniture to look like. They have a chance to
specify the features to be incorporated when making the furniture (Nicholas 2010). Things like
color, size, and weight can be specified by the client. This way, the end product meets the
specific requirements of the clients, therefore making them more attracted to the products. This
provision is not available when importing furniture from the two countries mentioned above.
JFL should also consider offering unique value-added activities to the customers. These
include offering free delivery services once in a while. Such acts make the customer feel valued,
thereby winning their loyalty to the firm and its products (Abbott and Lwakabamba 2010).
As a way of ensuring the firm continuously produce quality products, they should
consider developing very well structured process performance metrics (Branimir Wetzstein;
Steve Strauch; Frank Leymann 2009). These are the parameters used to monitor the quality and
effectiveness of the production process. This way, they are able to identify any lapses in the
production process that may lead to low-quality products or delayed production of items and take
the necessary steps to rectify such lapses. The firm should also ensure it is centrally placed at a
location that is easily accessible to its customers, emphasize on timely delivery of goods, provide
user manuals to its customers, and frequently reward loyal customers.
If these strategies are effectively implemented, the customers will definitely feel more
attracted to shop with Jungle Furniture Limited despite the prices being a little bit higher, thereby
increasing revenues.

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Forecasting
This refers to the ability of the firm to predict the number of its products that are likely to
be demanded by the clients at a future date (Daganzo 2014). This is dependent on historical sales
data by the firm. Based on that and the projected economic conditions, statisticians and
economists are able to come up with approximate quantities that are likely to be demanded in the
future.
Due to the nature of the business, short-range forecast and medium-range forecast may be
most appropriate. It is not expected that an already manufactured product would be kept in the
warehouse for a period of more than one year. To increase the levels of accuracy in the projected
figures, there should be a margin of error that is allowed when making projections (Ganesh-
Kumar, Prasad and Pullabhotla 2012).
In order to come up with a better forecast, certain assumptions must be made. One of
these assumptions is that the factors influencing demand in the future are similar to those that
were influencing demand in the past. The population patterns are also assumed to be constant
over the periods.
The moving average method can be used. This is because there is sufficient historical
data to be used in forecasting. The data used is from sales records recorded in the past. This
method is usually more accurate (Althelaya and MohammedI 2018). However, it also has its own
disadvantages. One of these disadvantages is that it requires a lot of historical data. The other
disadvantage is that as the time horizon under consideration increases, the forecast becomes less
responsive to change. The graph below represents the number of units sold per quarter of a year
for four years.

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1 2 3 4 5
0
50
100
150
200
250
Quarter Ly SALES
Series1 Series2 Series3 Series4
Year
Sales
The average number of units sold per year can be evaluated as;
Average = ∑
i=1
4
Xi
4 where Xi
= the number of sales per quarter year. The average number of
units sold for the four years are;
Year Average
1 53.75
2 74.25
3 99.5
4 131
Servitization
This is one of the most innovative and current strategies used by firms in developing
economies to increase sales volumes (Ahamed, Inohara and Kamoshida 2013). It is considered to
be very innovative and unique strategy toward increasing sales in a business. This strategy

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allows firms to refurbish already used items and sell them off at fairy discounted prices through
their retail centers. This minimizes the cost of productions also enables the targeting of a
completely new market segment. It was therefore very necessary for Jungle Furniture Limited to
adopt servitization as a strategy to boost its sales.
Through servitization, the firm is able to offer a variety of products to its customers. Both
high net-worth individuals, corporates and retail suppliers are able to access furniture suitable for
their class and within their budgets (Smith, Maull and Irene 2014). It would cost far much less to
refurbish the already used furniture compared to the cost of producing new once. At the same
time, JFK is able to maintain their corporate customers and high net worth individuals as they
supply them with the new furniture at the end of every year. This results in a constant and
predictable source of revenue to the firm.
Since it is clearly now which corporates or individuals would require new furniture at the
end of the year, the firm is able to plan in advance and ensure timely delivery of the new
merchandise. This technique helps the firm reduce the cost of advertisement as the main focus
shifts to maintaining existing customers and getting referrals from the existing customers. The
company would also be able to offer retail sales. This is a totally new market segment that was
previously not served by JFL.
Generally, servitization would result in a reduction in the costs of operation, expansion of
the target market, and increased revenues for the firm. This, in the end, leads to increase
revenues to the firm, therefore it is a strategy worth considering.
Make-To-Stock or Make-To-Order?

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Mae-to-stock is a traditional method used in manufacturing where a company would
produce goods in excess of demand and store the excess anticipating that they would be bought
in the future (Altintas, et al. 2010). On the other hand, make-to-order is a strategy where goods
are only produced when the customers place their orders (Hemmati and Rabbani 2010).
In the case of make-to-order, Jungle Furniture Limited are able to customize their
furniture to meet the specific needs of their customers. They only produce what has been ordered
by for the customers. This way, the problem of excess inventory is not encountered by the firm.
It also reduces the warehousing costs as less furniture is in store at any given point. However, its
success largely depends on the level of proactive demand management of the firm.
For the alternative option (make-to-stock), its success is largely dependent on the ability
of JFL to accurately predict future demand. Where the forecast is not accurate, then the firm may
experience excess inventory, resulting in high and unmanageable warehousing costs. The firm
may also experience liquidity shortage as a result of this since there is little or no cash inflow.
The firm is also obligated to keep redesigning operations at frequent intervals. This is a costly
exercise and therefore results in increased expenses for the firm (Zaerpour, et al. 2009).
Based on these facts, it would be prudent for JFL to apply both make-to-order and make-
to-stock as their strategies of production. However, more focus should be given to make-to-
order. This will enable the firm to not only reduce costs but also meet the specific needs of their
clients as a result of customization. This approach is suitable for maintaining customers and
boosting their loyalty to the brand.
Other Recommendations

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Other than the recommendations given above, Jungle Furniture Limited managements
should also consider introducing another shift. This move will help reduce the exhaustion of the
available staff. There will also be more production hours, thereby eliminating the problem of
delayed delivery. Other than that, the management should also invest in training its staff
members on the best applicable industry practices. This improves their knowledge and skills and
has an overall effect of increasing the quality of the items produces.
Lastly, the firm should consider sourcing for alternative suppliers of timber. This way,
there won't be delays in production as a result of the delayed supply of the raw materials. Also,
when there is a range of suppliers to choose from, the firm has the choice of picking one with not
only the best rates but also the best quality. Competition generally results in better quality in the
business context.

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References
Abbott, Pamela, and Gloria Lwakabamba. 2010. "Developing customer service delivery:
development with a smile?" Research Report.
Ahamed, Zahir, Dr. Takehiro Inohara, and Dr. Akira Kamoshida. 2013. "The Servitization of
Manufacturing: An Empirical Case Study of IBM." International Journal of Business
Administration 4 (2): 18-26. doi:10.5430/ijba.v4n2p18 .
Althelaya, Khaled El-Sayed M. El-Alfy, and Salahadin Mohammed. 2018. "Evaluation of
bidirectional list for short-and long-term stock market prediction." 9th International
Conference on Information and Communication Systems (ICICS). IEEE. 151-156.

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Altintas, Murat Hakan, Serkan Kiliç, Gokhan Senol, and Feride Bahar Isin. 2010. "Strategic
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