Nature of customer demand within a company

The general nature of the funeral business Is to some degree Incredibly uncertain. There is no guaranteed way of forecasting future work as there is no guarantee that death rates In the area will remain the same year on year due to various factors e. G. General health in the area, local disasters, poverty rates etc. For the purpose of this report the focus will not be on the funeral business as a whole but on one area of sales – monumental masonry.

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The nature of customer demand – volume, variety and uncertainty Month on month the monumental masonry side of the business will complete, on average, 40 monumental orders – 75% of this work will be new work that has come from funerals that the business has recently completed and 25% of the work will be In the form of ongoing maintenance of past monumental work, such as cleaning (see appendix 1).

In terms of volume of sales the majority of the work is dependent on the number of funerals completed each month, however it does make up the majority of sales month on month. Variety of sales can be divided, basically, into three sections: New monumental work- new headstones, vases and plaques Additional inscriptions – lettering added to an existing monumental Ongoing maintenance – cleaning monument’s, re-flung, fixing general damage.

Due to monumental sales coming mainly from funerals completed by the company there is a degree of uncertainty in the number of orders that will be made each month which makes It difficult to forecast for the future. However there Is a yearly trend whereby December has always been a notoriously busy month as it appears that many people wish decide to have monumental work undertaken and generally completed in time for Christmas (see appendix 2). WORD COUNT: 302 8) Management approaches to anticipate demand. Eke capacity plans and control supply the only way in which future supply needs can be predicted is by use of historical data, therefore the company runs the monumental masonry as a purchase to order business whereby the majority of raw materials will not be ordered until a confirmed order is received. Basic supplies such as gold leaf for the inscriptions and adhesives are constantly restocked and there are always the most popular headstones/vases/ plaques kept on stock (10 of each) in anticipation of an influx of possible high demand, particularly during the busier months, such as December.

There is a master production schedule in place for all monumental orders (see appendix 3) spanning from the time of order to the completed order, however the timings are entirely approximated and can differ greatly depending upon the size of each individual order, where the completed order will be situated and if any specialist materials need to be bought in. Customers expect a certain waiting time on confirmed orders as each order is personalized and cannot possibly be made prior to the order being taken.

Slack et tall (2007) define capacity as “The maximum level of value added activity that n operation, or process, or facility is capable of over a period of time”, in terms of the monumental masonry of R. Banks & Son this would mean the amount of materials that can physically be kept on stock, how many orders can be processed daily and how quickly these orders can be fixed in place in the cemetery/churchyard.

Throughout the year monumental orders are only physically passed over to the masons for completion approximately one week prior to the estimated completion date. Prior to this the work is held by the monumental manager, after being passed n by the monumental sales, who will assess what materials are required, order whatever is necessary and assess how long the order will take to complete (see appendix 3).

It is the task of the monumental manager to control how much work is passed over to the masons so that work can be completed in order of priority and always ensuring that they are not overloaded (it is essential that the masons do not get overloaded with work as this could lead to mistakes being made and lowering the quality of goods provided, which in turn leads to the whole production line slowing own, mistakes being rectified and the cost of production will rise as more time is taken and more raw materials being used than has been anticipated).

This generally works by use of medium term capacity planning whereby using historical data and current number of funerals to be carried out the manager can somewhat anticipate the demand and therefore ensure that current work is completed in time so that there will not be a back log of orders. However due to fluctuations in demand short term capacity adjustments will sometimes have to be made to ensure that work is aired out at a quicker rate in during the busier periods (in this case December).

When fluctuations in demand occur to a level that the business cannot cope with then the work will be sub-contracted to another business to help cope with said demand. This also helps in keeping the costs of staff down, momentary fluctuations in demand will not require the use of extra/temporary staff if the work can be completed elsewhere to the same standard of quality. Cemetery/churchyard, particularly during the winter months.

Therefore it is expected that if the weather has been particularly bad on some days and the process of fixing monuments could not be completed then on the days when the weather is fine then priority must be made for said monuments. Work can and will be subcontracted if the need arises as the wants of the customer will take priority. Stock control within the business mostly depends upon the type of monumental orders placed.

In the case of work such as additional inscriptions and ongoing maintenance where materials such as gold leaf and adhesives are used the business uses the theory of economic order quantity whereby quantity of materials ordered monthly is based upon the steady demand of orders. As the items are not perishable it can be stored in a relatively small space if not used on a monthly basis. Obviously if there are materials unused from one month to the next then it will not be reordered the next month.

In the case of new monumental orders it depends entirely on what monument has been ordered and if it is on stock. The most common headstones/vases/plaques are kept on stock to a maximum of 10, at the end of each month the monumental manager will complete a stock take of monuments and replace the number used. For other monuments displayed in the brochure that re not common then the individual orders will be placed for each item and the operation uses the Just In Time approach to complete the orders. This reduces the cost of storage and cost of stock held.

In terms of waiting times for monuments to be delivered to the business this again depends on the type of monument that has been ordered and is reflected in the waiting time for the customer. For example a standard 8″xx” black polished vase would typically take four weeks from point of order to delivery to the company, however a more complex order such as a 2’6 all oilseed lavender blue headstone would typically take 10 weeks delivery to the business (see appendix 4 for standard delivery times of all items).