Christopher smith Joseph chasteen Andrew kelly Jayson minix

1. IET 619 Group Project 2 Presented to: Ahmad Zargari PhD. In partial fulfillment of the degree: Master of Science in Engineering and Technology Management Morehead State University Christopher smith Joseph chasteen Andrew kelly Jayson minix

2. An Interview with Tim LivingstonThe Corporate Quality Manager of Big Ass Fans in Lexington Kentucky

3. CompanyVision & Mission • Big Ass Fans strives to produce the best quality fans in the world. • BAF markets their fans in commercial, industrial as well as residential markets. • They have multiple sites in multiple countries to include: • Four facilities in Lexington Kentucky • One in Australia • One in Malaysia • One in Hong Kong • And One pending in the United Kingdom

4. Inputs & Outputs • The company specializes primarily with custom fan designs, and can build fans to any size and shape desired by the customer. However they also sell a large number of their standard product line of fans. • The primary goal of all fans built by Big Ass Fans is the “destratification” of the air in a particular building structure. In order to ensure their product effectively achieves this goal, an initial visit and consultation is usually conducted by the innovations team to properly evaluate a customer’s facility.

5. Inputs & Outputs • They are a 70% supplier dependent making them a 30% assembly organization. • Their process is best described as a “value added process”. • 85% of their products are made here at home with even more of their manufacturing projected to return to the United States in 2014.

6. Inputs & Outputs • 50% of their business is in the residential market but this only generates 30% of their revenue. • Their primary competition being a similar organization in California. • Big Ass Fans has currently been growing at a rate of 40% to 45% each year for the past several years.

7. OrganizationalBehavior • The corporate manager is a firm believer in individual employee empowerment. • Weekly meetings are conducted via Skype with the lead quality managers in each facility around the world to create and review facility “action plans”. • Daily morning meetings are conducted by all quality managers (referred to as “Gemba Walks”) to ensure the quality and safety of all manufacturing.

8. Quality Assurance Techniques • Since they are 70% dependent on Supplier Quality they have an entire division devoted to Supplier Quality Assurance and Development. • Receiving Inspection using Acceptance Sampling • Weekly Quality Communication Meetings to attack quality issues (Quality Circles)

9. Quality Assurance Techniques Con. • 100% inline torque testing and traceability. Torque statistics can be traced down to a specific serial # Fan. • 100% End of Line testing for motor functionality. • They are ISO 9001 certified • Warranty Data Pareto analysis to attack the largest contributors of customer returns.

10. Will They stay competitive? • By owning 85% of the North American Market they have a enormous head start to stay competitive. • They have a great network of sales and service staff to address the consumers needs.

11. Weaknesses • However their global strategy of expansion still lacks the management structure, quality systems, and infrastructure that are present domestically. • They are also considered high end brand which inflates their overall pricing which could turn away potential buyers.

12. Growing too Fast • BAF is growing too fast, while most of the time this is a strength it can also become a weakness. • BAF is growing up to 45% a year

13. Growth Weakness • Having an overload of growth can make the quality of the product sloppy. • It is important to find ways to cut back on growth but still have great quality for your customers.

14. Improvement Recommendations for Growth • Having a more organized management structure for your global positions will help slow the rate at which BAF will grow • Better decision making in marketing and in quality • Will create a stronger infrastructure • Also it will create better quality of product.

15. Improvement Recommendations for Growth • Develop a cutting-edge analytical toolkit that enables them to continuously assess and respond to changes in consumer behavior. • Possibly cut back on the service in North America, since 85% of market owned is there. But still ensure quality

16. Strengths • Custom Fans • Can find a buyer in any market for this product as it can be made to their specifications. • Strong Warranty • The product is guaranteed for 5-7 years with shows assurance in the product.

17. Strengths • Strong desire for domestic market. • Product created in America for the American market, which is a strong desire of consumers for products.

18. Strengths • Communication • Company communication is maintained. • Other locations report at least once a week. • Regular updates to ensure highest possible communication.

19. Becoming More Competitive • Create a line of lowered priced fans. • The average person can afford this. • Increase in business by gathering a larger target consumer group. • Used in residential areas by the average home owner.

20. Becoming More Competitive • Big Ass Fans has a competitive edge currently. • With limited competition, it would not be hard to get ahead in this business. • There are several ways that the company can continue to develop a more competitive edge.

21. Becoming More Competitive • There is a larger possibility for residential business than industrial business. • Increase Residential Business. • Reach out to residential business. • Try to have fans placed inside new homes as they are built. • Since 50% of the sales are already residential, try to increase this number to 75% or more.

22. Becoming Competitive • Since 85% of the industrial market is in North America. • As industry is branching out to other countries the market should be shifting between these countries. • Reach out to more industrial companies throughout the world. • Lessen the burden of having all the industry in North America

23. Improvement Recommendations for Growth • Plan a negative contingency plan in case business grows more slowly and a positive contingency plan in case business grows more quickly. • Drop problematic profit loss customers. This type of customer would be the one that is always trying to cajole you into getting a cheaper product

24. Improvement Recommendations • Move towards a TS 16949 Quality System that measures compliance on improvements in Quality, Delivery, Order Accuracy, and Inventory turns. • Place more emphasis and resources on their global initiative. Bring Top leadership in Australia , Malaysia, and Hong Kong for extensive on-site cross Management systems training to apply lessons learned.

25. Improvement Recommendations • Intentionally slow their growth plan down to ensure that they can grow their infrastructure at the same pace. • Enhance and grow their supplier quality management team to aid in supplier development since they are 70% dependent on supplier quality success.

26. Improvement Recommendations • Enhance their purchasing strategy to review and reduce overall cost of supplied parts. • Review their pricing structure to ensure its accuracy. • Lower inventory levels down to reduce costs in a Lean model. • After cost review look to reduce their overall pricing of their fans to open up new markets that have been cost prohibitive.

27. Conclusion • BAF is a very large and fast growing organization • They must control the rate at which they expand • International positions need better management structure to improve quality of product

28. Conclusion • Adding a lower price of fans will make them more attractable to the average income • BAF strives to be the best at what they do, with a few modification they will be able to continually achieve this goal.