This case is about Ergonomics Inc., whose goal is to design an office chair which should meet or exceed industry standards for strength and durability and it should also have minimal impact on the environment. The company plans on incorporating environmentally sensitive process and design improvements into the chair that could be used in connection with the development of future ergonomics seating products. These goals can be the way to bring about manufacturing synergy through standardization, common application and waste reduction. Since all opportunities comes with the risk, Ergonomics has to decide whether to wait and see approach to green products or take the risk of being an ERM. Ergonomics is using Analytic Hierarchy Process to decide which approach to go with and they are examining the design, waste reduction, product life cycle and shipping of it.
Project Background
Businesses are competing on environmental level as International law and certification programs such as ISO 14000 are influencing the way the products are produced, marketed and reclaimed. Businesses are finding bottom-line impacts from producing products with less waste, using alternatives for hazardous materials, choosing lower costing recycled raw materials and reducing internal and external risks to the company. Competitive conditions are challenging office furniture manufacturers to improve their products further without sacrificing design or quality and at the same time offering low prices to the customers. Ergonomics Inc. is a $100 million dollar company which manufactures office furniture. The company is faced with a critical decision regarding the developments of a new product that is faced with major environmental production and sourcing issues. The importance of this decision is increased because this office chair can become the ERM Model for future products within the company.
Problem Statement
International law and certification programs such as ISO 14000 are influencing the way the products are produced, marketed and reclaimed in furniture manufacturing industry. Ergonomics Inc. is faced with a critical decision regarding the developments of a new product that is faced with major environmental production and sourcing issues. The importance of this decision is increased because this office chair can become the ERM Model for future products within the company. The company’s competitors are attempting to improve products using environmental approach and are not sacrificing design or quality and offering lower pricing to customer. But convincing the upper management to implement ERM is a challenge since this process will take additional time to develop. The development team has four options: First is to use ERM, second to work with Supplier A who is very reputable and has worked with Ergonomics for the past 10 years, third to work with Supplier B who is part of Ergonomics European supply base, located in Germany, is ISO 14000 certified, and has been working with Ergonomics for the past 5 years and fourth is to develop a new chair using existing processes and technologies or waiting, while letting other companies address environmental issues before ergonomics does. The major factors that will influence the decision making process include design, waste reduction, life cycle implications and shipping.
Methodology
1. In order to create Analytical Hierarchy Process (AHP) to solve the multi-criteria selection problem, we create a Decision Matrix.
2. Decision matrix is created by the following items: a) Design b) Waste Reduction c) Product Life Cycle d) Shipping.
3. Then, we assign relative intensity priorities for pairwise comparison of criteria.
4. Do synthesize judgment in order to calculate the priority of each criterion in terms of its
