Earth Buddy - Anton Rabie and Ronnen Harary

Anton Rabie and Ronnen Harary created a product that allowed customers to express their own creativity through styling grass hair that sprouted from a small humanlike head. They called this product Earth Buddy and the popularity soon spread like wildfire. Product sales started through the flower shops and gift shops in the Toronto-area but as demand increased they were able to start distributing Earth Buddy at K-Mart, Toys R Us, Wal-Mart and stores alike. However, the production of Earth Buddies were time consuming and very dependent on the weather. The production process had a total of seven steps. The first step was filling, which included six machines that filled the basic round heads with nylon stockings, sawdust and grass seeds. Followed by the next step where operators shaped the product’s eyeglasses. The rest of the process included molding the face, placing the glasses on the nose, and gluing the buddies’ eyes in. Next the buddies were sent to the painter who finished it off with a fabric paint mouth. The last step was to place the product on shelving to dry. In the right conditions, this step took about five hours, however, if humidity levels were higher, drying time increased to seven hours.

One of the more obvious challenges that the company faced was drying time increased in the summer. Due to hot and humid summer days Earth Buddy production director Ben Varadi had to confront the challenge of drying time taking an excess time of two hours. Due to this challenge work in process may be impacted negatively, which causes an increase in production time and overall efficiency standards will decrease. Another challenge that effected production was the vague direction given to Varadi by the co-owners regarding how much product he should allow to be produced. The challenge for Varadi was to only produce enough to keep up with sales, since the company could not afford to carry a large inventory.

Some of the other problems include the lack of employees in the filling, molding and painting stages, which is limiting the number of units that could be produced. Another problem that the company is facing is its production bottleneck. Seiger Marketing had already moved and expanded its Earth Buddy division’s factory and warehouse twice in two months. Even so, current production levels were straining the physical limits of its latest factory.

To address the challenge of increased dry time in the summer, the company should implement temperature-controlled rooms. This would enable the company to move forward with production in full force without the two-hour delays caused by hot weather. The stability in dry time would make it easier to predict all year around helping control inventory and costs. By not having to worry about the additional two-hour dry time in the summer, Earth Buddy can minimize wait time, while maximizing production.  The temperature-controlled rooms can also have another positive effect that will help production and dry time. With many of the modern temperature and humidity control systems the general five hour dry time can be cut down to three to four hours, enabling two batches to be dried in one day. Given the known eight-hour shifts, twice as many Earth Buddy’s can be dried in one workday.

The issue of the co-owners Anton Rabie and Ronnen Harary being uncertain about the company’s direction will have serious negative consequences in the future, unless they become more involved and more certain as to the direction they would like to lead the company. It is apparent that Ben Varadi is concerned about the production direction, yet the only response he is getting from the co-owners is to “Remain flexible. We could get an order for 100,000 units, but if the order doesn’t arrive, we would have to put the workforce on hold. We can’t afford to carry large inventories.” The uncertainty amongst the two owners can drive the business to the ground. The fact that Rabie and Harary want the best of both worlds, to be ready for a 100,000 unit order, while keeping inventory down to minimize costs is more easily said than done. As the owners they will have to make an important decision about whether they want to become a mass-producing company or keep it small to limit inventory and costs, since doing both will be very difficult. If the owners decide to mass-produce Earth Buddy, they will have to invest in more space and expand to other markets to make up for costs due to expansion. Otherwise distribution and sales have to be limited only to the bottleneck production capacity.

Production Volume

The company is limiting its production by not having enough employees working. Packing has a capacity of 363 units per hour, yet it is not being utilized to its maximum capacity due to other lines of production not keeping up. The chart below shows the effects of hiring just one employee that will work on eye gluing, eyeglass fabrication and painting stage. The newly hired employee will split his day between the three lines of assembly enabling the company to maximize production. The new hire would float throughout the production stages helping in a manner that would increase production by 1/3 for the three stages. The concept of this flexible employee becoming well versed in all three production stages can also benefit the company in the event of someone being absent from the eye gluing, eyeglass fabrication or painting stage, since he will be able to cover for that employee, allowing the production to continue without a halt. Alongside the company will need to hire three employees for filling and one employee for molding.