Operations Management Free Essays

The process type McDonald’s uses is batch process because there are moderate volume and moderate variety in their products and services. McDonald’s products are semi-standardized as they are stocked pre cooked. When a customer makes an order, the product is then prepared. We will write a custom essay sample on Operations Management or any similar topic only for you Order Now This shows high flexibility, for example, a customer orders a special order of McCracken without lettuce, the order will be processed within minutes. There is also high volume of production as McDonald’s serves thousands of customers dally. Inning a batch process means that the speed of delivery Is dependent upon the speed and experience of the Individual worker. This process supports the business of McDonald’s as they will be able to process the different types orders to cater to the different needs of customers, In the shortest time possible. To achieve that, moderate skill level of workers is required. The advantages of batch process are that it allows workers to specialist in specific lobscouse and use the specialist equipment, different batches of different production an be made. On the other hand, there are also disadvantages of batch process. Firstly, specialization means that the workers are doing repetitive jobs, which can result to boredom. Secondly, the machinery needs to be reset and cleaned in between batches. This can be time consuming which in turns slows down the production. Also, when the hamburgers are produced by batches, they would keep them for as long as possible and eventually discard them if they were not sold. This will increase the cost for McDonald’s. How to cite Operations Management, Papers Operations management Free Essays The current operations management strategies being employed by the two companies namely Ford Motors as well as Hard Rock can be characterized as an innovative way of putting quality and profitability in sheer balance. Both companies operate in an international setting and employ a diverse workforce with mixed cultures. Even if these factors hold for both companies, it is a operational wonder how both manage to have sizeable amounts of profit. We will write a custom essay sample on Operations management or any similar topic only for you Order Now For instance, Ford Motors established an automobile park wherein various factories dedicated to specific assembly lines have been established side by side. The factories lie close to the existing 80-year old facility in Southern Chicago. Each facility in this complex puts the assembly line in the various Ford automobiles closer. This strategy copied from low-cost vehicle assembly plants in Latin American countries saves the company up to $15 million annually in lost transportation costs. Before, it takes about a day in order to transport automobile parts from Ford’s component suppliers to the main assembly plant in Southern Chicago. Although initial costs are up to $250-million, the automobile company prioritized the quality of their supplier parts that would now take only 15-minutes in transport from one factory to the other within the park. According to Brown, â€Å"operations have been promising within the park† since it opened in early 2004. On the other hand, operations management innovations in Hard Rock have been similar to that of other companies such as Starbucks. This time though, Hard Rock has been successful in benchmarking itself as a fashionable and trendy bar restaurant serving great food, updated music as well as sold-out events. Hard Rock also became known in recent years by breaking into new territories by opening new Hard Rock Hotels in Bali, Indonesia, Pattaya, Thailand, Las Vegas, Nevada, among others. This has proven that the company amidst stiff competition. In general, Ford and Hard Rock have been perfect examples of how operations management principles can still improve quality even under profit maximizing measures. How to cite Operations management, Essays Operations management Free Essays Introduction Strategic Focus, one amongst the most important step in the design and development of a product, enables companies to discover and explicitly commit themselves to important considerations (Ahoy, 2008). In the current case studies of Ready Materials and Zara, efficient and effective strategic focus assisted in expanding and extending the business into the narrow market or industry segment. More specifically, the super-responsive supply chain developed by Zara permitted the company in designing, producing and delivering new garments for marketing worldwide (Gattorna 1998). We will write a custom essay sample on Operations management or any similar topic only for you Order Now Ready Materials, on the other hand, possessed no clear strategic focus and witnessed complexities in meeting the volatile demand pattern. This characteristic absence of strategic focus caused a demand uncertainty, which eventually led to the emergence of buffering mechanisms (forward load, inventory and capacity). Owing to the fluctuating nature of daily demand, most of the purchasers of Ready Materials have aligned their orders with respect to a day per day operation and waited for the dispatch for an average time of 24 hours. Use of capacity buffering system in the form of annualised hours helped in managing Ready Materials at times of demand fluctuations, enabling adjustments to the working day by up to two hours, either way, without any intimation (Gattorna, 2009). Though these buffering mechanisms caused the company to witness low levels of staff morale and retention, in recent years, this has gained immense attention with the work force finishing the task early more often than late. Buffering mechanisms undertake the forms of order backlogs link with a variable extension to lead time. Inventory buffering mechanism, used by Ready Materials, compressed the customer response time by committing capacity in the advance of demand. Reducing the capital or, in other words, operating at the negative working capital helps in aligning with offsetting the investment in additional capacity. Thus, managing buffering mechanisms through resource alerts and effective prioritisation of resource attention assists projects in taking an advantage. It minimises the impact of Parkinson’s Law, and prevents unnecessary distraction alongside facilitating recovery planning when required, yet at a time in advance when the project or company is in trouble. Presence of high demand uncertainty necessitates the need of project and strategic management (Lake, 2010). As indicated earlier, the use of buffering and alignment mechanisms, allow the resources and companies to gain a st rategic focus of resource attention besides enabling the advantage of good morale and early task finish. Much focus can be levied on time schedule management, and this automatically decreases unnecessary distraction, further enabling for the recovery planning to prevail, when needed. However, this is only necessary whenever the company witnesses extreme difficulty (Ahoy, 2008). Managing of uncertainty remained at the core of improvement of project performance for Ready Materials. Making use of highly sophisticated just in time systems could help in adjusting to the alignment and this automatically offers an efficient strategic focus. At such times, the company is required to get the projects completed both ahead of schedule and with efficient reliability of stock delivery dates that were promised. This specific approach to alignment offers mechanisms which allow a â€Å"complete system† view of projects. The mechanism of alignment recognises and safeguards the uncertainty and thereby avoids the Parkinson’s Law at the task level whilst considering Murphy’s Law at the project stage. All of these implications suggest an intimate interrelationship between strategic focus, buffering and alignment. Effective and efficient management of these three segments of operational management helps each of the companies in driving towards success (Vital e, 2002). It is the duty of project managers to shift their attention from assuring the achievement of strategic focus, task estimates and intermediate milestones. All of these are vital from the date it is required to the final promised due date. But, a grasping of the whole implication of this approach is an immense challenge. Running factories for only a single shift, sending half empty loads to other countries, which were followed by Zara, could help in focusing local efficiency at the expense of international responsiveness. Investing in the overall capital assets can eventually enhance the strategic focus and organisational flexibility (Stratton, 2008). Owing production assets can offer the company a level of control over its schedules and the companies no matter what they intend to do. Besides manufacturing of complicated products, it can enhance strategic focus and thereby minimise the incorporation of buffering mechanisms and alignment patterns. References Ahoy, K. (2008). Customer Driven Operations Management: Aligning Businesses, Processes and Systems, London: Hoffmann Publishers, pp. 90-100. Gattorna, J. (1998). Strategic Supply Chain Alignment: Best Practices in Supply Chain. London: SAGE Publishers, pp. 451-460. Gattorna, V. (2009). Dynamic Supply Chain Alignment. London: Heinemann Publishers, pp. 341-390. Lake, H. (2010). Operational Management and Control. London: Routledge Publishers, pp. 34-90. Stratton, R. (2008). Theory Building: Relating Variation, Uncertainty, Buffering Mechanisms and Trade-offs, Proceedings of the 3rd World Conference on Production and Operations Management. Tokyo: Japan. Vitale, B. (2002). Business to Business Marketing. London: Routledge Publishers, pp. 34-89. How to cite Operations management, Essay examples Operations Management Free Essays Operation management is the activity of managing the resources, such as capital, facilities, raw materials, technology, and so on, which create and deliver services and products. ( Slack et al, 2011 ) No organization could survive in long term if it cannot manage operations management effectively. The importance of operations management is that it affects an organization’s costs. We will write a custom essay sample on Operations Management or any similar topic only for you Order Now There are three activities of operations management, which is directing the overall strategy of the operation, designing the operation’s services, products, and processes, delivering to customer, and developing process performance. IKEA’s History and its Operations Management IKEA was founded in 1943 in Sweden, and it is a successful international retailer with 276 stores in 36 countries. IKEA offers a large variety of well designed furnishing products with low costs, which has contributed to its success. IKEA also contributes a lot to the environment. It cares about the safety of raw materials and production. For example, IKEA stopping selling plastic bags, and it encourage customers to bring their own bags. To support â€Å"less plastic bags† action, IKEA reduced 30 cents each of its own recycle bags. Supply Network Design and Supply Chain Management Most IKEA stores locate outside city centers in order to reduce transportation costs and capital costs. For example, there are two IKEA stores in Singapore, one is in Queenstown, the other one is in Tampines. These two places is not in the city center. Besides, Singapore is a small country that allows IKEA to save more delivery costs comparing with those big countries, such as America. In order to keep the price low, IKEA transports products by truck, rail, and ship. Flat packs and stackable products allows IKEA to handle more of them during delivering. Process Design and Layout Firstly, IKEA’s biggest symbol is its large blue building with yellow shop sign. Secondly, its showroom design is similar to ‘one way’ layout, which makes customers wanna visit the whole store. Thirdly, IKEA provides convenience to customer from free parking, large and clear notice board. IKEA not only offers functional furnishing products, but also restaurant, grocery stores which has majority of Swedish food, and children play area. ( IKEA ‘s Official Website ) Product Design IKEA designs stylish products that can be flat-packed efficiently. ( Slack et al, 2011 ) And it makes products with low costs that are affordable to customers. Customers have to collect the flat-packed goods from the store and assemble those products by themselves. (IKEA also provides delivery service ) In this way, IKEA could reduce labor costs ,storage costs, and shipping costs in order to support its high efficiency. In fact, both customer and IKEA benefit from this concept. IKEA’s has built good relationship with its suppliers. It has suppliers from more than 50 countries and Its purchasing teams are located all over the world and work with them. IKEA insists to work environmental friendly. ( ICMR, 2006 ) IKEA only accept woods from qualified forest which is verified as responsibly managed. According to IKEA’s introduction, it provides collection points for customers to return waste. During manufacturing process, it tries to minimize wastes. IKEA would use the waste to produce other items if possible. In a word, IKEA makes a great effort to use and produce remanufactured and renewable goods. IKEA does a great number of tests of productions every year, and it also has third-party auditors to do the tests also. Since IKEA purchase raw materials in large volume, it enables IKEA to reduce costs. With all these effort, IKEA is able to produce sustainable goods with high quality and low costs. In a way, IKEA does not only save direct costs, but also gain intangible costs, such as good reputation and trustworthiness. Quality Management From operation’s perspective, quality is to meet customers’ expectation. In the customers’ perspective, quality is what they think the product should be. IKEA offers delivery service, assembly service, kitchen installation, sewing service, children service, interest free, gift cards, and return policy. ( IKEA Official Website ) People love IKEA’s products, but dislike the shopping experience because there is always crowded and a long queue in the store. IKEA provides catalogue and brochures to customers, and it creates mobile Apps so that customers could download and read it. Customers can see new products and discount products with price. IKEA creates planning tools for customers, which allow customers plan before they shopping. Customer can do their planning online, and they can also check the stock availability. There is a code with every product, customer can check its availability via its official website. It is not easy to create such visibility to customers. It did help people to understand their need, and avoid crowd. Most important, it saved customers’ time and cost since they do not need to go to the store in person first. Nowadays, people rely on internet more than ever, IKEA should try to make itself and the system more approachable and complete. Effective operations management can bring an organization competitive advantage and profit. IKEA has presented a great example. Only each process can interact effectively, can the organization run smoothly. Reference: 1. Slack, N, Brandon-Jones, A, Johnston, R, (2011): Essentials of Operations Management, Pearson Education Limited. 2. IKEA Official Website. Online ]. Available http://www. ikea. com/sg/en/ 3. 2006. IBS Center for Management Research: IKEA’s Environmental Practices: Making Good Business Sense. [ Online ]. Available http://www. icmrindia. org/casestudies/catalogue/Business%20Ethics/IKEA%20Environmental%20Practices%20-%20Making%20Good%20Business%20Sense%20-%20Business%20Ethics. htm [pic]Confirmation Certificate Congratulatio ns! You have successfully completed the Library Plagiarism Quiz. 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Please print out this page and attach a copy of the certificate to the final page in all assignments you submit on each module as part of your programme (It is your responsibility to print the certificate, complete the information, sign it, and keep a copy of it for your records) ———————– 3 3 How to cite Operations Management, Essay examples Operations Management Free Essays 03-498 -89-1 SAADIA ROLLING MILLS In January 1989, Asim Noor, General Manager Saadia Rolling Mills (SRM), Badami Bagh, Lahore, Pakistan, was contemplating several recent developments in the iron billet market. Asim was concerned because in its production of iron reinforcement rods SRM used about 20 tonnes of iron billets every month. Iron billets were being produced in only two locations in Pakistan, Lahore and Karachi. We will write a custom essay sample on Operations Management or any similar topic only for you Order Now For several years SRM had bought iron billets from the supplier in Lahore. Purchases were made on a weekly basis, and the expediting and clerical cost per requisition were Rs1 50 and Rs 33 respectively. Cost of unloading the iron billets into SRM was Rs 8. 30 per tonne 2 of iron billets. The storage space for iron billets at SRM was enough for two months demand with extra leased storage space available at Rs 199. 20/tonne/year. A few months back, Asim had been informed by his purchasing agent that the local supplier had followed his Karachi competitor in announcing a new price structure: 2 US $ 1. 00 = Pak Rs 19. 1. The six metre billets used by SRM weighed about 250 kg each. This case was written by Research Associate, Arif I Rana, under the supervision of Visiting Professor James A Erskine, to serve as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Some information has been disguised for purposes of confidentiality. This material should not be quoted, photocopied or reproduced in any form without the prior written consent of the Lahore University of Management Sciences.  © 1989 Lahore University of Management Sciences 03-498-89-1 Order (in tonnes) First 20 Next 20 All over 40 Unit Price/tonne Rs 8,300 Rs 8,134 Rs 7,885 SRM’s local supplier had just increased its rolling mill capacity and would now supply iron billets only to a select group of customers. SRM now had to deal with the Karachi supplier whose prices were the same as the local supplier, except that they did not include the transportation costs from Karachi. Asim contacted a few transporters in Lahore and found that transportation cost of iron billets from Karachi was Rs 830 per tonne. However, large trucks with 20 tonne capacity were also available at Rs 10,000 per truck. It normally took one week for consignment from Pakistan Steel to reach their destinations in Lahore. Asim wondered what effects these new developments would have on his cost structure. 2 How to cite Operations Management, Essay examples Operations Management Free Essays OPERATIONS MANAGEMENT: as a competitive weapon mks mks@mdi. ac. in http://mks507. We will write a custom essay sample on Operations Management or any similar topic only for you Order Now vistapanel. net Prof. (Dr. ) Manoj K Srivastava Operations Management Area 1. The Systems Approach C O N T E N T S 2. 3. OM Definition Ten Critical Decisions 4. 5. The Cases 4V Typology of Operations 6. 7. Productivity Competitiveness 8. 9. Manufacturing Vs. Service? The History 10. The Future 1 Systems Approach Systems Approach Reduce waste†¦or enhance output†¦ 2 OM Definition What is Operations Management? What is Operations? a function or system that transforms inputs into outputs of greater value Operations management (OM) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs TYPES OF TRANSFORMATIONS †¢ †¢ Physical: Locational: as in manufacturing operations as in transportation operations What is a Transformation Process? a series of activities along a value chain extending from supplier to customer. activities that do not add value are superfluous and should be eliminated †¢ †¢ Exchange: Physiological: as in retail operations as in health care What is Operations Management? esign, operation, and improvement of productive systems †¢ †¢ Psychological: Informational: as in entertainment as in communication Value Engineering / Value Analysis ? Use ? Esteem ? Time ? Place 3 What Operations Managers do? ? Service, product design†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. ? Quality management†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ ? Process, capacity design†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. ? Location †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Ten Critical Decisions ? Layout design †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. ? Human resources, job design†¦Ã¢â‚¬ ¦.. ? Supply-chain management†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ ? Inventory management †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. ? Scheduling †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ ? Maintenance †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 4 The Cases Britannica Story Invite your enemy onto the roof, then remove the ladder Sun tzu The Art of War 36 Stratagems 1988 1988-93 Britannica (Leader, 230 years experience, 1768), $1000 Microsoft encyclopedia from funk Wagnall’s encyclopedia Searchability, Multimedia, Graphics, Timeline (20 feet), cross-links, updating 1993 1995 Price $300 (cost of CD:$1) (in-fact you can purchase encarta encyclopedia + a PC in Britannica price) Britannica has to jump in a business which was not its strength, Price still $1000 1997 Reduced to $125, later on free online, crashed twice Innovation in Operations McDonald’s Corp Olympic Flame ? ? ? Facing Increased Competition Smarter and More Demanding Customers Less Brand Loyal Switched to hamburger bun that does not require toasting. ? Customers prefer taste of new bun ? Saves time and money, QSVC Model ? ? ? ? 10,000 runners 15,000 miles through 42 states in 84 days Two years of planning Must plan for no-show runners and rush hour traffic ? Cost of this operati on in the neighbourhood of $20 million Innovation in Operations Ginger Hotel BillDesk No-frills, June 2004 No room service, travel desk, swimming pool Wi-fi, Two type of room: Rs. 999 and Rs. 1199, Prabhat Pani, CEO, Roots Corporation BillDesk, a property of IndiaIdeas. com Ltd. , 2000 Three Arthur Anderson Executives Third-party bill collection 25 Banks, 100 companies Just apply today. It only takes a few minutes. Once you’re approved, you get your very own Zipcard. Reserve one of our cars – for a couple hours or the entire Day. Do it online or use a phone. We’re easy. Walk to the car, then just hold your Zipcard to the windshield. The doors will unlock, and it’s all yours! Drive away†¦ and return to the same reserved parking spot at the end of your reservation. It’s that simple. And remember, gas and insurance are included too. 5 Operations typology: 4V Approach Differences within sectors are often greater than the differences between sectors Financial services An account management centre at a large retail bank Financial analyst advising a client at an investment bank Furniture manufacturing Mass production of kitchen units Craft production of reproduction ‘antique’ furniture Hotels Value-for-money hotel Lobby of an international luxury hotel A Typology of Operations: 4 V’s Low Volume High High how many products or services are made by the operation? how many different types of products or services are made by the operation? High Variety Low High Variation in demand Low how much does the level of demand change over time? how much of the operation’s internal working are ‘exposed’ to its customers? High Visibility Low Implications Low repetition Each staff member performs more of job Less systemization High unit costs Flexible Complex Match customer needs High unit costs Changing capacity Anticipation Flexibility In touch with demand High unit costs Short waiting tolerance Satisfaction governed by customer perception Customer contact skills needed Received variety is high High unit costs A Typology of Operations Implications High repeatability Specialization Capital intensive Low unit costs Well defined Routine Standardized Regular Low unit costs Stable Routine Predictable High utilization Low unit costs Time lag between production and consumption Standardization Low contact skills High staff utilization Centralization Low unit costs Low Volume High High High Variety Low High Variation in demand Low High Visibility Low 6 Productivity Effectiveness Efficiency Productivity Types of Productivity Single Factor Productivity Output Labor Output Materials Output is of quality nature Output Capital Multifactor Productivity Output Labor + Materials + Overheads Output Labor + Energy + Capital Total Factor Productivity Goods and Services Produced All inputs used to produce them America West’s Reverse Pyramid system This is in contrast to the approach used by many airlines of just boarding all seats starting from the back of the plane and working forward. 7 Competitiveness Competitiveness The degree to which a nation can produce goods and services that meet the test of international markets while simultaneously maintaining or expanding the real incomes of its citizens. A firm is competitive if it can produce products [†¦ of superior quality or lower costs than its domestic and international competitors. (US-President`s Commission on Industrial Competitiveness 1985, S. 6) Global Competitiveness Ranking 1. Switzerland 2. Sweden 3. Singapore 4. United States 5. Germany 6. Japan 7. Finland 8. Netherlands 9. Denmark India 51 10. Canada China 27 Competition Within Industries Increases When ? Firms ar e relatively equal in size and resources ? Products and services are standardized ? Industry growth is slow or exponential Barriers to Entry ? ? Economies of scale Learning curves Capital investment Access to supply and distribution channels 8 Manufacturing vs. services Degree of Servitization Manufacturing and Service Employment Manufacturing Employment and Production Services as % of GDP Tangibility Spectrum Economic Offerings can determine prior to purchasing can only be discerned after purchase or during consumption or use customer must believe in, but cannot personally evaluate even after purchase consumption Differences Between Goods and Services Intangibility Heterogeneity Simultaneous Perishability Production Consumption 9 History of OM Five Eras of Operations Management Journey of Operations Management Adam Smith uge increases in productivity obtainable from technology or technological progress are possible match human and physical capital, Division of labor Eli Whitney à ¢â‚¬ ¢ †¢ In 1798, received government contract to make 10,000 muskets Showed that machine tools could make standardized parts to exact specifications – Musket parts could be used in any musket Significant events in operations management ? ? ? ? Division of labor Standardized parts Scientific management Coordinated assembly line (Smith (Whitney (Taylor (Ford 1776) 1800) 1881) 1913) ? ? ? Gantt charts Motion study Quality control (Gantt (Gilbreths (Shewhart 1916) 1922) 1924) 10 Where are we going? Exciting New Challenges in Operations Management Changing Challenges Past Local or national focus Batch (large) shipments Causes Low-cost, reliable worldwide communication and transportation networks Cost of capital puts pressure on reducing investment in inventory Global Focus Future Just-in-time shipments Low-bid purchasing Quality emphasis requires that suppliers be engaged in product improvement Shorter life cycles, rapid international communication, computer-aided design, and international collaboration Affluence and worldwide markets; increasingly flexible production processes Changing sociocultural milieu. Increasingly a knowledge and information society. Environmental issues, ISO 14000, increasing disposal costs Supply-chain partners Rapid product development, alliances, collaborative designs Mass customization Empowered employees, teams, and lean production Environmentally sensitive production, Green manufacturing, recycled materials, remanufacturing Lengthy product development Standardized products Job specialization Low cost focus How to cite Operations Management, Papers