Operations management can be involved with the look, planning, control and improvement of the organisation's resources and procedures to provide goods or services for customers. Whether it's the provision of air-port services, medical services, vacation packages, or the making of cars, consumers electronics and so forth; the operations supervisor could have been mixed up in design, creation and delivery of those products and services. (Johnson, R. etal 2003). Operations Managers are found everywhere including banking companies, supermarkets, development site, production flower, government offices, etc. Their role includes building systems within an organisation, making sure quality, manufacturing products, and delivery of services. In addition they offer with clients, suppliers, companions, and latest technology.
Operation management is more than simply planning and taking care of operations; it is transformation processes which can be define as a series of activities along a value chain extending from dealer to customer.
TRANSFORMATION PROCESS
INPUT:
Material, Gadgets, Labour, Management, and Capital
OUTPUT:
Goods
Services
Feedback
For instance, in an automobile manufacturing stock, sheet material is formed into different designs, painted and finished, and then set up with thousands of component parts to produce a working automobile. Inside a clinic, customers (patients) are helped to be healthier individuals through special treatment, medication, dishes, physiotherapy, and surgical treatments. Core activities in procedures management include arranging work, arranging designs, locating facilities, designing jobs, measuring performance, selecting processes, controlling quality, scheduling work, managing inventory, and planning creation.
Operations Management Techniques
There are several functions management techniques used by companies. Included in these are but not limited to;
Lean Production
Just-in-Time
Material Need Planning (MRP)
Quality Management
Supply String Management
Inventory Management
Linear Programming
Waiting Collection Analysis
Forecasting
This article will focus on three of the ten Operations Management techniques in the above list. They are Source String Management, Just-in-Time, and Benchmarking.
2. 1 Supply Chain Management
According to Russell and Taylor (2006), Source Chain Management serves as a an functions management strategy that focuses on integrating an managing the movement of goods and services and information through the source chain in order to make it attentive to customer needs while reducing total costs. It is also an integrated group of business operations and activities with the same goal of providing client satisfaction. These processes are the procurement of services, materials, and components from suppliers; production of the products and services; and circulation of the merchandise to the customers.
2. 2 Just-in-Time (JIT)
This is an operation management idea directed at eliminating manufacturing wastes by producing only the right amount and blend of parts at the right place at the right time. Developed by the Japanese during the post World Conflict II time, it is dependant on the theory of producing only what's needed and nothing more than needed. The Japanese thought that anything produced over the number required is waste. Wastes results from any activity that contributes cost without adding value to the merchandise, such as transferring of inventories in one place to another or even holding them. (Sirisha, D. 2003).
The goal of JIT is to minimize the existence of non-value-adding functions and non-moving inventories in the production line. This will likely result in shorter throughput times, better on-time delivery performance, higher equipment usage, lesser space necessity, lower costs, and increased income. JIT is most appropriate to procedures or production flows that do not change, i. e. , those that are simply repeated over and over again. An example of this would be an automobile assembly lines, wherein every car undergoes the same production process as the main one before it.
Benchmarking
This is one of the businesses management technique targeted at enhancing organisational process by constantly determining, understanding and adapting successful practices and functions by others and facilitating its incorporation into an organisation. To put it simply, benchmarking means looking at one's group or a part of it with that of the others. As further explained by Camp (1995), "benchmarking is a continuing activity; key inner processes are tweaked, performance is monitored, new comparisons are made with the existing best performers and further changes are explored. When information about these key operations is obtained by using a co-operative collaboration with specific organisations (rather than third party such as independently-maintained data source), there can be an expectation of common benefit over a period". The sort of benchmarking that companies can choose are:
Strategic Benchmarking
Competitive Benchmarking
Process Benchmarking
Functional Benchmarking
Internal Benchmarking
External Benchmarking
International Benchmarking
Benchmarking exercise is a four-stage process involving;
Planning stage - involves identifying, building and documenting specific study target areas, key occasions and definitions.
Data collection level - will involve accumulating qualitative data and learning from the guidelines of different organizations.
Data analysis and reporting level - will involve critical analysis of practices adopted at high performing organizations, and the id of techniques that help and deter superior performance.
Adaptation stage - involves developing an initial action plan to adapt and execute the practices accompanied by these powerful organizations.
3. 0 Circumstance Research 1: Dell's Supply Chain Management Techniques (Consumer Electronics)
This case study is dependant on a different type of supply chain management tactics pioneered by Dell Inc, one of the leading Laptop or computer manufacturers on the globe. It is known as the Direct Model, a distinctive model of offering PCs right to the consumers, bypassing the resellers. With this model, Dell could provide its customers with tailor-made products, built only after procuring the order from them. This case study details this model in detail and points out how it enabled Dell to manage its supply chain effectively.
3. 1 Summary - Record Note
Dell Inc. (headquartered in Texas, USA) is a global technology corporation that develops, produces, provides, and support computers and other computer-related products. Founded in 1984 by Michael Dell (Michael), it grew during the 1980s and 1990s to become the largest seller of Computers and servers. Dell became a pioneer in the "configure to order" method of manufacturing - providing individual Personal computers configured to customer specs. In order to minimise delay between purchase and delivery, Dell has a general policy of processing its products near its customers; that allows for applying a just-in-time (JIT) manufacturing procedure, which minimises inventory costs.
3. 2 The Direct Model
Dell's 'Immediate selling Model' traces its origins to Michael's notion of selling computers right to the consumers getting rid of the need for vendors. He believed that by retailing system (PCs) directly to the consumers, the company would be able to better understand the needs of its consumers. Each system was assembled according to customer's preference.
Dell also realised that retaining a high level of quality was necessary in order to contend with the to Personal computer manufacturers like IBM and Compaq. To do this, the company made a decision to increase their cash in hand by reducing inventory. Dell decided to produce PCs according to orders it received and not to hold unnecessary inventory or finished products. Dell then later made a decision to replace inventory with information and pass on the info to the suppliers, who were provided usage of company's interior data about the demand for specific components. Along with the reduction in components inventory getting a positive influence on each cashflow, the company decided to bring other process related production based on the reduced inventory. The overall savings Dell produced from controlling the inventory urged it to try corresponding resource and demand on every month, every week and daily basis. This reduced the variant in source and demand and gradually it was no more necessary for Dell to keep any component inventory.
Dell established its website in 1994, released online costing in 1995, and began online sales in 1996. Within six months Dell's earnings on the Internet stood at US $1 million per day. By 1997, sales through the Web were all around us $1 billion, and by 1998, Dell's sales through the Internet accounted for more than half of its total sales. The web proved to be a booster for Dell's direct model as it was able to facilitate transactions. Keep your charges down, and improve relationships with customers. Dell's immediate model was immediately supported by the way the company's activities were planned globally.
3. 2. 1 The Immediate Model - Role of Dell's Suppliers
As taking components from the suppliers' factories to Dell had taken anything between 7 and thirty days depending on the mode of travelling, Dell required all its suppliers to keep up a warehouse near its factories. They could either manufacture the merchandise at the warehouse or produce at another place and dispatch the finished product to the warehouse. The warehouses known as Suppliers Logistics Centres (SLC) were located few mls from Dell's assembly plants. Each SLC could be shared by several distributor. Typically, Dell required suppliers to keep inventory for 8 to 10 times in SLCs. Dell required the inventory from SLCs as required, usually replenishing its shares every two hours. Most suppliers replenished the shares at SLCs thrice weekly.
Dell demanded that its suppliers should be extremely flexible to accommodate short-term demand fluctuations. The suppliers are given with data on real-time customer demand, and every week, suppliers received an order commitment from Dell for the following week. The suppliers had a need to send their consent to meet up with the company's demands immediately.
3. 2. 2 The Direct Model - Balancing Demand and Supply
Dell preserved a repository to observe the purchasing patterns of commercial customers and their budget cycles, in order to forecast demand. It also maintained a similar database for specific customers to be able to appeal to their future requirements. The changing demand habits were communicated to the major suppliers three times each day.
If it was discovered that the lead time for a product was increasing, the procurement of the merchandise was accelerated or additional suppliers were brought and the customers were motivated to buy substitute product. If any component was found to be accumulating, customers were provided incentive to buy those products. Alternatively, if demand exceeded resource at any given time, Dell had more than one supplier to accelerate supply. If the component was common, Dell checked out with alternate suppliers. Once the distributor options were worn out, Dell used its marketing team to transfer demand.
3. 3 Benefits of Direct Model
Dell gained tremendous reap the benefits of their Direct Model approach to Supply Chain Management. As Dell did not maintain large inventory of done products, it didn't have to market technologically obsolete products at a discount. Dell was able to bring in new products in line with the needs of the customers into the market faster than its challengers. In addition to this, Dell could incorporate new solutions quickly into its products and take them to customers almost two months before its competitors. With the Direct Model, Dell's production system functioned on negative working capital as suppliers were paid 36 times after Dell received repayments from its customers. That is on the other hand with other computer manufacturers who usually paid the suppliers 30 days before the Personal computer was skipped to the market
3. 4 What Dell could do to obtain additional positive results
In order for Dell to regain its number one position in the PC market, it must make significant business changes to way its been conducting business for two years. First of all, Dell could provide a facility where consumers have opportunity to start to see the product before buying it. Dell can perform this by partnering with Laptop or computer retail stores. This may also help address a few of the customer service issues and improve its support system. One more thing Dell could do is to generate products with a longer shelf-life, like digital tv sets and printing device cartridges, in addition to a few desktops and notebooks and sell them through the Dell retail stores. Finally, Dell could enter into the commercial retail segment and contend with wants of HP and Acer, although this is an area in which Dell is not experienced enough.
4. 0 Circumstance STUY 2: Toyota's Just-in-Time Revolution (Automotive)
This case study is dependant on the Just-in-Time processing system pioneered by Toyota. It is one of many production solutions of the post world war II era. The case discusses in detail the idea of Toyota's JIT system and the 'Kanban' concept; which was one of the guidelines on which Toyota's JIT was based mostly. I'll compare the Kanban principle with the european manufacturing philosophy. I am going to also make objective criticism and advice, where appropriate, showing what else Toyota could do to obtain additional excellent results.
4. 1 Brief summary - Qualifications Note
Toyota's history dates back to 1897, when Sakichi Toyoda (Sakichi) diversified into machinery business from his family traditional business of carpentry. He founded Toyoda Auto Loom Works in 1926 for production automatic looms. Sakichi set up an automobile section within TALW. Toyota Electric motor Corporation was founded in 1937 after Sakichi's kid Kiichiro Toyoda (Kiichiro) persuaded him to go into the automobile business.
Kiichiro seen the Ford Engine company in Detroit to study the US motor vehicle industry. He noticed that an average US worker's creation was nine times that of a Japanese staff member. He recognized that the production of the Japanese automobile industry needed to be increased if it were to compete globally. Back Japan, he custom-made the Ford creation system to match Japanese market. He also devised something wherein each process in the assembly line of development would produce only the amount of parts needed at the next step on the development collection, which made logistics management easier as materials was procured regarding to consumption. This system was referred to as Just-in-time (JIT) with the Toyota Group.
4. 2 Just-in-Time Development System in Toyota
Taiichi Ohno (Ohno), who is now known as 'the daddy of JIT' applied JIT in Toyota's processing plants in the first 1970s. The system was targeted at avoiding waste, lowering inventories and increasing creation efficiency to be able to keep Toyota's competitive advantage. First, it was used as a method for reducing inventories in Toyota's shipyards, but later it advanced into a management viewpoint including a set of techniques.
Kanban was an important component of Toyota's JIT strategy. It is a simple parts-movement system that depended on credit cards and containers for taking parts from one workstation to another on production brand. Ohno developed the in 1956 from the supermarkets in america, which got devised an efficient system for replenishment of store shelves based on the quantities chosen by customers. The substance of the Kanban idea was a supplier supplied components to the production line only when required, thus eradicating storage space in the creation area. Supplier sent desired components when they received a greeting card and an empty pot, indicating that more parts were necessary for the production. In case there is range interruption, each distributor produced only enough components to complete the box and then ended.
At Toyota, two types of Kanban credit cards were used. To move parts in one location to another, known as the Conveyance Kanban card and to authorize the production of parts, known as the Development Kanban card. Three types of information were exchanged using Kanban;
Pick up information led the earlier periods regarding parts to be produced for the being successful stages.
Transfer information indicated when the parts needed to be produced for the succeeding stages.
Production information was sent from the sooner periods to the later levels to see the personnel about the merchandise mixture and other operational matters.
To make the Kanban system effective and enjoy maximum benefits from it, Ohno framed six rules:
Do not dens faulty products to the subsequent process
The subsequent process comes to withdraw only what's needed
Produce only the precise amount withdrawn by the subsequent process
Level the production
Kanban is a means to fine tuning
Stabilize and rationalize the process
Another important component of JIT was called Heijunka (development smoothing). JIT's process of creating only the mandatory quantity of items helped keep carefully the development costs low. Heijunka helped in the success of this concept by setting up a consistent production volume. Heijunka averaged highest and lowest versions of the purchases. The modifications were then taken off the production schedule. This made certain that the right level of parts was produced with bare minimum workforce. Heijunka had taken health care not only of the total level of items but also the sort of items produced and the other available choices.
Benefits to Toyota
The JIT system put in place by Toyota offered several advantages over other developing processes. Because of the first adoption of JIT, Toyota benefited more from the machine than other car companies. The main good thing about the JIT system to Toyota is its capacity to help lower costs and misuse by increasing the circulation of development. Another big good thing about JIT system to Toyota is the fact it increases the responsiveness to changes popular. The Kanban concept implemented is like a good traffic light with potential to sense when the traffic, or in this case the demand, is building up. In addition to these, Toyota was able to:
Reduce stock holdings by reduction in storage space which saves storage and insurance costs.
Have less working capital tangled up in stock as stock is only obtained when it's needed.
Reduce time allocated to verifying and re-working the merchandise of others as the emphasis is on getting the work right first time
4. 4 What Toyota could do to get more positive results
Toyota has not been able to replicate the JIT production system in an efficient way in virtually any of its procedures outside Japan. Toyota should try to imbibe the Japanese culture (which really is a main driving force with their JIT) in their other functions outside Japan inorder to obtain additional end result. Also, Toyota should use more than two suppliers for some parts as having less than two suppliers makes Toyota vunerable to flow interruption.
5. 0 CASE STUY 3: Xerox - The Benchmarking Report (Consumer Electronics)
This research study is based on the benchmarking initiatives taken by Xerox, one of the world's leading copier companies. This is an integral part of their 'Command through Quality' program put in place by the business during the early on 1980s. I will discuss in detail the benchmarking theory and its implementation in various techniques at Xerox. I will explore the positive impact of benchmarking routines on Xerox also make objective criticism and recommendation, where appropriate, to show what else Xerox could do to get more positive results
5. 1 Brief summary - Track record Note
The background of Xerox dated back to 1938, when Chester Carlson, a patent lawyer and part-time inventor, made the first xerographic image in america. He struggled for over five years to market the invention, until 1944 when Battelle Memorial Instutite contacted him to refine his new process. Xerox was registered as a hallmark in 1948 if the Haliod Company obtained all privileges to Carlson's invention from Battelle. Xerox Firm was produced and listed on the brand new York stock Exchange in 1961.
The company grew throughout the 1960s by acquiring many companies, and later diversified into the information technology business through to the early 1970s. in the 1970s, Xerox centered on presenting new and more efficient models to preserve its share of the reprographic market and deal with competition from the united states and Japanese companies. The company's revenue increased from $698 million in 1966 to $4. 4 million in 1976, and profits also increased five-fold from $83 million in 1966 to $407 million in 1977. The fast growth at Xerox led to the intro of a number of controls and procedures and the amount of management layers was increased through the 1970s. This, however, slowed down decision-making and led to major delays in product development.
By early 1980s, has found itself progressively vulnerable to intense competition from both the US and Japanese competition. According to experts, Xerox ignored new entrants who have been consolidating their positions in the lower-end market and in market sections. The management also failed to supply the company strategic way. The company's operating cost was high and its products were of inferior quality in comparison to its challengers. Xerox also experienced its highly centralized decision-making procedures. Because of this, return on assets fell to significantly less than 8% and market show in copiers came up down sharply from 86% in 1974 to just 17% in 1984. xerox's profits reduced from $1. 15billion in 1980 to $290 million in 1984.
When David T. Kearns (Kearns) had taken over in 1982, he learned that Japanese companies were able to undercut Xerox's prices faultlessly because their average costs of copiers was 50-60% cheaper than that of Xerox. Kearns quickly began emphasizing reduction of developing costs and offered new thrust to quality control by releasing a program that was popularly referred to as 'Command through Quality'. Within this quality program (to find ways to reduce their manufacturing costs), Xerox applied the benchmarking program. These initiatives enjoyed a significant role in tugging Xerox out of trouble in the a long time. The company even continued to become one of the better types of the successful execution of benchmarking.
5. 2 Benchmarking against Japanese Competitors
Xerox discovered it took twice as long as its Japanese competitors to bring something to market, five times the amount of engineers, four times the number of design changes, and 3 x the design costs. The company also discovered that the Japanese could produce, dispatch, and sell devices for about the same amount it cost Xerox merely to manufacture them. In addition, Xerox's products acquired over 30, 000 faulty parts per million - about 30 times more than its challengers. Benchmarking also disclosed that Xerox would want an 18% annual productivity progress rate for five consecutive years to meet up with japan. After a short period of denial, Xerox managers accepted the reality.
Following this, Xerox defined benchmarking as 'the process of measuring its products, services, and techniques against its toughest competitors, identifying the gaps and establishing goals. Goal is always to achieve superiority in quality, product dependability and cost. ' Gradually, Xerox developed its benchmarking model. This model included tens steps grouped under five periods - planning, research, integration, action and maturity.
Figure 2: Xerox Benchmarking Model (corresponding to Karsnia 1991, Camp 1989)
Xerox collected data on key processes of best practice companies. These critical techniques were then examined to identify and explain improvement opportunities. For the purpose of acquiring data from the related benchmarking companies, Xerox subscribed to the management and specialized databases, referred to publications and trade journals, and also consulted professional associations and consulting companies. Having worked out the model it wanted to use, Xerox began by utilizing competitive benchmarking. However, the company found this kind of benchmarking to be insufficient as the very best practices, in some processes or operations weren't being applied by copier companies. The business then adopted functional benchmarking, which involved a study of the greatest practices followed by a variety of companies regardless of the industry they belonged to. Xerox initiated functional benchmarking with the analysis of the warehousing and inventory management system of L. L. Bean (Bean), a mail-order supplier of shoe and outdoor clothing.
Similarly, Xerox zeroed in on various other best practice companies to benchmark its other operations. These included American Exhibit (for billing and collection), Cummins Engines and Ford (for factory floor layout), Florida Ability and Light (for quality improvement), Honda (for distributor development), Toyota (for quality management), Hewlett-Packard (for research and product development), Saturn (a department of Standard Motors) and Fuji Xerox (for creation operations) and DuPont (for developing safeness).
Results of Benchmarking
Some of the benefits Xerox derived because of this of the benchmarking are;
Customer satisfaction for its copier/duplicator and printing systems increased by 38% and 39% respectively.
Customer satisfaction using its sales processes better by 40%, service operations by 18% and administrative processes by 21%.
Customer complaints reduced by more than 60%.
Financial performance of the company also improved noticeably through the middle and past due 1980s.
Some of the other benefits Xerox produced were:
Number of results reduced by 78 per 100 machines.
Inspection of incoming components reduced to below 5%.
Inventory costs reduced by two-thirds.
Notable reduction in labour costs.
Became the leader in the high-volume copier-duplicator market segment
Country units improved upon from 152% to 328%.
5. 4 What Xerox could do to obtain additional positive results
Xerox could easily get more excellent results by continually benchmarking against others outside the United States, especially in India and China. As we are in a more competitive business environment where customers preference are changing plus they want more value because of their money, Xerox should make an effort to diversify more in to the technology market to be able to sustain its competitiveness on the market.
6. 0 Conclusion
Hence we can see that businesses management is an essential requirement of any business company. It is very important as it is concerned with creating products and services; the main associated with an organization's existence. It is also challenging because the techniques implemented by organizations need to work globally and responsibly within the world and the environment; as we can easily see in every the three circumstance studies used in this record.
