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Operations Management Study
Term Paper ID:27125
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Essay Subject:
Analyzes major trends in Operations Management today, paying particular attention to the step-by-step process needed to implement successful Operations Management.... More...
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10 Pages / 2250 Words
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Paper Abstract:
Analyzes major trends in Operations Management today, paying particular attention to the step-by-step process needed to implement successful Operations Management.
Paper Introduction:
Operations Management Study
Introduction
During the last ten years, much attention has been given in the academic and management literature concerning the topic of Operations Management (Adam & Ebert, 1990; Daniels & Burns, 1997). Much of this interest is attributed to the astounding success of the Japanese "just-in-time" manufacturing process wherein effective scheduling and "top-to-bottom" organizational motivation play a major role (Goulden & Rawlings, 1997). This paper will analyse the major trends in Operations Management today, paying particular attention to the step-by-step process needed to implement successful Operations Management. Rather than deal with abstract theory, it will be more meaningful to establish a company model, so that the definitions have a
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Products that do not contribute as much can be givenless attention. Daniels, R.C.; Burns, N.D. 46:2, 52-57. In this structure, wefind: (a) Package Preparation (Steps A & B) has been assigned to one set ofemployees, (b) Product Selection and Wrapping (steps C and D) has beenassigned to a second set of employees, (c) Packing (steps E, F, G) has beenassigned to a third set of employees, and Shipping (steps H,I,J) has beenassigned to a fourth set of employees. However, for an aggregate plan to be effective, theproduction process must be considered just that, "a process." For sevenyears, ABC has not analysed the step-by-step order fulfillment procedure.It spent some time studying the process as the basis for increasing itsproduction schedule. (1998). In a one-year planning period, ABC does not have time for capitalexpenditures, so the only variables it can usually count on controlling arelabor and materials. Pareto can apply also to labor. The objective is to developa plan that is low cost, meets the demand forecast, and considers hire/firepolicy consistent with the firm's mission (Adam & Ebert, 199 ). It learned the importance of looking again at stepsthat have been assumed as necessary over the years (Daniels, 1998). Rather than deal with abstracttheory, it will be more meaningful to establish a company model, so thatthe definitions have a practical application.Model Created for this Discussion ABC Products packages and sells gift boxes of wine by mail. (199 ). Utilizing aggregate production techniques to maintain schedules of amaster production schedule has two formulas for determination. This happens because it focuses on totalsrather than individual items. (1997). The company plans to meet demand byadjusting the work force size. Materialsand labour are scheduled in a production plan. If youhave limited resources (usually labor), the products that contribute mostto cost or revenue are the ones you need to manage the best (Tavana &Rappaport, 1997). Therefore, aggregate planning and itsability to expedite production flow are natural additions to ABC'sstrategic planning mix.Summary Aggregate planning, as a subset of production planning, opens channelsof communication between top management and manufacturing. These objectives often conflict with one another.These conflicts are resolved by trading off one objective for another or byletting one objective, such as "minimise costs," dominate. The key thing is to be consistent,so time frames of equal size are used. The Japanese usethe analogy of a mountain stream with boulders in it that obstruct flow.Only by reducing the water level (inventory) can we see the boulders(problems) and remove them.Expediting the Removal of Problems The key benefit of aggregate planning is that it greatly enables theconcept of "expediting" which is just another way of saying makingactivities happen more quickly. Much of thisinterest is attributed to the astounding success of the Japanese "just-in-time" manufacturing process wherein effective scheduling and "top-to-bottom" organizational motivation play a major role (Goulden & Rawlings,1997). In many ways, scheduling and its counterpart, expediting owe much oftheir philosophical structure to the Japanese concept of "just in time" orJIT manufacturing. A company such as ABC which decides to do Aggregate Planning willdevelop an operations plan for a time horizon of about one year. After much research, the companyofficials have learned the importance of approaching the planning in alogical and flexible manner. Optimal allocation of arrivals to acollection of parallel workstations. ABC is located near a large metropolitan area and newemployees are readily available. International Journal ofOperations & Production Management. The key elements which ABC must determine aspart of their aggregate planning model are these: Master ProductionSchedule, Detailed Scheduling, Job Assignment, Sequencing (or flow), andExpediting. (1997). Aggregation deliberately reduces the detailplanners deal with. Inventories, which allowthe process to continue running are kept to a minimum. It is not necessary to be concernedwith the individual monthly variation in number of days, since daily demandis totaled or aggregated. An operational manager who uses both elements is said to be anexpert in "mixed strategy." Research on the value of mathematical modelsin aggregate planning suggests that mathematical modeling outperformstraditional techniques (the search decision rule showed the greatestimprovement). 17:3, 3 5-325. The tasks that contribute most to ABC'sprofits are the tasks they may wish to study and improve. On the plus side, the packagingoperation is simple, inventory delivery is rapid and new employees can betrained quickly. In effect, if ABCperformed a Pareto analysis, it would be able to prioritize the products,allowing them to see which ones contribute most to cost or revenue. Some 6 percent of the gift packages ABC send out are membershippackages, where a customer has elected to receive packages for a 12-monthperiod. The remaining 4 percent of the orders are first-time customers.These first-time customers are the only ones that are necessary to processat the "head end" of the sequencing structure, and the time elementrequired to process those orders would be considered in a separatesequencing process. International Journal of Operations &Production Management. Devoting time toimprove tasks that are not as important or that do not take much time maynot be the best use of their valuable time. The virtual corporation. (1997).The adoption and modelling of the strategic productivity managementapproach in manufacturing systems. (1997). 17:1. For instance, steps A & B above can take the new employee beingtrained three to five minutes, while an employee who has been at ABC for awhile can perform the same tasks in three to five seconds.Assignment of Jobs Armed with the above information, ABC management could then assigntasks A & B to an employee who could do it faster than anyone else, therebyspeeding up the process. Productioncapacity may be adjusted by hiring, firing, layoffs, overtime,subcontracting, and short term leases of equipment (Daniels & Burns, 1997). Production and operations management:Concepts, models and behaviour. It usually costsabout BP 2 to hire a new employee and BP 3 to lay one off. One possible option ABC could apply isto sequence these jobs and assign aspects of these jobs to specificemployees. Work Study. Once these key elements have been thoroughly analysed, thenthe aggregate planning process can commence for ABC.Creating a Master Production Schedule ABC has sales records for the past seven years so it will be easy topredict future demand. Zhiwei, Z.; Cernich, W.A.; Meredith, P.H.; Lanier, P.A. Long range planning ishigher than aggregate planning in a firm's organizational structure; shortrange planning is lower (Daniels, 1998). Once the order "hits the floor," the following sequence is followedwhich shows a considerable difference from Figure 1. 47:1, 2 -22. Bydoing this, it will learn the importance of sequencing and the assigning ofjobs.Detailing of Jobs Each production line employee goes through the following steps: (a)unfold the gift box, (b) add batting and insulation filler, (c) select winebottles, (d) wrap wine bottles, (e) add top batting, (f) seal gift box, (g)add ID label, (h) insert gift box into mailing box, (i) wrap mail box, (j)add label, (k) begin again (See Figure 1).Figure 1| ||Order In 6 Preparation 6 Fulfillment 6 Shipping ||(A & B) (C,D,E,F,G) (H,I,J) ||Total Times: A-H = 12 minutes new employee, 4 minutes trained | With each employee doing each of these tasks, there are oftenbottlenecks in the production line. In general, this ruleargues that 8 percent of ABC's costs or revenues can be attributed to only2 percent of ABC's possible products or materials. One is theratio of the number of units produced in each given time period. (1997).Scheduling customized bag production: an application of the GroupTechnology concept. Goulden, C.; Rawlings, L. Unfortunately, problems often result in production ofwork-in-process (i.e., waiting for wine, boxes, or batting in ABC's case)or defective finished goods (wine breakage, label damage, etc.). London: Prentice Hall International. A framework for proactiveperformance measurement system introduction. The objectives of Aggregate ProductionPlanning are: (a) determining production quotas during each time period (orbucket) in the intermediate time chart, and (b) adjusting capacity to meetthe production requirements (Zhiwei, Cernich, Meredith, & Lanier, 1997).The operations manager has several options available to him or her formaking these capacity adjustments: (a) the work force can be expanded by hiring more temporary workers, in ABC's case, moving workers from the box preparation steps (A & B in figures 1 and 2 above) into the more productive Fulfillment steps, and replacing those workers with temporary employees; (b) the length of the workweek can be expanded by working Saturdays and Sundays; (c) the number of shifts worked can be expanded into two, or around the clock. Now Figure 1 would look like Figure2.Figure 2: After Assigned Jobs and Sequencing| ||Package Preparation 6 ||Order IN 6 Fulfillment 6 Shipping ||Selection of Product 6 ||Total Times: (per unit) ||Package Preparation: 4 seconds ||Selection of Product: 8 seconds ||Fulfillment: 22 seconds ||Shipping: 32 seconds | It is readily apparent that the benefits of assigning jobs (which isbased on analyzing jobs) and sequencing jobs (which is based on studyingjob flow) are worthwhile. And they want to experiment with "aggregateplanning," but are not sure of (a) exactly what it is, and (b) the validityof using it.What is Aggregate Planning? Addingbudget to these incentives or withdrawing them can impact planning.Conclusion In the science of aggregate production planning, there are two primarytactics to implement the strategic planning. Murugesh, R; Devadasan, S.R.; Aravindan, R.; Natarajan, R. Currently,there are 12 employees on the payroll. This paper will analyse the major trends in Operations Managementtoday, paying particular attention to the step-by-step process needed toimplement successful Operations Management. Quality costing: The application ofthe process model within a manufacturing environment. Industrial Management & Data Systems. The same concept could be applied to otheraspects of the jobs -- bottle wrapping, labeling, packing, and so on.Critical to the concept of assigning jobs is the sequencing of the work(Daniels, 1997).Sequence Analysis In general, the workflow at ABC starts with the order coming throughthe door. Those two tactics are called"Chase" and "Level." The "Chase" tactic calls for adjustments ofproduction rates or work force levels to match demand requirements in eachtime period within the planning horizon, while "Level" tactics calls for aconstant production rate or work force level during each of the timeperiods. Using another definition, aggregate production planning is medium termcapacity planning that typically encompasses a specific time scale and liesbetween long range planning and short range planning (Zhiwei, Cernich,Meredith, & Lanier, 1997). With this information and new structure, ABC cannow tackle the next important concept of operations management: scheduling.Scheduling: The Key to Success Scheduling (both macro and micro) is a part of the concept known asPareto Analysis, (and also known as the 8 /2 rule). For instance, with ABC, our model company, themain product is wine in bottles. Daniels, S. WorkStudy. Long range planning includes facilitiesplanning; short range planning includes scheduling. ABCcannot carry any inventory of finished products because of slow inventoryturnover and insufficient capitalization. 17:3, 239-255. Theusual time frame for these is monthly. The lack of explicit cost data was the major reason forusing relatively simple aggregate production planning techniques"(Murugesh, Devadasan, Aravindan, & Natarajan, 1997). Tavana, M.; Rappaport, J. A sample aggregate-planningchart would look like figure 3.Figure 3: Six Month Aggregate Planning Strategy for ABC Products(Thousands of Units)|Month |J |F |M |A |M |J ||BI |3 |2 |2.5 |3.5 |4.5 |4.5 ||P |2 |2 |2 |2 |2 |2 ||D |3 |1.5 |1 |1 |1 |1.8 ||EI |2 |2.5 |3.5 |4 |5.5 |6.5 |Beginning Inventory, Production, Demand, Ending InventoryThere are many possible specific numerical objectives for aggregateproduction planning to attempt to achieve (Murugesh, Devadasan, Aravindan,& Natarajan, 1997). The productionplan summarizes the production resources that are needed to achieve thestrategic objectives of the firm. (1997). Over the course of a day a managerperforms many different tasks. Therework to fix these problems may average 1 month out of 12, and istherefore very expensive. ABC is still new to the operations management concept, but the topmanagement is willing to try anything. 1 -116. Within theconcept of aggregate planning, there are several strategic tactics that caninfluence demand. These include: (a) Price incentives, (b) Backlogs, (c)Complementary products or services, and (d) Advertising/promotion. The one-year time horizon is further divided intotime periods (sometimes called "buckets" or "segments" or "slots"). Back to basics with productivity techniques. On the average, each employee can produce1, gift boxes of wine per month. Thesecond is keeping track of the balance of unused inventory units that arecarried forward from the previous period. References Adam, E.A.; Ebert, R.J. Daniels, S. Expediting as a process is most effective within aproduct family, since such products have manufacturing or deliverycharacteristics in common. Operations Management StudyIntroduction During the last ten years, much attention has been given in theacademic and management literature concerning the topic of OperationsManagement (Adam & Ebert, 199 ; Daniels & Burns, 1997). Payroll costs including wages andfringe benefits average BP 1,73 per employee per month. International Journal of Operations &Production Management. Aggregate production planning is closely linkedto Master Production Scheduling. 97:1 31-36. InternationalJournal of Operations & Production Management 17:2, 199-21 . In JIT, managers keep the process running bystudying and correcting problems as they occur.
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