The use of operations management techniques

The use of trading doings succeedment techniquesOperations charge is concerned with the foundation, planning, control and amelioratement of an organisations resources and servees to appropriate goods or services for customers. Whether it is the provision of airport services, medical services, holiday packages, or the manufacturing of automobiles, consumers electronics and so on the operations manager would have been elusive in the design, creation and address of those carrefours and services. (Johnson, R. etal 2003). Operations Managers be found eitherwhere including banks, supermarkets, expression site, mathematical product plant, g overnment offices, and so on. Their role includes designing trunks deep down an organisation, ensuring quality, manufacturing products, and deli precise of services. They in like manner deal with clients, suppliers, partners, and latest technology.Operation focussing is much than(prenominal) than effective planning and managing i nfluencees it is transformation processes which can to a fault be define as a series of activities along a value chain ex ten dollar billding from supplier to customer.TRANSFORMATION PROCESSINPUT framework, Equipments, Labour, commission, and CapitalOUTPUTGoodsServicesFeedback maturate in 1 Operations as a Transformation Process ( alteration from Russell Taylor, 2005)For instance, in a car manufacturing manufacturing plant, sheet steel is formed into different shapes, multicolored and consummate, and then assembled with thousands of component parts to produce a working automobile. In a hospital, customers (patients) are helped to become healthier individuals done special care, medication, meals, physi primeval(a)apy, and surgical procedures. Core activities in operations counselling include organizing work, arranging layouts, posture facilities, designing jobs, measuring performance, selecting processes, controlling quality, scheduling work, managing roll, and planning pr oduction.Operations heed TechniquesThere are several operations management techniques used by companies. These include but non limited toLean ProductionJust-in-TimeBenchmarkingMaterial Requirement Planning (MRP)Quality ManagementSupply chain of mountains ManagementInventory ManagementLinear ProgrammingWaiting Line abstractForecastingThis report will focus on triple of the ten Operations Management techniques listed above. They are Supply chain of mountains Management, Just-in-Time, and Benchmarking.2.1 Supply Chain ManagementAccording to Russell and Taylor (2006), Supply Chain Management can be described as an operations management technique that focuses on desegregation an managing the flow of goods and services and information through the supply chain in set out to make it responsive to customer necessitate while dense total costs. It is likewise an integrated group of cable processes and activities with the like terminal of providing customer satisfaction. These proce sses include the procurement of services, materials, and components from suppliers production of the products and services and distribution of the products to the customers.2.2 Just-in-Time (JIT)This is an operation management philosophy directed at eliminating manufacturing lay waste tos by producing only the reform amount and combination of parts at the upright place at the right time. Developed by the Nipponese during the post World warfare II era, it is based on the belief of producing only what is undeniable and zip fastener more than needed. The Nipponese believed that anything produced over the quantity indispensable is waste. Wastes results from any legal action that adds cost without adding value to the product, such as transferring of inventories from one place to some separate or even storing them. (Sirisha, D. 2003).The goal of JIT is to minimize the presence ofnon-value-adding operationsand non-moving inventoriesin the production stage business. This will result in shorter throughput times, better on-time delivery performance, high equipment utilization, less(prenominal)er space requirement, lower costs, and greater profits.JIT is most applicable to operations or production flows that do not change, i.e., those that are simply recurrent over and over again. An example of this would be an automobile lying line, wherein every car undergoes the same production process as the one in the beginning it.BenchmarkingThis is one of the operations management technique aimed at improving organisational process by constantly identifying, recognizeing and adapting successful practices and processes by opposites and facilitating its incorporation into an organisation. patently put, bench marking means comparing ones organization or a part of it with that of the some other companies. As further explained by Camp (1995), benchmarking is a continuous drill reveal intrinsic processes are adjusted, performance is monitored, new comparisons ar e make with the current beat performers and further changes are explored. When information about these enamor processes is obtained through a co-operative partnership with specific organisations (rather than third party such as independently-well-kept entropybase), there is an expectation of mutual value over a period of time. The type of benchmarking that companies can adopt areStrategic Benchmarking competitive BenchmarkingProcess BenchmarkingFunctional BenchmarkingInternal BenchmarkingExternal BenchmarkingInternational BenchmarkingBenchmarking exercise is a four-stage process involvingPlanning stage involves identifying, establishing and documenting specific pick up focus areas, key events and definitions.Data collection stage involves accumulating qualitative data and learning from the topper practices of different organizations.Data analysis and reporting stage involves critical evaluation of practices followed at high performing organizations, and the identification of practices that help and deter ace performance.Adaptation stage involves developing an initial action plan to adapt and implement the practices followed by these high performance organizations.3.0 CASE STUDY 1 dells Supply Chain Management Practices (Consumer Electronics)This flake playing area is based on a different type of supply chain management practices pioneered by dingle Inc, one of the leading PC industriousnessrs in the world. It is cognize as the Direct sit, a unique computer simulation of change PCs directly to the consumers, bypassing the re marketers. With this model, dingle was able to provide its customers with tailor- do products, built only after procuring the ordain from them. This case study describes this model in detail and explains how it enabled dingle to manage its supply chain effectively.3.1 Summary Background Note dingle Inc. (headquartered in Texas, USA) is a global technology corporation that develops, manufactures, sells, and nurse pers onal computers and other computer- tie in products. Founded in 1984 by Michael dell (Michael), it grew during the 1980s and 1990s to become the largest seller of PCs and servers. dingle became a pioneer in the configure to crop start to manufacturing delivering individual PCs configured to customer specification. In inst on the whole to minimise clench among purchase and delivery, Dell has a general policy of manufacturing its products loaded to its customers which allows for implementing a just-in-time (JIT) manufacturing approach, which minimises line of descent costs.3.2 The Direct ModelDells Direct selling Model traces its origins to Michaels idea of selling computers directly to the consumers eliminating the need for distributors. He believed that by selling dodging (PCs) directly to the consumers, the familiarity would be able to better understand the needs of its consumers. Each system was assembled according to customers preference.Dell as well as accomplished t hat maintaining a high level of quality was necessary in assure to compete with the to PC manufacturers like IBM and Compaq. To achieve this, the play along clear-cut to emergence their funds in hand by reducing inventory. Dell decided to produce PCs as per orders it trustworthy and not to hold excess inventory or finished products. Dell then subsequently decided to put back inventory with information and pass on the information to the suppliers, who were provided access to companions internal data about the demand for specific components. With the reduction in components inventory having a positive effect on each cash flow, the company decided to bring other task related production in line with the fastend inventory. The overall savings Dell derived from managing the inventory boost it to try matching supply and demand on monthly, weekly and mundane basis. This rock-bottom the variation in supply and demand and gradually it was no long-lasting necessary for Dell to mai ntain any component inventory.Dell established its website in 1994, introduced online pricing in 1995, and began online sales in 1996. within six months Dells tax on the Internet stood at US $1 million a day. By 1997, sales through the Web were more or less US $1 billion, and by 1998, Dells sales through the Internet accounted for more than half of its total sales. The internet proved to be a title-holder for Dells direct model as it was able to facilitate transactions. Reduce costs, and improve relationships with customers. Dells direct model was directly supported by the office the companys activities were form globally.3.2.1 The Direct Model Role of Dells SuppliersAs bringing components from the suppliers factories to Dell took anything between 7 and 30 days depending on the mode of transportation, Dell infallible all its suppliers to maintain a warehouse close to its factories. They could either manufacture the product at the warehouse or produce at some other place and ship the finished product to the warehouse. The warehouses known as Suppliers Logistics Centres (SLC) were hardened fewer miles away from Dells assembly plants. Each SLC could be shared by more than one supplier. Typically, Dell required suppliers to maintain inventory for 8 to 10 days in SLCs. Dell took the inventory from SLCs as required, normally replenishing its transports every two hours. Most suppliers replenished the stocks at SLCs thrice a week.Dell demanded that its suppliers should be extremely flexible to accommodate short-term demand fluctuations. The suppliers are provided with data on real-time customer demand, and every week, suppliers were given up an order commitment from Dell for the following week. The suppliers needed to send their consent to suffer the companys demands immediately.3.2.2 The Direct Model Balancing Demand and SupplyDell maintained a database to track the purchasing patterns of corporate customers and their bud touch on cycles, in order to f orecast demand. It similarly maintained a similar database for individual customers in order to cater for their future requirements. The changing demand patterns were communicated to the major suppliers three times a day.If it was found that the lead time for a product was increasing, the procurement of the product was press forwardd or additional suppliers were brought and the customers were encouraged to bargain for substitute product. If any component was found to be accumulating, customers were provided incentive to grease ones palms those products. On the other hand, if demand exceeded supply at any given point in time, Dell had more than one supplier to accelerate supply. If the component was generic, Dell checked with alternative suppliers. Once the supplier options were exhausted, Dell used its marketing team to shift demand.3.3 Benefits of Direct ModelDell gained tremendous benefit from their Direct Model approach to Supply Chain Management. As Dell did not hold large i nventory of finished products, it did not have to sell technologically obsolete products at a discount. Dell was able to bring in new products according to the needs of the customers into the market faster than its competitors. In addition to this, Dell was able to control new technologies quickly into its products and take them to customers almost two months ahead of its competitors. with the Direct Model, Dells production system functioned on negative working capital as suppliers were paid 36 days after Dell received payments from its customers. This is in contrast with other computer manufacturers who usually paid the suppliers 30 days before the PC was skipped to the market3.4 What Dell could do to find out more positive resultsIn order for Dell to regain its make sense one position in the PC market, it has to make evidentiary business changes to way its been doing business for two decades. Firstly, Dell could provide a preparation where consumers have the opportunity to see the product before buying it. Dell can achieve this by partnering with PC retail stores. This will also help to address some of the customer service issues and improve its support system. Another thing Dell could do is to create products with a longer shelf-life, like digital televisions and printer cartridges, in addition to a few desktops and notebooks and sell them through the Dell retail stores. Finally, Dell could cypher the commercialized retail segment and compete with likes of HP and Acer, although this is an area in which Dell is not experienced enough.4.0 CASE STUY 2 Toyotas Just-in-Time Revolution (Automotive)This case study is based on the Just-in-Time manufacturing system pioneered by Toyota. It is one of the most significant production approaches of the post world war II era. The case discusses in detail the design of Toyotas JIT system and the Kanban concept which was one of the principles on which Toyotas JIT was based. I will compare the Kanban concept with t he western manufacturing philosophy. I will also make objective criticism and suggestion, where appropriate, to show what else Toyota could do to get more positive results.4.1 Summary Background NoteToyotas history goes back to 1897, when Sakichi Toyoda (Sakichi) alter into machinery business from his family traditional business of carpentry. He founded Toyoda Automatic Loom works in 1926 for manufacturing automatic looms. Sakichi established an automobile department within TALW. Toyota repel Corporation was established in 1937 after Sakichis son Kiichiro Toyoda (Kiichiro) convinced him to enter the automobile business.Kiichiro visited the Ford Motor company in Detroit to study the US automotive industry. He saw that an average US workers production was cabaret times that of a Japanese worker. He realized that the productivity of the Japanese automobile industry had to be increased if it were to compete globally. Back in Japan, he customized the Ford production system to suit J apanese market. He also devised a system wherein each process in the assembly line of production would produce only the act of parts needed at the next step on the production line, which made logistics management easier as material was procured according to consumption. This system was referred to as Just-in-time (JIT) with the Toyota Group.4.2 Just-in-Time Production schema in ToyotaTaiichi Ohno (Ohno), who is now referred to as the father of JIT employ JIT in Toyotas manufacturing plants in the early 1970s. The system was aimed at avoiding waste, reducing inventories and increasing production cleverness in order to maintain Toyotas competitive edge. Initially, it was used as a method for reducing inventories in Toyotas shipyards, but later it evolved into a management philosophy including a set of techniques.Kanban was an important component of Toyotas JIT concept. It is a elementary parts-movement system that depended on brainpowers and containers to take parts from one wor kstation to some other on production line. Ohno developed the in 1956 from the supermarkets in the US, which had devised an effective system for replenishment of store shelves based on the quantities picked by customers. The essence of the Kanban concept was that a supplier delivered components to the production line only when required, thus eliminating depot in the production area. Supplier delivered desired components when they received a card and an empty container, indicating that more parts were needed for the production. In case of line interruption, each supplier produced only enough components to fill the container and then stopped.At Toyota, two types of Kanban cards were used. To move parts from one place to another, known as the Conveyance Kanban card and to authorize the production of parts, known as the Production Kanban card. Three types of information were exchanged using KanbanPick up information guided the earlier stages regarding parts to be produced for the succ eeding stages. shipping information indicated when the parts had to be produced for the succeeding stages.Production information was contagious from the earlier stages to the later stages to inform the workers about the product mix and other operational matters.To make the Kanban system effective and reap maximum benefits from it, Ohno enclose six rulesDo not dens defective products to the consequent processThe subsequent process comes to withdraw only what is neededProduce only the look at quantity withdrawn by the subsequent processLevel the productionKanban is a means to fine tuningStabilize and rationalize the processAnother important component of JIT was called Heijunka (production smoothing). JITs principle of building only the required number of items helped keep the production costs low. Heijunka helped in the accomplishment of this principle by creating a consistent production volume. Heijunka averaged highest and lowest variations of the orders. The variations were the n distant from the production schedule. This ensured that the right quantity of parts was produced with minimum workforce. Heijunka took care not only of the total volume of items but also the type of items produced and the other options.Benefits to ToyotaThe JIT system implemented by Toyota offered several advantages over other manufacturing processes. Because of the early adoption of JIT, Toyota benefited more from the system than other automobile companies. The main benefit of the JIT system to Toyota is its ability to help drive down costs and waste by improving the flow of production. Another big advantage of JIT system to Toyota is that it improves the responsiveness to changes in demand. The Kanban concept implemented is like a bracing traffic light with ability to sense when the traffic, or in this case the demand, is building up. In addition to these, Toyota was able toReduce stock holdings by reduction in storage space which saves storage and insurance costs. look at les s working capital tied up in stock as stock is only obtained when it is needed.Reduce time spent on checking and re-working the product of others as the emphasis is on getting the work right first time4.4 What Toyota could do to get more positive resultsToyota has not been able to replicate the JIT production system in an efficient way in any of its operations outside Japan. Toyota should try to imbibe the Japanese culture (which is a main driving force of their JIT) in their other operations outside Japan inorder to get more result. Also, Toyota should use more than two suppliers for most parts as having less than two suppliers makes Toyota sensitized to flow interruption.5.0 CASE STUY 3 reproduce The Benchmarking Story (Consumer Electronics)This case study is based on the benchmarking initiatives taken by drive off, one of the worlds leading copier companies. This is a part of their Leadership through Quality program implemented by the company during the early 1980s. I will di scuss in detail the benchmarking concept and its death penalty in various processes at drive away. I will explore the positive impact of benchmarking practices on make off also make objective criticism and suggestion, where appropriate, to show what else elope could do to get more positive results5.1 Summary Background NoteThe history of reproduce dated back to 1938, when Chester Carlson, a patent attorney and part-time inventor, made the first xerographic image in the US. He struggled for over flipper years to sell the invention, until 1944 when Battelle Memorial Instutite approached him to refine his new process. Xerox was registered as a trademark in 1948 when The Haliod Company obtained all rights to Carlsons invention from Battelle. Xerox Corporation was formed and listed on the 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 th e 1970s, Xerox focused on introducing new and more efficient models to check its share of the reprographic market and cope with competition from the US and Japanese companies. The companys 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 speedy maturement at Xerox led to the introduction of a florilegium of controls and procedures and the number of management layers was increased during the 1970s. This, however, slowed down decision-making and resulted in major delays in product development.By early 1980s, has found itself increasingly vulnerable to penetrating competition from both the US and Japanese competitors. According to analysts, Xerox unattended new entrants who were consolidating their positions in the lower-end market and in niche segments. The management also failed to give the company strategic direction. The companys operating cost was high and its produc ts were of middle-level quality in comparison to its competitors. Xerox also suffered from its highly modify decision-making processes. As a result of this, return on assets fell to less than 8% and market share in copiers came down sharply from 86% in 1974 to just 17% in 1984.xeroxs profits decreased from $1.15billion in 1980 to $290 million in 1984.When David T. Kearns (Kearns) took over in 1982, he discovered that Japanese companies were able to undercut Xeroxs prices effortlessly because their average costs of copiers was 50-60% cheaper than that of Xerox. Kearns quickly began punctuate reduction of manufacturing costs and gave new thrust to quality control by launching a program that was popularly referred to as Leadership through Quality. As part of this quality program (to find ways to reduce their manufacturing costs), Xerox implemented the benchmarking program. These initiatives played a major role in pulling Xerox out of trouble in the years to come. The company even we nt on to become one of the best examples of the successful implementation of benchmarking.5.2 Benchmarking against Japanese CompetitorsXerox discovered that it took twice as long as its Japanese competitors to bring a product to market, five times the number of engineers, four times the number of design changes, and three times the design costs. The company also found that the Japanese could produce, ship, and sell units for about the same amount that it cost Xerox just to manufacture them. In addition, Xeroxs products had over 30,000 defective parts per million about 30 times more than its competitors. Benchmarking also revealed that Xerox would need an 18% annual productivity growth rate for five consecutive years to catch up with the Japanese. subsequently an initial period of denial, Xerox managers accepted the reality.Following this, Xerox delimit benchmarking as the process of measuring its products, services, and practices against its toughest competitors, identifying the gaps and establishing goals. Goal is always to achieve favourable position in quality, product reliability and cost. Gradually, Xerox developed its own benchmarking model. This model involved tens steps categorized under five stages planning, analysis, integration, action and maturity. get word 2 Xerox Benchmarking Model (according to Karsnia 1991, Camp 1989)Xerox collected data on key processes of best practice companies. These critical processes were then study to identify and define improvement opportunities. For the purpose of acquiring data from the related benchmarking companies, Xerox subscribed to the management and technical databases, referred to magazines and trade journals, and also consulted lord associations and consulting firms. Having worked out the model it wanted to use, Xerox began by implementing competitive benchmarking. However, the company found this type of benchmarking to be inadequate as the very best practices, in some processes or operations were not being upright by copier companies. The company then adopted functional benchmarking, which involved a study of the best practices followed by a variety of companies no matter of the industry they belonged to. Xerox initiated functional benchmarking with the study of the warehousing and inventory management system of L.L. Bean (Bean), a mail-order supplier of sporting goods and outdoor clothing.Similarly, Xerox zeroed in on various other best practice companies to benchmark its other processes. These included American Express (for billing and collection), Cummins Engines and Ford (for factory floor layout), Florida Power and Light (for quality improvement), Honda (for supplier development), Toyota (for quality management), Hewlett-Packard (for search and product development), Saturn (a division of General Motors) and Fuji Xerox (for manufacturing operations) and DuPont (for manufacturing safety).Results of BenchmarkingSome of the benefits Xerox derived as a result of their benchma rking areclient satisfaction for its copier/duplicator and printing systems increased by 38% and 39% respectively.Customer satisfaction with its sales processes amend by 40%, service processes by 18% and administrative processes by 21%.Customer complaints reduced by more than 60%.Financial performance of the company also improved considerably through the mid and late 1980s.Some of the other benefits Xerox derived wereNumber of effects reduced by 78 per 100 machines. recap of incoming components reduced to below 5%.Inventory costs reduced by two-thirds.Notable decrease in labour costs.Became the leader in the high-volume copier-duplicator market segmentCountry units improved from 152% to 328%.5.4 What Xerox could do to get more positive resultsXerox could get more positive results by continuously benchmarking against other companies outside the United States, especially in India and China. As we are in a more competitive business environs where customers preference are changing and they want more value for their money, Xerox should try to diversify more into the technology market in order to retain its competitiveness in the market.6.0 ConclusionHence we can see that operations management is an important aspect of any business organisation. It is very important as it is concerned with creating products and services the core of an organizations existence. It is also thought-provoking because the techniques implemented by organizations need to work globally and responsibly within the society and the environment as we can see in all the three case studies used in this report.