Last Updated 10 Aug 2020

Operations Management – A Strategic Approach

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Major Factors affecting choice of Process designs are: 1. nature of product/service demand: patterns of demand and price-volume relationships, 2. Degree of vertical integration: forward and backward integration, 3. Production flexibility: product and volume flexibility, 4. Degree of automation, 5. Product/service quality. Types of Process designs include: i. ). Product focused, ii. ) Process focused, iii). Group technology/Cellular manufacturing. Two different but complementary approaches exist for designing processes: process reengineering and process improvement.

"Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed. "(Hammer and Champy, 1993). Process improvement is the systematic study of the activities and flows of each process to improve it. Its purpose is to “learn the numbers,” understand the process, and dig out the details. The two basic techniques for analyzing process activities and flows are flow diagrams and process charts. Both are ways to organize the detailed study of process components.

1. Describe the primary inputs, outputs, and conversion subsystems of the following organizations: (a) dry-cleaning business, (b) factory making computers, (c) medical clinic, (d) fire station, and (e) public employment office. 2. Name two organizations that have no production functions. Defend your answer. 3. Define strategic decision. Give an example of an operating decision for: (a) a computer center, (b) a university, and (c) a government agency. 4. Your company is in the garment business, and you discover that two of your sewing subcontractors in Bangladesh are using child labor.

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If the children lose their jobs, some of them may be driven into prostitution. What is the right thing to do? Lay the children off or keep them working in the factory? Explain your answer. 5. Continuous improvement recognizes that many small improvements add up to sizable benefits. Will continuous improvement take a company at the bottom of an industry to the top? Explain? 6. John B. Galiault, president of the Aviation Safety Institute, said: “Airlines since the mid 1970’s have stuffed 20% more seats in the same size aircraft. ” The standard first class and coach configuration of an MD-11 holds about 300 passengers.

With narrower, more upright seats and coach seating throughout, an MD-11 will seat about 410 passengers. Some 747’s presently fly with 568 passengers. Double-deck airplanes are being designed to carry even more passengers. What are the trades-offs between safety and capacity utilisation? What other facility changes are associated with increasing the number of passengers per plane? 7. Form a discussion group in which each member represents a different functional area of a manufacturing business. Suppose that cycle inventories are to be reduced. Discuss the implications of that decision of each functional area.

Will organisations ever get to the point where they will no longer need inventories? Why or Why not? 9. Operations strategy for GlobalTel in Asia GlobalTel, Inc. , is a U. S. telecommunications company that has developed a new type of low-cost cellular telephone system technology. The technology has a potential to provide widespread access to telephone service at a very reasonable cost to users GlobalTel is planning to design and engineer the telephone systems in the United States, manufacture most of the components in Mexico and Taiwan, assemble the finished products in South Korea, and initially sell the products in China and India.

GlobalTel plans to establish joint ventures with manufactures in Mexico, Taiwan, and South Korea, and to contract with local distributors in China and India. Bob Venture is the owner of Holiday Candle Company and would like to expand his company’s operations. For the past two years Bob has sold candles via the Internet, but sales have steadily grown beyond his ability to produce the candles alone from his garage workshop. Because future sales growth looks very promising, Bob has decided to open a small manufacturing plant to produce the candles.

Sales have primarily been to customers in the United States with occasional orders from other countries. In addition to selling via the internet, Bob would like to start selling his candles to specialty stores in the United States. With the new plant, he would also like to consider expanding the products he offers in the near future. Assignments (a) Discuss what you think should be Bob’s competitive priorities. (b) Referring to the elements of operations strategy in this chapter, discuss different aspects of the operations strategy that you think Bob needs to develop.

References:

1. Gaither, Norman. Operations Management: Greg Frazier, Thomson, 1999

2. Krajewski J. Lee. Operations Management – Strategy and analysis: Larry P. Ritzman, Addison-Wesley, https://www.uel.ac.uk/clearing-homepage

3. Grainger, Peter. Managing Operations: Nichols, 1994

4. Baca, Claudia. Project Managers spot light on Change Management: Harbor Light Press, 2005

5. Operations Management – A Strategic Approach. Edited by Alison Bettley, David Mayle and Tarek Tantoush, Sage Publications, 2005

6. Cairncross, Frances . The Company of the Future: Profile Books, 2002, 2003

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