Management of Cadbury Products - Case Study Example

Name: University: Course: Tutor: Date: Operations management mainly concerns itself with the activities, decisions made and the responsibilities attached to each and every individual in the managing of the production process and also in the delivery of goods and services (Weeks, 2005). This case study mainly deals with the study of the operations management in four cases. 1. Holloware (case 42) This is a product manufacturing company. This mainly is an example of a company which deals with the transformation of materials to finished goods and products. Its transforming resources are the manufacturing facilities and the staff which are used in this transformation process. Therefore its transformation process can be represented as below. Transformed Resources. Environment. Materials Goods Its operation performance measures include Quality-The quality should mainly be determined by use of products and services. In terms of products, the company puts so much emphasis on the quality of the prestige products (Benner, & Tushman, 2002). The prestige products they produce should be able to meet customer’s needs. Their quality is assessed in terms of the returns from the customers and also inspecting the products before they are distributed to the consumers. Flexibility- The Company manufactures only one type of product and they do not have a wide variety of services. Therefore they cannot be able to change. Dependability-The delivery is not dependable because there is a high customer’s contact, production and consumption are simultaneous and therefore the quality is difficult to judge. This is not supposed to be so especially to a factory producing pure or tangible goods. The products should have a low customer contact and the production should precede consumption. The quality should also be evident. Cost- The cost mainly depends on the percentage of the Turnover and also the percentage of the profit (Bielski, 2001, Bielski,2004). This shows that the cost is usually facilitated depending on the turnover and also depending on the profit realized. This is not really a good way of determining the cost because, in order for the company to perform well, the cost of doing things should be totally cheap and should not depend entirely on other external factors. Speed- The speed the company used to reach the final consumer is very long. This is mainly indicated by the simultaneity and the customer contact. The simultaneity is mainly indicated by the way the product is produced. Since this is a pure good the production should precede the consumption and also should have a low customer contact. The characteristic of its operations are as follows: (i) Volume: The volume is very low because of the low process capabilities which are mainly as a result of materials used, the machinery used in the processing, the labor used layout and materials handling and also the work organization. The low volume experienced results to low repetition; each staff will perform more of the tasks than they are capable of. This leads to high systemization and a high unit costs. (ii) Variety The variety of the products they manufacture is very low because they only deal in the manufacture of prestige products. The routine manufacture of this product also leads to low unit costs. (iii) Variation. The company’s variability is very low because they are not in touch with the demand. The company’s production and the rate of consumer’s absorption are simultaneous. The company therefore is not flexible to produce various goods of varied taste. This therefore leads to low unit cost (Bielski, 2006). (iv) Visibility. The time taken to reach the final consumer is very long and this leads to a high lag between production and consumption. The overworking of staff members leads to high staff utilization. The visibility also leads to low unit costs and low contact skills which are mainly demonstrated by the executive Holloware. Its operation strategy involves: Location, capacity, facilities, technology, supply, planning and control system, workforce and the organization. 2. CADBURY WORLD (case II) This is a service providing company. This is an example of a company which mainly deals with the transformation of information or customers to meet their required services. Its transforming resources are the information and the staff which play a very important role in this transformation process. The transformation process can therefore be represented as below. Transformed Resources. Environment Information/customers Services Its operation performance measures therefore involves Quality- The quality is mainly determined by the demand of the company’s services (Cataldo, 2006, Chrystal, & Lipsey, 1997). The company mainly uses the aggregate demand in company with the already tabled forecasts. The variation in the rate of demand is also used in analysis of the quality (Elliott,, Swartz, & Herbane, 2002). This is done in terms of the daily and hourly variations in the rate of demand. The calculations for hourly, daily, weekly and yearly demand are calculated as follows. An example of an extract from Cadbury world (case II) DEMAND Mid August- end December = 185,000 visitors = 185,000 x 12/4.5 visitors = 493,333 visitors per year. Calculating the average weekly demand = 493,333/52 weeks = 9487 visitor/weeks Calculating the Average Hourly demand =9487/40.5 hours/week Daily demand of weekly visitors is as follows: Sun Mon Tues Wed Thur Fri Sat 22% 12% 12% 12% 12% 12% 18% 2087 1138 1138 1138 1138 1138 1707 The hourly demand for visitors is as follows Sun Mon Tues Wed Thur Fri Sat 463 190 190 190 190 190 287 - Flexibility- The Company only manufactures the chocolate products and it mainly concentrates its tasks and processes to providing this service. They are therefore not flexible because they cannot be able to change. - Dependability- The delivery is reliable because the production and consumption are mainly simultaneous. There is also a high customer’s contact and the services are also provided in various distributed places. There is also enough space allocated to the customers and the movement is very easy. The response time is very quick and the mode of delivery is superb. Customers can travel to the restaurant by either car, coach park, rail or the canal. The display of the product are done in Jungle, chocolate Drink, Bull street, Marie Cadbury, packaging plant and demonstration area. The point where the product is sold includes the shop, restaurant and coffee parlor. The statistics are as shown below. Packing = (484x3+24x35)/2.5 = 917 per hour Entrance = (15 to 20)/2.5 mins = 360 to 480 per hour. Jungle has large capacity Chocolate drink has large capacity Bull Street has large capacity. MARIE CADBURY 23-700 people/9 mins = 153 – 467/hrs Packaging (3 visitors/8 mins) = 225/hr/guide Demonstration (15 visitors/17 mins = 53/hr/guide Shop (3 tills; 15seconds transaction = 72/hour Restaurant (169 seats, 25 mins average stay) = 406/hour Parlor (46 seats, 17 mins average stay) = 162/hr - Cost- the cost fluctuates depending on the demand of the products. The demand of the product mainly rises during the week days and therefore results to the increase in the price of the product. But the stability of demand during the week days makes the prices of the products stable. The table below shows this fluctuation of demand. Hourly demand of weekly visitors Sun Mon Tues Wed Thur Fri Sat 463 190 190 190 190 190 287 The fluctuation in prices is mainly due to the principle and the laws of demand and supply. -Speed- The speed used by the company to reach its final consumers is very fast. The fixed and the varied delivery times indicate the speed in which it is used by the company in responding to various demands. The fixed delivery times are mainly due to the normal delivery of goods which the demand is consistent while the variability in the delivery times is mainly as a result of extra demand which might arise. The display is also done in various parts i.e. jungle, chocolate drink, Bull street, Marie Cadbury, packaging plant and demonstration area. This enables exposure of the product to reach many customers so that it can be bought quickly. The characteristics of its operations are as follows. (i) Volume The volume is always regulated according to the demand. As the demand increases the volume is also increased in order to meet the amount of quantity demanded by the customer. As the demand reduces the volume is also reduced. (ii) Variety The variety of the products they manufacture is also very low because they deal mostly on the Cadbury products. (iii) Variation The company’s changing capacity leads to a high variation. The capacity of layout has both fixed capacities (space) and the variable capacities (Guides). The capacity as compared with the demand has bottlenecks and also queues. It also affects the quality. There is also a high unit costs and the variation is also in touch with the demand. (iv) Visibility. There is a short waiting tolerance. The goods are well displayed on the Jungle, chocolate Drink, Bull Street, Marie Cadbury, packaging plants and the demonstration area. The points of departure are on the shop, restaurant and the coffee parlor. Its operation strategy involves Technology, capacity and the location. 3. London 200(case 49). This is a service providing company. This is therefore an example of a company which deals with the transformation of customers in order to meet their required services. Its transforming resources are the staff which plays a critical role in the transformation process. The transformation process can therefore be represented as below. Transformed Resources. Environment Customers services The operation measures therefore involves Quality-The quality is mainly determined by the performance of the company. The performance mainly is determined by the ranking. These rankings are as below. Rankings Lower than 2 Lower than 3 Higher than 4 Higher than 3 The important rankings to customers are as followers Rankings Higher than 4 Higher than 3 Lower than 2 Lower than 3 The quality therefore seems to meet the requirements of the customers. -Flexibility-There are enough services to satisfy the customer’s needs. The satisfaction of the customers is mainly due to the new products and services which are offered. There is also a wide range of products that are offered. -Dependability-The delivery is reliable because the provisions of services to the customers are mainly simultaneous. There is also a high customer contact and the services are provided in a superb way because it satisfies the customer’s needs and wants. -Costs-The costs is low and that leads to the increase in the demand. This is as a result of the high ranking of customer’s opinion on demand. This will help the company so much in doing things cheaply. -Speed-The speed used to reach the customer is very high because the customer utilizes the product as it is being produced. There is also customer contact which means that the product comes in contact with the services as it is being produced. The characteristics of its operations are as follows. (i) Volume The volume is very high because the cost of every unit is low. The service provided are mainly focused to one area which they allow the company’s staff to specialize in only one product. This results to high repeatability and thus increases the volume. (ii)Variety-The variety is very high because the services the company provides matches the customer’s needs and wants. This then results to flexibility in the production of these services. (iii) Variation-The variation is high because the services provided are in touch with the demand. This also is a result of changing capacity and the flexibility in the provision of the services. (iv)Visibility-The visibility is very high as there is less time consumed in the waiting of the service in order to be consumed. The high visibility is also as a result of the high variety received. The customers are also in contact with the services and there is high satisfactions which are governed by the perception of the customer. Its operational strategy involves Location, capacity, facilities, technology, planning/control system, supply, workforce, organization. 3. I’LL PHONE YOU BACK (CASE 23) This is a product manufacturing company. Therefore it is an example of a company which deals with the transformation of materials to finished goods and products. Its transforming resources are the manufacturing facilities and also the staff which are used in this transformation process. Therefore its transformation process can be represented as below. Environment Materials Goods Its operation performance measures includes -Quality-The quality depends on the various products the company produces. This depends on the customer’s tastes and preferences. -Flexibility-There are various products produced in the company. These products are of wide range. Therefore the flexibility of the company is very high because they can adapt to changes. -Dependability-The Company is very much reliable in the delivery of the products. They are able to do things on time. These are illustrated in the figure below. Customer Time in Hours Op op op op Total Delivery slack 1 2 3 4 ops Alpha Oil 50 30 40 25 145 160 15 T M D M British 50 25 10 20 105 120 15 Pipelines T M D T Gamma 20 30 50 200 150 Gases M D Delta 15 20 20 55 240 185 Engineering T M G Total 135 105 70 45 355 720 365 -Cost-The cost is very high due to the high slack time used and therefore the time of doing things is very low. The shortest delivery required also leads to an increase in the cost (Morris, 1998, Statt, 2004). -Speed-The delivery time used is a little bit high and therefore requires the shortest delivery time. This is demonstrated by the table below. Prices Loud Capacity per Loud/capacity (Hours) week (Hours) (weeks) Turn 135 80 1.7 Mill 95 40 2.4 Drill 80 40 2 Grind 45 40 1.1 Total 355 200 1.8 Operations 355 160 2.2 The characteristics of the operation are shown below (i) Volume-There is a low volume of the products produced. This is mainly because each and every staff performs more of the job. There is also a high unit cost. (ii) Variety-There is a high flexibility in terms of product types and the products matches the customer needs. (iii) variation-There is a high variation because of the high flexibility and also the demand requirements. (iv)Visibility- There is low visibility in terms of a high lag time between the production of the product and the consumption. There is also a high utilization of the staff and also low unit cost. Quality There is the similarity in the quality between executive Holloware, Cadbury world and the London 200. All of them focus on the high quality. The quality of only I’ll phone you back is the lowest. Flexibility There is no flexibility between the executive Holloware and the Cadbury world. Therefore they have no new products and these products are of a wide range and volume. They can hardly adapt to changes. The London 200 and I’ll phone you back are flexible because they can adapt o various changes. Dependability The Cadbury world, London 200 and I’ll phone you back are dependable because they have a reliable delivery system and they can do things on time. Only the executive Holloware is the only one who is not dependable because they cannot do things in time. Cost. The cost of Holloware, Cadbury world and the London 200 fluctuates due to the response in demand and supply. The cost of I’ll phone you back on the other side is high because their operating expenses is very high. Speed The speed of Cadbury world, London zoo and I will phone you back is very high due to short delivery time. While that of executive Holloware is low. This is mainly caused by high lead-time spent in delivering the goods and services. The characteristics of operations are as follows: Volume: The volume for Holloware and the I’ll phone you back are very low. This is because there is a very low repetition in their product and services. Also each and every of their staff members performs much of the job with less systemization. Also the unit cost of their products and services is very high. The volume for the Cadbury world and the London Zoo is very high. This is mainly as a result of high cases of repetition i.e. there is a large production of wider range of products. Most of the employees in this organization are specialized only in one field. There is also production of goods and services in a systematic manner. Most of the products are of low cost and they are capital intensive. Variety: The variety of goods and services of the executive of the executive Holloware and that of the Cadbury world is very low. This is mainly due to the standardized process of producing the goods and services among these companies. There is also a well defined course of work because only a single product is being produced i.e. the products is routinely produced. The low unit cost also is another factor which has contributed to the low variety. The variety of I’ll phone you back and those of the London Zoo are very high. This is due to the flexibility of the company in producing products of various types and range. The production is mainly due to the customer’s requirements and taste. Therefore the companies in the process of meeting these taste and preferences have to manufacture these wider ranges of goods and also provide wider range of services. The wider range of the products produced and the services provided leads to a higher unit cost. Variation The variation in the kind of goods produced and the services provided are very low in executive Holloware and Cadbury world. These variations are mainly due to the high utilization of the resources in the process of manufacturing and producing these goods and services. The stability has also resulted in the production of goods of various types and kinds which are of a higher quality (Theil, & Ferguson, 2003, Thierauf, 1999). The routinely manufacturing of goods and the provision of services has also led to the production of various kinds of goods and services that of a higher quality. The productions which are carried out in the process of adjusting for the demand and supply of products and services sometimes leads to the conclusion which are mainly biasing the low variation side. Low unit cost of the products and services has led to the reduction in variation. On the other hand the variations of the London zoo and I’ll phone you back are high. The increase in these results of the changing capacity in the production of various goods and services. The customers taste, preferences and wants has made these companies to manufacture various goods and provide several services in order to enable them meet these demands. The flexibility of producing different types of goods and providing various kinds of services has also resulted to the increase in variability. Visibility The visibility is low for the executive Holloware, Cadbury world and I’ll phone you back are low. The low visibility is mainly caused by the time lag between the production and consumption of the product (Golann, 2006, Warner, 2001). Also there is a low contact between the customer and product produced. There is also a high staff utilization and low unit cost in various products and services. The visibility is high for the London zoo this mainly is a result of short waiting tolerance, satisfaction on the customer’s side, high variety, there is also a high unit cost. Bibliography Benner, M. J., & Tushman, M. (2002). Process Management and Technological Innovation: A Longitudinal Study of the Photography and Paint Industries. Administrative Science Quarterly, 47(4), 676+. Retrieved November 4, 2007, from Questia database: http://www.questia.com/PM.qst?a=o&d=5001995941 Bielski, L. (2001). Middleware Begets New Business Process. ABA Banking Journal, 93(9), 66. Retrieved November 4, 2007, from Questia database: http://www.questia.com/PM.qst?a=o&d=5000883731 Bielski, L. (2004). 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