Services Operations - Assignment Example

RUNNING HEAD: Services Operations Services Operations Name Institution Date Question one It is quite evident that more drivers across the globe have widely transformed the roles, functions and responsibilities that were initially portrayed to be operation manager over recent. It has been noted that these drivers have not only based their argument on distinct technological innovation but also on the needs of organization to develop competitive strategies in global environment and the various demand of discerning customer. According to Aquilano (2001), it is for this reason that this part will focus on identity current issues on operation management regarding techniques, strategies and systems especially basing the argument in response to these driving forces. In order to understand the underlying issues, it is very essential that we understand what is meant by operation management (Aquilano 2001). Aquilano 2001 asserts that, operation management is considered to be a multi-disciplinary field which widely focuses on managing the various aspects of an organization key operation system. Further, operation management widely put focus on ensuring all operations within an organization are planned and controlled effectively. It is quite evidence there are several issues that are impacting on these systems as a way of competition. According Aquilano 2001, The recent wave in technology is one of the key issues impacting operation system within an organization. This wave has resulted to improved technology thus leading to deregulation and consolidation resulting to foreign modes of carrying out various operation systems. Operation managers have been left with the choice of constant acquiring knowledge on new technology so as to ensure it is operation on up to standard technology to fight its key competitors. Operation managers have developed new mechanism as part of understanding that technology as a significant driver of change thus, enhancing global understanding within the organization thus achieving effectiveness in all their operation. Aquilano 2001asserts that, operation management has realized that to implementation of new technology is essential and that upgrading on technology improves organizational operations. William 2001 asserts that, globalization is considered as the key issue affecting today operation management. Before the issue of globalization intensified, most operation management considered improving their system only in their country. Due to this intense, today more operation managers have been forced to adapt on new ways that will ensure that an organization is operating effectively therefore resulting in profitability and future success (William 2001). Globalization has brought about many challenges within an organization forcing operation managers’ address on these challenges to stay ahead in their market position. It is for this reason that operation management is widely focusing on understanding globalization. It is evident that in the eyes of all operation managers globalization have been termed to integrate the economy both within an organization and a country. Globalization is seen to transform organizational operation management into a more competitive department thus ensuring that new and distinct opportunities have been created for the expansion of business operational systems (William 2001). Competitive advantage is another key issue that constantly affects organizational operation management. Operation managers have been forced to come up with new opportunities that will foresee the creation of competitive advantage as strategy to have a stronger business platform and retain their market position. By focusing on a strong competitive advantage background, operation management team ensures that an organization is able to produce quality goods and services ahead of their chief competitors (William 2001). Competitive advantage can be in term of availability of resources, cost of labor and availability of skilled manpower. Globalization is constantly blamed by operation mangers to have changed the figure and nature of competitions. They argue that globalization have created challenges thus resulting to severe competition both local and regional markets. Beach (2000) asserts that, with the current economic trends it is quite evidence that economic of scale is a factor affecting operation management. It is important to understand that organizations are expected to gain economics of scales by use of operation management especially through the fields of marketing and production. Through focusing on economies of scale, operation managers have helped organizations in achieving a certain cost advantage by way of large scale production and creating a strong customer base. According to William (2001), understanding on economic scale comes along with increased sales volume by way of fixing cost incurring in their production decreases thus spreading on a larger volume. Managerial and industrial impediments are also issues that are affecting operation management. It is quite evidence that for globalization process to be termed as successful, all managers especially those in the operation management should widely define on their managerial skills on companies operation systems so as to have a high advantage within global environment. Time and effort need to constantly realign on their operation processes (Beach 2000). Finally, it is very important to note that operation management should be able to come up with techniques and strategies that will focus on transforming and converting resources into variable outputs. Resources may be in term of raw materials, customers and information. It is the duty of operation management to ensure that these resources are transformed to goods and services according to customer satisfaction. The best strategy that should be incorporated by operation manager is to interface with various organizational disciplines. In addition to this, it is expected that to develop a good operation system so as to control variation in how various services are conducted. Question 2 (a) Forecasting is the process in which an individual or an organization predicts a future event. It is aimed at providing estimates that the entity can use to plan for future operations in terms of cost and time. To begin with, the scenario given will call for a long range forecast as the university not only aims at changing the methodologies employed in computer procurement, but restructuring the whole procurement process to serve its students more efficiently. The type of forecast that should be used is a demand forecast as the university wishes to predict the sales of computers to its students. More specifically, the forecast technique that should be applied is the Time Series Forecasting technique. To apply this technique, one needs to observe responses that vary depending on a certain time period. It is based on past values and assumes that the factors that influence the past and present will continue to influence the future. This technique best suits the university as it can observe recent trends in computer purchasing so as to forecast for larger purchases that will meet the consumer demand. This technique also takes into consideration the seasonal element that influences the amount of computers that should be purchased. This is important as the university has an on-peak season every intake that it can adequately prepare for. This technique also has a random component that very well caters for the uncertain amount of purchase of computers by both new and existing students during the year. 2 (b) The past demand for computers in each season is one of the major factors relied on in the drawing up of forecast figures. Trend projections using past demand of computers A Multiplicative Seasonal Model is then used to modify the trend data above so as to accommodate the seasonal variations in the demand for computers in the university. Modification involves considering the seasonal index for each season. Seasonal index is important as it provides details of exactly which seasons experience the highest demand and those that experience the lowest demand in a year. This enables the university to increase purchase of computers when the seasonal index is high and reduce purchase when it falls. This, in turn, matches the demand and supply of computers, preventing shortages and gluts. Another factor considered in this model is the average demand for all the seasons. This enables the university to plan for the warehouse space allocated to computers and the space that will be left for other bookstore products. It also helps in determining how many warehouse workers will be needed for purposes of handling and installing PC’s. The final factor is the estimate of the next year’s demand. This will allow the university to plan for transportation among other factors that will be coupled with increase of computers purchased. The multiplicative seasonal model takes into account all these factors. It involves dividing the estimate of the total demand in the year by the total numbers of complete seasons. After this, multiply by the calculated seasonal index that belongs to that season. Multiplicative Seasonal Model Total demand / number of seasons * seasonal index 2 (c) Students in the university register dissatisfaction due to the fact that after purchasing computers from the university they come to the sad realization that the computers offer only one generic specification. Quality management supports differentiation of the products offered to the customers. Additionally, for a product to meet high quality standards, it has to satisfy the needs of the customer to a large extent. The university should therefore seek to provide its students with computers that have a larger combination of features so that they can satisfy their special academic needs. For such an improvement to be made, the school leadership body has to be consulted. This is because the current computer specifications have to be reviewed and expert advice sought on whether the university will get new retailers or whether the current retailers will increase the software programs in the computers sold. The outcome of the decision made will then require training and staff support to ensure that the new computers are properly installed and that students are assisted in understanding the improved computers. The university and the retailers should also agree on the most efficient time of ordering and delivery. This will eliminate unnecessary warehouse and transportation costs. Introduction of highly specialized computers may increase the purchase price but their high quality and special programs will be a competitive advantage in the market. The computers will allow students to use specialized programs such as scanning and reading of software, editing and creating music and videos, among many others. Such an improvement on quality and performance of the computers will not only ensure that the students are fully satisfied, but that the sale of computers by the university will not decline in the future. Question four It is quite evident that the layout in which a supermarket is emphasized has a major impact on the profitability of the business. Clearly, layout designs decided by different supermarkets widely focuses on maximizing on contribution made per square meter and the total revenue collection not forgetting on minimizing supermarket operating costs. When designing on supermarkets layout it is very essential that customer factors are constantly oriented to meet all costs and measures put aside. It is for this reason that this section will focus on discussing various methods that supermarkets can highly deploy while designing their layout. Further, it is quite essential to understand various approaches in which these layouts can act as factors which can highly be used in increasing profitability by method of reducing costs at the same time maintaining and attracting more customers. In order to understand about supermarket layout, it is very essential for one to understand factors that influence design and layout. Small businesses need to ensure that operational factors are in place when either renovating or building for maximum effectiveness in the layout. For a supermarket it is very essential that one creates a layout that allows easiness for further expansion or any definable change. Supermarkets are expected to be designed in such a way that it can be adjusted so as to meet changes either from production or operation. Flexible layout should always be considered to accommodate automated facilities so as to occupy intermediate volume in production. Flow of movement within the supermarkets is important when coming up with a supermarket layout. It is quite important for the layout so as to ensure the recognition of smooth process in the flow of commodity and customers. Flow of movement entails designing a plan that will show raw materials entering your supermarket at one particular end and the other one showing a finished product at the other. It is not necessary that the flow of movement to be straight provided the desired movement is attained. Back tracking in movement should highly be avoided regardless of the pattern chosen for movement. When goods and services within a supermarket move either against or across the overall flow it is important that there is constancy in coordination. With the current globalization and improved technology, a supermarket needs to have a revised layout as a way of optimizing on increasing its sales. There are different ways in which a supermarket can work on their layout as part of increasing their profitability. For instance pricing is one of a supermarket layout, it is quite necessary that management understand that layout is understanding prices demographics that will enable to maintain future success of the business at the same time working towards customers interests. It is definable that supermarkets are able to deliver more through improved performance due to well designed layout which are highly connected to pricing. It is important to note that there is no any single method in which is right when it comes on deciding on one’s own pricing strategy. It is your duty to work hard so as to ensure that you develop a strategy that will be both you and your customers. The layout involving pricing is an approach that enables companies in fitting cost as a measure of cost effectively. Layout within supermarket need to be carried out effectively, so as to avoid constant redesigning as this can be costly and more demanding. Designing the layout properly calls out for avoidance in equipment interferences, material handling thus ensuring maximally flexibility all operations. Product layout is identical with assemblage line and is slanting toward the products that are being made. Process layout is oriented in the region of the processes that are used to construct the products. Usually, product layout is appropriate for high-volume recurring operations, while process layout is appropriate for low volume specially made goods. Question 5 Simulation is an attempt taken to duplicate the appearance, features and characteristics found in a real system so as to be able to draw conclusions as well as make action decisions that are based on attained simulation results. In this scenario, the Monte Carlo simulation will be used as there exists elements that show chance in their behavior. This type of simulation is done by first setting up probability distributions required for all important variables. A Cumulative Probability Distribution is then built for each variable. Intervals for the random numbers are then established. Finally, Random numbers are generated and a series of trails is then simulated. The steps above are implemented as follows: Probability of demand Demand for Tires Frequency Probability of Occurrence Cumulative Probability 10 1 0.04 0.04 12 3 0.12 0.16 14 6 0.24 0.4 16 8 0.32 0.72 18 4 0.16 0.88 19 2 0.08 0.96 20 1 0.04 1.00 Assigning Random numbers Demand for Motorbikes Probability of Occurrence Cumulative Probability Interval of Probability 10 0.04 0.04 01 Through 04 12 0.12 0.16 05 Through 16 14 0.24 0.40 17 Through 40 16 0.32 0.72 41 Through 72 18 0.16 0.88 73 Through 88 19 0.08 0.96 89 Through 96 20 0.04 1.00 97 Through 100 Table of random numbers 52 50 60 52 05 37 27 80 69 34 82 45 53 33 55 69 81 69 32 09 98 66 37 30 77 96 74 06 48 08 33 30 63 88 45 50 59 57 14 84 88 67 02 02 84 90 60 94 83 77 Simulation example 1 Day number Random number Simulated daily demand 1 52 3 2 37 2 3 82 5 4 69 4 5 98 6 6 96 6 7 33 2 8 50 3 9 88 6 10 90 6 11 50 3 12 27 2 13 45 3 14 81 5 15 66 4 16 74 5 17 30 2 18 59 4 19 67 4 20 60 4 = 79 TOTAL = 4 AVERAGE Expected Demand = Σ (probability of i units) x (demand of i units) = (.04)(10) + (.12)(12) + (.24)(14) + (.32)(16) + (.16)(18) + (.08)(19) + (.04)(20) = 0.4 + 1.44 + 3.36 + .5.12 + 2.88 + 1.52 + 0.8 = 15.52 motorbikes Perwira Superbikes should continue ordering 16motorbikes in a month. This is because the expected demand in a month as derived from above is 15.52motobikes, which is approximately 16motobikes, matches the supply for motorbikes in the firm. 5 (b) Inventory simulation is a type of simulation that enables an entity to determine the suitable amount of goods to purchase at exactly what time of the month such purchasing should be done. The re-order quantity is also determined as is gives the company a cue for more motorbikes to be ordered so as to avoid costly stock outs. Below is an example of how inventory is simulated. Inventory simulation Reorder lead time Delivery time (in months) Probability Cumulative probability Random numbers Interval 1 0.20 0.20 01 through 20 2 0.40 0.60 21 through 60 3 0.30 0.90 61 through 90 4 0.10 1.00 91 through 100 Inventory simulation Order quantity = 36 units Reorder point = 9 units Day Units received Beginning inventory Random number Demand Ending inventory Lost sales Order? Random number Lead time 1 36 06 0 36 0 No 2 0 36 63 4 32 0 No 3 0 32 57 4 28 0 No 4 0 28 94 6 22 0 No 5 0 22 52 3 19 0 No 6 0 19 69 4 15 0 No 7 0 15 32 2 13 0 No 8 0 13 30 2 11 0 No 9 0 11 48 3 8 1 Yes 02 1 10 36 36 88 6 30 0 No The results in the above inventory simulation show that it is unwise to order motorbikes in batches of 36 units. This is because the inventory is slow moving and it takes a long period of time before the next batch is ordered. This translates into high holding or storage costs that exceed the costs of ordering motorbikes more frequently. It is therefore recommendable to order less units to cut on storage costs that may become to large to bear. 5 (c) A container management company in a dockyard can apply simulation techniques where the management wants to determine the appropriate number of container-handling forklifts for unloading and loading containers of its customers. The simulation technique will allow the company to estimate the demand of containers that require handling within the dockyard. Knowing the demand for its services enables it to plan for how many forklifts will be required for its operations. A high demand will call for additional forklifts so as to satisfy the needs of the customers adequately without any costly delays. This in turn will require more personnel which can be planned for by the management in good time. The company can also use simulation techniques to simulate the inventory that will be held by the company at a certain period of time. By simulating the inventory in storage, the company can calculate the holding costs for such inventory. This not only allows the company to create sufficient storage space, but also allows it to utilize such space to the maximum so as to reduce on holding costs. Minimal holding costs will, in turn, enable the company to charge less to its customers, giving it a competitive advantage over other docking companies. Inventory simulation will also provide the company with detailed information on the lead time of the inventory they keep in store. Such knowledge is beneficial because it helps the company know the time span for which they will store certain goods. This is vital as fast-moving goods are identified as they have a short lead time and more attention can be placed on them to earn the company increased profits. Slow-moving goods with a longer lead time are also identified. With such knowledge, the docking company can wisely determine its capacity in terms of space, time and personnel. It can then make wise decisions in which customer orders to accept and which ones to decline in light of such capacity and their scale of operations. The company will then be in the track to operating at high standards of quality and efficiency. The flow chart above gives a wide definition in which all organizational processes take course. With recent globalization and improved technology, the process should be embedded with new methods that support all operations within the systems. Technology forms the main basis towards ensuring that organizational goals and objectives are met. References Aquilano, F. 2001. Operations Management for a Competitive Advantage, Ninth Edition, McGraw-Hill Irwin. Beach, R. “Manufacturing Operations and Strategic Flexibility: Survey and Cases,” International Journal of Operations and Production Management, 20, 1, 2000, 7–30. Myers, John. "Fundamentals of Production that Influence Industrial Facility Designs." Appraisal Journal. April 1994 Weiss, H.& Mark E. Gershon. Production and Operations Management. Boston: Allyn and Bacon, 1989 William, C. “How to Become a Supply Chain Master,” Supply Chain Management Review, September–October, 2001, 24–35 Read More