Operations Management Assignment: Case Analysis of ABC Ltd & City School of Architecture
Students are required to read the Case Study given below and answer the questions. (Word count – 1600)
Logistics Operations of ABC Ltd
ABC Ltd. is the country’s largest manufacturer of spun yarn with well-established market. ABC Ltd. has good reputation for quality and service. Their marketing department identified that the potential for global market is expanding rapidly and hence the company undertook exercise for expansion of the capacity for export market.
The company formed team of Marketing and Materials department to study the global logistics possibilities. After extensive study, the team came up with a report on global logistics and submitted that global logistics is essentially same as domestic due to following similarities:
- The conceptual logistics framework of linking supply sources, plants, warehouses and customers is the same.
- Both systems involve managing the movement and storage of products.
- Information is critical to effective provision of customer service, management of inventory, vendor product and cost control.
- The functional processes of inventory management, warehousing, order processing, carrier selection, procurement, and vendor payment are required for both.
- Economic and safety regulations exist for transportation.
The company had very economical and reliable transportation system in existence. For exports as well they decided to evaluate capabilities of their existing transporter and entrusted them with the job of transport till port. For customs formalities they engaged a good CHA after proper cost evaluation and entered into contract for freight with shipping company agent.
The response for company’s export was very good and the company could get as many as 15 customers within first two months and reached to a level of USD 250,000 per month by the end of first half of the year. Based on this response the export volumes were expected to grow to a level of USD 400,000 per month by the end of the year. When the review was made at the end of the year, company found that export volumes had in fact come down to the level of USD 120,000 which was much lower than it had reached in the first half of the year.
The managing committee had an emergency meeting to discuss this and the export manager was entrusted with the task of identifying the reasons for this decline. Mr. Ganesh decided to visit the customers for getting the first hand information. When he discussed the matter with the customers, the feedback on the quality and price were good but the customers were very upset on the logistic services due to delayed shipments, frequent changes in shipping schedules, improper documentation, improper identifications, package sizes, losses due to transit damages etc.
After coming back, the export manager checked the dispatch schedules and found that production and ex-works schedules were all proper. Then he studied the logistics systems and found that the logistics cost was very high and all the logistics people were demotivated due to overwork and were complaining of total lack of coordination and the system had become totally disorganized.
Prepare a report on operations management assignment answering the following:
- Explain the problems experienced by ABC Ltd. What is the main cause of these problems?
- Suggest recommendations to the current logistic model to overcome the existing problems.
- Describe the re-engineering effort for Q2 above. Use appropriate diagrams such as input-process-output, process interaction chart, process flow chart to elaborate your answer.
(Word count – 2400)
Students are required to select an organization (preferably the current work place) and answer the questions below. Students are expected to source from published peer reviewed academic literature and databases including scholarly work. Students are expected to use only published secondary data sources.
- Describe the importance of a sound operations strategy to meet the business strategy of the organization. Use Input-Process-Output diagram to explain the scope of the operation function.
- Explain the process of developing the plans for operations function focusing on specific competitive-priorities such as time, cost, quality and flexibility. Students are required to provide practical examples from the selected organization.
- Explain the following processes in the organization with appropriate examples.
- Linear programming for optimizations of resources
- Use of productivity assessment of processes for improvements
- Cohesiveness of supply chain management for smooth operations
- Sound quality management framework for cost reduction in operations
- Appropriate Total innovation management (TIM) for product and process innovations
- Effective Inventory management for uninterrupted operations
Operations Management Assignment: Section One
The logistics are the most important part of a business and they help to expand the business vastly. The export and import depend mainly on logistics and the quality of the product and service of the manufacturer helps to create a good reputation in the market. The study sheds light on the ABC Ltd. company, which is the country's largest manufacturer and they are well established in the market. They have planned to expand globally and hence undertook export market. They did perform well in the first half of their financial year and as expected they were to perform better in the next half. However, their performance was found to be declining and hence the whole business was reviewed as a whole. The study below discusses the review process and the problems discussed along with the models to overcome the issues.
Explanation of the problems experienced by ABC Ltd. and its main cause
The main problems as discussed by the customers with the export manager was that though the quality and service were better, the service was getting delayed. The shipment was much delayed and due to this issue, the product was getting delivered late. This created problems among customers as they order products for their customers and if logistics shipment gets delayed the whole procedure is getting late. The next issue with the export of ABC Company is there were frequent changes in the shipping schedule. This mainly created problems for the customers of the global retailers who were taking products from ABC Ltd. The customers of these retailers were now backing off since they were not getting products on time. There was also improper documentation and during returning of things, there was no proper paperwork or signature which could prove there was a problem in products of ABC Ltd. The products, after being delayed suffered from lack of identification and after there is loss due to transit damage there is no claim accepted.
According to Chang et al. (2019), any product is damage must be claimed accepted and the reason of damage must be explained. In the scenario of problems experienced by ABC Ltd the export manager, Mr Ganesh has checked the dispatch schedule and found out that production was all proper. The ex-works schedules were also proper. However, owing to high logistic costs the logistics people were getting demoralized and they spread the rumour about the company. There was a lack of motivation owing to overwork and lack of coordination and the system had become unorganized. This has resulted in complaining of employees and they have made the delivery late as per their wish though production was completed in time. After studying the whole scenario, the export manager could understand the reason behind the decline of export volume from USD 250000 to USD 120000 at the end of the year and they have lost many customers. The main reason being overwork and lack of salary, the operation costs, however, was not less since the logistics costs kept on increasing to complete the products on time.
Recommendations to the current logistic model to overcome the existing problems
Firstly, the company has to keep a separate conceptual framework for linking supply sources, plants and warehouses. They need to separate the customers’ concept as they fall in a different frame. The main model used is the conceptual framework for organizing ideas and since it helps to analyze the variations in the context, the framework must be separate and not same as the company uses as of now. They need to use separate models for domestic and global business. Management and product storage must be different. They must not be stored in the same place.
Secondly, the company mainly follows the Broker model where the company purchases shipment space in bulk from the transportation company. It has entrusted the transportation company with the job of transport till the port and for the formalities, it has engaged good CHA with a better cost evaluation and entered into a contract with the shipping company agent. It is recommended that the company can use gain sharing model where they can directly deal with the customer and this would cut the costs (Xu et al. 2020). The company can form deals with customers where customers can only charge the fee 3PL successfully delivers lower costs. This gain sharing model potentially results in large profit and since there is directly dealing with the customer there is no chance of damage of products through "via shipping”.
They can also use the commission model as it works for the shipping performance and helps the companies to connect them with the buyers. The model provides transparency and results in the best technological solutions as the 3PL makes the shipping tackle technology in their way. In the scenario of ABC Ltd, it would be helpful to follow the model since they need not rely fully on the employees after the assembly till delivery of products and they can technologically tackle the whole process on their own with a cost-cutting. This cost-cutting would help the employees to work less and they would not be overloaded with work and there would not be any lack of coordination in the export of products. The whole process would result in the proper delivery of the goods in good quality.
Re-engineering effort with appropriate diagrams
To complete the operation and administration of the business practices to create high-efficiency level within the organization, the conversion of materials and goods and services are maximized at the highest level. Re-engineering is mostly defined as the redesigning of the business processing and development of the associated systems and structures. This helps to achieve improvement in business performance. The re-engineering is purposefully used to cut operational cost and become a world-class competitor (Frischmann and Selinger, 2018). The reengineering process used for the improvement of the logistics in the above section helps to develop the workflow and dramatically improve customer service.
In the reengineering process, the input-process-output model is used. The logistics operations management transforms the inputs (labour, capital, materials and information) into outputs (services and goods) and these provide value to customers. The transformation system is very important and determines that an organization produces goods to meet customers' needs (Lomotko et al. 2021). ABC Ltd mainly supplies goods to customers so that they can satisfy the demands and strive to maximize the quality of the transformation process to meet customer needs. They also research whether the goods supplied are damaged or delivered in proper quality.
Figure 1: Input-Process-Output Diagram
ABC Ltd is a manufacturing company and the process is best visualized by presenting the process through charts. These process charts show the ways through which manufacturing is observed in stages and the equipment and tools are planned. The operation process chart mainly shows the sequence of the operations that are to be performed on a component. The logistics that are to be exported to different companies must go through the operation process chart as the production schedule and assembly illustration gets through it. The reengineering goes through several components like single assemble or sub-assembly that is represented in the single outline process chart. The components are identified at top of the horizontal line by name of raw material specification.
Figure 2: Process Flow Diagram
Finally, there is the process Flow Chart which is the analysis tool and it maps out the process through the steps of flow chart. A flow chart is a similar approach that values stream mapping and the value stream of the product or the service is mapped for raw materials for customer distributions (Huang et al. 2019). The product is supplied to the customers and when they complained to the export manager regarding the delaying of the products and the scheduling it was found that the total production flow chart was completed following the schedule. However, the production employees delivered the products lately owing to overwork and delay in salary. This whole process must be overviewed through graphical representation of the business process flow chart. This means there must be involvement of the top-down understanding of the process and the steps involved along with changes.
The study concludes that ABC Ltd has few problems while dealing with the export globally and they are trying to identify the issues. Once identified, Mr Ganesh, the export manager, has further researched the reason behind the loss of customers and a decline in profit. The study also comes up with few recommended models like gain-sharing and commission model that are expected to reduce the issues in shipping and transportation. The topic also focuses on process flow chart and input-process-output transformation management system for reengineering design. This concludes that the operation process represents proper sequences of operation so that significant effort is put into the preparation of the logistics. The process flow charts also describe the different scheduling through which products must be reviewed before they are released to customers. This improves business operations and proper appraisals improve supply base.
Operations management of an organization is the business practices which creates the highest level of efficiency and business effectiveness made within the organization. It is focused on converting raw materials and labour force into products and services to maximize the profit and business objectives of the organization. The strategies used in the business may be used to optimize the processes, resources, technologies which in turn would help in shaping the long term possibilities for the operations and their overall contributions(Kumar et al.2018). Likewise, the operation processes are delivery concerned thereby ensuring the successful production of organizational inputs into output efficiently and with long term durability.
The City School of Architecture (CSA) is an eminent institution that provides courses and education in Architecture and helps to build a career in the same. It is a very well articulated course that helps students to achieve excellence in the study of Architecture. The school offers two courses. One is the three years full-time Architecture Course or the Diploma in Architecture Course. The second one is the three years of part-time Architecture Course or the Advanced Diploma in Architecture Course. Operations Strategy is very important as it decides a company's operations, the crucial part of the business that deals with the distribution of services that is an education in this case. Operations Strategy is equally important as Business Strategy and it plays a crucial role in the overall ever-changing market. (Pfutzenreuter, et. al, 2020) With a proper strategy for Operations Management, the administration of the Educational institute can optimise the use of its resources, people, technology and processes.
Figure 3: Input-Process-Output Diagram
(Source: Created by Author)
The Input included the courses that are being offered by the institution. It also must talk about the set curriculum for each course. This part is of utmost importance as this forms the basic foundation of excellence for every academic institute. (Jeihooni, et al., 2019) The Process on the other hand would include the mode in which the education is being provided. The City School of Architecture usually provides classroom education like any other academic institute. The most effective and efficient mode of education is the one where the facilitator and facilitated get a chance to interact on a one on one basis. Due to the Pandemic situation and the entire process of physical distancing as a method of precaution, the City School of Architecture is also not being able to conduct on-ground classes. They are currently also availing the online mode of education to provide quality academic services to their students. Finally, another important part is Output. The Output includes the outcome or the final performance of the students of the institute. (Haleem, et al., 2017) The sole purpose of the institute is to make their students excel in the Study of Architecture and to make them eminent Architects. The Output keeps a detailed account of the progress of the students and the contribution of the organisation on a larger societal basis.
For example, the Students Intake, Enrollment and Output for 2019 can be taken into consideration, which will show how the Input-Process-Output works for The City School of Architecture. The institute was offering two full-time courses in 2019. One was the Bachelor of Architecture Honours degree and the other one was a Diploma in Architectural Studies. It was a 3 years course affiliated to the University of West England, UK and City School of Architecture, Sri Lanka consecutively. In this particular year, 20 male and 19 female students were taken and the total enrollment was 51 and 59 respectively. The number of Graduated students for 2019 was 14 for male and 21 for female. This shows the Input-Process-Output for 2019.
The authorities believe that the education and other services provided at the CSA are very much sophisticated and at a high level which helps students to become prominent names in the world of architecture. However, considering the entire scenario of input-processing-output structure, current requirements, and the diversity of students and their requirements, there are certain possibilities of making the entire academics and curriculum more time-friendly, financially accessible, flexible for each student, and of top quality. Though at this point the curriculum is highly systematic and up-to-date, still some concerns were raised by some members regarding the maintenance of standards that are essential in today’s industry. In this course, the authorities strictly believe that to compete with the modern state of the architectural industry, CSA must diversify in every aspect. There are many suggestions given by different board members of the institute, for example, some of them think that other forms like interior designing or landscaping must be included; some others think that the institute should be limited to architecture only but expanding the education courses in higher levels like the MBA course (Adebanjo et al., 2020). The students must get involved at the maximum level. There is no student union or student committee and thus no talent shows or Vesak festivals get organized for the students. Increasing the scopes for extracurricular activities will help in bringing up the grades and the exposers. Attracting foreign students or students from different regions is also important.
When reshaping an institute, it is really important to count the feedback of the students. Though currently, the institute is offering an education based on the online mode, when the campus opens, some issues like more space for modelling work, 24/7 open space for completing group work, well-maintained state of toilet or canteen, Wi-Fi with good bandwidth, working library and computer lab et cetera must be resolved. Also, even now, the issue of fee structure must be resolved. Students do not understand the entire process and the logic behind it. Easy payment methods must be provided and a proper payment plan should be disclosed with necessary details at the time of registration. Implementation of a digital student management system to maintain student information for all purposes will be useful. Also, CSA must install immediately a Student Service Unit (SSU) to convey all these issues and enhance the solving procedure.
In the academics provided by the institute, a ‘syllabi review committee’ can be built up which will interrogate and propose thorough changes to the board. The students can be offered opportunities for exchange programs with other universities or visiting lectures by eminent international academicians. Access to international journals must be provided free of cost for the students via the library. The paper-checking and examination feedbacks must be more improvised focusing entirely on the area of expectations and improvements. Student scholarship scheme and student loan scheme must be provided to local and international students (Idris and Naqshbandi, 2019). An ERP (Enterprise Resource Planning) for academic and non-academic operations can also be implemented.
All of these upper stated possible development plans must be planned in a good manner and categorized into short term and long-term action points. CSA is a great institute for architecture and some changes and responses to feedbacks can make it even greater.
a. Linear Programming
Linear programming along with other research techniques are used by the organizations for assisting the administrations and planners to help the business in achieving the racial balances(Lee et al.2018). The programming is mainly used to deal with the issues like maximization of profits, cost minimizations and to check upon that the organization uses the available resources in the best possible way. The process allows the organization for the generation of the optimal solution to satisfy the variant constraints at once and provide the best strategies for ensuring an effective operation process and practices within the organization. For instance, in universities, there is seen as a common problem of creation of a timetable for the respective courses in every semester for the students. The main issue persists in the allocation of certain resources such as the availability of the teachers for giving lectures, constraints in classrooms etc. This problem may be solved with the linear programming mix which will allow the conducting of lectures in the limited classrooms within the limited period and providing the course timetable in the institution's website allowing the students to precisely follow the routine and attend the classes accordingly, thereby delivering good performances.
b. Productivity Assessment
The productivity assessment tool is one of the simple and most frequently used tool which helps to measure the rise in the effectiveness of costs of the employees in an organization after a detailed intervention. This tool is more like a time-based approach and compares the before as well as after the situation in the organization(Lohmer et al.2020). It is a well-known fact that the quality of the work environment affects the overall performances of the workers, human resource management, business outcomes of the organization. It is thereby, crucial to see where the possibilities for the improvement of the management is necessary and capitalize on the cost savings which are available for the organizations. For example, in an organization, if there is lack of communication between the workers and the management, it will affect the business goals and decisions as they will fail to deliver the output within the timeframe. Thereby, it is important to have clear communication between the management and employees about the achievement of the desired business objectives and work in coordination with each other to deliver the output within the period. This will help the organization to become highly business effective and efficient and overall improve productivity.
c. Cohesiveness of Supply chain management
An accelerated efficiency in business process is important for ensuring timely delivery of products and services by an organization to make it proficient to help increase the performance and efficiency of the business processes. To achieve success in a business streamline, integrated and cohesive supply chain management is implemented which helps in the efficiency of the business process to accommodate dynamic changes in the business environment without making any changes in the ideal business processes(Agrawal et al.2019). This provides an integrated solution between the technologies and the legacy elements to increase the production and reduce the costs. Technology is crucial to achieving the cohesiveness of supply chain management. As the organizations now become more focused on the efficiency in the supply chain, thereby, technology has become essential to manage the increasing business complexities. Asset tracking, supply chain management software are some of the core technologies that have leveraged the organisation’s supply chain processes. Likewise, the integrated supply chain process for universities works with the processing of the number of the study materials ordered by the board to be provided to the students till the final delivery of the resources(Kumar et al.2018). The distributors continue to drive the production of the resources for efficient delivery and the cycle continues within the management.
d. Sound quality management framework
The implementation and practice of sound quality management have improved the business operation process because of its effectiveness in the reduction of wastes, costs of raw materials, lowering if overhead expenses, decreasing the labour costs and thereby increasing the productivity. The incorporation of the quality management have achieved the cost-saving advantages by making product designs more simplified and eliminated the errors as well as the rework process. The quality management process would help the organization for continuous improvement in the produced goods and services and make them enhance to attain the needs of the consumers(Ivanov et al.2017). Likewise, through the use of a quality management framework, the universities integrate the processes, thereby providing the systematic approach for improving and enhancing the quality of its educational provisions. The educational institutions see the quality as a new dimension of the activities of the students, management and staffs and work on improving the acquired capabilities of the members associated with the institution. Through a comprehensive process the organization's effective oversight of the planned activities are ensured that they are transparent, relevant and aligned with the respective institution's strategies as well as quality objectives. This is to ensure the achievement of high-quality educational objectives and strategic growth of the institution(Lohmer et al.2020).
e. Total Innovation Management
Implementation of Total Innovation Management (TIM) in an institution ensures a smoother development procedure and improved outcomes. TIM is a process that synchronizes technology, organization, and culture and thus helping in designing a successful innovation proficiency. There are many ways of achieving this, for example, creating a long-term program may help in the procedure of development and also enhance the motivation of achieving the short-term goals. Like, in the case of library problems, creating a digital library may seem a future program, but giving access to the e-journals right now is possible. These small steps direct the innovative energies of the students and staff in the right direction. Secondly, the ideas are better to be crowdsourced. Feedbacks must be taken and responded to seriously, every person involved in a network as wide as possible must be able to throw their suggestions in the decision-making procedure. The student body development becomes necessary here (Sayem et al., 2018). Finally, nurturing a creative culture and boosting employee engagement, reverse-mentoring, rewarding contributions, arranging extracurricular events, teaching creative thinking, employing technology as an enabler, advocating good relationships between staff and students and many other measures can be taken to make the culture an innovative and persistent one. A communication strategy is very important in all of these cases and also, the competitive spirits of the students or staff must be nurtured under care for further cultural developments.
f. Inventory Management
Inventory management makes work a lot easier for proper operations management. Inventory management is a systematic and set approach to storing, sourcing and selling inventory. Inventory management plays a role in situating the right stock, in the right place, at the right time. It is of utmost importance to have a well-functioning inventory management system to ensure the smooth running of any work or business. Proper inventory management allows more effective management of the institute. The inventory management system can ensure manual data entry and ongoing maintenance. Inventory management helps in eliminating guess works and errors. ( Dillon et.al, 2017) It also helps in less wastage of time and money.
At any time of the day or night, one can use the inventory and get all the information in the palm of their hand. The inventory can include the student's address, number and other additional information. It is something that plays an effective role in managing the bookstore of a University or Library, student union, retail store, dormitories, health clinics and dining hall of any educational institution. For example, if the Librarian has a detailed inventory of the books present in his Library, it makes the work easier for him. He can find any book at any moment. Similarly, if he has a detailed inventory of the names of the students who are issuing books then it would help him to maintain the records properly and keep the entire process of lending and returning books in order.
Operations management is focused with converting raw materials and labour force into products and services to maximize the profit and optimize the processes, resources, technologies which in turn would help in shaping the long term possibilities for the operations and their overall contributions. To achieve success in a business streamline, integrated supply chain management helps in the efficiency of the business process to accommodate dynamic changes in the business environment without making any changes in the ideal business processes, ensuring the successful production of organizational output efficiently.
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