Open Polytechnic Nz Operations Management Assignment 1 T3 2012
| 71232 Operations Management| Assignment 1| | Matt Hinkley 3319696| 12/10/2012| | Contents Question 1: Operations management role2 Question 2: Types of production4 Question 3: Environmental factors5 Question 4: Strategic options [case provided]6 Case question 1 (customers)6 Case question 2 (competitors)6 Case question 3 (strategic decisions)6 Case question 4 (expansion issues)7 Question 5: Measures of quality8 Question 6: Types of quality management9 Works Cited10 Figures Figure 1: Company structure2 Tables Table 1: Quality characteristic measurements8
Part A: Nature of operations management Question 1: Operations management role I would imagine that my role would be to ensure the profitable and reliable running of services. A bus service is a continuous service which runs to a schedule on a predetermined route. Our customers base their movements around our schedule and will expect us to adhere to those times. Figure 1 below is an indication of the simplified assumed structure of the company essay writers world reviews. I have not allowed for maintenance workshops and such like and have assumed that these functions are outsourced to suppliers.
Figure [ 1 ]: Company structure The interactions between the departments are on a two way information route and feedback is gathered from the customer by the frontline staff. This could also include the drivers or ticket staff. The long term strategies of the company would be managed by the CEO and their senior team which would then be fed down to the operations manager for the day to day management to deliver these goals. Operations would see to the efficient running of the services and provide any early warning signs in their reports to the senior management.
An interface with the customer would also be recommended by way of an occasional MBWA (management by walking about) style. This enables a personal interaction with both the staff and the customer. Close relations with suppliers should be kept with the finance side of the relationship being managed by the accounts department. Maintaining this degree of separation enables the ‘good cop bad cop’ kind of relations which can be of great benefit when bills come due. Question 2: Types of production The bus company is a transportation operation, as it transports people. It works as a mass services production process type.
This is demonstrated in the fact that it has many customer transactions, involving limited contact time and little customisation (Nigel Slack, 2011). It does not store stock but you could argue that resources are stored in the form of bus spares and fuel should they have their own depot rather than outsourcing these items. The customers are queued in as much as the wait to be picked up on the route but they are not defined in a customer list or database. Question 3: Environmental factors As with any business there are more than one company vying for the limited number of consumers.
Running busses you will have very little scope to be better than your competition so you need to be very careful how you do it. There will be a couple main reasons why your customer chooses you which will be price, route, condition of vehicle and convenience. Breaking the four task environments down and assuming that there is a counter to each of the factors, we can reduce the impact as follows: Competitors: You could be cheaper or more regular than the competition, perhaps have newer buses which don’t smoke so badly as the others.
Try to offer services on the routes which the competitors would struggle to compete on. Customers: The customer is king (or Queen). The most effective way to encourage New Zealand customers is by price. Kiwis love a bargain (Edmunds, 2012). Be it the one day special or concessions for demographic or regular users. But your price will not matter if the route is in the wrong place so location is a major factor when looking for the target customer. I’d probably hit high density student areas, they have low income and require transport regularly.
Suppliers: The suppliers in this case would be our vehicle manufacturers, stationary suppliers and most probably land to operate from. You can enter into long term contracts with the suppliers and bulk order to reduce costs. But as with every business we are our suppliers’ customer so shop around. The only restraint is location. Buses are easy to buy direct from Japan with parts sourced just as easily. Suppliers will cause your variable costs to change and as such will have a greater impact on your margin which needs to be passed on to your customer.
Building good solid relationships is imperative. Labour market: “The central bank expects unemployment of 7. 1 percent in the March 2013 year, falling to 5. 9 percent in 2014 and 4. 9 percent in 2015, according to forecasts in the MPS. That’s more pessimistic than the 6. 4 percent, 5. 3 percent and 4. 9 percent forecasts in September” (BusinessDesk. co. nz, 2012). With unemployment predicted to be falling and the labour market choosing to head to Australia in droves it makes the pickings slim.
A business like the bus company will require skilled trades people to service the busses unless it out sources this and clerical people to administer the day to day operations. This is on top of the drivers and management team. Labour is a large cost for the company and retention is a big cost reducer, by keeping training and trained staff within the organisation. I fly to PNG where I work on a mine site, every time I get into a conversation with the bus driver taking me between international and domestic they ask if I can get them a job as a driver on the mine site.
Question 4: Strategic options [case provided] Case question 1 (customers) Currently the customer base for HollyRock is teens and school aged youths. They have been referred to in the article as “Young people”. There may be some parents who also attend the restaurant but I would assume from the way the article reads this would be in accompaniment of younger people. Case question 2 (competitors) From the article we can see that there are two possible current competitors in the area.
These are the pizzeria which serves similar food to HolyRock in as much as Pizza and Robb’s restaurant which opens Friday evenings also. Although neither of these are competing for the same demographic as HolyRocks but they do have similarities in goods and services. It is also mentioned in the article that fast food chains had had difficulty in the past gaining approval to operate but, in time these may be able to move into the area. Case question 3 (strategic decisions) To fully answer this question we should look at the details for each component: 1.
Structural. a. Location: Large old house in the middle of a retail area 15mins walk from the schools. b. Capacity: Ample parking and facility to seat 75. c. Technology: Low to mid technology level. 2. Infrastructure d. Work-force: 3 staff, cook, counter staff e. Quality Management: Nothing is mentioned regarding the Quality Management but I would assume this would be handled on a customer feedback system. f. Organisation design: A flat structure with an owner manager. Compact enough to manage easily and able to adapt to its target audience easily. . Policies and procedures: There was no mention of policies. Procedures are simple with food orders being taken with the issue of a number, empties and waste is collected on a continuous service system. Events seem to managed by the customer with a board in place for bands to volunteer to play. The initial concept was for the local young people to have somewhere safe to be able to gather and ‘Hang out’. The structure of the business would support the initial concept in that it is simple to manage and adapt to the needs of the client.
It has furniture that is moveable to accommodate the groups at the time and the venue offers enough space to cater for the needs of the customer. If the organisation were to grow past the current system then other changes would need to be brought into place which would then mean tighter management would be needed which would most likely mean a change in infrastructure. I would therefore say that the decisions do support each other and that of the overall strategy of HolyRocks. Case question 4 (expansion issues)
The proposed enhancements would step completely outside of the current company structure. Although the base idea is similar in so much as it is a supply of food to customers the demographic is vastly separated. Some of the issues to consider are as follows: * Direct completion with Robb’s restaurant. An already well-established lunch and breakfast coffee time shop. * Is the location right for the stay at home mum? We note that it’s close to the high school, but there is no mention of other facilities which would attract the new client base. * Interior decor.
Do rock posters and picnic tables attract stay at home mums looking for a coffee, a chat and some finger food? * With younger children coming onto the premises are there implications to the high school kids being turned off the idea of it being a ‘Hang out’? * Suppliers for the different food types will possibly differ, so more contracts need to be administered and accounts. * Extra equipment will be needed for coffee production and the storage and display of finger foods. As these are generally uncooked foods they need to be stored separately from the other food types.
Different skills/personalities of staff required. Although there may be more intricate details regarding food, health and hygiene legislation the main points to consider are the local competition and the site suitability for the operation. It may be worth considering the option but at another location and sponsoring the new location with some brand attachment. Part B: Quality management Question 5: Measures of quality Using the table system as shown in the set text, the quality characteristics which we can measure would be the following: Quality characteristic| Variable| Attribute|
Functionality| Number of meals served| Was the food acceptable| Appearance| Number of seats and layout| Were they clean in a timely manner| Reliability| Bands playing or meals delivered on time| Were there any complaints| Durability| Is the venue keeping up with the times| Are the trends of the young people being followed| Recovery| Meals rectified or bands removed| Did the customer feel the staff acted accordingly and timely| Contact| The extent that customers feel well treated by staff (1 to 5 scale)| Did the customers feel that the staff were helpful (yes or no)| Table [ 1 ]: Quality characteristic measurements
We could easily apply functionality, appearance and contact to this business with contact being our quantitative measure. Functionality would be measured on the number of meals served against the number returned due to poor quality. Appearance would be a general measure by the management as to the tidiness of the venue throughout the shift. Contact could be measured through a quick and easy 2 question tick slip with the customer at the end of their visit. This could be a voluntary measure as people with high opinions are certain to leave feedback if it is made easy for them. Question 6: Types of quality management
There are a range of available approaches such as TQM, Six Sigma and ISO 9000. Briefly each of the systems are as follows. Total Quality Management (TQM) is a comprehensive and structured approach to organizational management that seeks to improve the quality of products and services through ongoing refinements in response to continuous feedback. TQM requirements may be defined separately for a particular organization or may be in adherence to established standards. TQM can be applied to any type of organization; it originated in the manufacturing sector and has since been adapted for use in almost every type of organization, TQM is based on uality management from the customer’s point of view (Rouse, Total-Quality-Management, 2005). Six Sigma is a management philosophy developed by Motorola that emphasizes setting extremely high objectives, collecting data, and analyzing results to a fine degree as a way to reduce defects in products and services. The Greek letter sigma is sometimes used to denote variation from a standard. The philosophy behind Six Sigma is that if you measure how many defects are in a process, you can figure out how to systematically eliminate them and get as close to perfection as possible.
In order for a company to achieve Six Sigma, it cannot produce more than 3. 4 defects per million opportunities, where an opportunity is defined as a chance for nonconformance (Rouse, Six-Sigma, 2006). ISO 9000 is a series of standards, developed and published by the International Organization for Standardization (ISO), that define, establish, and maintain an effective quality assurance system for manufacturing and service industries. The ISO 9000 standard is the most widely known and has perhaps had the most impact of the 13,000 standards published by the ISO.
It serves many different industries and organizations as a guide to quality products, service, and management (Rouse, ISO-9000, 2005). From the three approaches above only two would lend themselves to our diner environment, these are the TQM and the ISO-9000 approaches. The Six Sigma philosophy is extremely complex to implement and can take years to show any real savings from a financial perspective. It is also not appropriate to our scenario as it better suits mass production or production line businesses. Of the two which are left I would use the TQM approach.
It has a far better management system and would suit this small close knit workforce. The customer feedback would be available as to monitor the results and give indicators to the improvement strategy. The ISO-9000 system is a more formal and managerially implemented system which would detract from the empowerment of the employees in this case, although there may well be some standards within the ISO-9000 that could be used in the TQM structure. Works Cited BusinessDesk. co. nz. (2012, December 6). NZ official unemployment rate overstates labour market woes, RBNZ says. Retrieved December 10, 2012, from www. sharechat. co. nz: