The Operations of E-Cab - Essay Example

The Operations of E-Cab Appraisal of Operations, Activities and Current Processes Used By E-Cab Definition of Operations Management Operations management is the process of overseeing resources intended for the production and delivery of goods and services (Slack, 2010:122). Consequently, operations management involves the creation, operation, and control of the transformation system of goods and services. This system converts inputs in order to produce the desired products and services (Sweeney, 1991:199). This model implies that input resources are linked to desired output products and services by a transformation process (Slack, 2010:133). The input resources refer to the required raw materials necessary for the production process. On the other hand, the production process refers to the manufacturing process or system involved in the production of goods and services. Consequently, the goods and services represent the desired packaged product. Therefore, considering the operations within E-Cab Company, the input resources would correspond to the raw materials required for the assembly of the cabs. These include posts and cross nails, paint and cross members (Johnson, Chambers, Harland, Harrison, and Slack, 2003:494). Consequently, the production process would correspond to the manufacturing process involved in the production of cabs, including all the quality checks involved in the entire process. Finally, the cabs produced represent the finished product desired by the customer such as the Nokia company. According to Render and Heizer (1994:198), the manufacturing process requires an operational process. An operation process underlines the crucial decisions undertaken in the transformation of resources into products and services. Consequently, the objective of the operation process is the prompt and effective production of the desired goods and services (Heizer, 2010:198). Therefore, the transformation process incorporates the fundamental management model. This process involves operations strategy, design, planning and control, and, finally, improvement. All these processes are intertwined to produce the desired strategy in regard to operations. However, in order to understand this process, one has to consider the Hayes and Wheelwright model. The Four Stages Model of Operations Contribution (Hayes and Wheelwright) Stage one of the model involves the correction of problems in the organization as shown below: Consequently, stage two involves the adoption of the best practice as shown below: As shown below, stage 3, on the other hand, involves the linkage of company’s strategy with operations: The last stage, stage 4, involves the prioritization of operations: This model provides a comparison between the contribution of operations and their corresponding strategic impact. Consequently, in order to be competitive, a business has to be: Right Prompt Productive Flexible Fast This information can be summarized as follows: Therefore, as regards E-Cab Company, its manufacturing system lacked in quality as a result of poor operational systems. This was a result of deficiency in two crucial transforming resources: facilities and personnel. The cabs produced were lacking in quality due to unavailability of the right tools and equipment. In addition, the personnel were either highly inexperienced or lacking in motivation. However, E-Cab Company was involved in the creation of unique designs that employed excellent service standards. Nevertheless, in a mature market, design alone does not guarantee a level of competitiveness. It involves a combination of processes geared towards the development of the entire business. Consequently, competitiveness requires an operations strategy. Operations strategy refers to a collection of decisions that influence the roles, objectives, and activities of a certain undertaking. Consequently, an operations strategy supports the organisation’s business strategy (Schroeder, 1993:32). This implies that an operations strategy specifies the means by which the corporate strategy is implemented (Krajewski and Ritzman, 2002:31). Therefore, an operations strategy provides a link between short and long term decision making. Consequently, this leads to the five Ps of operation strategy implementation, which include: Purpose. This refers to the understanding of the context for developing operations strategy. It also defines the motivations and boundaries involved in the process. Pint of entry. This refers to a certain point in the organisation where the process of implementation is initiated. Process. This refers to the way in which the operations strategy formulation is executed. Project management. This refers to the process of overseeing the implementation. Participation. This refers to the members of staff involved in the implementation process. However, in order to fully comprehend the operations strategy, it is necessary to consider the operations strategy models. Operations Strategy Models Platts-Gregory Model This model involves three stages (Platts and Gregory, 1990:97): Stage 1. This stage involves the external environment analysis of an organisation. This includes the assessment of both opportunities and threats. In addition, it includes the identification of the factors required by the market. Stage 2. This stage involves the assessment of the capabilities of the given operation. Stage 3. This stage involves the development of new strategies for the organisation. Hills Methodology Model Unlike Platts-Gregory Model, this model involves five stages (Hill, 2006:129): Stage 1. This stage involves the comprehension of long term corporate objectives. This, in turn, helps align the operations with these goals. Stage 2. This stage involves the goods and services to be satisfied by the operations strategy. Stage 3. This stage focuses on the factors that contribute to the success in business. In addition, it also focuses on customer satisfaction. Stage 4. This stage focuses on the structural characteristic of a certain organisation. Stage 5. This stage focuses on the determination of the infrastructural aspects of the organisation. Schroeder Model The Schroeder Model involves the following processes (Schroeder, 2008:142): Operations Mission. This defines the purpose of the operations function with regard to the business strategies. Distinctive Competence. This refers to the operations that must be accomplished in order to excel at a competitive level. Operations Objectives. This is a representation of the mission in attainable terms. Operations Policies. This determines the process through which the aims are to be achieved. Consequently, a typology of the operational process can be outlined as follows: This analysis is commonly referred to as the 4 Vs. Therefore, considering the analysis above, E-Cab Company lacked a well-defined operations strategy. Consequently, its departmental heads were continuously involved in the process of attaching blame to one another. As a result, the manufacturing system was also inefficient. Therefore, although the company employed good design system, the system on its own failed to support the company substantially. Consequently, this necessitated the evaluation of the company’s operations system and strategies by employing the various methods discussed above. Evaluation of the Contribution of E-Cab’s Operations to Its Organisational Objectives In order to succeed and thrive, E-Cab Company had to be deeply rooted in certain organisational objectives. The organisational objectives of a company are centred on the following elements: Cost. The costs have to be minimised so as to result in maximum returns. Speed. The manufacture and delivery processes have to be fast in order to ensure quality customer services. Quality. The goods and services produced must depict high levels of quality. Flexibility. The company must be flexible to the needs of the market. The company should also be flexible to the technological changes. Dependability. The company’s delivery system must be consistent in order to ensure quality customer service. Consequently, E-Cab Company was lacking in many of these areas. For instance, the company operated on large overheads in order to meet its clientele base. This implies that the company was incapable of reaping maximum returns as a result of these huge overhead costs. In addition, the company was also incapable of meeting its huge market with proper speed due to staffing issues. However, the most conspicuous shortage was the poor quality of the finished products. This was as a result of numerous issues within the production process. These issues shall be discussed at a later stage. Consequently, there was a need for strategic layout decisions by the company. Among other issues, these decisions would assist E-Cab in the: Utilization of space and equipment; Increased speed of flow of materials and information; Improved working conditions; Flexibility. There exist different layouts; therefore, E-Cab’s management can develop an appropriate layout system that would optimise their production while minimising their cost of operation. This would, in turn, cut off unnecessary overhead costs. Discussion of Issues Facing E-Cab’s Organisation Consequently, as a result of poor operations strategies, there existed many issues that impeded the proper functioning of E-Cab’s processes. The company suffered serious quality issues. This quality issues were a result of two things: lack of experience and poor tooling and equipment (Johnson et al., 2003:498). The high level of inexperience was as a result of lack of proper training. When one of the employees was interviewed, he revealed that he had not been through any training process. He had to learn how to operate different equipment through apprenticeship (Johnson et al., 2003:498). He exclaimed at the lack of proper training of the employees. In fact, when interviewed, one of the few experienced employees confessed that some of the new employees did not even know the right types of spanners and screwdrivers to be used (Johnson et al., 2003:500). In addition, most of the temporary employees in the Mechanical Department had no training. When interviewed, the department head of Mechanical Assembly admitted the fact that most of the employees in his department were temporal staff (Johnson et al., 2003:494). This temporal staff had not received appropriate training. Consequently, it was impossible to achieve high levels of efficiency while working with such employees. Only a few of the employees had received proper training. In addition, when interviewed, majority of these employees termed the level of training received from the company as poor and below average (Johnson et al., 2003:501). Therefore, this, coupled with other operational problems, resulted in the production of low-quality products. In addition to the issue of inexperience, the issue of the proper tooling and equipment also existed. When interviewed, one of the workers lamented concerning the poor condition of the torque wrench shipping equipment (Johnson et al., 2003:499). This equipment was troublesome, hence impeding his performance. When he requested for new equipment from the relevant authority, they promised to repair the faulty machinery. However, this promise has never been fulfilled, leaving the poor employee to employ survival tactics in order to meet the set targets. Consequently, all these sentiments pointed to a high level of inexperience brought about by absence of proper training system. They also reflected the lack of efficient tooling and equipment. As a result, this led to the issues in quality, which ultimately resulted in poor quality products. In addition, the company had a poor basic MRP system. This was as a result of outdated data, failed working practices, and inaccurate data entry systems. The inefficiency of the equipment was further compounded by the failure to employ the use of SPC system of analysis. Consequently, the unavailability of this system resulted in difficulties in identifying the main sources of mechanical faults. When interviewed, the departmental head of the Mechanical Assembly marvelled at the absence of such a crucial system of analysis in a company of E-Cab’s calibre (Johnson et al., 2003:494). Consequently, this added to the list of the growing concerns as far as proper equipment and tooling are concerned. The issues with poor tooling and equipment also highlighted significant problems in the management system. The management system remained insensitive to the needs of the employees. For instance, when a worker reported a malfunction in the equipment, the concerned authorities took no measures despite having promised to intervene (Johnson et al., 2003:499). This failure of the management to show commitment to the quality was further underlined by its refusal to return faulted cabs by the inspections department (Johnson et al., 2003:493). Therefore, this implied that the management’s attitude to the employees had a negative impact on the production process. However, in its defence, the management explained that poor quality levels were due to the lack of care, specifically by the Mechanical Assembly Department (Johnson et al., 2003:493). The management also accused this department of the lack of discipline. Consequently, according to the management, this was a source of most of the quality issues. This was a result of complacency and lack of attention to details. However, this resulted in the emergence of even a bigger issue. The issue of quality verses quantity. The management wanted both quality and quantity. However, the employees were not equipped for both quality and quantity. When interviewed, one of the Electrical Assembly team leaders admitted that they had to use all the material they hard, regardless of whether or not it met the required standards (Johnson et al., 2003:498). This was in an effort to reach the high production targets set by the management. Besides, the management also provided the teams with extremely short time limits within which to complete their projects. Consequently, this increased the pressure on the teams and the limited resources. As a result, the teams had to compromise quality in order to attain the enormous targets in limited time spans. One of the interviewees pointed to the short time limits as a reason for poor inspection processes (Johnson et al., 2003:498). This implies that the inspectors were always in a rush not to exceed the deadlines. Consequently, they were prone to missing a number of faults in the finished products, thus compromising their quality. In addition, other issues mentioned by the employees included poor wages and lack of morale. When interviewed, one of the Agency workers in Assembly confessed that his wage was extremely low (Johnson et al. 2003:499). This prompted the employees to work at beating the set output targets in order to attract additional bonus in pay. However, these targets were consequently achieved at the expense of the desired quality. In addition, low wages resulted in the lack of morale in many of the employees. The low morale levels were also occasioned by the huge pressure imposed by management on the employees to meet the set output targets. Consequently, some employees felt that the style of management was also extremely aggressive. Suggested Potential Improvements through Application of Operations Management Tools and Techniques Therefore, as evidenced above, there existed numerous issues that hindered E-Cab’s effective production of products and services. Consequently, there was a need for the application of effective operations and management tools to rescue and restore the company. Thus, as pointed out by the new Vice President of the company, there was a need for the employment of an experienced materials manager (Johnson et al., 2003:586). This is because poor quality systems constituted the bulk of E-Cab’s operational issues. This poor quality was a result of lack of experience in the materials management. Therefore, an experienced materials manager would help the company to cut on its overhead cost while maintaining competitive output production targets. In addition to the introduction of an experienced materials manager, the company needs a more effective layout system than the current one. The company should seek a more organised layout system with all the stock and lines for assembly on one end. This will not only optimise the space occupied but also result in an efficient manufacturing process. The company should also adopt the use of the MRP system in order to minimize shortages. Consequently, poor equipment should be repaired or replaced with new equipment in order to further increase the efficiency of the production process. In addition, the company should offer training services to its employees. This would help minimise the quality issue, especially in the Mechanical Assembly department. Moreover, the Quality Department is extremely small. This renders it incapable of handling the huge volumes of products that need to be manufactured on a daily basis. Consequently, this department should be expanded. This expansion should be both in terms of the physical space occupied and the employment of additional quality engineers to perform the daunting task of inspection. As a result, this would go a long way in maintaining quality production. Therefore, E-Cab should concentrate on the improvement of its management system as well as investing in the necessary systems for effective production. Such systems would include the improvement of the tooling and equipment as well as the introduction of experienced personnel and offering the necessary training to the less experienced employees. Reference list Heizer, J.H., 2010. Operations management. Upper Saddle River, N.J.: Pearson Prentice Hall. Hill, M., 2006. Operations management for competitive advantage. Boston: Emerald Group Publishing Limited. Johnson, R., Chambers, S., Harland, C., Harrison, A. and Slack, N., 2003. Cases in operations management. Harlow, UK: Pearson Education Limited. Krajewski, L.J., and Ritzman, L.P., 2002. Operations management: processes and supply chains. Upper Saddle River, N.J.: Prentice Hall. Platts, K.W., and Gregory, M., 1990. Operations strategy and performance: addendum. Cambridge, University of Cambridge: Manufacturing Engineering Group. Render, B., and Heizer, J.H., 1994. Principles of operations management: building and managing world-class operations. Boston: Allyn and Bacon. Schroeder, R.G., 1993. Operations management: decision making in the operations function. New York: McGraw-Hill. Schroeder, R.G., 2008. Operations management: decision making in the operations function. New York: McGraw-Hill. Slack, N., 2010. Operations management. Harlow, England: Financial Times Prentice Hall. Sweeney, M.T., 1991. Towards a unified theory of strategic manufacturing management. London, England: Financial Times Prentice Hall. Read More