Specific Operations Management Issue within University Organisation (Canteen) - Essay Example

Title Page Topic: Select, Critically Analyse, and Explain A Specific Operations Management Issue (or problem) Within Your University Organisation and Present an Improvement Plan Table of Contents Title Page………………………………………………………………………1 Table of Contents…………………………………………………………… 2 Introduction…………………………………………………………………….3 Background information………………………………………………… 3 Aims and Objectives……………………………………………… 4 Current Situation………………………………………………………. 5 Theoretical Framework……………………………………………………. 6 Analysis and Improvement Plans……………………………………………. 6 Quality………………………………………………………………….. 10 Performance Objectives……………………………………………………. 11 Description of Process Map Situation……………………………………… 12 SMART Recommendations for Service Process Improvement……………… 12 Conclusion………………………………………………………………… 13 Appendix……………………………………………………………… 15 Process Map………………………………………………………………. 15 Gantt Chart……………………………………………………………….. 16 Bibliography……………………………………………………………….. 17 Introduction This report aims to review the operations management process of the university canteen, within the campus. This canteen is an organisation which is identifiable in the context of a series of operations management issues, which will be analysed in this write-up. Generally, operations management in contemporary times is a necessary feature for the viable economic performance of most business establishments. The university canteen has been selected for purposes of this report. Slack, Chambers & Johnston (2007) define operations management as the activity which manages the processes and resources devoted to the production and delivery of goods and services. Operations management, they note, invariably entails input-transformation-output processes, which can generally be divided into categories of ‘staff’, on the one hand, and ‘facilities’ on the other. The university campus canteen provides cooked meals and snacks for (mostly) students and other university staff. Examples of its products/services include fried rice, stewed beans, sausage rolls, steak pies, fried egg and chips, to name a few. Drinks are also available, such as coffee, tea, soft drinks and fruit juice. It also sells sweets such as cakes and biscuits. Cigarettes and alcoholic drinks make up the remainder of the product range. Background Information The university canteen comprises a two-section arrangement, which are: (1) a front-section, having seats and tables for customers. This section also contains a counter from where the customer orders are taken, and payment made. (2) The inner section, which comprises the kitchen where food is prepared and sent to the front section, and eventually served to the customer. There are two kitchen staff, involved in food preparation, and one front-room staff, involved in delivery, i.e. serving the food/drinks etc to the customers. The kitchen equipment comprises a gas cooker, a bread toaster and a giant refrigerator. Alternative power generation, in the event of power failure, has been taken into consideration- hence a small power generator resides in a corner of the rear section. There is a radio and a TV set in the front section, for customer entertainment. The rear section has a giant cupboard, for storage of provisions, as well as raw food items requiring no refrigeration- examples include uncooked rice, bean sand potatoes. Aims and Objectives This university campus canteen’s activities will be analysed in terms of how its operations management and service can be made more efficient and cost-effective, by means of the concept of Lean thinking- without a customer-perceived decline or reduction in the quality of its products/services. Czabke, Hansen & Doolen (2008) cite Womack et al (1996) as broadly defining Lean thinking as a multi-dimensional approach to doing business, with a primary focus on reduction of waste. Arts (2004) more concisely defines Lean thinking as the removal of waste from the value chain, where waste is any activity that absorbs but creates no value. Examples, in the context of this canteen, include mistakes requiring rectification, such as improperly prepared food item, production of unwanted food due to error in taking order(courtesy of distraction), food processing steps that are unnecessary. Quality, according to Lorefice (1998) is the compliance of a product or service with required specifications, and not necessarily the outperformance of the requirement specifications. Thus, the provision of the right dose, the required materials at the right time, brings quality to the production process. The objective of this report is to propose operations management solutions to help this campus outfit/organisation achieve greater profitability, productivity and quality, while reducing or eliminating wastage. The objective further aims to achieve a more appropriate level and quality of customer contact (visibility). Current situation Efficiency in this canteen’s business operation is vital because there is the need to provide its goods and services in the desired quantity and quality. There are threats and opportunities which compete with this canteen, as there are a few other eateries within campus, and quite a good number of others just outside the campus. Indeed, there is the additional threat of alternative student attitude to feeding on campus. Operating issues during preparation of drinks and snacks, for instance, need to be addressed with a view to improvement in food quality; this corresponds to product design. The process design of the canteen needs to address how the food will be prepared. There are basically two categories of consideration involved: (1) technical- i.e. selection of equipment and the sequences of food production. Will there be more baking or cooking, as opposed to frying, for instance? This will impact on the kitchen equipment required in the reorganised set-up. (2) The business component, i.e. the use of equipment to make the canteen staff more productive. This outfit has a responsibility which includes the translation of its business strategy into operational action, not only of its products and services, but also the system or procedures that produce them. Furthermore, it must seriously consider the control and planning of its catering activities, and how to improve these operations over time. Efficiency in this campus canteen’s processes is vital because of the profound impacts on cost reduction. This may further provide the set-up with a basis for future innovation. Of particular importance to this organisation is elimination or minimisation of duplication in its processes, as this (i.e. duplication) nullifies the efficiency of the production operations process. Theoretical Framework This report makes use of the ‘4V model’ to review the operational strategy of the canteen. This campus catering organisation is a low variation, high volume, high customer outfit. Analysis and Improvement Plans A consideration of demand level by students (and other campus customers) for the rice, beans, pies, sausages and drinks etc offered in this canteen implies that demand must be considered in terms of how well justified is greater production (volume) of these. Further, it entails a consideration of variety in the demand, and this in turn impacts on the canteen’s need (or otherwise) for a more flexible production system in its food/snack preparation, and even in its drinks procurement process. There is further need for this canteen, as a unit, to consider demand in the context of how it supports a sustained production facility- i.e. will demand continue, such that the canteen is able to keep operating, or is the demand merely a one-off, seasonal type? This campus organisation needs to get rid of bureaucratisation. There is presently too much paperwork on its front section, where orders are taken. Lean thinking in this case implies the reduction of all the excessive activity surrounding paperwork, to the barest essentials of same. In an operations management context, as noted by Lorefice (1998), any activity that does not physically change the end product, does not add value. The undue attention to paperwork procedures does not transform the end product, i.e. the food served. Therefore, it adds no value to the canteen’s products/services. There is also the issue of appropriate level of customer contact, whereby in this case there is too much paperwork observed by customers, which is not ideal, especially given the frequent occurrence of failure to deliver orders as and when required. Therefore, less visibility will be achieved with the reduction of excessive concern with documentation, as well as cost-saving on stationery. Customer demand needs to be more accurately assessed by this campus unit. Presently, there is frequent inability to supply the required food or snack. This arises because food and snack production in this organisation is not complying with demand, because expected demand is wrongly projected by the canteen. The canteen’s schedule for buying materials and preparing the various food and snacks must be accurately assessed as a factor that pushes production to comply with orders. The inaccuracy is further reflected in excessive inventories because customer demand is not being used to determine the purchase of raw food items. The result, in terms of waste, is observable in the disposal of unused, spoilt food items packed in a giant bin behind the canteen. Wastage, in terms of overproduction, needs to be addressed. The speed of the production process in this canteen needs to be improved. Currently there is too much waiting time between orders and delivery, resulting in poor customer service. Efficiency and productivity have also been adversely affected. Distraction has been observed, whereby the front-section staff frequently shuttles between the paperwork and the kitchen, to ascertain the cause of delay regarding orders. This is an aspect of wastage, which additionally impacts negatively on customer contact. The food and snack production process need to be reviewed. The operations involved need to be streamlined, so that the activities involved are reduced. There should, for instance, be greater use of semi-processed food items, for quicker preparation. Many fast food outlets such as Mc Donald’s, Burger King, achieve streamlined food preparation operations in this manner. There should also be consideration for the element of speed. This in turn impacts on the issue of process technology, for this canteen. Therefore, the equipment used in food preparation must be critically analysed in this context. For instance, the kitchen should replace the gas oven with a pressure cooker, and consider the inclusion of a microwave oven among the equipment. For this organisation, inventory must be based on an accurate projection of demand. An average of 2,000 customers patronise this outfit per week; hence the purchase of quantity of raw food items must take account of this, in addition to the actual nature of requests made by students(regarding preferred food types), when orders are placed. This will help avoid stocking unused food items, a regular feature of this food canteen. In other words, this outfit should stop assuming demand in a generalised manner, because of the elements of volume variation and product range variety involved in its business process. Stocking for certain types of foodstuff (having low customer demand, in this canteen’s experience, e.g beans), therefore, must be reduced, while certain other food types must be increased in stock, because of their high customer demand as experienced by the canteen, which it actually struggles to meet(failing sometimes to deliver them on order because they are out of stock). This university organisation’s (canteen’s) production system however must be able to quickly respond to changing customer demand. The present demand configuration for the canteen needs to be addressed by mixed production. As earlier mentioned, this canteen presently operates high volume, high variation and low variety process, with attendant inability to operate in the context of flexibility, as appropriate to the business scenario on the ground. The product range needs to be able to change with customer demand, with very minimal notice. This is necessitated by the fact that the customer (students) demand configuration is not static, as campus students are very unlikely to remain static in their tastes- for a variety of reasons. A most obvious rationalisation is the fact that the customer flow is dynamic, with generations of students arriving and leaving, as some graduate, while some others gain university entry. Even those customers in neither category are unlikely to remain, over time, constant in their taste, as people change. This canteen must also consider volume flexibility, because there is a seasonal aspect to its customer demand. For instance, during the session, customer (student) traffic is high, whereas at the end of the session (just before the holidays), customer traffic is low. As noted by Greasley (2007), an organisation needs a lower cost base, in order to compete on price. The cost base of this canteen must be reduced. It is presently unsuitable in the context of putting the canteen in a competitive position, pricewise. At the moment, the cost of food and drinks in this canteen does not have proximity to the market average. This may be due to the fact that the canteen is located on campus, and wrongly relies on the fact that students will be compelled by unwillingness to commute out of campus to buy meals. For this reason, it features high food and drink prices, which need to be reduced. There is a relationship between expenses and sales, costs, profits and inventories. There will be greater profit through more effective use of capital. This canteen also should make more effective use of display space, towards increasing sales volume per square foot. The operations management process of this campus unit needs to consider facilities layout. Its present size is fine but it needs to relocate, via moving to a more central location on the campus. It is presently located well into the campus interior, and the suggested move is clearly an aspect of structural decision in the process. Variation in terms of operations capacity is another issue faced by this canteen. Decisions need to be made concerning working hours. Presently, it operates a 24 hour shift, with its three staff (two in the kitchen, and one on the front section). The night shifts however, have only one staff present in the kitchen to handle preparation of food, based on customer orders. This probably is based on the assumption of generally lower demand at night, which really should not be presumed. The fact is that it is a vicious circle, customers may perceive inability to meet demand, through visible observation in the canteen, at such hours, resulting in fewer customers deciding to patronise. On the other hand, if customers perceive canteen staff availability at night, they interpret this positively, and will not change or reduce their normal level of patronage or demand. Hence, there should be maintenance of both kitchen staff, and the front section staff, to take orders, even at night. Quality The canteen should pay attention to aesthetics. This relates to operations management in the context of competitiveness. The furniture, for instance, in the front section of this organisation needs a facelift, as it is rather old and worn. This impacts on customer sense of appreciation of the environment, and it has the potential to induce willingness to sustain custom. The primary operations characteristics, as reflected in the performance dimension of this canteen’s equipment, are another area of priority consideration in the unit’s operations strategy. The equipment, such as refrigerators, cooker, etc used in providing or delivering the customer orders, should be user-friendly for the operating staff. This campus canteen unit should prioritise conformance, which relates to standards. This, potentially, impacts customer satisfaction. There is a need, for instance, for stocks to be inspected, to ensure the items are of the right grade. The same applies to uncooked, raw food items, and the semi-processed supplies. These must be checked for conformance to required standards, because of the ultimate contribution to the quality of the end product. The organisation should also prioritise its features, so that an upgrading of the front section furniture, for instance, complements the service and products (food, drinks, snacks, etc) which are being enhanced and improved. This aspect should however not be restricted to the canteen front section, but reflected also in the non visible (back-room or kitchen) section; the consideration is for all-round, overall quality. In addition, cutlery used in this canteen appears in need of attention, in the context of regular replacement. It is fairly apparent from these peripheral but relevant items that the canteen’s projection of quality of its services falls short of levels generally perceived as aesthetically appealing to the average customer. As a further enhancement of quality in the operation process, the equipment (or process technology) adopted in this organisation must pay attention to serviceability of the devices or gadgets used in production of the customer orders. Therefore the kitchen cookers and ovens, for instance, need to be selected and installed with consideration for ease of repair. Ideally, this campus unit could ensure that there is an arrangement for an interim replacement or the availability of technical service at a moment’s notice, in the event of equipment breakdown. Above all, the repair process itself should be a quick and easy one, to ensure a return to the production process/operations as soon as possible, in terms of preparation of customer orders for food, snacks, drinks, etc. Performance Objectives This canteen’s present objectives have to do with easy and cheap sourcing of inputs to the production process. It also seems to prioritise cost-cutting indiscriminately, across board. This is not ideal, because of the flawed economic or business logic it implies, in the consideration of the canteen operations strategy. In other words, there is the erroneous belief by the canteen operators that arbitrary cost cutting will generally result in overall running cost, which in turn, may result in increased profit. However, as earlier implied, the ideal logic in operations management is that every cut cost must be efficient, in order to yield profit. Hence, greater investment in certain well-considered, well-targeted areas, can actually lead to greater overall profitability. The outfit also appears to prioritise a production process where it operates with minimal flexibility, hoping to make profit from a static demand configuration. But in a changing economic and student world, such an attitude must change. The priority of the student (customer) differs in that the average student wants to have variety as and when desired. He/she wants value for money. The student also wants a bargain each time, while the canteen wants to cover overhead costs, which tend to become unnecessarily high due to its inefficient structure, while trying to maximise profit as much as possible. The canteen’s performance objectives should include a consideration of durability for its equipment in use. It makes use of kitchen equipment such as gas cooker/oven, refrigerators, etc. These, in operations management terms, require that the production process carefully considers the period of usage over which any of the equipment will function without a breakdown, because of the cost implications of necessary repair, and how this impacts on the profitability of the entire process. Description of Process Map Situation The simplified process map shown, represents a very Lean approach to the canteen’s operations. It comprises the consideration of initial process of input, which is the supply of partly-processed food, to minimise time and cooking procedures. The order is taken by the front section and communicated to the 2 kitchen staff, who then prepare the appropriate dish. This is passed down to the front, where the front staff delivers the customer order. Lean thinking features in this simplified procedure, as the essential process elements are here represented. The sale of sweets in the front section is not depicted, as customer demand is here taken as interwoven with availability of the main order. The main aspect of the process is the provision of the edibles. Drinks are either available or not, and this is subject to demand assessment as earlier explained. The kitchen staff prepare (along with food orders) any drink orders required to be prepared by the kitchen-such as coffee or tea. The process is reduced to its barest essentials, in the depiction. SMART Recommendations for Service Process Improvement As earlier discussed, this canteen must move to a more central campus location, for better catchment and strategic physical positioning to attract customers. It must invest in process technology, more time effective devices such as pressure cooker. It must work with suppliers who can deliver straight to its kitchen, partly-processed foodstuff. This is realistic, and cost effective. It needs to invest in overhaul and face lift of its front shop, while also cutting down on waste. Reduction of paperwork while maintaining the single front staff is imperative. It must have a monitoring /evaluation scale to measure its expenditure on inputs, especially food items, while projecting customer demand based on assessment of customer preferences over time, and from experience. This is to ensure it is buying the right quantity of the right items for processing. Another aspect of the process for this canteen relates to its relationship with external support service providers. This, in the context of operations management has to do with its supply network. It must have a choice of suppliers that reflect its drive toward enhanced quality and efficiency, at a competitive cost in terms of investment or capital. The extent of its dependence on suppliers must be critically assessed, to avoid negative effects such as supplier control and manipulation. Services required by this outfit are vital, time-dependent and time-based, in relation to the (dynamic) customer demand scenario. Hence, there is a need to ensure that the canteen’s production process is not jeopardised by the nature of supplier response. The unit must therefore spread its input-sourcing tentacles appropriately to ensure or reflect its drive towards effectiveness. Conclusion The foregoing represents the proposal for the university campus canteen, for enhanced viability. The analysis has involved the use of the 4 V evaluation technique of operations management. It is concluded that this organisation can operate more profitably without customer-perceived quality decline, while cutting cost. By increasing investment in the right areas- such as overhaul of front shop- and by reducing negative visibility/customer contact, greater customer appeal is created for the enterprise. By reason of lean thinking, to streamline operations and consideration given to speed as reflected in consideration of investment in process technology to minimise time, along with other time saving measures such as purchase of partly processed food, the unit can make a viable venture out of its business activities. Appendix Process Map Gantt Chart Start date Amount completed Amount remaining End Task 1 15th Dec 1900-01-00 1900-01-00 End Task 2 30th Nov 60% 40% End Task 3 10th Dec 80% 20% End Task 4 15th Dec 85% 15% End Task 4 10th Jan 95% 5% End References Arts, J.” Lean Thinking and Strategic arts Management” (2004) 10 November 2010 Czabke, J, Hansen, E. N, & Doolen, T. L, “A Multisite Field Study of Lean Thinking in US and German Secondary Wood Product Manufacturers”(2008) 11 November 2010 Greasley, A, “Operations Management” (2007) 12 November 2010 Lorefice, A. A. “Just In Time Manufacturing: Introduction and Major Components” (1998) 12 November 2010 Neely, A. “Business Performance Measurement”.(2007) 10 November 2010 Slack, N, Chambers, S, & Johnston, R, “Operations Management” (2007) 9 November 2010 Waters, D. J, “Operations Management” (1999) 8 November 2010 Bibliography Arts, J.” Lean Thinking and Strategic arts Management” (2004) 10 November 2010 Czabke, J, Hansen, E. N, & Doolen, T. L, “A Multisite Field Study of Lean Thinking in US and German Secondary Wood Product Manufacturers”(2008) 11 November 2010 Greasley, A, “Operations Management” (2007) 12 November 2010 Lorefice, A. A. “Just In Time Manufacturing: Introduction and Major Components” (1998) 12 November 2010 Neely, A. “Business Performance Measurement”.(2007) 10 November 2010 Slack, N, Chambers, S, & Johnston, R, “Operations Management” (2007) 9 November 2010 Waters, D. J, “Operations Management” (1999) 8 November 2010 Anon, “Operations, Strategy and Operations Strategy” (nd) 12 November 2010 Anon, “Operations Management”(Reference for Business, Encyclopedia of Business, 2nd ed. ) (nd.) 7 November 2010 Anon, “Lean Manufacturing Operations Management Portal” (nd) 7 November 2010 Read More