Operations, Logistics and Supply Chain Management - Essay Example

?Assignment 2 Qualitative Forecasting Methods Qualitative forecasting methods are those that allow for non-statistical review of a quality initiative, a group process that provides for intuition, experiences, emotions, or values to make determinations. One such method is the Delphi Method, involving group opinion and experience. A series of rounds are scheduled in which managers or other group experts answer a preliminary questionnaire. In later rounds of discussion and analysis, a group facilitator is selected to summarize the questionnaire data, allowing peers to make adjustments to their forecasts based on the information provided (Rowe and Wright, 1999). Through various rounds, answers become more correlated and streamlined as responses become congruent, ultimately leading to an established criterion and the mean totals of responses become the norm for quality initiatives or problem solutions. The advantage of this method is that having multiple members with various experiences working together provides for a broader scope of ideas and forecasts than through individual analysis. A disadvantage of this method is that members of the group can be misinformed which creates uncertainty and brings questions to reliability of responses. The time series approach is also used, which relies on historical forecasting data to make current determinations. The disadvantage in this case is that current market conditions may be radically different than previous quarters or years. The advantage of this approach is that it is founded on actual data that provides for rational predictions. A final method is market research. This could involve questionnaires or interviews with customers to determine attitudes in a key market segment. The disadvantage of this method is bias introduction from consumers. An advantage is that it provides real sentiment about the brand or product features that can assist in predicting competitive advantage or output demand. A Bad Design Beware of Scalding Splash-Back! Slow-brewed tea and coffee lovers beware! This product is hard to get a handle on. Twist and shout, it’s as easy as a flick of the wrist. When attempting to pour oneself a delicious cup of their favorite hot beverage, the angle of descent is highly illogical. It is reasonably rational to assume that one would pour a liquid away from themselves to avoid burns, though such self-protectionism might be a tall order with this particular decanter. This product would require some form of research and development and also a molding system to ensure quality and also to establish the most effective production process. Was the company recruiting the Mad Hatter, Alice and the White Rabbit when determining the most practical design for effective consumer utilization of this revolutionary and innovative decanter? Um, clean cup, clean cup! Move down. This product truly misses the mark in satisfying quality control and effective market consideration. This would be a more effective product if the potential liabilities to consumer safety had been considered; a risk management model that is concerned with potential litigation for neglect in design. It is illogical for a company that produces a product like this to believe that this design would fulfill customer needs and provide the necessary benefit to guarantee sales. Most people in society that drink tea and coffee rely on automatic machines and not decanters, thus this market is already limited and a niche market to begin with. Such a bad design builds a poor reputation on the market and, when the business discovers this is the reason for its diminished sales volumes, will likely add considerable costs to the production process to adjust assembly and molding for the pot. Controlling Public School Output Quality The first step in controlling quality would be to conduct a large scale qualitative research study using a very large randomized sample of graduates from various public schools. Questionnaires and interviews should be developed asking questions about perceptions of instructor quality, curriculum concepts, the practical application of public school learnings to adult career, and recommendations from the respondents about ways to improve the educational experience. Further, an additional qualitative method of observation should be conducted by experts in curriculum delivery and psycho-social theory to determine the validity of various teaching methods performed in class. Using a case study approach, a sample of approximately 700-1000 teachers could be subjected to expert scrutiny, highlighting successes or failures in delivery and observed comprehension of materials. A quantitative method could be applied, using analysis of existing exams returned by students grades nine through 12 to determine whether learning is effective and identify any potential correlations between performance outcomes and particular teaching style. By taking an inventory of teacher demographics, ages, preferred teaching style and delivery, and other important aspects, correlative analysis can determine whether certain teachers or styles produce the best learning outcomes. The sentiment from actual graduates can be applied to these quantitative statistics to create a best practice in education and new training for instructors based on the broad study concept. Henerson, et al. (1987) and Patton (1997) describe the complexities of using qualitative methods to measure a desired outcome because of various attitudes, principles and beliefs by the sample. This is why quantitative addition would provide more valid results for measuring and improving quality. Standardization Kumar and Suresh (2009, p.183) define standardization as “producing maximum variety of products using a minimum of materials, systems and tools”. Standards are set or specific units of measure for quality improvements, product value, product performance, and quantity. It is an adherence to one standard of production that drives all future output without deviations. The advantages of this method are that it can promote a lean procurement model in the supply chain which has cost savings implications. It can also lower the unit costs of manufacture with less specification modeling that occurs in CAD systems or other research and development. Standardization can also improve the marketing function and reduce complex quality control activities to ensure product quality. Standardization can also improve productivity and reduce cycle times for faster output by streamlining the production process and eliminating certain steps in production that could be a savings by removing equipment and tooling needs in the system. The disadvantages of standardization are that it can limit consumer choices and options and thus affect competitive advantage. When a particular standard has been set, there can be future staff resistance to any modifications made that could impact productivity. It also reduces production systems flexibility for making changes in the future based on changing market conditions or product quality outputs. Innovation can be promoted in standardization practices, using the technology example, by only setting standards for hardware but allowing for flexibility in software development. Hardware can be set against a unit standard which improves cycle time in the production process while in other areas of the business, software improvements are made based on market needs and technology development teams. This would still satisfy meeting customer demands and improving competitive advantage while also allowing for a leaner production system and cost savings in production. ERP for Ice Cream Stores ERP is usually an expensive integrated system and the ability to offset costs using price increases in ice cream would be difficult in an environment where there is considerable price sensitivity. The traditional ice cream sales usually range from $1.50 to $5.00 for more high volume desserts with multiple options (e.g. toppings, blending practice, etc). Such a system would require high capital investment that might not be recoverable through moderate pricing increases. The high operational cost of ten different ice cream stores also complicate cost recognition in establishing ERP. Further, ice cream is a trends-based business that is difficult to predict, unless the business has an ideal location in place marketing next to a major theater or concert venue that has predictable in and out times for consumer traffic. Ice cream sales are also dependent on the seasonal changes, thus there are going to be periods where profit is lower and where it suddenly spikes. Again, a high capital investment might be impractical for this type of fluctuating business. Staffing concerns could also complicate effective use of ERP with a need for a manager to translate ERP data into usable supply and demand strategies. It could add several different payroll obligations to the operational model that might be impractical in an environment that sells only ice cream desserts that usually does not require a high staffing volume. However, an advantage of the ERP system would be the ability to integrate finance, supply chain, and inventory control in a single software system to provide for more effective procurement. ERP maintains a database that shows historical sales volumes and inventory movements in real-time to assist the manager in analyzing future business trends based on hard data. ERP could show certain ice cream flavors that have the highest demand and which are low demand, thus removing non-essentials from the procurement process. It could also assist in creating innovative desserts based on sales volumes that would have more market appeal and therefore assist in creating effective advertising and promotion to gain market share against competition. By showing where there is higher inventory movement, it can indicate certain customer likes and dislikes to make a more efficient ordering system with relevant products offered. References Henerson, M.E., Morris, L.L. & Fitz-Gibbon, C.T. (1987) How to Measure Attitudes, Newbury Park: Sage. Kumar, S.A. & Suresh, N. (2009). Operations Management. New Age International Publishers. Patton, M.Q. (1997), How to Use Qualitative Methods in Evaluation, Newbury Park: Sage. Rowe, G. & Wright, G. (1999), The Delphi Technique as a Forecasting Tool: Issues and Analysis, International Journal of Forecasting, 15(4). Assignment 3 The Worst Jobs One of the worst jobs is construction, specifically laborious construction such as asphalt laying, jackhammer operator, and other associated specialized activities in a construction project. This is a poor job as it does not provide for any task variety and very little autonomous working without direct supervision ever-present within the project. Auditors and construction managers continuously critique the work output and quality, emphasizing worker productivity and adherence to specific construction guidelines. Thus, there is less emphasis on human resources that builds higher motivation and commitment and much more focus on quality outputs. Despite the reasons why this is a bad job, they are usually some of the highest-paying, which provides for a better quality of life for the individual. Compensation and benefits are the motivation to seek these laborious jobs. Another in the worst job category is the data entry clerk common in organizations with a great deal of statistical knowledge required for effective business function, such as the medical records field or finance. This is a bad job because skill variety is limited by entry of figures and numerical representations that are constant without deviation throughout the work week. The worker would not find motivation in the notion of task significance since this data already exists in certain databases, but is simply required to be tabulated and correlated for better usage by executives or investors. Individuals seek these jobs as they can sometimes have high salaries and they do not require a great deal of physical labor, which is highly attractive to those who have minimal skills other than clerical and desire a clean professional environment. What determines a bad job from a good job is highly relative. However, taking into consideration the five core characteristics of job design is a good way to distinguish the specific needs that most employees are going to have about their job quality. It serves as a foundation for establishing a job that would be considered valuable by the majority of employees. Five Core Characteristics of Job Design A quality job design consists of opportunities for autonomy, have high task significance, much skill variety, quality task identity, and provide for meaningful job feedback (Heizer & Render, 2004). Autonomy is determined by the volume of work that an individual is allowed to perform with minimal supervision and that is self-managed. Job satisfaction is known to result as a product of autonomous working environments as employees want to be considered valuable in the organization with trust to provide self-managed decision-making (Emery & Barker, 2007; Nguni, et al., 2006). Task significance deals with the level by which a job has significance for others, such as consumer, managers, or social lifestyle. If an individual believes they have an important role with meaningful outputs, they are more dedicated to commitment. Skill variety is speaks of diversity in the job role and the ability of the worker to experience multiple activities to prevent the job from becoming mundane. Task identity is “the degree to which the position demands completion of a "whole" and identifiable piece of work” (Mainiero & Tromley, 1994, p.96). Feedback is one of the most important elements of a good job design, as individuals in the business want to know that they have value, trust, and are meeting performance expectations. They will also require clear and concise instructions about what is expected in terms of job tasks and productive outcomes to avoid ambiguity which is often not tolerated by workers in the organization. Many businesses establish regular performance appraisals or 360 degree feedback systems to guarantee more feedback and better job satisfaction as part of job design. Forming the Keiretsu The keiretsu is a grouping of different companies and enterprises that form inter-dependent business function where each maintains a stake in shareholding, thereby insulating all member organizations from fluctuations in market and economic conditions. The keiretsu is reflected by Mitsubishi, a company that has such an alliance with Nikon, Nippon, Pacific Consultants International, and Kirin Brewery (San Jose State University, n.d.). The advantages of this type of alliance would be protecting the businesses from takeovers by distributing shareholder ownership among member groups. It could also lead to sharing of knowledge and expertise in certain key areas which is motivated by shareholder equity to assist in developing better software, share supply distribution networks, and other important cost savings and efficiency business models. The disadvantage of this type of organization is that not all organizations will have horizontal hierarchies, with some being highly centralized, thus cooperation can be impacted by radically different executive leadership styles. Innovation could be stifled by a vertical organization against one that is highly democratic where HR is a focus in the liberal organization while hard line leadership is demanded in the vertical business The types of organizations that would belong to this would be tiers of suppliers, smaller-sized manufacturing companies performing outsourcing production efforts, and various financial and investment firms that have strategic importance for successful business operations. These businesses are integral in financial aspects of the firm as well as supporting productive business function. The businesses involved in the keiretsu want to have these insulating businesses included as environmental and competitive conditions change significantly especially for multi-nationals. Having financial firms and suppliers in the network bring more economic security and also assist in developing cooperative supply relationships for faster response from key supplier players. Negotiating with Striking Pilots The main goal is to establish a win-win scenario, which is not always possible especially when dealing with a massive pay increase such as in this case. The first step is to separate the people involved from the problem. Emotions from the pilots would be running high in this situation, and the goal is to let the pilots understand that the negotiator is legitimately concerned about their position. To avoid fueling emotional responses, the negotiator should try to focus only on interests, and not the negotiator’s position on the issue. Using tangible hard data about profitability and the potential impact on business growth and sustainment by adding a high burden would put facts into the negotiation and avoid emotional outbursts. By illustrating to the pilots that massive pay increases could harm their career security, it would give a better bargaining position for the business. The next step is to invent options that would provide for the most mutual gain. It might not be necessary to give significant pay increases, instead recognize the best alternative that would provide for bonuses in reward for performance or other affordable packages that could be offset through hedging or other financial investments. The goal is to reduce over-burdening short-term payroll to allow the company to better strategize capital growth strategies that can be subsequently delivered back to the pilots. Never responding to counter threats will keep hostilities low and allow for a principled, reserved approach to finding mutual benefit. Negotiating when it comes to pay maintains significant potential implications for sustaining quality of life for the individuals. Thus, negotiators on the side of the pilots are going to use more aggressive bargaining tactics. The goal is to get the pilots to express their specific grievances to identify other potential areas where more consensus can be gained with less emphasis placed on pay issues. This could open other avenues of discussion to gain collaboration. Costs of Inventory in the Clothing Store The tangible cost of the item must be considered in the procurement process, which is determined by production contracts with the apparel maker and distribution costs that are also included. These initial costs consider the labor payments made during the manufacture. Such ordering costs could also include design experts and their development fees for new fashions which are ever-changing based on consumer demands and social trends. Another cost is the holding cost, which takes into consideration the lighting, warehouse space, taxations, and personnel costs for managing inventory in the warehouse (Heizer & Render, 2004). These holding costs are unavoidable as tangible facility management requires cost recognition and the staffing to support inventory processes including receivables and deliveries. Holding costs are a significant concern to the retail organization. Some retail organizations will adopt piggybacked distribution, using existing networks, to avoid having to hold inventories for a long period of time either in-store or in a main hub warehouse facility. In retail, there are also obsolescence costs which are a major concern for retailers when fashion trends change and unpredictable consumer behavior is a factor in holding inventories and ensuring they do not reach clearance racks. The business would not have an advantage in ordering high volumes of apparel merchandise as they are quickly rejected by consumers in many fashion forms when new tastes and styles enter the social marketplace. Thus, effective supply chain utilization and best methods of distribution (e.g. maritime, air, or land transport) should be considered against a leaner purchasing model. Insurance costs must also be considered, which are on the increase nationwide. Depending on the specific location where the inventory is being housed, based on crime statistics, they can be significant. This is protection against losses, thefts, or the contingency of destruction of merchandise occurring through a variety of different means. Depreciation costs, also, are a consideration as inventory is trends-based and thus the life cycle of the product is not sustained over a long period of time. Depreciation is significant in clothing retail. In addition, the business will have to consider opportunity costs for high volume inventories, taking into consideration the volume of capital invested that could be allocated to different business activities such as expansion or improvement of equipment or even training imperatives. References Emery, C.R. & Barker, K.J. (2007), The effect of transactional and transformational leadership styles on the organizational commitment and job satisfaction of customer contact personnel, Journal of Organizational Culture, Communication and Conflict, 11(1). Heizer, J. & Render, B. (2004), Operations Management Flexible Version Package, (7th ed). Prentice-Hall. Mainiero, L. & Tromley, C.L. (1994), Developing Managerial Skills in Organizational Behavior, (2nd ed.). Prentice-Hall. Nguni, S., Sleegers, P. & Denessen, E. (2006), Transformational and transactional leadership effects on teachers’ job satisfaction, organizational commitment, and organizational citizenship behavior in primary schools: The Tanzanian case, School Effectiveness and School Improvement, 17(2), pp.145-177. San Jose State University. (n.d.). The Kieretsu of Japan, Retrieved September 11, 2012 from http://www.sjsu.edu/faculty/watkins/keiretsu.htm Assignment 4 Mathematical Models and Aggregate Planning Aggregate planning maintains too many different scenarios and inter-dependencies that are not easily measured through quantitative mathematics. They include demand as it relates to the product or company brand, as one example. Demand is considered in the aggregate planning process, however far-future determinations such as 12 to 18 months forward is not always possible when a business operates in a trends-based environment that is heavily influenced by consumer attitudes, behaviors and social customs. Mathematical models cannot account for brand-related situations and the heavy influence of consumer sentiment effectively. One good example would be identifying the automakers that cannot plan effectively for colors in car production this far forward in time as these are strongly dictated by consumer preferences. Thus, production changes as it relates to painting processes would have to be planned more short-term based on recent sales data. Sudden spikes or declines in demand could also impact staffing levels this far into the future, where layoffs might be mandated or additional staff added to keep up with output demands. Mathematical models cannot account for such spikes or declines and would rely on historical sales and production data that is not always relevant in a highly-fluctuating business environment. There are also many different human analysis characteristics involved in forward business strategy including promotional activities or executive mandates for expansion to meet growth expectations. The human factor complicates a mathematical representation of aggregate planning in these situations. Mathematical models also do not take into consideration the training needs that might be required for new production processes or technology implementation that could occur in the next 12 to 18 months. The use of mathematical models is more relevant to pricing establishment and other associated business activities. The MRP System The MRP system is a computerized method to determine the volume and timing of needed production materials in procurement that will have to satisfy the master production schedule at the organization (Kumar & Suresh, 2009). MRP considers the imperatives of the aggregate plan, the tangible bill of materials, CRP as labor and specific machinery requirements, lot sizing, and different component items required for assembly that are either dependent or independent of demand. MRP impacts a wide variety of functions at the firm. First, it impacts purchasing and procurement in terms of cost and scheduling of deliveries from various suppliers and vendors. It will also impact manufacturing as the capacity of current equipment and other associated assets needed to produce the product must be considered. Supply time is a significant consideration in MRP, which involves procurement, line management and executive departments, as well as production supervision. The necessity to facilitate more cooperative relationships or quality standards such as ISO or QS9000 could be relevant to ensure a more flexible and responsive supply chain actor within the value chain. Inventory as far as receiving and shipping must be considered also, taking into consideration the LIFO or FIFO of inventory controls and how these areas will be impacted in terms of inventory holding costs and inventory transfer from warehousing to production against the production cycle. MRP further impacts quality control personnel including the time for returns to quality assurance and final output deliveries to customers. Thus, R&D is affected, the shipping department, and quality control are impacted in MRP. Why is Scheduling of Services Difficult? Service is considered an intangible (Hill, 2009; Marketplace Partners, 2007; Green, 2001), meaning that its dimensions and imperatives are difficult to quantify. Unlike products, services have many dimensions that are reliant on human attitude and behavior, are driven strongly by customer preferences and competitor service adaptations in like markets, and are often time-sensitive meaning that they occur in sporadic periods with no definable rationale for spikes or declines in service usage. Services are largely performed, thus there are factors associated with maintaining adequate labor during periods of expected higher sales volumes. In some industries, services are easy to predict such as accountant services which will always have spikes in service demand during tax season from February through April. However, other businesses that are service-oriented can experience surges and declines in demand driven by changing market conditions and social principles. Qualitative questionnaires could assist in scheduling services by gaining real-time customer sentiment about the service and their lifestyles, however this is subjective and not wholly reliable. Effective service delivery is dependent on service worker competency and attitude toward the customer, which can make or break loyalty and intention to return for further service usage. Thus, staffing training and supervision is critical in this business, dimensions that differ day-to-day depending on service variety and effective supervisory actions with customers. Highly-variable demand ratios require there to be flexibility (Kumar & Suresh, 2009), thus long-term aggregate planning becomes more difficult when unpredictable shifts occur. As value cannot be stored in service consumption, it is a more adaptable system requiring adjustment in leadership than mathematical planning models. PERT/CPM Scheduling Techniques The Program Evaluation and Review Technique and Critical Path Method are statistical planning tools that outline specific tasks and provide for analysis these tasks within a process. The specific amount of time needed to perform critical tasks in the process can be answered with the PERT model. This model refutes uncertainty and aids in planning a project that recognizes events within the project where cost is not a variable, but the actual labor and task activity are included to determine how best to schedule for the project. Events within the project show the rational sequence of tasks where inter-dependencies have it so that no one task can be begun until the previous task is completed. In an environment where many different tasks in the process are being undertaken simultaneously, the PERT diagram illustrates milestones and helps to manage reduction of redundancies that could occur in the project or cycle. It can measure the optimistic times, those where time is largely minimized to meet a task end. It can also identify pessimistic times, those tasks that are at the highest risk of failures or interruptions within the cycle. In this technique, the critical path is determined by identifying the tangible, longest pathway toward achieving a terminal end, thus helping managers of the project identify all conceivable tasks in the project and how they inter-relate to one another with time as the most important variable. Through the PERT diagram and CPM recognition, it can measure how to fast track certain activities to reduce time dependencies or remove tasks that are not providing value to the project or cycle. It will recognize the most critical functions within the cycle that require attention or improvement to shorten the process from start to terminal finish. Thus, PERT/CPM answers what tasks are most efficient, which are most critical, and which require adjustment to meet more effective time expectations. Expert Systems Expert systems are a form of technological computerized system that simulates human decision-making ability (Jackson, 1998). What is referred to as the inference engine allows for access of the knowledge database to extrapolate potential solutions to problems or potential best practice activities based on theoretical analysis. The expert system usually maintains a conversational interface for the end user to facilitate more effective usage. The expert system utilizes a blend of logic-based programming and other programming that provides for a more qualitative-style analysis of input data to determine potentials for the business. The expert system can facilitate more effective procurement models, as one example, by examining the production and resource angle of the business and then using inference programming to identify redundancies or improve processes for more efficient utilization of inventories. The expert system has the ability to reason, using hard data about current capacity, machinery and resources, to identify solutions not easily recognized by human capacity for analysis. With this explanation in mind, the maintenance system is designed to identify all potential negative consequences (non-routine developments) that occur within a system before they impact the business. Issuance of work assignments or work orders are a common outcome of maintenance systems. The expert system advice provided identifies potential non-routine situations that could occur, thus improving the human analysis and improving scheduling or work assignments. Recognizing redundancies, as one example, would assist maintenance system workers in improving efficiency within the critical path. More efficient distribution of resources can also be provided by expert system technology whereby maintenance systems can be better effective planners between inter-dependent operational divisions. Expert systems can recognize the catalysts not easily identifiable by maintenance team members that lead to critical disruptions in production or distribution of resources. References Green, Charles H. (2001). Ten Myths about Selling Intangible Services, Retrieved September 13, 2012 from http://trustedadvisor.com/public/files/pdf/articles/2001_Ten_Myths_About_Selling_Intangibl e_Services.pdf Hill, Peter. (2009). Tangibles, intangibles and services: A new taxonomy for the classification of output, Economic Commission for Europe, Retrieved September 12, 2012 from http://www.csls.ca/journals/sisspp/v32n2_09.pdf Jackson, P. (1998). Introduction to Expert Systems, (2nd ed.). Addison Wesley. Kumar, S.A. & Suresh, N. (2009). Operations Management. New Age International Publishers. Marketplace Partners. (2007). The Power of Branding: A Focus on Intangible Services, Retrieved September 13, 2012 from http://www.marketplace-partners.com/ThePowerofBranding- AFocusonIntangibleServices.pdf Read More