Operations Management Principles - Assignment Example

OPERATIONS MANAGEMENT PRINCIPLES I. Executive summary This document describes a detailed analysis on the operations management principles adopted bya copier rehabilitation facility near Charleston, SC. The content of this document brings to light problem areas identified with various departments of the organization, an analysis of the problem is discussed, and a cohesive plan for correction of problems recommended. II. Areas of problems identified: In order to identify the areas of problems, the responsibilities of the Operations Management needs to be understood as follows: Plan - Absence of process & procedures Organize - Absence of systems in place Staff - Resources not well managed Lead - No lead Control - Absence of control in various departments. Following tables provides a brief single point view of various problems identified reasons and required areas of improvement, which has been mapped against the above domains/functions. Below is the detailed analysis of the problem: Sl. No. Problem area Problem Required areas of improvement 1 Copiers arrive at irregular intervals & varying quantities Lack of planning & control Plan & control 2. Repair spares out of control Lack of systematic organizing measures and control mechanisms Organize & Control 3. Purchasing department double checking and validating purchase requests Lack of trust, resulting in lack of systems in place Organize, Lead & control 4. Purchasing department using an outdated EOQ Not in line with current trends of the industry and technology Staff 5. Personnel department decided to set permanent staffing levels Resources not objectively sourced and utilized Plan, staff and control III. Analysis of the problem: a. "Distributors are accumulating copiers at their locations until they physically run out of room, then ship the entire quantity" which results in arrival of irregular intervals and varying quantities. This problems reveals following problems: Charleston, SC has set no norms, policies or procedure towards distributors to ensure that they follow a methodology for dispatch, storage, and schedule related to sending copiers to Charleston facility. Distributors lack knowledge on the impact caused on the business and organization and customers, on account of accumulating copiers at their premises. On account of unexpected load of materials from distributors, this results in impact on resource, space, and spares and inventory. b. "Repair parts that are controlled by Charleston facility are out of control". Following are the outcome of analysis related to this problem area: Absence of procedure for replacement of spares The probability of manual handling of spares. Lack of check, if there exists a possibility to reuse defective spares by conducting necessary rectification. Poor inventory system used. c. "Purchasing department is double checking and validating every single purchase request that comes from the inventory department" Purchase procedures do not appear to exist. Failure to adopt process of for every purchase, three vendor quotes to be obtained and compared in terms of cost, quality, delivery and payment schedule. Lack of trust on persons raising requests for purchase Absence of systems, that confirm replacement of spares being used. Absence of audit mechanism, which can be one of the measures for checks and balances. d. "Purchasing department operating a five year old EOQs (Economic Order Quantities)". Systems used on inventory and ordering cost outdated. Absence of technology oriented systems to meet the supply demand Failure of being in line with new technology. Data used, appear to be out-dated e. "Personnel department tired of obtaining trained (or trainable), temporary workers, decided to set permanent staffing levels" Lack of overview of the periodic surges in workload. Poor Resources management, resulting in loss to the organization. Absence of strong employee benefits schemes, binding employees to the organization. IV. Conceptualized conclusions, recommended solutions: Having identified the problems with Charleston, SC operations, and further analysis of problems analyzed, what clearly has been brought to light as outcome of the analysis is lack of control on the overall "operations management". In order to help resolve the identified, problems I recommend usage of McKinsey's 7-S framework as follows: Keeping the above model of McKinskey's following cohesive plan is recommended: 1. Structure: In order to help the entire process, the first requirement is to define the structure of an organization with responsible for each of the following domains: a. Operations Management Head, having following staff: i. Facility Head - Responsible for the facility operations, equipment handling ii. Purchase Head - Responsible for all purchase iii. Inventory Head - Responsible for all inventory spares iv. Systems Head - Responsible for keeping in trend with technology trends. v. Finance Head - Responsible for payments. vi. Human Resource Head - Responsible for optimum use of resources. vii. Service Head - responsible for service of equipment and distributors. 2. Strategy: Having the structure of the organization, one specific strategy is to set the organizational goals in terms of service, cost, etc. 3. Systems: A systematic flow of the process should be implemented as follows: i. Distributor to send copiers as per the timelines/periodicity defined by the Charleston facility - to be defined by Service responsible. ii. On receipt of the copier, service department to identify required spares. iii. Inventory department should ensure that the spares are available, and obtain receipt of acknowledgement for spares replaced. iv. Inventory department to escalate shortfall of spares to Purchase department, along with three vendor quotes of suppliers. v. Purchase department should conclude on the vendor/supplier based on cost, quality, delivery schedule and payment terms. vi. Human resource to obtain from other departments the peak workload periods, and train employees, ensuring supply on demand is available, rather than having unutilized resources on organization permanent rolls. 4. Styles: Management styles help in maintaining the entire process. Each department head should have a style in managing his team/resources/ material, which would ensure success and eliminate problems. 5. Staff: The staffs of the organization are one of the vital resources, irrelevant of which function or domain, grade or salary levels they belong to. Some recommended measures are as follows: a. Human Resource which handles the vital aspect of resources, should introduce employee retention, employee benefit schemes, having people employed on a contract mode, where employees are ready to join keeping in mind the benefits the organizations offer. b. Offer training to employees of various functions, to expertise their job. c. Encourage rob rotation, so that employees get to be aware of challenges and responsibilities of other departments. 6. Shared values: Share with distributors and teams the values of the organization and represent organizations culture, which would draw more support of distributors and teams and get to be well associated with the organizations requirements - eg: dispatching material on time. 7. Skills: Develop skills within the organization with permanent staff, so as to manage surge in work load. V. Conclusions: The achievement of an organization is to identify its weaknesses, analyze and decide What is to be done Who will do it When will it be done How will it be done Devising the right process and using the right concepts help in resolving the problems of Charleston, SC. References: 1. McKinsey's 7-S Framework with Hard and Soft S's 2. Principles of Operations Management, 5/e, Jay Heizer Barry Render Read More