Systems and Operations Management - Assignment Example

Systems and Operations Management Part Option Economists have long been discussing the shifts from the physical tothe digital economy. Use Arthur’s (2011) article as a starting point and discuss the strategic importance of the digital economy for an industry or region of your choice. Information systems, e-business and successful operations are increasingly recognised as for the success of businesses and economies. This study tries to bring to light important aspects of the shift from physical to a digital economy and how this digital economy has led to crucial development in the economy of the republic of Korea. A new breed of technology springs out every 60 years or so of which without noticing this new breeds tends to affect the economy positively as a whole; hence, developing it. It introduces new social classes and leads to a different approach to business. In current times, the economy is highly digitised which is characterized as vast, automatic and invisible with adverse effects on employment. An example given is the digitisation of air travel, whereby 20 years ago one had to visit the airport to book a flight, but in current times one can book a flight and pay for it using online services. It is estimated that in less than two decades the digital economy will be as huge as the physical economy (Sears, 2007, 41). It is growing at an alarming rate and people should not underestimate the rate at which it is changing due to the simple fact that unlike the physical economy, the digital economy has no limits. Its limitations are that human employees will lose their jobs as they will be replaced by these information systems which can effectively and efficiently do the job better than them. In the development of the global economy it is stated that informational technology brought by the digitisation of the global economy plays a very crucial role than labour and capital. As the global economy is interconnected and integrated it is significant to understand the effects of information technology on the economy in general and establish frameworks that will lead to the prosperity of the global economy as a whole (Eui-Hwan, 1999, 2). Information systems and technology has led to crucial and evident development on the economy. In macroeconomic perspective information technology has affected and enhanced the factors and patterns of productions, investment and employment. In a microeconomic perspective, it has enhanced business transactions in that it has led to effective and efficient modes of communication and an interpretation of information among employees who are key players in economic development (Eui-Hwan, 1999, 2). In Korea informational technology has led to direct and indirect development of its economy. In 1995, the value of its information and communication industry was 30 trillion won, this figure rose significantly to 43 trillion won three years later in 1998. Surprisingly enough its GDP also from 7.9% to 9.6%. Consequently, that year employment in that industry increased to 507,000 from 395,000 in 1995. In the information and export industry exports increased to 30billion dollars in 1998 and price increase rates in this industry services and equipment are -0.2% and 6.7% in 1998 which is lower than the national average (Eui-Hwan, 1999, 1). The role of the Korean government while dealing with economic failure has also changed from solving market failure to solving system failure, where system refers to the players involved such as the corporate, the individual person, university etc, and the environment which includes banking systems, labour market structure law and regulations. It is very important that the government should effectively and efficiently utilize the information technology by doing away with non value adding aspects of it (Eui-Hwan, 1999, 1). The Ministry of Information And Communication of the republic of Korea recently created a Cyber Korea 21, which is a vision for knowledge and information based society. It will be responsible for the designing and utilization of information technology at the national systems level. Its objectives are growth of national productivity based on information technology, reinforcement of information infrastructure and enhancing and boosting new businesses (Eui-Hwan, 1999, 1). Part 2: Challenges facing the Operations process of Ninak fireworks and how it affects satisfying the customer There are various challenges facing Ninak fireworks operating process, in order to analyze these challenges effectively the study will employ three models that are going to assist in achieving this objective. These models are the input process output model, the value chain model and finally the business process mapping model. The input process output model This model identifies all inputs put in a business venture and the final product which is the output. It also involves analysing the processes that will be carried out so as to arrive at the desired outcome. In Ninak fireworks, the main challenge they are facing is that they are unable to come up with the correct product mix. This problem is affecting the organization negatively as they are not able to satisfy their customers. (Camillus, 1986, 12) This problem is brought by the fact that the operations department receives conflicting messages from the sales teams and the warehouse and logistic team when it comes to addressing what product is required by the customers and the current inventory levels in the organizations stores. This immensely confuses the operations department, and they have to make uncalculated decisions on which product mix to make. This leads them to coming up with products that customers do not like thus they end up losing customers. To solve this problem, Ninak fireworks need to identify and install a good information technology systems such as resource planning systems that will enable them capture all departments information accurately and efficiently (Ghosh, 2005, 13). This will be very crucial as the system will integrate all departments together I and communication of information between them will be enhanced. This will ensure that important information can be derived from the systems effectively without the departments contradicting themselves (Plenkiewicz, 2010, 39). Value Chain model A value chain model is a model whereby businesses receive raw materials known as inputs and go ahead in addition of value to these specified raw materials through various processes and sell the outcome as finished products to customers. Be it individual consumers or business consumers as in the case of Ninak fireworks. Their goal here is to deliver maximum value to finished products for the least possible cost incurrence. The challenges faced by the Ninak fireworks operational processes are as follows; sometimes pyro technicians are left waiting for batch of parts that are to arrive in the future (Jacka & Keller, 2009, 160). This happens because the production assistants are dealing with more than one pyro technician when it comes to the delivery of batch parts like plastic casing, glue, plastic spacers as so on and so forth, the number of pyro technicians compared to production assistants is more thus making it impossible to cater to all the pyro technicians and this in turn slows up the production processes in the company because of the delayed time accrued to get the necessary raw materials used in making fireworks (Verma, 2009, 35). Since the issue of production assistants and pyro technicians generates slow processing of the prime products of the company, sales is going to be affected in a major way because when the products are not delivered in the specified time that the two parties had agreed on (the consumer and Ninak fireworks) Ninak fireworks might end up losing their market to their competitors (Conger, 2011, 56). To curb this challenge, Jeff Tyron the operations manager can increase the number of production assistants so as to have an equal ratio to pyro technicians thus making it next to impossible to delay the production processes due to the fact that a production assistant can support one tyro technician unlike in the previous situation where we find one production assistant supporting more than one pair of tyro technicians thus delaying production processes. Another challenge faced by Ninak fireworks is also the issue of production assistants whereby we find this specific group been involved in the packing of selection and standard display boxes to be handed over to Li Zhang who is the manager of warehousing and logistics department. This might be a wrong move because production assistants are only involved in the issuance of the necessary raw materials. The best team to handle this task are the pyro technicians who are involved in the production of finished goods. They know the risk and health issues that can pop up when the best care is not used when packing these products (Collier, Agyei-Ampomah & Chartered Institute of Management Accountants, 17, 2008). To improve on this situation, the manager of the operational department Jeff Tyron can issue this task to the appropriate team...the tyro technicians. This is due to their awareness of the safety precautions in handling these fragile products that can go off with the wrong kind of handling creating wastage of raw materials and inconveniencing the consumer. Business process mapping Business process mapping refers to the activities that are involved in defining what the business entity’s vision and objectives are, who is responsible for the performing and completion of certain tasks so as to realize these visions and objectives (Hunt, 1996, 160). This helps Ninak fireworks in attaining organization efficiency through assessing the areas of the current process that require improvements. The business process mapping of Ninak fireworks is as follows: -The organisation structure is divided into four departments each department been involved in the conversion of inputs to outputs and ways of attracting customers. They are marketing and sales department headed by Claire Forest, operations department headed by Jeff Tyron, warehousing and logistics department headed by Li Zhang and lastly administration department headed by Amy Butler. The challenges that are faced by these departments are as follows; the operations department endlessly receives conflicting messages from the sales team and the warehousing and logistics teams on what is required and what the current stock levels are (Butterfield, 2010, 100). The operations manager said that the Warehousing and logistics team as well as the sales and marketing teams had quite different opinions on what type of products should be made and when they should be made. The correlation between the sales forecasts and the actual levels differ by a huge margin. The best way to improve on this challenge is by the different teams coming up with one clear system so that all departments can receive the similar information on the current stock and the incoming orders. Part 2: Mind map picture A mind map refers to a visual representation of information. The information is derived from analysing a certain central idea where associated ideas and concepts are derived to explain the central idea (Wallace, 2003, 72). The diagram below represents the mind map picture of Ninak organization: 1.1 The issues of employees faced by Ninak fireworks are as follows; there is wrong job allocation to some employees, for example we see that production assistants are responsible for packing of selected and standard display boxes instead of pyro technicians doing this job description, for they are very well trained in this area, they know the risks involved and the health hazards better than the production assistants (Andersen & Galloway, 2008, 102). The respective manager of this department has to make some changes in the allocation of jobs to correct this error. The employee with the best training or who has the best experience can do this specific job (Sekhar, 2009, 115). This applies where we find production assistants been allocated jobs that pyro technicians can perform well. 1.2. Another area where we find issues in Ninak fireworks is in the area of management. We find there is miscommunication between the four departments resulting to no correlation between the forecast sales and the current stocks levels (Burlton, 2001, 108). This can affect the company in terms of processing sales orders and forecasting demand thus leading to low returns in investment. The best way to curb this issue is to come up with one clear system so that all the departments have the same information on their current stock status and their incoming orders thus creating one team that is able to work under stressful situations because they are working together to achieve a common goal of attracting customers by marketing their products (Schwalbe, 2008, 122). 1.3. Technical issues that are faced by Ninak Fireworks Company are as follows; the Company does not have an online site for marketing their products. This issue makes Ninak fireworks far behind than its competitors because they cannot reach a large target market as their competitors thus they are not exhausting their ways of attracting a larger market share. When the company manages to get an online site, they can manage to sell their products worldwide instead of regionally. Therefore, this is the process that the company ought to use in order to achieve a higher market share through attracting customers. Bibliography Eui-Hwan, H. 1999. Information Technology and Economic Development, Ministry of Information and Communication, Republic of Korea. Accessed at Andersen, B., & Galloway, D. 2008. Mapping work processes. Milwaukee, Wis: ASQ Quality Press. Camillus, J. C. 1986. Strategic planning and management control: Systems for survival and success. Lexington, Mass: Lexington Books. Sekhar, S. 2009. Business Policy and Strategic Management: Michal Potter Model of Value Chain Analysis. Jacka, J. M., & Keller, P. J. 2009. Business process mapping workbook: Improving customer satisfaction. Hoboken, N.J: Wiley. Butterfield, J. 2010. Problem solving and decision making. Boston, Mass: Course Technology/Cengage Learning. Sears, W. H. 2007. The front line guide to thinking clearly. Amherst, Mass: HRD Press. Schwalbe, K. 2006. Introduction to project management. Boston (Mass.: Thomson Course Technology. Burlton, R. T. 2001. Business process management: Profiting from process. Indianapolis, Ind: Sams. Collier, P. M., Agyei-Ampomah, S., & Chartered Institute of Management Accountants. 2008. Management accounting--risk and control strategy. Oxford: CIMA. Ghosh, N. 2005. Management control systems. New Delhi: Prentice-Hall of India. Verma, N. 2009. Business process management: Profiting from process. Delhi: Global India Pub. Conger, S. A. 2011. Process mapping and management. New York, N.Y. (222 East 46th Street, New York, NY 10017: Business Expert Press. Plenkiewicz, P. 2010. The Executive Guide to Business Process Management: How to Maximize Lean and Six Sigma Synergy and See Your Bottom Line Explode.  Bloomington: iUniverse Read More