How the Use of the Operations Management and Production Has Led to the Success of Turbo Company - Case Study Example

Turbo Exhausts Student Name: Tutor: Institution: Submission Date: Case Study: Turbo Exhausts Introduction Production and operations management plays an important role in determining success of a production company. Different types of goods undergo different production processes. This also depends on the quality of the goods required. It is also important to note that various tools and equipment are used during the production process. The type of tools and equipment used determines the quality of the finished products (Melville, 2010). Technology plays an important role during the manufacturing and production process. The use of modern technology is increasingly becoming common during the production process and the production process depends on the efficiency of handling the inventory. This determines the capacity of a company to satisfy the demands of the customers. The demand of the customers also determines the capacity that a company should produce. However, it is important to note that a company will always face challenges when trying to satisfy the customers. The changes, in most cases, affect the operation of the company in terms of finance and production. The paper critically discusses the production and operation management at Turbo Exhausts Company. Discussion Turbo exhaust utilizes several production methods for the purposes of meeting the demands of the customers. The made-to-stock production process is utilized by the company in terms of satisfying the demand of some of the customers. This became common for the company after some customers with street cars became interested with the services of the company. This was an opportunity for the growth of the company and it embarked on this type of production process. In type of production, goods are usually manufactured and the customers purchase the already finished products without placing their order. This concept is being used by the company and it has led to the customer satisfaction. However, it has had some impacts on the capacity of the company. The company has been forced to hire a warehouse for storing some of the already finished products and others that are still undergoing the production process. Although the company is not being inconvenienced by the process, it has some negative financial implications for the company. This issue has also been of concern for the finance manager of the company. However, the use of made to stock production is important in terms of satisfying the customers who are in urgent need for the products (Barratt, 2011). Made-to-order process The made-to-order process of production is also one of the concepts that are partly utilized by the company. The custom made products are usually given the first priority by the company during the production process. This is due to the urgency of the products ordered by the customers. The sale for these types of products has also been on the increase for the company. The company founders have also noted that this type of production has been profitable for the company. However, it requires a lot of inventory as the products have to be manufactured in time. This has forced the company to invest more on the raw materials so as to ensure that the orders of the customers can be completed on time. This has also had some impact on the finances of the company and the finance manager also expressed concern. Most of the money made by the company is used for the purpose of purchasing raw materials. However the contract with the performance shop has also seen the company increase its capacity. This is for the purpose of meeting the demand of the customers as well as that of the performance shop. The company has also been able to attract other customers due to its efficiency in terms of meeting the demands of the customers. It is thus evident that the made to order process of production is convenient for the customers who require a special design of a certain products (O’brien, 2010). Continuous Production Process The continuous production process is also utilized by the company during the production of the goods. This involves the use of machinery and trained personnel during the process. The company has several equipment that are used for the production process although it only operates a single plant. The production process is continuous as both the products required by the customers as well as the off the shelf have to be produced. The company has been able to meet the demands of the customers due to the continuous production. However, it is important to note that the continuous production requires a lot of raw materials at hand. This is for the purpose of ensuring that the process does not stop. Stopping the process highly inconveniences the customers who have placed their orders. This may end up affecting the credibility of the company incase it fails to meet the demands of the customers. It is also through continuous production that the company has been able to expand it is growing at a steady rate. The continuous production has however resulted in the mass production and hence bringing about issues with the storage of its products. Continuous production is useful for manufacturing companies for the purpose of meeting the demands of the customers (Gurnani, 2011). Turbo Exhausts signed a contract with the performance shop that led to some effects for the company. One of the main effects that the company faced was the overstretching of the resources that it had. The contract with the performance shop meant that the company had to increase its production. The initial increase of production by five hundred units had a lot of impacts on the company. The workers had to compete for the use of the same equipment for manufacturing the products for the performance shop as well as the products for the other customers. However the contract also had positive impacts for the company in terms of the number of units produced. It led to mass production for the company and hence increasing the productivity of the company. The mass production meant that the company had to invest more in the inventory. To this effect, the company had to purchase more raw materials as compared to the past when the company had not signed the contract. The finance also expressed concerned over the issue of purchasing raw materials. However, the founders of the company noted that the contract with the performance shop was beneficial to the company. A contract may always lead to changes within the company and its method of production (Wong, 2011). The contract with the performance shop also had some impact on the working hours within the company. The company had to extend its working days and hours in order to meet the demand of the performance shop. Extension of working hours means that the company has to invest more on the payment of the employees. However, this issue did not impact negatively on the finances of the company. On the other hand it is also important to note that the capacity of the company was stretched. The company had to hire a warehouse in the neighborhood so as to solve the problems with storage. The products were also full in the warehouse with some being unfinished while the others were finished products. This distorted the arrangement of the goods in the warehouse. A warehouse is supposed to be well organized so as to make accessibility easier for the personnel. The contract with the performance shop therefore changed the operations of the company. It also changed how the orders of the customers were being handled. However, it is important to note that the contract did not affect the relationship with the customers who made orders. This is because the first priority was given to the customers with the orders before resuming to the requirements of the performance shop. It is thus important for an organization to have clear plans on how it handles all its customers to avoid any inconveniences (Kleindorfer, et al, 2009). Under the current operations of the company, operational decisions ought to be made for the purpose of enhance the day to day activities. This is also for the purpose of ensuring that the company is able to satisfy al its customers. Planning production is one of the operational decisions that need to be undertaken by the company in order to meet the demands of the customers. This is because some of the products left unfinished during the production process in order to satisfy other customers. The presence of unfinished products in the warehouse is not good for the company as it leads to the wastage of space in the warehouse. The planning of production will also ensure that the resources of the company are not stretched. This will also be convenient for the workers in the company as they will know their work schedule. The planning of the production will require the development of a timetable or a work schedule. This will act as a guide for the company as it implements the decision made. It is also important to ensure that the production process is monitored on a daily basis for the purpose of making corrections incase of errors during the production. The availability of a work plan is important in terms of ensuring that the production process is efficient (Pilkington, 2009). The scheduling of personnel and equipment is also an operational decision that needs to be made at the company. Scheduling the personnel will ensure that the operations of the company are run effectively. This is because the employees of the company have to work under the guidance of the schedule. It is thus important for this decision to be implemented at the company. This will also avoid inconveniencing the workers during the operations. The scheduling of equipment is also one of the major decisions that need to be undertaken by the company. This is because the workers have to use one equipment while performing different tasks. The workers serving the customers with orders have to use the same equipment with those working to meet the demand for the performance shop. This therefore brings some sort of complications and is slows down the production rate of the company. The scheduling of the use of the equipment will result to order and efficiency during the operations of the company. The production rate also needs to be adjusted. This is for the purpose of ensuring that the demands of all the customers are met. The adjustment should ensure that the rate of production is high and therefore meeting the demands of the customers. It is also important to ensure that the quality is controlled so as to avoid errors or poor quality products (Bernardes, 2009). Off-the-shelf system The off-the-shelf system is common in the operations of the company and it was introduced for the purpose of meeting the demands of the customers. This system has been important for the company in terms of boosting the sales and hence profiting the company. However, this system also has some impacts on the finances of a business organization. The off the shelf system of production mass have negative impacts on the finances of the company. This is because the goods are much cheaper as compared to the custom made products. This therefore means that the company looses a good amount of revenue due to the system. Although the company has not complained of any loses and it id experiencing a steady growth, this system is still not efficient. It is for this reason that the finance department is concerned with the issues relating to finances of the company. The use of of-the-shelf system also promotes high investment in the inventory for the purpose of enhancing the capacity of the company to sustain the of-the-shelf system. It is thus evident that this has some negative impacts on the profits made by the company. The off-the-shelf system is thus not efficient in terms of making profit but it has positive impacts on the customer satisfaction (Aquilano, 2009). Through this system, the expansion of the company is being slowed down as it is difficult to save enough money. This system also ties up most of the amount to the inventory of the company. This discourages the circulation of the money to other activities that may generate more money through expansion. It thus leads to a negative impact on the finances of the company. On the other hand, the company has been forced to rent an expensive warehouse in the neighborhood. This is due to lack of space cause by the system during its operations. Renting the warehouse has some cost implications on the operations of the company. More money is being spent on clearing the rent areas for the expensive warehouse. The amount would have been used for other activities for the purpose of generating more income. On the other hand, the finance manger expresses concern on the profit margins. He expects that the profits would have been much higher when using another system. However, due to the use of the of the shelf system, the profits of the company are not as they are supposed to be. The cost associated with the system is also rising and it has negative impacts on the profits made by the company. It is thus evident that the system has negative impacts on the profit margins of the company. This may lead to lack of expansion for a company using this system Conclusion In conclusion, the use of the operations management and production by the company has lead to the success of the company. It is evident that the company has been able to satisfy all the demands of the customers. This is one of the most important aspects of a successful business. The production system used by the company is also able to carter for the needs of different customers for instance the customers who have made orders and those that make their purchases through the counter. The signing of the contract with a performance shop also led to several outcomes for the company. Some of the outcomes were negative while others were positive for the company. The rate of production of the company has to increase after signing the contract leading to overstretching of the facilities of the company. It is also evident that some operational decisions are required for the purpose of enhancing the production of the company. Enhancing the rate of production, planning and also scheduling the personnel and the equipment are some of the suggested operational measures. On the other hand, the finances of the business are being impacted negatively by the off-the shelf system of production. It is also evident that this system is limiting the growth and expansion of the business. Bibliography Barratt, M, 2011, Qualitative case studies in operations management: trends, research outcomes, and future research implications, Journal of Operations Management, 29(4), 329-342. O’brien, C, 2010, A production planning model to reduce risk and improve operations management, International Journal of Production Economics, 124(2), 463-474. Gurnani, H, 2011, Special Issue of Production and Operations Management: Global Supply Chain Risk Management, Production and Operations Management, 20(2), 301-301. Wong, B, 2011, A survey of the application of fuzzy set theory in production and operations management: 1998–2009, International Journal of Production Economics, 129(1), 157-168. Aquilano, N, 2009, Operations and supply management, New York: McGraw-Hill. Melville, N, 2010, Information systems innovation for environmental sustainability, MIS Quarterly, 34(1), 1-21. Kleindorfer, P, et al, 2009, Special Issue of Production and Operations Management: Measuring the Impact of Sustainable Operations, Production and Operations Management, 18(2), 241-241. Pilkington, A, 2009, The evolution of the intellectual structure of operations management—1980–2006: A citation/co-citation analysis, Journal of Operations Management, 27(3), 185-202. Bernardes, E, 2009, A theoretical review of flexibility, agility and responsiveness in the operations management literature: toward a conceptual definition of customer responsiveness, International Journal of Operations & Production Management, 29(1), 30-53. 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