Part 1 discussion in week one.
This module is practice based and requires full attendance –
All the material in this file has been taught and discussed in detail in the class.
Assignment part one:
Where to start
1: Start with brief discussion on Components of Business Operation Management
- How B&M is creating value for customers and what are their models to create this value (discuss in the context of the operations theories).
3 Brief statement why you are using SSM
- You are trying to find the gaps between B&M and other retailers.
5 Your solutions to fill these gaps (see notes above).
6 The Parcel Conundrum depending on your solution – issues with delivering to the door.
Please read the assignment brief – it includes all the instructions.
Briefly outline the essential components for effective business operations management for B&M.
You need to understand the key components (elements) of operation management.
Key elements of operation management:
Production selection and design
Facilities layout and materials handling
Production planning and control
Quality assurance and control
Work study and job design
Maintenance and placement
Cost reduction and cost control
Following elements for retail:
You have to research which of the above elements are B&M good in performing. Not all apply to B&M and assignment states briefly outline the essential components.
WHAT B&M IS GOOD AT FOR THE CUSTOMER: COMPARE TO OTHER GROCERY RETAILERS
HOW DO THEY CREATE VALUE FOR THE CUTOMER?
Here you should research the practice – How B&M creates value for customer
Combine the theory (i.e. Operation strategy priority model, Walter’s four V’s profile, customer value chain etc.) and the practice to synthesis outcomes.
This should be critical analysis supported with evidence/reference (relevant theories and practice). Critical discussion (synthesis from your research).
Support your discussion with appropriate business operations models i.e. operation strategy performance (priorities) model, customer value, the service gap model, four v’s profile etc..
(Operation strategy priority model – Different authors refer to this with different names (Slack et al. refer to this as operations performance objectives – this is Speed, Dependability, Cost, Time and Flexibility).
Walter’s four V’s profile (discussed in the first lecture), The service GAP model and other models discussed in the lectures and from your research. DO NOT USE PORTER or SWOT.
Here apply the various models to support your discussion relating to B&M. You should critically discuss what they do in the store in the context of the models.
PLEASE NOTE YOU ARE NOT REQUIRED TO EXPLAIN EACH MODEL BUT CRITICALLY APPLY IT TO YOUR DISCUSSION.
Bit more details on Slack’s model to start you off – please research the other models
- Cost: The ability to produce at low cost.
- Quality: The ability to produce in accordance with specification and without errors.
- Speed: The ability to do things quickly in response to customer demands and
thereby offer short lead times between when a customer orders a product or
service and when they receive it.
- Dependability: The ability to deliver products and services in accordance with
promises made to customers (e.g. in a quotation or other published information).
- Flexibility: The ability to change operations. Flexibility can comprise up to
- The ability to change the volume of production.
- The ability to change the time taken to produce.
iii. The ability to change the mix of different products or services produced.
- The ability to innovate and introduce new products and services.
Excelling at one or more of these operations performance objectives can enable an
organization to pursue an operations strategy based on a corresponding competitive factor.
Slack et. al.
Brief statement why you are using SOFT SYSTEMS METHODOLOGY.
HERE WE ARE TRYING FIND OUT WHAT B&M IS NOT DOING GOOD COMPARE TO THE COMPETITORS.
READ ON MOODLE: A Complete Model of the Supermarket Business – Frank Steeneken and Dave Ackley
WHERE ARE THE GAPS – and what are your solutions to fill these gaps.
You should compare and contrast different models used by the sector in which B&M operates and recommend appropriate solutions for online shopping, make easier for customers to select and buy their products with fully integrated mobile applications.
If one of your solution is online shopping to accommodate middle class customers then you have to consider following issues:
Issues to consider centralised/decentralised inventory and delivery chain, customer value chain, cost implications, sustainability etc..
What is Argos doing with their delivery to the customer?
OCADO pure play online what are they doing?
Delivery model for Sainsbury, Tesco, ASDA how this differs from Waitrose and Morrison. Is Morrison model working?
New Commer ALDI to online – what are they doing?
The new big threat to all from AMAZON.
Should B&M base the deliverY from Warehouse or local store?
With reference to the parcel conundrum (http://www.bbc.co.uk/news/magazine-18709348) recommend how B & M should respond to the “delivery to the customer conundrum” (keeping in mind the possible technological and environmental (CO2) impact).
(Which approach should B&M use to deliver to the door).
Should B&M base the delivery from the Warehouse or local store?
YouR research above will show which stores deliver from local stores?
Which stores deliver from central warehouse?
(These are General Notes to help)
Availability matches the demand.
Delivered customer cost
Facilities layout and materials handling:
Delays and congestion
Product selection and design:
The right kind of products
Process selection and planning:
Technology to automation.
Just in time (JIT)
Quality (this is important to ALDI)
Work-study and job design:
Operation prospective to consider:
Providing continuously higher quality
With shorter delivery time
And better customer service
While simultaneously reducing labour and material cost and utilisation of existing faculties
All this as completive advantage.
Operations management and its objectives
An operation may be defined as the process of changing inputs into outputs thereby adding value to some entity. Right quality, right quantity, right time and right price are the four basic requirements of the customers and as such they determine the extent of customer satisfaction. And if these can be provided at a minimum cost, then the value of goods produced or services rendered increases. Thus the objectives of production management are “to produce goods and services of the right quality, in the right quantities, according to the time schedule and a minimum cost”.
Objectives of production management may be amplified as under:
- Producing the right kind of goods and services that satisfy customers’ needs (effectiveness objective).
- Maximizing output of goods and services with minimum resource inputs (efficiency objective).
- Ensuring that goods and services produced conform to pre-set quality specifications (quality objective).
- Minimizing throughput-time- the time that elapses in the conversion process- by reducing delays, waiting time and idle time (lead time objective).
- Maximizing utilization of manpower, machines, etc. (Capacity utilization objective).
- Minimizing cost of producing goods or rendering a service (Cost objective).
<img src=”http://www.mbaknol.com/wp-content/uploads/2010/04/Operations-manager-mbaknol.jpg” alt=”” title=”Operations-manager-mbaknol”>
Key elements of Operations Management
Product selection and design: The right kind of products and good designs of the products are crucial for the success of an organizing. A wrong selection of the product and/or poor design of the products can render the company’s operation ineffective and non-competitive. Products/services, therefore, must be chosen after detailed evaluation of the product/services alternatives in conformity with the organization’s objectives. Techniques like value engineering may be employed in creating alternate designs, which are free from unnecessary features and meet the intended functions at the lowest cost.
Process selection and planning: Selection of the optimal “conversion system” is as important as choice of products/services and their design. Process selection decisions include decisions concerning choice of technology, Equipment, machines, material handling systems, mechanization and automation. Process planning involves detailing of processes if resource conversion required and their sequence.
Facilities (Plant) location: Plant location decisions are strategic decisions and once plant is set up at a location, it is comparatively immobile and can be shifted later only at a considerable cost and interruption of production. Although problem of location choice does not fall within preview the production function and it occurs infrequently, yet it is of crucial importance because of its major effect on the performance of every department including production. Therefore, it is important to choose the right location, which will minimize total “delivered customer” cost (Production and distribution cost). Locational decisions involve evaluation of locational alternatives against multiplicity of relevant factors considering their relative importance to the organization and selecting those, which are operationally advantageous to the organization.
Facilities (Plant) layout and materials handling: Plant layout is concerned with relative location of one department (Work center) with another in order to facilitate material flow and processing of a product in the most efficient manner through the shortest possible time. A good layout reduces material handling cost, eliminates delays and congestion, improves co-ordination, provide good housekeeping etc. while a poor layout results in congestion, waste, frustration, inefficiency and loss of profit.
Capacity Planning: Capacity planning concerns determination and acquisition of productive resource to ensure that their availability matches the demand. Capacity decisions have a direct influence on performance of production system in respect of both resource productivity and customer service (i.e. delivery performance). Excess capacity results in low resource productivity while inadequate capacity leads to poor customer service. Capacity planning decisions can be short-term decisions. Long-term capacity planning decisions concern expansion/contraction of major facilities required in the conversion process, economics of multiple shift operation, development of vendors for major components etc. Short-term capacity planning decisions concern issues like overtime working, sub-contracting, shift adjustments etc. Break-even analysis is a valuable tool for capacity planning.
Production Planning and Control (PPC): Production planning is the system for specifying the production procedure to obtain the desired output in a given time at optimum cost in conformance with specified standard of quality, and control is essential to ensure that manufacturing takes place in the manner stated in the plan.
Inventory control: Inventory control deals with determination of optimal inventory levels of raw materials, components, parts, tools; finished goods, spares and supplies to ensure their availability with minimum capital lock up. Material requirement planning (MRP) and just in time (JIT) are the latest techniques that can help the firm to reduce inventory.
Quality assurance and control: Quality is an important aspect of production system and it must ensure that services and products produced by the company conform to the declared quality standards at the minimum cost A total quality assurance system includes such aspects as setting standards of quality, inspection of purchased and sub-contracted parts, control of quality during manufacture and inspection of finished product including performance testing etc.
Work-study and job design: Work-study, also called time and motion study, is concerned with improvement of productivity in the existing jobs and the maximization of productivity in the design of new jobs. Two principal component of work-study are: Method study and Work measurement
Method study has been defined as the systematic recording and critical examination of the existing and proposed ways of doing work, as a means of developing and applying easier and more effective methods and reducing costs. Method study when applied to production methods yields one or more of the following benefits:
- Improved work environment
- Improved facility layout
- Better utilization of facilities
- Greater safety
- Lesser materials handling
- Smooth production flow
- Lower work-in-process
- Higher earnings for the workmen
Maintenance and replacement: Maintenance and replacement involve selection of optimal maintenance Preventive and/or breakdown) policy to ensure higher equipment availability at minimum maintenance and repair cost. Preventive maintenance, which includes preventive inspection, planned lubrication, periodic cleaning and upkeep, planned replacement of parts, condition monitoring of the equipment and machines, etc. is most appropriate for critical machines.
Cost reduction and cost control: Effective production management must ensure minimum cost of production and in this context cost reduction and cost control acquires significant importance. There are large number of tools and techniques available that can help to make a heavy dent on the production cost.
Chameleon – I am not clear if this applies – please have look at the articlehttp://www.gsb.stanford.edu/sites/default/files/research/documents/farfe%20panel%20pfleiderer.pdf
E-Commerce Operations Management
By Marc J. Schniederjans, Qing Cao