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Key Topics
- Requirement
- Solution
- Executive Summary
- Operation Layouts and Process Types with Reference to four V’s Model
- Improvisation in the Present Production Layout of the Smog Co.
- Benefits from the Improved Production Layout by using Distinct Measures of Performance
- Implementation of ERP System
- Usage of Lean, Agile and JIT Concepts in the Implementation
- Conclusion
- REFERENCES
Requirement
OPERATIONAL RESEARCH
Solution
Executive Summary
The operations management is being defined as those functions of the business which perform the various activities of controlling, organizing, planning and leading the resources which are needed in order to produce or generate the products and the services of the organization to create the value. Further, to study the operations management deeply, the case of the Smog Co. production system has been taken. Further, the report will help in understanding how the company changed the production system and how it went wrong to some extent. Moreover, the report will help in understanding that how distinct layout of the operations and the types of processes are estimated as the most appropriate one for the production of distinct products in accordance to the model of four Vs. Then, the present layout of the company will be accessed in order to improve and define the advantages of shifting to a more suitable layout. Further, the importance of the ERP system will be addressed which will help the company in order to solve the issues like surplus or shortage of the stock, damages of stock, increased cost and how the ERP system will help the company in achieving sustainable competitive advantage.
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Operation Layouts and Process Types with Reference to four V’s Model
The operation layouts and the types of processes can easily be demonstrated as the nexus of the organization where direct labor takes place. If we take the case of Smog Co. then we can easily say that the operations of the company are task-oriented and follows the adequate steps till the service is not completed (Slack et al., 2013).
Further, the model of four V’s has been used in order to show the appropriateness of operation layout and the type of processes. The examples have been taken in order to show the appropriateness by using the model of four Vs. Further, the processes of the operations have a single thing that0 is in common, they take the inputs such as knowledge, raw material, equipment, capital and time and then transform these inputs to outputs. Furthermore, in order to perform this activity, four V’s model is used i.e. variation, variety, visibility, and volume.
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Volume: McDonald's has a huge volume and offers a product at a low cost. The volume of their operation is the way they organize their business. The operations of the business are in systematic order despite the repeatability of the operations.
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Variety: Let us take the example of the taxi and the bus service. A bus had the specific and defined schedule and route whereas, the taxi has a greater dimension of variety as it will pick you and drop you at the desired place. Therefore, it can be said that the model of low cost can be easily gained with the minimum variety.
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Variation: Let us take the example of building contractors, who build homes by showing a catalog and the other one provides customized homes so that the person can walk through and take the decision. Therefore, the second company has a greater cost level and the reduced volume as compared to the other company.
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Visibility: This focuses in tracking the order and experience of the customers by the process of operations. For example, the courier companies have the greatest visibility as the orders can be tracked and the companies of web design have the lower visibility as compared to the courier companies.
Therefore, it can be understood from the above-given examples that the Smog Co. should carefully barrel with these aspects in order to ensure a sustainable competitive edge and maximize the profitability (Pahl, G. and Beitz, W., 2013). Further, this will help the company to create the value and satisfy the customers according to their changing needs without even changing the layout of the operation.
Improvisation in the Present Production Layout of the Smog Co.
The production layout of the Smog Co. can be improved which will help the company to solve the issues which it is facing at present like the company will be able to improve the quality of products by satisfying the changing needs of the customers, shortage and the surplus of stock, increased cost, damages of the stock, etc. Further, the improved production process or layout is given for the company which the company can use to maximize the competitive edge and profitability (Malakooti, B., 2013).
The engineered components will be received, and for the process of assembling, they will go through the fabrication line for part A of the components. Similarly, there will be separate fabrication lines for part B and C of the engineered components. The technique will be capital intensive and will not at all be labor-intensive. Further, the products will be assembled at the assembly line, and they will be further tested in order to ensure that there will be no damaged product and whether there will be a surplus or shortage of stock. After the testing of the products, the stock will move to the store of finished products and they will be further packed and labeled for the final shipment of the product. This process will help the company to keep the stock for a longer period of time even if it is not required by the customers at the present time. The product will not get damaged because the technique is capital-intensive based (Hill, A. and Hill, T., 2012). This production layout will not become outdated even if the demands of the customer changes with time. This layout will help in creating a balance among the stock level, and the Smog Co. will be able to achieve a sustainable competitive edge for a longer period of time.
Benefits from the Improved Production Layout by using Distinct Measures of Performance
There are various benefits that the company will get if it will use this improved production layout (Canen, A.G. and Williamson, G.H., 2013).
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The process will include the less time of flow of the product from the stage of input to the stage of output, and the product will not get damaged at any step.
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The planning of production and control will be easy, and it will include less labor as it will be capital intensive based.
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There will be less occurrence in the cost of material handling.
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It will ensure that there will be no shortage or surplus of the stock as it will be capital intensive based and the labor will ensure about such things with ease.
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The machines will not get affected because of the repetition of the jobs.
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There will be a minimum inventory of work-in-process will be required.
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It will help in creating a balance among the levels of the stock.
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The company will be able to create the value and will be able to maximize its profitability.
Further, the company can use the performance measure of the supply chain in order to maintain the balance between the quality and the quantity of the products. Moreover, this performance measure will help the company to know when to minimize the cost of the product and minimize the level of inventory. This will help the company to reduce the probability of the stock out. Also, customer loyalty and responsiveness will increase. Further, the company will be able to analyse the duration of hours take place in the particular activity and what will be the total price of the complete engineered product (Estampe et al., 2013). The performance measurement of the supply chain will help the company to estimate the capacity of the system and further, it will help in maintaining the machinery as the technique will be completely capital intensive based.
Implementation of ERP System
Smog Co. can implement the ERP system in order to increase the productivity and the profitability of the company by satisfying the changing needs of the customers.
Initially, the project team will be developed which will identify the main causes and the solutions of the company while implementing an effective ERP system. Further, the project team will work on the configurations for the implementation of the system and the various standard procedures will be documented (Kurbel, K.E., 2013). Then the phase of development will take place which will include various activities like customizations, training and the importing of data. Further, the testing of the software will occur, and the employees will be given adequate training so that they can perform their task effectively and efficiently. Then, the ERP system will be employed in order to check the validation. Further, the changes will be made in the ERP system according to the configuration.
If the Smog Co. implements the ERP system, then the company will be able to achieve various advantages like (Madapusi, A. and D'Souza, D., 2012):
The company will be able to increase the visibility into the various processes of the organization. And the company will be able to have a cross check on the various issues at the initial stage only.
There will be a coherent and automatic workflow from the single function to the other in order to make sure the smooth and quicker transition of the process.
The company can also use the functionality of the business intelligence which will provide greater insights to the processes of the business in order to identify the areas for improvement.
The company will be able to identify the reasons for the surplus and the shortage of stock.
The company will be able to unfold the reasons for the high cost of the product and the damage to the product.
The company will be able to keep track of all the engineered components once they are entered in the organization.
Usage of Lean, Agile and JIT Concepts in the Implementation
The Smog Co. will be using the Lean concept like the company will specify the value for their work and what they provide to their customers. Then, the company will unfold the value stream in order to configure the various activities which sometimes deliver value and sometimes don’t. Then, according to the concept of Lean the company will ensure that all the processes of the business are connected so that the unnecessary and interrupted detours can be removed for the success of the company. Moreover, if the Smog Co. will use the concept of Agile, then the companies will be able to spend more time and effort in documenting the actual flows of the business process (Sharma et al., 2015). By using this approach, the company will be to keep track of all the products and services until they are shipped to the customers. Furthermore, the Just in Time will help the company to keep track of the stock and will allow the company to drive the spontaneous need as compared to the projected sales. Further, this concept will help the company to streamline the process of production (Green et al., 2014). Therefore, by using these concepts, the Smog Co. will be able to achieve sustainable competitive advantage and the company will be able to maximize its profitability.
Conclusion
It can be clearly understood from the above-given information that the Smog Co. will be able to improve their production layout or process which will help the company to identify and solve the issues which they are facing at present. Further, the company will be able to provide the products and services to the customers according to the changing needs of the customers. Also, the implementation of the ERP system will be beneficial for the company to a great extent and the company will be able to create the value and will develop a great brand image for a longer period of time.
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Canen, A.G. and Williamson, G.H., 2013. Facility layout overview: towards competitive advantage. Facilities.
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Estampe, D., Lamouri, S., Paris, J.L. and Brahim-Djelloul, S., 2013. A framework for analyzing supply chain performance evaluation models. International Journal of Production Economics, 142(2), pp.247-258.
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Green, K.W., Inman, R.A., Birou, L.M. and Whitten, D., 2014. Total JIT (T-JIT) and its impact on supply chain competency and organizational performance. International Journal of Production Economics, 147, pp.125-135.
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Hill, A. and Hill, T., 2012. Operations management. Palgrave Macmillan.
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Kurbel, K.E., 2013. ERP System Implementation. In Enterprise Resource Planning and Supply Chain Management (pp. 159-188). Springer Berlin Heidelberg.
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Madapusi, A. and D'Souza, D., 2012. The influence of ERP system implementation on the operational performance of an organization. International Journal of Information Management, 32(1), pp.24-34.
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Malakooti, B., 2013. Operations and production systems with multiple objectives. John Wiley & Sons.
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Pahl, G. and Beitz, W., 2013. Engineering design: a systematic approach. Springer Science & Business Media.
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Sharma, V., Dixit, A.R., Qadri, M.A. and Kumar, S., 2015. An interpretive hierarchical model for lean implementation in machine tool sector. International Journal of Productivity and Quality Management, 15(3), pp.381-406.
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Slack, N., Brandon-Jones, A. and Johnston, R., 2013. Operations management.
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