The customer numbers in London Zoo are greatly affected by factors such as holidays, weather, London Zoo accordingly has to change its capacity, managers will sometimes have to anticipate the visitors figure, thus the variation dimension of it is high. While, Executive Holloware Oilpartz Ltd processes with moderate-variation.
The visibility dimension
As we mentioned before, the goods of Oilpartz Ltd and Executive Holloware is low-customer contact, their visibility dimension is thus low-visibility. By providing face-to-face service to customers, London Zoo has a high-visibility.
The Objectives of operations
Every company, no matter what goods or service they provide with to their customers, has its own operations objectives. Basically, there are five ‘performance objectives’ and they apply to all types of operations.
-
You would want to do things right; that is , you would not want to make mistakes, and would want to satisfy your customers by providing error-free goods and services which are ‘fit for their purpose’. This is giving a quality advantage to your company’s customers.
-
You would what to do things fast, minimizing the time between a customer asking for goods or services and the customer receiving them in full, thus increasing the availability of your goods and services and giving your customers a speed advantage.
-
You would want to do things on time, so as to keep the delivery promises you have made to your customers. This is giving a dependability advantage to customers.
-
You would want to be able to change what you do; that is, being able to vary or adapt the operation’s activities to cope with unexpected circumstances or to give customers individual treatment. This is giving a flexibility advantage to the customers.
-
You would want to do things cheaply; that is, produce goods and services at a cost which enables them to be priced appropriately for the market while still allowing for a return to the organization. This is giving a cost advantage to the customers.
Here is the overview of detailed meaning of performance objectives to three companies.
Detailed meaning of performance objectives
** Those with shadings are of extreme importance to the companies.
Main problems in the cases
In the three cases, because of the different outputs of those companies, some of the performance objectives are critical and vital to certain companies, while some are of less importance. In order to meet those objectives, operations managers have to tackle those complex problems such as quality planning and control, , capacity planning and control, operations improvement, etc. In the following article, we will go through the problems in the companies.
All operations regard quality as a particularly important objective. In some ways quality is the most visible part of what an operation does. Furthermore, it is something that a customer finds relatively easy to judge about the operations. Quality is important to Oilpartz Ltd, because they’re the professional producing company of those complex and special components; quality is important to Executive Holloware, because they’re aimed at top end of the market and commanded high price, and their poor quality has been a burden on the cost; quality is important to London Zoo, because they want to increase visitor numbers in order to survive in a hard time for zoos.
Fortunately, by carefully selecting the order types and giving full attention to each step, Oilpartz Ltd manages to maintain an exceptional quality almost all the time. But story is not the same in Executive Holloware and London Zoo. The biggest problem they are facing is quality. There’s 5% of return of products from the retailers, and 5% of rejected from the final inspection stage in Executive Holloware. London Zoo is totally not sure how customers judge the quality of the service they provide.
When we are diagnosing quality problems, we first should check whether the product or service meet the expectations of customers, and whether there’s gap between the customers’ perceptions of the product or service and their expectations of it. If the latter exits, there must be other gaps elsewhere. They are:
Gap1: The customer’s specification-operation’s specification gap
Gap2: The concept-specification gap
Gap3: The quality specification-actual quality gap
Gap4: The actual quality-communicated image gap
In Executive Holloware, there’s an obvious gap between quality specification and actual quality. We can see that there is high frequency of scratches and bruises in the assembly line, even the final goods which arrive to the retailers exit the same problem. They don’t have a clear definition of what is scratches and bruises, what is the standard of semi-finished and finished goods. The internal quality services are rather poor, workers don’t care what kind of semi-finished goods they are ‘throwing’ to the next stage.
Meanwhile, by doing the questionnaire, London Zoo is trying to find out the gap between service concept and the way the organization has specified the quality of the service internally, the gap between the customer’s specification and operation’s specification of quality.
Quality planning and controlling
Quality planning and controlling can be divided into six steps:
Step1: Define the quality characteristics of the product or service.
Step2: Decide how to measure each quality characteristic
Step3: Set quality standards for each quality characteristic.
Step4: Control quality against those standards.
Step5: Find and correct causes of poor quality.
Step6: Continue to make improvements.
Step1: Define the quality characteristics of the product or service.
Executive Holloware’s internal quality assurance department only inspect the final goods in the daily work, however, those quality problems lie in each step. They should give a clear definition of quality to every semi-product phase, explaining what is ‘scratch’ and ‘bruises’ to the workers on each step.
By doing the questionnaire, London Zoo is trying to define their quality of service. It is good for them to develop the explanation of zoo service by means of benchmarking the 18 determinants of service quality. In their anticipation, the performance score will give out the perception of the quality, and the priority scores will give out the customers’ expectations. Since resources such as investment of money, human resources, are not sufficient enough for all the improvement. London Zoo tries to find out ten priorities to be first considered, if the final score doesn’t match the recent performance scores, that means, London Zoo has to improve those criteria. By looking at the table of priority overall scores, we first pick up ten aspects and compare them with the performance scores.
It is obvious that those 10 priorities are what customers expect from visiting the zoo. Although customer choosing criteria may change under different situations, for example, parking is critical when visitors are over 6000, however, it is not included into the 10 priority by looking at the overall scores, the overall scores are by far the balance of the whole situation, those gaps with the negative scores are urgent to be met, the more negative the score is, the more urgent the situation should be changed.
Step2: Decide how to measure each quality characteristic.
All quality definition should be able to be measured with the quantitative figure or describable peculiarity. In Executive Holloware, dimensional accuracy can be measured on a continuously variable scale (for example, diameter, length) scratches and bruises can be measured with attributes which are those assessed by judgement and are dichotomous, i.e. have two states, (for example, smooth or not smooth) .
In London Zoo, the quality characteristic can be given a continuously variable scale as well as the attributes. For example:
Step3: Set quality standards for each quality characteristic.
Not leaving the quality problem to the last step, each semi-product leaving each step in Executive Holloware should has its own standard, otherwise, it can’t be passed to the next stage. By given a clear definition and measurement in the last two steps, it’s easy to set up the quality standards in this step.
This step is critical to London Zoo, because without a good standard, everything will still be in a mass. What they should do next is to find out what the acceptable level of each quality characteristic, for example, how many animals customers are hoping to see in the zoo. They can do it with more customer surveys or adopt some benchmark in other zoos.
Step4: Control quality against those standards.
Not only just inspect the final products, QA department in Executive Holloware should also pays attention to each step. That will give the company a complete controlling system.. Moreover, workers on the assembly line should be incentive to inspect the quality spontaneously.
Since London Zoo provide service to the customers, except for those objective quality characteristic, they should have good control of the service quality of their staff. From the performance score, we can see that those staff helpfulness, catering etc are extremely low, in order to give the customers a complete image of the zoo, employee performances will be a important controlling point.
Step5: Find and correct causes of poor quality.
With a solid standard in each producing step, Executive Holloware will be able to trace back the origin of the quality problem and mend it. Maybe the operation method is wrong, maybe the process is not capable enough. Those sampling basis inspection should be concentrated on one batch of products, not like the way Paul Stone uses, he takes a random sample at various stages, which can’t explain the origin of the problem.
Step6: Continue to make improvements.
Since operations improvements are concerned with all aspects of operations management, we will discuss about this theme in the last part of the article.
- Capacity planning and controlling
Oilpartz Ltd and London Zoo’s performance objectives in speed, dependability, flexibility are tightly related to capacity planning and controlling. Oilpartz Ltd has to work out the timesheet for the complex orders, and London Zoo experience difficulties when the visitor figure is big. Capacity of an operation is the maximum level of value-added activity over a period of time that the process can achieve under normal operation conditions.
When we are trying to do the capacity planning and controlling, we usually follow three procedures, they are:
Step1: Measure the aggregate demand and capacity levels.
Step2: Identify the alternative capacity plans.
Step3: Choose the most appropriate capacity plan.
Step1: Measure the aggregate demand and capacity levels.
The visitors in London Zoo are largely influence by weather and holidays, the demand is rather hard to predict, however, its loading is infinite.
The demand for Olipartz Ltd is relatively stable, since its loading capacity is finite, they have to carefully calculate the capacity before giving promises to any customers. Without considering the Nitro chemical orders, the average ratio of load/capacity for processing machinery and for operators are 1.8 weeks and 2.1 weeks, the shortest delivery time is 3 weeks, theoretically, they are able to accept some extra work. Adding the demand of Nitro, those two figures go to 2.2 and 2.78, but Nitro asks for the goods in two weeks, it seems that they have to work overtime or deny the order. However, since they have two turning machines, and considering the bunching of load, things may be different.
Step2: Identify the alternative capacity plans.
London Zoo may chase the demand plan in the way of varying the size of the workforce or using part-time staff in order to meet the fluctuated demand, or they can manage demand like giving special offers in those off-peak time, etc.
Without consider the Nitro order and working overtime, we first design the Gantt chart ( Appendix 1) in three ways, they are
- Due date (DD)
- First come, first served (FCFS)
- Longest operation time first (LOT)
In the three ways, bunching of load in turning process are all considered, since the deliver date of Gamma Gases and Delta Engineering are quite late, the bottle neck will be on Alpha Oil and BP. But in the last two ways, products of AL are first to be produced, that’s why they can’t deliver the goods to BP on time. When we see that DD is efficient, we then consider of adding the demand of Nitro Chemical, fortunately, the work can be done on time.
Step3: Choose the most appropriate capacity plan.
Economically, using part-time staff and facilities, managing demand in London Zoo will be better ways. And for Olipartz Ltd, producing in the sequence of Due Date will solve all the problems, thus the company will deliver the goods to all the customers without working overtime and any delay. The cost is controlled, profit is made, performance objectives are reached.
Since the customers’ expectations are changing all the time, operations improvement will thus never stop. For those three companies, after they solve the urgent problems, they will have to look back again the performance measurement. Sometimes, they will have to find new performance standards and make continuous improvements or breakthrough improvement. The operation managers have to do the “trade-off” all the time.
