operations management

University Degree Business and Administrative studies

Operations Management

‘Design House Partnership at Concept Design Services’

Lawrence Britt

Introduction

Businesses continually need to make decisions, whether it has to find a cheaper way to carry out tasks in the production department to choosing which marketing campaign they will use.

The operations manager must decide on their overall operations approach built on their business strategy. The manager must design processes on a day-to-day basis, ensuring there is appropriate delivery of their service.

Importantly the company must continually seek out ways of improvement to create and deliver products and services.

CDS Model of Operations Management

Operations strategic objectives

Villessi & Design Operations strategy

House Partnership

Inputs Output

Out-Sourcing

“Focus” products

(Operations Management, Slack, N, 4th edition)

We can see from the above diagram the overall picture of CDS. The inputs are entered into the transformation, where designs are passed to manufacturing then are produced and distributed as outputs.

The objectives of the company are used as a template for the strategy of CDS’s operations, which will over see the designs and production of it products. There is also involvement from its design partners that will influence the operation strategy and designs of products. It has been said that the manufacturing department see more of their Design House partners more then their own and that the Villessi partners are always in the factory.

From this, we can see that the most important part’s of CDS’s operations for the operations manager is the good co-operation and communication between three departments design, manufacturing, planning and distribution.

CDS activities of core functions

These are the three core functions within CDS, which is central to the company because it produces the goods and services, which are its main reason for existing. The product development and operations go hand in hand, as designs are created and tested then assembled and sold.

Operations management is important to CDS, as planning and managing these processes are key to the company’s success. CDS must make sure all its transformation processes, which create inputs into outputs, operate smoothly.

The third marketing and sales is important as this segment creates sales volume through advertising the products ...

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The third marketing and sales is important as this segment creates sales volume through advertising the products and attracting business. It helps in determining sales targets and positioning the company within its markets. Due to the firm selling on a business-to-business basis, it is essential that they can meet changes in its customer’s demands. It is important that CDS try’s to market itself as a quality brand that is unique in the products of home ware goods, as they do not sell directly to the consumer they need to attract the business that do which means that their client base is more narrow

Profile of CDS using a typology of operations

Volume

Low High

Variety

High Low

Variation

High Low

Visibility

High Low

(Operations Management, Slack, N, 4th edition pg25)

Volume Dimension

As CDS is a manufacturing company it can be said that, its volume dimension is quite high. This is because of the repeatability of the production tasks carried out by its employees and the systemisation of the work. As shown by the company’s transformation process all production is carried out in the same, way from designing to manufacturing, to planning and distribution. By doing this, its employees are specialised in their area of operations for example a certain team of people are specialised in creating new moulds for new home ware products.

Variety Dimension

The variety of CDS can be considered low. This is shown in its manufacturing operations where they are able to use the same workforce to make three times more items per minute increasing its productivity by 60 percent. This is because of the introduction of the new larger machines. Meaning that the firm is able to standardise more effectively, “as any mould could fit any machine”. (Case study, Grant Williams, CDS Operations Manager)

This allows more flexibility as they are able to change product moulds to meet changes in product demands. By doing, this CDS is able to minimise waste and disruption in day-to-day operations design, which will result in low operation unit cost.

Variation Dimension

The distribution service department was regarded as being at the lowest of the company’s customer service drive. Its purpose was to integrate the effects of design, manufacturing and sales by planning the flow of products through the distribution centre, to the customers.

The planning of its operations aims to maintain high utilisation, manager, Sandra White, “that anticipation of demand in new home ware products is difficult to forecast”. (Case study CDS) The nature of the products makes scheduling difficult as these home ware products are sometimes fashion items and seasonal this means that these types of products have a short life cycle. With promotions being organised at short notice this also adds to planning problems. Again, by being flexible in the manufacturing operation it can meet changes in demand. This is why CDS has a high variation in demand.

Visibility dimension

CDS can be said to be a high and low visibility operations. The workforces that perform the vital tasks such as manufacturing the products have little contact with the customers. They are usually centralised to the factory area and are highly staff utilised. Where as, the employees at the planning and distribution operations provide a service in which they need to have good customer service contact skills as they deal with their clients, receiving their request and meeting new customers. Customer satisfaction is met by quality of service as well as CDS’s products. This is shown by the focus brand, as they are very important clients, failure of this could lead to upsetting the customers and losing their account if delivery was to be missed.

(Operations Management, Slack, N, 4th edition)

The polar diagram shows that CDS have a high quality rate but their dependability and speed are not as high quality as it should be. The company needs to focus on bringing cost down as low as possible so that they can equalise each position.

Improving operations

A lean production approach can be introduced to CDS operations. This aims to reduce the quantity of resources used up in production. Lean producers use less of everything, from factory materials, stocks’ and time. As a result, it raises productivity and reduces costs. The number of defective products is reduced, lead times are cut and reliability improves. CDS will be able to design more products faster and give their customers a wider variety of products to choose.

The main concept of lead production is Kaizen, which means continuous improvement. (Operations Management, Slack, N, 4th edition pg652) By being able to change moulds faster, CDS can reduce change overtimes

Both CDS and its employees would benefit from teamwork. Effective team working requires co-operation between workers and management or even management them selves.

It can be noticed that the managers have different opinions to one another, we can see that the planning manager Linda Fleet, who feels that the manufacturing of designs has no limitation and that any type of product could be produced. Whereas, Grant Williams who believes that designers ‘don’t seem to understand the consequences or the implications of their design decisions’.

By developing, a team spirit the company will improve motivation and productivity; teams will plan their own work schedules, share out put tasks, choose methods of work and solve their own problems. This will lead to quicker decision making and create more ideas. As team-working results in improvements of communication and labour relations.

Cell production can also be introduced into CDS’s manufacturing; this will divide the shop floor into cells, which occupy an area, and focuses on the operations production of a product family. This is a group of products which require a sequence of similar operations for example a cell can be creating tests out on new moulds for new product ranges. This will eliminate CDS’s delays in manufacturing processes that currently occur when they have to pre arranged new mould tests.

Specific cells can be created to be responsible for specific tasks such as designing, planning and maintenance.

If CDS decide to introduce cell production the advantages it will give them is it encourages team working, cuts lead-time, improves product flexibility and more floor space is freed up because cells use less space than a leaner production line.

By being able to free up more floor space CDS can allocate this to producing the Focus brand products in house again, this will then leave them safe in the knowledge that the quality and lead times to delivering them to the customer are met. This will save them the cost of outsourcing the production and the fear of losing a large client.

Good communication is also important, this can only happen if information is sent, received and understood.

There seems to be a lack of communication between the companies departments, this could be why they have problems with forecasting its sales and production levels and the differences in understanding the limitations of manufacturing new designs. Horizontal channels of communication then help CDS to plan and forecast more effectively. For example, the marketing department can co-operate with the planning department to accurately predict sales forecasts and allow the manufacturing department time to meet production targets and meet stock levels.

Forecasting is an issue with CDS when planning for sales in its products.

The company can use two approaches to this forecasting problem; CDS can use qualitative methods, as well as qualitative techniques, which is used to mould data. A panel approach can be introduced to CDS when forecasting and CDS can allocate a day for all the managers in each department to act as a panel so that they can discuss and give their opinions.

In the meetings they can use time series analysis, which will examine past patterns in sales as it gathers information overtime, which then the managers use to predict future behaviours. However, by using these methods to forecast sale of products it still does not mean they will be accurate in their predictions, as information will sometimes be in accurate as it is down to human judgement and no one can foretell the future events. Demand may not be high as expected or a machine can breakdown and make manufacturing difficult to meet sales targets. (Operations Management, Slack, N, 4th edition pg652 pg196)

Conclusion

In conclusion, if CDS introduce lean production it will lessen their use of resources and cutting their cost down but their productivity will be high and they will be producing more in the short term. The company needs to make sure that their managers are on the same path and each voices their opinions and then come to an amicable decision.

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