Operations Strategy Case Study of Factory

operations Strategy Case Study of pulverisationConsultants Report An Operational suss outofThe pulverisationContents (Jump to)1. Executive thick2. Introduction3. strategical Review4. Operational Issues4.1 movementes4.2 Plant/Equipment4.3 Customers4.4 Contractors/Supply grasp4.5 force play4.6 Environmental4.7 Market/Competitors5. Recommendations6. Further Recommendations7. Conclusion8. Bibliography9. Appendices1.Executive outlineThis Report has place the Pea pulverisation (the manufactory)s cognitive acts scheme as focusing on producing pop crossings, on date and pleasurable the bespoke exigencys of its nodes. It achieves this through and through its look hold upled in operation(p) processes and procedures.Unfortunately these processes and procedures be non without problems, which atomic human activity 18 categorised at a lower place the following headings processes, personnel office, environsal, plant/machinery and market/competition. Problems encoun tered with whole step things tummy be addressed by carrying out a reexamination of the whole process using qualitative and quantitative methods, applying benchmarking techniques and canvassing the whole constitution and applying total quality management methodology.The introduction of computerisation into the administrative process would carry off charitable race error and remove conversation problems within the control room. It whitethorn in any suit contribute the opportunity of reducing bells (over a period), with the removal of personnel.The interpret chain is a fundamental area for focus, as this is polar for the survival of the care. Ensuring the summate chain is running smoothly is not lone(prenominal) an extremely difficult thing to achieve and it can also be extremely costly. The management team deficiency to focus on maintaining effective-hand(a) relations with alone(a) suppliers, contractors and subcontractors.Me very(prenominal) of the issues, m uch(prenominal) as wishing of capacity, the requirement for additional equipment, increased market share etc could easily be change with the acquisition of a adversary. This charters serious consideration, although it obviously requires investment by the parent company. In the meantime however, by implementing the recommendations in this report, the pulverization can and will move closer to achieving sustainable competitive advantage and change productivity, whilst reducing costs.2.IntroductionThis Report has been commissioned to provide an practicable go over of The Pea Factory (the Factory). The trading operations strategy will be identified together with an analytical review creation carried out on the operational problems facing the Factory. Areas such as how the correct process is controlled, the use and guardianship of the equipment, the focus on the customers needs and the use of quality control amongst separate areas.The Report will also make recommendations f or rectifyments to the operation, which will eliminate many an(prenominal) of the problems highlighted. For instance, the introduction of a computerisation into the control room to monitor the process from scribble to finish would remove many of the timing and colloquy issues experienced.In chore the research for this report there were a number of new(prenominal) aspects of the operation that were identified, which would benefit from good and they are also contained within this report.3.Strategic ReviewIn commit to complete a strategic review of the Factory, it is demand to first understand what is meant by the term operations strategy. correspond to slake et al1, it isthe total pattern of decisions and actions which set the role, objectives and activities of the operation so that they contribute to and live the judicatures business strategy.In order to develop an operations strategy, the operations manager has to consider a number of factors such as the needs of custom ers, as well as what the competition are doing. According to door guard(2)an organisation should aim to achieve sustainable competitive advantageThe Factory achieves this by focusing on their customer requirements and by producing a quality product, in a timely fashion and at a probable cost. The qualification to adapt and be flexible in its approach to its customers demands is an eventful feature in the organisations strategy. The Factory concentrates on its core competencies (that of the production of frozen vegetables) rather than diversifying into other products such as pizzas, pies and other products. Specialisation is key to the strategy.Whilst sufficient training is know astir(predicate) the Factorys operations strategy, little is known about the Groups strategy, and how the Factorys operations strategy fits with it, other than to say that they are specialist food producers.4.Operational IssuesA review of the processes and procedures of the Factory using a SWOT (strength s, weaknesses, opportunities, threats) analysis was undertaken (see vermiform appendix 1 attached). This identified several operational problem areas, which have been grouped under the following headings processes, plant/equipment, customers, contractors/supply chain, personnel, environmental and market/competitors.4.1ProcessesThe operations process is coordinated from the control room. Unfortunately the control systems used are manual ones, with any change in process being revise on the board, this manual process could lead to errors, miscommunication and time delays.With the express daily processing capacity, even if there was greater demand, the organisation would not be able to cope. Further, there is little room for error with the strong time line from picking to blanching.Quality issues with stock held in quarantine, and absolute majority peas needing to be run though the Sortex colour sorter, several times, solvents in spare time and cost.4.2Plant/EquipmentThe extensive use of expensive machinery meat that the organisations overheads are high with costly down time through misery ( itemly unplanned). This has a detrimental raise of the Factorys ability to achieve its targets and to fulfil orders, costing the organisation both time and money.4.3Customers hack made packaging for its customers may have a negative effect on the cost base. Satisfying the customers needs is an important aspect of the organisations strategy, but the question needs to be asked, as what cost? In order to answer this question, detailed financial information would be need for analysis.4.4Contractors/Supply ChainThe use of so many contractors in various parts of the process does lead to problems such as communication, control and quality. Differing yields and size containers results in identification and repositing difficulties. Using multiple storage contractors could result in missing stock and lack of quality control. This could result in down time and ultimately affec t the quality of the product.4.5PersonnelFluctuating staff trains at different times of the stratum causes particular problems for the organisation. The need to train and re-train new staff results in delays and errors. Lack of communication causes costly delays. Such seasonal work may not be entirely satisfying thereby creating problems with lack of job satisfaction, and therefore lack of attention to detail.4.6EnvironmentalEnvironmental issues are a major headache. The hold up clearly impacts on the production of the pea crop. The varying weather patterns make believe uncertainty and scheduling issues. The crop rotation cycle also restricts the level of produce provided in any given region at any given time. This limiting factor can result in not enough of the product being available.4.7Market/CompetitorsAn analysis of the competitive environment reveals that there is at least one in camera owned competitor who is using aggressive pricing in the market. There is also the iss ue of the major retailers controlling the market. If one of the retailers decides to stop using the Factory therefore this will negatively impact the level of profitability and sustainability of the business.All of these issues need to be addressed immediately and the recommendations for doing so are highlighted in the side by side(p) section.5. RecommendationsAll operation managers experience difficulties and this is certainly the case at the Factory. In order to achieve operational effectiveness, Slack et al (3), agrees that there should beSmooth customer flow, a clean, well-designed environment, sufficient goods to satisfy demand, sufficient staff to serve customers, appropriate quality of service, a continuous stream of ideas to rectify its operations.What better way to measure a smooth customer flow than to introduce a computerised system which will track the stock, deliveries and every last(predicate) the processes from start to finish. This would require significant invest ment, but would have the benefit of eliminating human error and reducing overhead (by reducing the number of staff required to fulfil the function).Whilst this would affect staff morale, a programme of empowerment should be implemented combined with a reward scheme or action measurement which would motivate the staff to achieve their individual and the organisations goals.A Total Quality anxiety (TQM) process should be implemented, the characteristics of which aremeeting the needs and expectations of customers, covering all parts of the organisation, including every person in the organisation, examining all costs which are elated to quality, especially failure costs, getting things rightfield first time, develop systems and procedures which support quality and improvement, developing a continuous process of improvement.4Using a process flow chart (similar to that shown in Appendix 2) would help to clearly key out what happens during the operations process and therefore show up the problem areas. Input-output analysis could be undertaken. Further analysis could be carried out using drive off diagrams, cause-effect diagrams and Pareto5 diagrams.The issue of the limited daily processing capacity could be amend with the purchase of additional equipment. spare quality checks should be introduced into the process in order to eliminate time wasting through re-sorting the product, and the down time of equipment. This could be done through benchmarking or other continuous improvement mechanisms. According to Deming the PDCA6 (plan, do, check, act) cycle should be used, alternatively business process re-engineering which has been very popular recently. That isthe fundamental rethinking and radical redesign of business processes to achieve hammy improvements in the sarcastic, contemporary measures of performance, such as cost, quality, service and speed.7Although this has been criticised as being the latest fad, as well as being an excuse for removing personnel and it could ultimately result in the loss of essential experience from the Factory.Additional preventative maintenance should be scheduled which would help resolve part of the issue of the unplanned downtime. The employment of an additional maintenance person would also speed up the process.The issue of bespoke packaging of the product for the customer should be debated within 2the management team. If uniform packaging is introduced, this could result in a reduction in costs. However this needs to be 3carefully weighed up against the customer needs and ultimately deciding not to purchase from the Factory. A customer quality survey could be conducted in order to detect the mathematical effect of this suggestion.The supply chain is also a critical area for the Factory to keep tight control on. According to Waller8The supply chain is a complex network of suppliers, manufacturers and distributors whose ultimate objective is to provide goods and services to the client in a timely man ner. The dependableness of this supply chain depends on all the people in the network, plus the reliability of all the equipment employed including transportation vehicles, sophisticated machines and computer based information systems.The use of contractors is a major issue that needs to be addressed. stiff contracts should be drawn up setting out the conditions of the relationship (if it has not already been done) with penalties for missing certain key targets being made. Consideration should be given to the Factory acquiring its own transportation, storage and packaging facilities.By focusing on the JIT (just-in-time) approach within the operation, it may moreover improve and simplify matters, as, according to Slack et al9JIT is a disciplined approach to modify overall productivity and eliminating waste. It provides for the cost effective production and delivery of solo the necessary quantity of parts at the right quality, at the right time and place, while using a minimum am ount of facilities, equipment, materials and human resources. JIT is dependent on the balance between the suppliers flexibleness and the users flexibility.The need to keep a close tenderness on inventory is essential for the Factory, and to keep it as low as possible, thereby freeing up essential funds for other areas of the business.The Factory needs to address all of these issues as a matter of urgency. any(prenominal) of the recommendations identified here would involve capital investment. Therefore, further analysis would need to be undertaken once the necessary financial information is available, in order to present a robust business case to the parent company. The Factory needs tosecure essential increases in productivity (which) requires the combined efforts of all functions. The increased use of technology has resulted in maintenance making a major contribution to the effective efforts in most business10)In addition to the problem areas identified above, there are other ar eas that could be improved in the future, and these are mentioned in the following section.6.Further Recommendations get is an area that is significant to the business, as Slack et al11)suggestspurchasing at the right time and in the right quantity can impact on the operations performance in terms of delivery, speed, delivery reliability and flexibility.A separate review of the purchasing process and department should be initiated at some stage.Undertaking a financial review may also identify further improvements or reductions within the business (environmental, taxes, transportation and discharge costs). Using forecasting tools such as qualitative and quantitative methods to more(prenominal) accurately predict risks, time horizons, and economic indicators could also identify further areas to improve.Other problem areas that may be addressed include the environmental influences on the Factory. It should be possible to produce product all year using the poly-urethane tunnels that a re seen in the countryside. The use of such tunnels would extend the outgrowth period and lifecycle and allow pea production to take place all year, without the peaks and troughs that are currently happening. Further, if the organisation wanted full control of its entire process, then perhaps it should consider the acquisition of land to produce the product itself.Finally, in terms of the competition, we already know that one competitor is privately owned. In order to achieve transformational growth, rather than organic growth and wherefore achieve many of the objectives identified above, the organisation should acquire this competitor. There would, of course, be issues with the merger of another organisation into its current business, but the increase in market share, the ability to produce more products and the access to additional equipment that this would bring, would wait to be an obvious answer to many of the problems. A thorough business case would have to be submitted to the parent company to qualify and quantify this proposal.7.ConclusionThe operations strategy of the Factory is aimed at producing quality goods, on time and to their customers exacting requirements. This is achieved at the Factory, but at what cost? A thorough review of the Factory has revealed a number of areas that can be improved.Areas such as by identifying the process through the use of flow charts, then any weaknesses can be readily identified. The three quality checks that are currently undertaken is insufficient to prevent quality issues occurring, therefore additional checks should be implemented. Computerising the operations process would eliminate communication problems and speed up the process together with reducing costs.Focusing on JIT and TQM would enhance the process further. Not forgetting staff morale. Their input is critical in ensuring the process runs smoothly, whether it is the manual or computerised method. Including reward schemes and introducing empowermen t is a means of involving the staff in the process and in achieving the goals and objectives of the organisation.If the parent company is volition to invest further, then transformational growth can be achieved by acquiring a competitor, land, a haulage company and by producing its own packaging. In order for the parent company to consider this, a business case would need to be produced, justifying the recommendation.The Factory has a great number of strengths, not least of which is its location, quality product and specialist knowledge, however, by addressing its operational weaknesses and threats, it is possible to achieve sustainable competitive advantage and to continue to achieve its operational strategy, goals and objectives.8.BibliographyCheng TCE, Podolsky S (1993) Just in Time Manufacturing, Chapman Hall (Pages 21 175)Fitzsimmons JA, Sullivan RS (1982) value trading operations Management McGraw Hill (Pages 7 25)Hill, Terry. (2002) trading operations Management Strat egic setting and Analysis, Basingstoke Palgrave ( rascals 184-547)Johnston, R. Clark, G. (2001) Service Operations Management, Harlow FT/Prentice Hall (pages 25 73)Johnston R, Chambers S, Harland C, Hanson A, Slack N (1997) Cases in Operations Management financial Times, Pitman Publishing 2nd Ed (Pages 5 503)Lowson, R. (2002) Strategic Operations Management The New Competitive Advantage London, Routledge (Pages 5 158)Muhlemann, A. Oakland, J Lockyer, K. (1992) payoff and Operations Management, 6th Ed, Harlow FT/Prentice Hall (Pages 63-150)Slack, N. Chambers, S. Johnston, R. (2004) Operations Management, Ed 4, Harlow, Pearson Education (pages 5 798)Sutherland, J. Canwell, D. (2004) Key Concepts in Operations Management, Basingstoke Palgrave (Pages 19 117)Taylor, D. Brunt, D. (2001) Manufacturing Operations and Supply Chain Management, London Thomson Learning (Pages 5 37)Waller, D.L. (2003), Operations Management a supply chain approach, London, Thomson Learning (pages 88 595)Wild, R (2002) Operations Management, London Continuum (Pages 17 187)www.cips.orgemailprotectedAppendicesAppendix 1 SWOT AnalysisAppendix 2 Flow Chart of the Factory Pea Production Process1Slack N, Chambers S, Johnston R (2004) Operations Management Ed 4, Harlow Pearson Education p77Michael Porter from Lowson R (2002) Strategic Operations Management The New Competitive Advantage, London, Routledge, page 2944,5, 6, 7 From Slack et al p695-696567238 Deming from Wild, Operations Management p 6369 Slack et al p548110 Hill T, (2002) operations Management Strategic Context and Analysis, Basingstoke, Palgrave p184111 Slack et al p478