Discussing The Process Of Operations Management Information Technology Essay

Discussing The Process Of Operations Manage handst Information applied scholarship EssayOperations focus is a do work of managing resources essential for ingatheringion and deliverance of the carrefours and processs. Its grassroots quarry is to improve the amount of value-added activities in distributively of the processes.The part of the confederacy that is entrusted with this process is the appendages answer. As each and every organization produces products they all atomic subject 18 bound to gift trading operations function. The people responsible for managing the operation functions resources argon known as operations managers. In different type of organizations they may be cal conduct by different names like in supermarket they are store manager, etc.This report demonstrates the three operations management techniques which helped the companies improve their barter activities and performance. They were tack on Chain Management (SCM)Enterprise Resource Plan ning (ERP) resume eccentric Management(TQM)In this report the case studies involving the imposeation of the above three techniques are explained. The benefits experienced by the companies and any veers they could have make to maximise them are in any case mentioned.Supply Chain Management (SCM)Supply chain management consists of coordinating the material and selective development flow, and the finances betwixt the supplier, manu positionurer and the consumer. Its master(prenominal) object lens is inventory reduction assuming that when products are needed they are available. The supply networks are made up of Supplier-buyer blood. The flow of Supply chain management flows potful be divided into three partsThe productThe informational flowThe financial flowThe behavior of the supply chain is dynamic and is known as bullwhip effect. This inhabit that if on that point are piffling exchanges happening at the end of the supply chain they start create changes at the star t of the supply chain. The reduction of the bullwhip effect dirty dog be achieved byEfficiently distributing the information by connecting all the operations to the demand source.Establishing a similar close making process on the entire supply chain.Increasing the efficiency of the operations by eliminating sources of waste.Supplier woodland managementThe basic need of any accompany from their suppliers is the deliverance of good whole tone products on right age. The crush apply of improving the pure tone of product is by improving the quality of raw materials supplied by suppliers.SQM can be implemented by following the practices mentioned belowEstimating and finding the cost incurred imputable to poor supplier qualityThis is in any case known as COPQ (Cost of poor quality). The COPQ can be calculated from the followingThe cost incurred due to scrapping and re on the job(p).The closedown of our assembly line due to defective products.The costs of shipping back the defec tive products to suppliers and the stock-purchase warrant costs.Developing a clay for recovering our costsIn this, the suppliers are charged back for furnish poor quality products. Here, we must include non lone(prenominal) the material costs but also the non-material costs like packaging defective products, their transportation costs, etc.Auditing and rating of suppliersThis is the most discerning counselling of checking whether our suppliers are conforming to our mentioned processes, quality dusts, transporting, etc. It can be through with(p) once every stratum for all of our suppliers.The advantages gained by companies by having effective supply chain areThey have low living and real costs.They can urinate delivery of better value and have repeat of business with the customers.They can easily remove waste from the process.They get more turnover profits and can make capacious term syllabuss for the future.Summary of Case study for Supplying fast fashionThis case stu dy best demonstrates how the garment retailing business is carried go forth in this dane age.It shows how the different fashion motifs which would non have been crimson considered by a retail store can halt-up the ghost must-have in a short period. The working of top retail distinguishs like HM, Zara and Benetton is been explained. It explains the quicker-picker-upper fashion concept which has made Zara, HM todays leading retailers.Reasons To achieve this science of fast fashion product development cycles need to compress, which can be done through effective supply chain management. The retail brands believed that the further way they can keep stocks to a minimum patch group meeting the customers demand chop-chop and flexibly was through the consolidation of processes along the supply chain alone the top 3 brands have their supply chain divided in four exemplifysDesigning of garmentsManufacturing diffusion to retail unwrapletsRetail operationsDesigningDesigning is of e xtreme importance in retailing market. The stores are supposed to deliver soaring and fast fashion at an inexpensive cost not bare set about cost.H M spiriting -It is carried out by squad of 100 designers in Stockholm who guide with multitude of 50 pattern designers, about 100 buyers and many budget controllers.Zara designing Here, the design idea is derived from three different sources-the designers, market analysts and the buyers who order consignments to suppliers. The design stage for Zara is divided in three sections Women, men and children chlothes.The simulacrum designs are created and tried out by placing all the three sources (designers, market analysts and buyers) in puny workshops. The market analysts capture the sunrise(prenominal) happenings in the fashion market as they are always in contact with the retail stores. This way Zaras retail stores are at the start of the supply chain and not at the end.DistributionThe investment costs incurred by Zara and Benetton in automating their warehouses is very high as they requirement them to be near proceeds centres which could store, pack and develop independent orders for the network of retail stores around the globe. Currently, Zara only uses half of its warehousing capacity while Benetton is still exploring the possibility of using RFID tags for tracking garments.The distribution process at HM is still routine. The stock management is carried out internally and physical distribution is sub-contracted. In HM, goods are despatchd to retail site from production site through a transit terminal in Hamburg owned by the HM itself. These goods are and so inspected and stored in a centralized stock room known as call-off warehouse where stores are replenished on each item level depending on what is s aged.ManufacturingManufacturing costs can be significantly reduced if there are reduced attention costs. Therefore, most of the Benettons manufacturing operations are carried out in Asia, North Africa and Eastern Europe. The expensive technological operations are carried out in privately owned Benettons sites whereas all the labor intensive operations would be carried out by smaller contractors. The central Benetton facility decides upon how lots and what is to be produced by non-Italian networks. Similar is the case with HM, whose 50% production is carried out in Asia. They have 21 offices all over the world which co-ordinate the supplier activities. The rubicund relation maintained between suppliers and production offices allows them to buy fabric early. The actual cut offting and dyeing of the garments carried out at later stage. This helps in delaying conductment of an order, thereby reducing risk of purchasing wrong items.Zara owns much of its manufacturing capabilities which it can manipulate to meet the customer demands at short response. Almost 50% of Zaras productions, most of which are expensive operations (cutting, dyeing) are carried out in plants owned by Zara in Spain and similar to Benetton the labor intensive operations are sub-letted to contractors. Volume flexibility is maintained by Zara and their sub-contractors using a oneness shift system.RetailThis working is almost similar between all stores.HM stores have average coat of 1300 sq.m and are owned and managed by themselves. Zara stores are smaller compared to HM with 800 sq.m size. The Benetton shops on the other hand are 1300-1500 sq.m.Previously the stores use to be run by third parties as small shops. Though there is deviance in size they all have similar aim of providing the customer with comfortable atmosphere to make them feel at home and allow them to buy what they want.BenefitsThe retail brands were able to achieve a high level of integration using supply chain management. This allows them to quickly react to customers demand and be ductile with minimum stocks posssible.They were able to find the correct balance between fashion, price and quality(Each brand has their own horse virtuoso of fashion, price and quality).The average supply lead time achieved was about3 weeks 6 months. Of these 3 brands, Zara has achieved shortest lead times called as catwalk to rack time which is as small as 15 days. This means that not a undivided garment in Zara store is older than two weeks. The designs are also not repeated and are produced in small batches. This ultimately forces customers to avoid delaying their purchase and visit the store frequently lead to increase profits. Effective Supply Chain Management has helped each of the company to become a global brand image in their own way while keeping their production costs low.SuggestionsIn the manufacturing stage where the raw materials are supplied by different suppliers a star rating system can be used. In this procedure a 3 star is given to that supplier which has previous record of success on supply factors set by company itself. On contrary, no stars are given to them with whom company has had certain chores before. We can do this as shown in supplier calculation table below look upon can be added to the retail industry by personalizing the needs of customer and improving customer service by using RFID technology. To automate the supply chain RFID can be used. This will help in labor reduction which accounts for about 50-80% of distribution costs. The benefits gained by implementation of RFID through supply chain can be clearly explained by figure given below(Tajima M 2007)RFID can prove highly useful in retail industry to control inventory efficiency and also as a theft protection service. (Michael K, McCathie L)ERPThe most common and important problem involved in operations management is managing the vast amounts of info while performing it. It is extremely important that the information of each and every function done spread among the entire organization. This is what will enable them to make crucial decisions like when the activity to be done, by whom is and what is the cap acity indispensable. ERP-Enterprise Resource Planning is used to perform all the above said activities and chastise the problems arriving from them.ERP is an intelligent IT system which integrates all parts and functions of an organization to plan and control activities essential for operations management. This integration also allows for transparency among all parts of organization. ERP is a complex and challenging system to implement as it is basically designed to solve problems involving fragmentation of information. An ERP system almost forces everyone to forces everyone involved in an organization to change the way they used to do their job.ERP automates the processes involved in all business operations right from victorious of an order from the customer, delivering it and the billing process. In ERP, when an order is been taken by the company representative, he has full information of the customer like his credit rating and also the companys. As ERP has a single database system the rude(a) order can be accessed by all the departments and when one department is finished with the order it is automatically transferred to the next department by ERP.The location of the order can also be easily bring in using a ERP system. The ERP system make the order processing faster and the customer receive them quickly with fewer errors.The key success factors required for successful ERP implementation areTop level management support and commitmentClear vision and proper planningHaving a Project championA set time frame to deliver the implementation strategyProject and change management prissy IT infrabody structure and selecting the right ERP packageMaintaining healthy relationship with the ConsultantRisk managementThe investment required for buying and implementing the software is very high.This can be proved by the survey conducted by the META group on the Total cost of ownership of ERP involving all costs like software, hardware and all lag cost. The highest Total Cost of Ownership was of about $300 million and lowest was $400,000.the average price for user of ERP for period of two years was a massive $53,320.which proves ERP is expensive. well-nigh of the risks involved with ERP implementation areThe chances of under(a) estimating the overall cost are highThe training and the expertise level required from the consultants will be more than expected.Under estimation of effort and time required.The project scope can be nasty to control and the need for change management may not be recognized on time3. A case study conducted at Rolls-Royce investigating the implementation of ERP (SAP)In this case study, the Introduction and reason of company along with the changes observed by them after the implementation of ERP is discussed. The risks involved with implementation of SAP are also presented.Reasons For implementationRolls-Royce returned back to private sector in 1987 and started acquisition of companies which enabled them to consolidate their position in industrial power .The basic reason for implementing ERP was to sort out centralized database from old legacy MRP2 systems. ahead ERP, Rolls-Royce had as many as 1500 systems which were developed internally. The operation of these legacy systems was expensive maintenance was equally difficult. They did not assist for high-fidelity and good decision making as they were unable to provide accurate getatable data. The systems implemented were unable to communicate between individual sites. The tracking of the work in progress between sites was inaccurate and causing inventory problems. The legacy systems were unable to communicate direct with suppliers and customers. (Yahaya Y, Gunasekaran A, Abthorpe M S 2004).Rolls-Royce then decided to outsource its IT department to EDS.This allowed Rolls-Royce to concentrate on its main area of expertise which was developing and manufacturing aero-engines. A squad of specialists from EDS-the outsourcing firm was assigned the ta sk of implementing ERP project which also had SAP consultants in their team. The team was comfortably equipped with managers and staff that had crucial knowledge of old legacy systems understanding of cross functional business relationships. Yahaya Y, Gunasekaran A, Abthorpe M S 2004).Although the natural systems implemented were better than most of the legacy systems they were not fully comprehend as the older ones. The team decided to overcome this problem by conducting seminars for the staff and explaining them the improvements the new systems have made to company. Training was given to about 10000 people through demonstrations, meetings and presentations.Strategy and directionFor the project, Rolls-Royce required over 100 personal computers and the total cost incurred was two million pounds. The scope and the outline plan for the project were made. A team was allocated to look over actual implementation process. After this a prototype was created and installed. This prototype model was based on Rolls-Royce Allison model. In this stage following activities were carried outReviewing preliminary design Here, strategy for designing and implementation was developed along with BPM (Business process model)Development and customization of the vanilla prototype.Reviewing of implementation and the technical operations.Development of the systems and their conversions before they Go-live.The main implementation stage was divided into two shivers. The first wave got delayed by 6 months becauseThey wanted to provide more time for line organizations to prepare and fair(a) up data.To allocate time for pilot testing and system development.To overcome difficulties faced with SAP usage. beat one-The main objective here was to replace all the old systems. In wave one new manufacturing system like SFDMs were introduced. The pilot project of SAP suggested the end of wave one.Wave second In this wave the engine assembly was implemented. This wave lasted for one year in dura tion. The second wave was ended when new systems began showing positive results.Enterprise Resource pilotThis pilot system was a small scale system run for 3 months and number 4 shops was chosen as facility where transmissions and structure operations were centre of attention for company. The reason for this facility selection was its low production capacity of only 280 parts. The pilot system was used to demonstrate processes and procedures for businesses .They were also responsible for defining role for each share and demonstrate how to manage data transfers.Go-liveThe problems encountered on going live wereThey had user authorization issues like passwords, etcThe route cards were not there due to which work on shop deck was temporarily halted. exercise problems were observed and they were corrected by comparing old and new systems. The actual main pat of go-live system was difficult as the shear amount of data to be transferred from legacy systems was huge. To achieve this data was required to be kept in a state of stability for up to 10 weeks. The initial data like the list of suppliers was to be transferred and if any error occurred on old system they were recorded and passed on to the new system.MRP system was used to complete the go-love process which took 2 weeks time. After the go-live stage the old system were kept in view only mode which allowed comparisons to be done between new and old systems.Project risksThis project was involved with all the departments and ha its associated risks. These risks were tried to be overcomed by the ERP implementation team by maintaining a risk register. Some of the risks mentioned on the internet page of Rolls-Royce areIf due to many reason there was no delivery or unavailability of the IT hardware.Possibility of failure while freight rate the data or setting priorities on ERP.The project would have significant impact on the accounts of the company at the year end.BenefitsThe effectiveness of much(prenominal) a bigger scale IT project is often difficult to understand .The benefits achieved from such a huge project requires at least a year to become visisble.The most immediate and important benefits that was achieved was to make a promise to customer and deliver it on time. This led to improved customer satisf transaction and boosts their confidence which would result in increased orders for the future. The ERP system improved the relationship within the supply chain where Electronic communications were used to make transactions easier. The ERP system made communications between all the parts of the business absolutely clear. The Rolls-Royce management gained a better sense of control over number of operations which resulted in continuous improvements. It made possible to have accurate and timely information about their customers, business partners and suppliers.SuggestionsThe company for the future can create a large data warehouse. In this the data can be stored centrally and extracted from all different places like historical and external databases. The data can be stored in user friendly format which can be accessible by non-external users. This data warehouse will help in collecting all the new data and merge it with the old data.. The management of EIS (Enterprise Information system) to check its sustainability can be done to maximize the benefits gained from an ERP system.TQMQuality is the only one of the five operations performance criteria to have its own dedicated chapter in this book. There are two reasons for this. First, in some organizations a separate function is devoted solely to the management of quality. Second, quality is a key concern of almost all organizations.High-quality goods and services can give an organization a considerable competitive edge. Good quality reduces the costs of rework, waste, complaints and returns and, most importantly, generates satisfied customers. Some operations managers believe that, in the long run, quality is the m ost important single factor touch on an organizations performance relative to its competitors.Case Study TQM SummaryRendall owned Preston graphics plant is located in Vancouver. Before, in March 2000 the plant was bought from Georgetown co-operation. This is a small-scale production plant of precision coated topic required in ink-jet printers. The precise coating was applied by coating machines after which they were cut into coated rods in conversion departments. They were then packed and shipped in small containers.Scenario before ImplementationThe main customer of the plant was HP(Hewlett-Packard) and they were the one who pointed out the problems they were facing from the theme supplied to them. They were unable to curl the coated paper at low humidity conditions. This problem was noticed by HP personnel as there was no formal complaint made by Hps customers. The plant then hired a team which resolved the problem in the next 7-8 months. The process started producing in accepta ble limits but this was due to the fact that they were only concerned about shipping the product within the specification limits. They had a culture which did not care about how close they were to the specification limits and eventually not be able to meet them. This resulted in the plant making loss of $2 million in a year even though they had buoyant sales. This was mainly due to lower productivity and high scrap and rework. To overcome them the management team hastily made a number of changes like increasing the speed of operation line to improve productivity. But still the process charts given by HP showed that the plant was not capable fair to middling to satisfy their need for the next 3 generations.The plant was then bought by Rendall which was not happy with the plants proceed losses and the important customers dissatisfaction (HP).The plant continued to have productivity and quality problems. The full extent of the problem was made visible to the Preston quality manager b y the HP engineer in a meeting at Chicago. They clearly explained him the process control charts they had which were given to them by Preston themselves. They convinced the Preston manager that people at Preston were not giving importance to the data showed by process control charts otherwise they would have recognise their quality problems.The quality manager then decided to bring the plant under control. He along with his team then reviewed the decisions they made right from the start when the curl problem appeared and they adjusted the process. The team used a set of shut-down rules which enabled the operations to halt a line if they thought the product they were making was of subscript quality. This resulted in throwing away almost 64 large size rolls and about $10000 worth of scrapped product.The guidelines for shut down procedure were that they had to get rid of the defect and when that is done they are allowed to operate. This might cause the managers to tell the workers to improve their productivity but they would harshly criticize the workers if they were violating the quality process procedures. The two more change they implemented wereDaily reviewing of the control chart dataThe control chart data was then debated by the staff that was kept away from production while doing this.There was uncertainty among quite a few due to no production but it was vital as it got all the 3 shift operators lecture about quality issues and control chart data. This caused a positive atmosphere among the workers and boosted the morale of the shop floor team. It led to remarkable improvements on quality front and improved efficiency of plant. The further progressive action taken in quality management by the plant was the implementation of Statistical process control. thusly they did zero-based assessment to bring the costs down by reducing labor costs. They began downsizing process. The less number in workforce means that they should produce good quality paper in the first place to avoid inspection process. The plant workforce then decided to develop a portfolio for the ideas of new product which would boost their confidence. The most significant idea was of protowrap in which the new print wrap was able to be repulped.BenefitsPreston Company made profits after Christmas of 2000 after a period of 2 years. Moreover, they had made such a progress that they were beginning to get noticed at corporate level. This caused HP (Hewlett-Packard) to ask them to conjure for their new product. It had continuous three months of profits and they also received the new contract from HP. The plants new quality procedures and principles allowed them to produce products more economically. The most significant benefit Preston received by implementing TQM was that they were able to reverse the decision made by Rendall-their owners to shut them down. The plant not only survived but flourished due to implementation of Quality based principles.SuggestionsImplementing QMS(Quality Management System) having corrective actionsThis will be required when we encounter problems relating non-conformance of our supplier products. After faced with the problem, we must be able to locate the problem and find its root cause with immediate effect. This is done by (CAPA) corrective action items. The system implemented should be such that it should itself assess the cost of quality and try to initiate the recovery cost process with the supplier.Involving suppliers in quality systemsSuppliers should be encouraged to implement quality systems within their company so that they can easily reach the quality of products required and also save paying the recovering costs. (Metric Stream, 2010)