Operations Management | My Assignment Tutor

Operations Management ModuleMBA7061Feb 2021Module Resource BookOperations ManagementModule Aims:This module provides a comprehensive introduction to Operations Management aspractised in organisations. It provides an overview of key aspects of operationsmanagement from both manufacturing and service sectors’ perspective within modernorganisations. The module considers operations strategy in the broadest sense. Thebroad aims of the module are:• To develop and introduce and develop a critical understanding operationsmanagement for modern organisations in a variety of sectors of activity;• To consider operations strategy in its broadest sense and relate this to the internalmanagement and organisation of the production of goods and services withinorganisations in different sectors of the economy;• To examine how to organise resources and operations, and how to improve themusing a variety of quality tools and techniques and process improvement activities;• To consider the organisation in its wider context; examining how inputs on thesupply side can be managed and improved, and on the demand side howcustomers, and customer satisfaction can be understood.Module Status: Core Module run in Semester 1 of the Masters in BusinessManagement Programme and is credit rated at 20 M level credits.Learning Outcomes:After successfully completing the module, you should be able to:• Evaluate the nature, scope and extent of manufacturing and service operationsstrategy;• Critically evaluate the use of quality tools and techniques for a wide range oforganisational problems;• Solve complex operational problems related to managing capacity and constraintswithin organisations;• Demonstrate the application of strategies, tools and techniques to improve businessoperations, appraise, and select appropriate methods for managing supply basesfor a variety of organisations. Module TitleModule NumberJACS Subject Code(s) and % of each subjectOperations ManagementMBA7061N500Level(0 – M)CreditsECTSModule ValueLevel (0 – M)CreditsM20101.0M20Teaching PeriodPre-requisitesSemester 1NoneModule LeaderSchool(s)CampusDr. Mohamed Abdel SalamArab Academy Graduate Schoolof Business• Alex Miami Campus• Cairo Heliopolis Campus• Smart Village CampusAssessment MethodsAssessment TypeDuration/Length Assessment TypeofWeighting Assessment ofApproximate Submission Date ofCourse workWritten assignment(4,000 words)100%End of SemesterAim(s)Operations management is a vital component in any business organization. It is the function that designs,plans, operates and improves productive systems. This course discusses operational issues facingorganizations and introduces operations management concepts and techniques. In addition, students willlearn some of the quantitative analysis tools such as linear programming that are used to solve problemsfacing operations mangers. Students develop skills necessary to improve productivity and quality ofoperation in both manufacturing and service organizations. Topics include productivity, forecasting demand,capacity planning, quality management, inventory management, planning, and location planning.Learning OutcomesThe aims of this course are to:1. To gain an understanding of the role and scope of the operations function in businessorganizations; to recognize the interdependence between operations and other major functionalareas of business; and to appreciate the implications of operational decisions on overall enterprisestrategy.2. To develop an awareness of the major strategic and tactical problems associated with the design,operation, and control of goods and services producing systems (a.k.a. “Operating Systems”) andto provide exposure to the managerial decisions and activities necessary for their resolution.3. To develop competency with basic problem solving and decision-making tools using typicaloperations management problems.Learning and Teaching Delivery MethodsLectures24 hoursSeminars/workshops12 hoursStudent – centred learning64 hoursTotal100 hours Indicative Content1. Competitiveness, strategy and productivity2. Forecasting3. Process selection and facility layout4. Location planning and analysis5. Strategic Capacity planning6. Quality management (TQM, Quality control)7. Supply chain management8. Inventory management and scheduling9. Aggregate planningRecommended Reading & Required ReadingRequired Reading / Learning MaterialsStevenson, W. J. (2015) Operations management: theory and practice (12th ed.). New York, NY: McGrawHill/Irwin.Simon A. Burtonshaw-Gunn, (2010) Essentials tools for operations management (1st ed.). WillyRecommended Reading / Learning MaterialsChaffey, D. & Wood, S. (2005). Business information management – Improving performance usinginformation systems. London: Prentice Hall.Krajewski, L., & Ritzman, L. (2004). Operations management: Processes and value chains. (7th ed.). NewYork: Addison-Wesley. Module assessment:As an Operations Management Consultant, XYZ has hired you to help determine how it canimprove its operations management (improving forecasting accuracy, minimizing waste,developing supplier relations, etc.) by using its current resources in a cost effective manner.Furthermore, you should provide both short-term solutions to their problems and long-term ones.You are required to undertake an individual research project and to prepare a Management Report(4000 ± 10%4400 words) based on the case study provided below.The key aspects that need to be covered within the report are:▪ Critically evaluate the key Operations Management issues faced by XYZ. You mustcritically discuss each of these issues showing clearly, why it is actually a problem, howyou see an opportunity for improving XYZ operations in that issue, and preferably you canalso provide evidence from literature that these issues are common/not common in similarbusiness contexts and how improvements are usually attainable.▪ For each issue identified, critically analyse each issue using the most appropriate topics,techniques, methods, models and tools available that you would have possibly identifiedwithin the lectures and textbooks recommended in the first lecture (you can even use otheroperations management topics in these books that you might find relevant). You mustclearly show why you selected any of these topics in the first place and in light of the casestudy, provide a detailed justification for the techniques, methods… etc. that you havechosen.▪ Based on what you presented in the previous points, you are required to critically evaluateand analyse different alternatives pertinent to each issue identified. I expect you to use bothquantitative and qualitative evaluations, show any improvement that you might achieve,use appropriate illustrations, charts, and tables.▪ Reflect your findings in the light of how XYZ are currently handling their operations andin light of their expected development.Report Structure and LayoutYou need to follow a report formatThe following main sections must be included in your report. Number of words in each section isa guide only; however, the report must be a range of (4000 ± 10% words) 4400words.▪ Cover Page: Student Name, Student Number, and the word count.▪ Executive Summary.▪ Key issues identified [1000 Words].▪ Identification of the key approaches, concepts that apply to these issues [1500words].▪ Reflecting and relating your findings in point four and how they relate to what XYZCompany is doing along with your recommendations. You would be expected to providejustification of every aspect and solution to every issue you identified in the first point[1000-1500 words].▪ Conclusion: Overall conclusion of your proposed action(s). [500-1000 words]Further tips▪ Structure within the sections identified can contain further subheadings (such asTechniques, Methods, Models, Tools, Strategies etc.)▪ I would expect you to expand on the case study and bring in any further information youmight find suitable and that would help in further analysis of XYZ operations. You mighteven want to bring in examples from other similar companies, industries, or products.▪ The report MUST have a proper reference list in the end of the report. Harvard style forboth citations and reference list should be used.Marking and assessment criteria▪ Evidence of the level of critical analysis of the issues faced by the organisation in the casestudy.▪ Quality of the definition of the key problems faced by the organisation in the case study.▪ Understanding, critical evaluation and application of appropriate techniques, methods,models and tools to the issues discussed.▪ Appropriateness and justification of recommended changes and interventions to addressthe issues identified.Clarity and coherence of report (with regard to structure of analysis, diagnosis, correctness ofspelling and grammar, appropriateness of language, accuracy of referencing including use ofEnglish and Harvard Referencing scheme).The following table clarify the assessment and the evaluation criteria for assessment: AssessmentcriteriaUnderstanding,critical evaluation andapplication ofappropriatetechniques, methods,models and tools tothe issues discussedEvidence of the levelof critical analysis ofthe issues faced bythe organisations inthe case studyQuality of thedefinition of the keyproblems faced bythe organisations inthe case studyAppropriateness andjustification ofrecommendedchanges andinterventions toaddress the issuesidentifiedClarity andcoherence of report ,including use ofEnglish and HarvardReferencing scheme[Distinction]70%+Draws on comprehensiverange of appropriatetechniques, methods,models and tools whichshow evidence ofindependent research.Application is effectiveand critical / creative andshows evidence ofsynthesis of differentmodels.Comprehensive, criticaland original analysis ofthe issues,demonstrating excellentability to synthesiseevidence.The problems areidentified, relatedclearly to the precedinganalysis. Problemdefinition is creative andshows excellent andcritical awareness ofalternative possibledefinitions and ability tosynthesise these toproduce cleardefinitions.Selection of changes andinterventions is creativeand critical and clearlyjustified. Recommendedinterventions are creativeand critical and clearlyjustified through relationto earlier analysis.Written English style isclear, articulate andpersuasive, and reportis logically andcoherently structured.Referencing is accurateand full.[Merit]60%-69%Draws on extensive rangeof appropriatetechniques, methods,models and tools.Application is effectiveand shows evidence ofsynthesis of differentmodels.Extensive and effectivecritical analysis of theissues demonstratingability to synthesiseevidence.Problems are identifiedand related clearly tothe preceding analysis.Problem definition isthorough and showssome awareness ofalternative possibledefinitions and ability tosynthesise these toproduce cleardefinitions.Selection of changes andinterventions is welljustified. Recommendedinterventions are welljustified through relationto earlier analysis.Written English style isclear and effective andreport is structuredlogically. Referencing isaccurate.[Pass]50%-59%Draws on range ofappropriate techniques,methods, models andtools. Application iseffective.Relevant critical analysisof issues Key aspects ofthe situation areidentified and analysed.Problems are identifiedand defined.Selection of changes andinterventions areappropriate and somevalid justifications aregiven.Written English style isclear and descriptiveand report structure isclear. Referencing isgenerally accurate.[Fail] 40%-49%Draws on limited range oftechniques, methods,models and tools. Thesemay not always beappropriate. Applicationmay be flawed in places.Critical analysis ofcurrent situation islimited or flawed. Keyaspects of the issuesmay be ignored.Problems may not beclearly identified.Definition of theproblems may beflawed.Selection of changes andinterventions may beinappropriate and / or notunderstood.English style may beweak and difficult tounderstand. The reportmay be presentedpoorly with many errorsand structure may beunclear. Referencingmay be inaccurate.[Fail] 30%-39%Inappropriate or / notechniques, methods,models and tools may beselected and/ or notapplied to organisation.Knowledge andunderstanding may belacking.Little or no criticalanalysis of the issues.No identification ofproblems or problemsidentified is irrelevant.Selection of changes andinterventions may belargely absent and / orirrelevant.English style may beweak and difficult tounderstand with somelack of semantic/grammaticalcorrectness. Reportstructure maybeconfused. Referencingmay be very limited,inaccurate or largelyabsent. Operations Management ProjectXYZ Company for Tea ProductionXYZ Co is a prominent company in the FMCG industry. It provides 400 different brands spanning14 categories of home, personal care and foods products. XYZ is now one of the world’s biggestcompanies. Their first business in the Middle East started in Saudi Arabia in the 1930’s and by1978, the first factory was set up in Jeddah to supply the Middle East region with home andpersonal care products. In Egypt, XYZ established in 1991 a joint venture with an Egyptiancompany creating one of the largest FMCG businesses in Egypt.In 2000, XYZ established its tea factory in Borg El Arab to produce high quality tea. The totalsales for XYZ (the tea factory) were around 60 Million Egyptian pounds during year 2020. Thecompany is operating under a strategy that aims to provide the best tea tasting experience to itscustomers (differentiation strategy).ForecastingDuring the last board of directors meeting, there was a hot discussion about the future of the teabusiness. The General Manager of the tea business shared the latest sales numbers. He highlightedthe constant growth in sales in years 2018, 2019 and 2020. However, the current conditions inEgypt and the world calls for reassessment of their future sales. Thus, the General Managerhighlighted the need to reassess the forecasting techniques that they currently use. MonthYear 2018Year 2019Year 2020Jan230000250000270000Feb227000240000260000Mar225000235000255000Apr223000233000320000May205000290000270000Jun260000245000260000Jul200000220000240000Aug195000210000230000Sep200000220000240000Oct205000220000245000Nov220000240000255000Dec235000265000295000Total annualsales (box/year)262500028680003140000 Capacity Planning and ProductivityXYZ has 6 production lines with a max. capacity (Actual O/P) of 260,000 box of tea per month.During 2020, the capacity of the factory critically covered the market demand. However, in 2021,the company might face a problem to cover the expected demand. Thus, it seems critical to rethinktheir capacity for 2020. During the meeting, the operations manager proposed two capacityalternatives to increase their capacity. The first alternative is to buy a new production line. Thesecond alternative is to continue outsourcing to a third party producer. The following tableindicates the annual fixed and variable cost per unit of each alternative: Buy a new lineOutsourcingFixed costLE 1,200,000NoneVariable costLE35/BoxLE 50/Box However, cost is not the only determinant for taking the decision. Other criteria could stronglyaffect XYZ decision (quality, flexibility, etc.). Thus, it is important for the company to includeother dimensions while taking the decision.Besides, there is a need to reconsider the use of the company resources while maintaining the samequality of their products. Accordingly, the operations manager proposed a process improvementinitiative that reduces processing time for each box (the company operates 8 hr./day- 30days/month), so that output is increased by 10 %, but two additional workers required for eachproduction line. Originally, 10 operators are needed to operate each line (6 production lines).Operator costs are LE 20/hour, and material input is LE 2.5/box and operating line cost LE 250/hr.Overhead is charged at 1.5 times direct labor cost (before and after the proposed initiative). As amember of the improvement team, you are required to assess the feasibility of the proposedinitiative with respect to its effect on the productivity of the production lines (assume that theoutput is evenly distributed among the 6 lines).Production process and qualityGenerally, production in XYZ company could be considered as a batch processing that providesquite high volume and quite acceptable variety of output. As previously mentioned, there are 6production lines that are used to produce the 5 different types of products produced by XYZ. Line1 and 2 are used to produce tea bags (100, 50 and 25 packs). Line 4 is used to produce tea bags aswell (but the 10 pack). Line 5 is used to produce the dust while line 6 is used to produce the CTC.Line 3 could produce all the different types of tea. The production processes for the different typesof tea produced are as follows:1. The warehouse dispatches the raw tea after receiving the production order.2. After the raw tea is dispatched, the certified tea tasters start to propose the needed blend oftea and then the blend preparation starts.3. The mixing stage starts which includes a magnet, mesh and a mixing drum to guaranteethe homogeneity of the blend.4. The blend then is moved to the sample tank. In the sample tank, samples are taken to dosome quality checks.5. The blend is then moved to the main tanks according to the type of the blend.6. The blend is then moved to one of the production lines to be processed.7. The final product is then moved to the packaging stage.Quality is strongly emphasized at XYZ. Employees are trained in quality concepts and the use ofquality tools. Training is incorporated on-the-job so that employees can see the practicalapplications of what they are learning. Employees are responsible for performing in-processquality checks (quality at the source), and to report any defects they discover to their supervisor.In that sense, several quality checks are performed (step 4); moisture content, bulk density, dustcontent and sensory testing.The close monitoring of step 4 revealed that the company is frequently facing problems with themoisture content of the tea mixture. The accepted norm of the moisture content ranges between6% to 8%. The standard deviation of the process is 0.5 %., So, the quality team decided to collecta sample data (20 samples each with 5 observations) about the moisture content (in percentage) ofstep 4 as shown in the following table: 1234567891011121314151617181920177.77.987. Inventory and order fulfillmentThe company attempts to minimize the amount of inventory. There is a real need to reassess thisstrategy for their purchases. The current model of ordering and inventory ignores calculatingeconomic order measures as well as quantity discounts that might be offered. For example, theneeds of XYZ from one of its raw materials, the raw tea; being as a crucial ingredient and importedfrom an international supplier has a total demand of about 350,000 tons/year. Ordering costs are$21000 per order, carrying costs are $25 per ton per year. Orders less than 20,000 tons will cost$30 per ton, 20,001 to 29,999 will cost $ 29.5 per ton, and larger orders will cost $ 29 per ton. Inaddition, the company determined that the lead-time needed from placing an order until having theorder is around 15 days on average.Aggregate PlanningPlanners of the company are about to prepare the aggregate plan that will cover 6 months.Assuming that the company identified the following forecast for period (1-6): PeriodJanFebMarchAprilMayJuneTotalForecast2800002750002900003100002900002700001715000 They now want to evaluate a plan that calls for a steady rate of regular output (260000boxes/month), mainly using inventory to absorb the uneven demand but allowing some backlog.They intend to start with zero inventory on hand in the first period. They decided to use overtimeto make up for lost output. The maximum amount of overtime output per period is 30000 box permonth. The regular production cost per box is 35 LE while the overtime cost per box is 40 LE.The holding cost is 10 LE per box per month and the backorder cost is 20 LE per box per month.Location Planning and AnalysisThe company owns two factories, one in Al-Sadat city and the other in Port said. The company distribute itsproduct in three markets; Cairo, Alexandria, and Tanta. The following table shows the supply, demand andcost of transportation per unit from each source to each destination. DistributeFactoriesAlex.CairoTantaSupplyAl-Sadat7111831Port said9131521Demand261141 Due to the shortage of supply to satisfy the demand, the company is thinking in building a new factory. Twosuggested locations are considered; Borg-El-Arab and 6 October. The following table shows the transportationcost from each factory to the three markets. Determine the best location. Alex.CairoTantaBorg-El-Arab119166 October13146 DistributeNew Factory


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