Operations management is a process of managing resources necessary for creation and deliverance of the products and services. Its basic target is to improve the amount of value-added activities in each of the processes.
The area of the company that is entrusted with this technique is the functions function. As each and every business produces products all are bound to have procedures function. Folks responsible for controlling the operation functions resources are known as operations managers. In various type of organizations they may be called by different labels like in supermarket they are simply store supervisor, etc.
This report demonstrates the three functions management techniques which helped the firms improve their business activities and performance. They were
Supply String Management (SCM)
Enterprise Source Planning (ERP)
Total Quality Management(TQM)
In this report the truth studies relating to the implementation of these three techniques are explained. The benefits experienced by the firms and any changes they can have made to boost them are also brought up.
Supply String Management (SCM):
The informational flow
The financial flow
Efficiently distributing the info by linking all the functions to the demand source.
Establishing a similar decision making process along the whole supply string.
Increasing the efficiency of the businesses by eliminating resources of waste.
Supplier quality management
The basic need of any company using their company suppliers is the deliverance of good quality products on right time. The very best practice of enhancing the grade of product is by bettering the grade of raw materials given by suppliers.
The costs incurred scheduled to scrapping and reworking.
The shutdown of the assembly line due to defective products.
The costs of shipping back the defective products to suppliers and the warranty costs.
In this, the suppliers are billed back for offering poor quality products. Here, we should include not only the materials costs but also the non-material costs like packaging faulty products, their travelling costs, etc.
This is the simplest way of looking at whether our suppliers are conforming to our mentioned techniques, quality systems, transporting, etc. It could be done once yearly for all of our suppliers.
They have zero-maintenance and real costs.
They can make delivery of better value and have repeat of business with the customers.
They can certainly remove throw away from the procedure.
They have more turnover profits and can make long term plans for future years.
Summary of Research study for Delivering fast fashion:
This research study best demonstrates how the garment retailing business is carried out in this dane age group. It shows how different fashion ideas which wouldn't normally have been even considered by way of a retail store can become must-have in a brief period. The working of top retail brands like H&M, Zara and Benetton is been explained. It talks about the quicker-picker-upper fashion strategy which includes made Zara, H&M today's leading vendors.
Reasons: To achieve this knowledge of fast fashion product development cycles need to compress, which is often done through effective supply chain management. The retail brands thought that the only path they will keep stocks to a minimum while meeting the clients demand quickly and flexibly was through the integration of processes along the resource chain
All the most notable 3 brands have their source string divided in four stages
Designing of garments
Distribution to retail outlets
Designing is of extreme importance in retailing market. The stores are likely to deliver high and fast fashion at a cheap cost not cheap cost.
H &M building -It is completed by team of 100 designers in Stockholm who operate with group of 50 pattern designers, about 100 potential buyers and many budget controllers.
Zara designing: Here, the design idea is derived from three different sources-the designers, market experts and the buyers who order consignments to suppliers. The design stage for Zara is divided in three areas: Women, men and children chlothes. The prototype designs are manufactured and used by putting all the three sources (designers, market analysts and customers) in small workshops. The market analysts record the new happenings in the style market because they are always in touch with the retail stores. In this manner Zara's retail stores are at the beginning of the supply string and not by the end.
The investment costs incurred by Zara and Benetton in automating their warehouses is very high as they want them to be near creation centre's that could store, load up and develop impartial orders for the network of shops around the globe. Presently, Zara only uses half of its warehousing capacity while Benetton is still exploring the possibility of using RFID tags for monitoring garments.
The syndication process at H&M continues to be usual. The stock management is carried out internally and physical distribution is sub-contracted. In H&M, goods are routed to retail site from production site via a transit terminal in Hamburg owned by the H&M itself. These goods are then 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 sold.
Manufacturing costs can be significantly reduced if there are reduced labor costs. Therefore, almost all of the Benetton's making operations are completed in Asia, North Africa and Eastern European countries. The expensive technical operations are completed in privately owned Benetton's sites whereas all the labor extensive businesses would be completed by smaller companies. The central Benetton facility decides upon how much and what's to be produced by non-Italian networks. Similar is the truth with H&M, whose 50% production is completed in Asia. They may have 21 offices around the globe which co-ordinate the distributor activities. The healthy relation taken care of between suppliers and creation offices allows these to buy fabric early. The actual slicing and dyeing of the clothes carried out at later level. This helps in delaying placement of an order, in doing so reducing risk of purchasing incorrect items.
Zara owns much of its manufacturing functions which it can manipulate to meet the customer demands at short response. Almost 50% of Zara's productions, almost all of which are costly operations (chopping, dyeing) are carried out in plants managed by Zara in Spain and much like Benetton the labor rigorous procedures are sub-letted to companies. Volume versatility is managed by Zara and their sub-contractors using a single shift system.
This working is nearly similar between all stores. H&M stores have average size of 1300 sq. m and are held and managed independently. Zara stores are smaller compared to H&M with 800 sq. m size. The Benetton outlets on the other hands are 1300-1500 sq. m. Previously the stores used to be run by third celebrations as small retailers. Though there is difference in size each of them have similar goal of providing the customer with comfortable atmosphere to make them feel at home and invite these to buy what they want.
The retail brands were able to achieve a higher degree of integration using source chain management. This enables them to quickly react to customers demand and become flexible with minimum stocks posssible. They were able to find the appropriate balance between fashion, price and quality(Each brand has their own sense of fashion, price and quality). The average supply lead time achieved was about3 weeks - six months. Of the 3 brands, Zara has achieved shortest lead times called as 'catwalk to rack time' which is as small as 15 days. Which means that not a solitary garment in Zara store is older than fourteen days. The designs are also not repeated and are stated in small batches. This eventually causes customers to avoid delaying their purchase and go to the store frequently lead to increased gains. Effective Supply Chain Management has helped each of the company to become a global brand image in their own way while keeping their creation costs low.
(Tajima M 2007)
RFID can demonstrate extremely useful in retail industry to regulate inventory efficiency and also as a robbery safeguard service. (Michael K, McCathie L)
The most usual and important problem involved in functions management is handling the vast amounts of data while carrying out it. It is rather important that the info of each and every function done pass on among the whole organization. This is exactly what will enable these to make critical decisions like when the activity to be achieved, by whom is and what's the capacity required. ERP-Enterprise Source Planning is utilized to perform all the above said activities and beat the problems arriving from them.
ERP is an intelligent IT system which combines all parts and functions of a business to plan and control activities required for businesses management. This integration also permits transparency among all elements of business. ERP is a sophisticated and difficult system to use as it is actually designed to solve problems regarding fragmentation of information. An ERP system almost pushes everyone to pushes everyone involved in an organization to improve just how they used to do their job.
ERP automates the procedures involved with all business operations right from taking of any order from the client, delivering it and the billing process. In ERP, when an order is been considered by the company agent, he has full information of the customer like his credit history as well as the company's. As ERP has a single database system the new order can be utilized by all the departments so when one department is completed with the order it is automatically used in the next section by ERP. The location of the order may also be easily tracked by using a ERP system. The ERP system make the order processing faster and the customer acquire them quickly with fewer mistakes.
Top level management support and commitment
Clear perspective and proper planning
Having a Task champion
A set time frame to provide the execution strategy
Project and change management
Proper IT infrastructure and choosing the right ERP package
Maintaining healthy marriage with the Consultant
The investment required for buying and putting into action the program is very high.
This can be turned out by the study conducted by the META group on the Total cost of ownership of ERP relating all costs like software, hardware and all staff cost. The best Total Cost of Possession was around $300 million and most affordable was $400, 000. the average price for consumer of ERP for amount of 2 yrs was an enormous $53, 320. which proves ERP is expensive.
The chances of under estimating the overall cost are high
The training and the experience level required from the consultants could be more than expected.
Under estimation of effort and time required.
The project scope can be difficult to regulate and the need for change management may well not be known on time
3. A case study conducted at Rolls-Royce looking into the execution of ERP (SAP):
In this case study, the Benefits and qualifications of company combined with the changes discovered by them following the execution of ERP is reviewed. The risks involved with implementation of SAP are also shown.
Reasons For execution:
Rolls-Royce returned back again to private sector in 1987 and started out acquisition of companies which enabled them to combine their position in industrial power. The basic reason for employing ERP was to straighten out centralized data source from old legacy MRP2 systems. Before ERP, Rolls-Royce acquired as much as 1500 systems which were developed internally. The procedure of the legacy systems was expensive maintenance was similarly difficult. They did not assist for appropriate and great decision making as they were struggling to provide appropriate accessible data. The systems integrated were unable to connect between specific sites. The traffic monitoring of the work happening between sites was inaccurate and causing inventory problems. The legacy systems were not able to communicate direct with suppliers and customers. (Yahaya Y, Gunasekaran A, Abthorpe M S 2004).
Rolls-Royce then made a decision to outsource its IT office to EDS. This allowed Rolls-Royce to focus on its main specialization which was developing and developing aero-engines. A team of specialists from EDS-the outsourcing firm was assigned the task of putting into action ERP job which also got SAP consultants in their team. The team was well outfitted with managers and staff that had essential knowledge of old legacy systems understanding of cross efficient business human relationships. Yahaya Y, Gunasekaran A, Abthorpe M S 2004).
Although the new systems executed were much better than almost all of the legacy systems these were not fully treasured as the more mature ones. The team decided to overcome this issue by conducting seminars for the staff and detailing them the advancements the new systems have designed to company. Training was presented with to about 10000 people through demonstrations, conferences and presentations.
Strategy and direction:
Reviewing primary design: Here, strategy for designing and implementation originated 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 execution stage was split into two waves. The first influx got postponed by 6 months because
They wished to provide more time for lines organizations to prepare and clean up data.
To allocate time for pilot trials and system development.
To overcome problems confronted with SAP usage.
Wave one-The main aim here was to replace all the old systems. In wave one new production system like SFDM's were presented. The pilot task of SAP advised the finish of influx one.
Wave second: In this wave the engine unit assembly was carried out. This influx lasted for just one year in length. The second influx was ended when new systems started showing excellent results.
Enterprise Source pilot:
This pilot system was a tiny size system run for 3 months and number 4 4 shops was chosen as facility where transmissions and composition businesses were centre of attention for company. The explanation for this service selection was its low creation capacity of only 280 parts. The pilot system was used to demonstrate processes and types of procedures for businesses. They were also responsible for defining role for each member and show how to control data transfers.
They had individual authorization issues like passwords, etc
The route cards weren't there credited to which work on shop floor was temporarily halted.
Transaction problems were witnessed and they were corrected by contrasting old and new systems. You see, the main pat of go-live system was difficult as the shear amount of data to be transferred from legacy systems was huge. To do this data was necessary to be retained in a state of stability for up to 10 weeks. The initial data like the list of suppliers was to be moved and if any problem took place on old system they were recorded and offered to the new system. MRP system was used to complete the go-love process which got 2 weeks time. Following the go-live level the old system were kept in view only function which allowed comparisons to be done between new and old systems.
If due to some reason there is no delivery or unavailability of the IT hardware.
Possibility of failing while loading the info or placing priorities on ERP.
The project would have significant effect on the accounts of the company at the year end.
The performance of such a huge scale IT job is often difficult to understand. The huge benefits achieved from such a huge job requires at least each year to become visisble. The most immediate and important benefits that was achieved was to make a assurance to customer and deliver it on time. This led to improved customer satisfaction and boosts their confidence which would result in increased orders for future years. The ERP system improved the relationship within the supply chain where Digital marketing communications were used to make orders easier. The ERP system made communications between all the parts of the business enterprise absolutely clear. The Rolls-Royce management gained a much better sense of control over variety of operations which resulted in continuous improvements. It made possible to have appropriate and well-timed information about their customers, business lovers and suppliers.
The company for future years can create a big data warehouse. In this the info can be stored centrally and extracted from various different places like historical and exterior databases. The data can be stored in user friendly format that can be accessible by non-external users. This data warehouse will help in collecting all the new data and combine it with the old data. . The management of EIS (Business Information system) to check on its sustainability can be done to maximize the benefits gained from an ERP system.
Quality is the only person of the five 'businesses performance requirements' to obtain its own dedicated chapter in this e book. There are two known reasons for this. First, in a few organizations another function is devoted specifically to the management of quality. Second, quality is a key concern of virtually all organizations.
High-quality goods and services can provide an organization a considerable competitive edge. Good quality reduces the costs of rework, waste materials, complaints and comes back and, most importantly, generates satisfied customers. Some procedures managers think that, over time, quality is the most important single factor influencing an organization's performance in accordance with its rivals.
Case Research TQM Summation:
Rendall possessed Preston graphics vegetable is positioned in Vancouver. Before, in March 2000 the plant was bought from Georgetown co-operation. That is a small-scale production plant of precision coated newspaper required in ink-jet printers. The precise coating was applied by finish machines after which they were slice into covered rods in transformation departments. They were then loaded and transported in small containers.
Scenario before Execution:
The main customer of the vegetable was HP(Hewlett-Packard) plus they were the main one who pointed out the problems these were facing from the paper supplied to them. They were struggling to curl the layered newspaper at low humidness conditions. This problem was seen by HP staff as there is no formal issue made by Hp's customers. The plant then hired a team which resolved the problem within the next 7-8 months. The procedure began producing in satisfactory limits but this was due to the fact that these were only worried about shipping the merchandise within the specification limits. They had a culture which did not care about how close they were to the specification limits and finally not be able to meet them. This led to the plant making loss of $2 million in a calendar year even though that they had buoyant sales. This was due mainly to lower productivity and high scrap and rework. To triumph over them the management team hastily made a number of changes like increasing the speed of operation lines to improve efficiency. But still the procedure charts given by HP showed that the vegetable was not competent enough to meet their dependence on another 3 generations.
The plant was then bought by Rendall which was not happy with the plant life continuing losses and the key customer's dissatisfaction (Horsepower). The plant continued to own output and quality problems. The full extent of the challenge was made obvious to the Preston quality supervisor by 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 administrator that folks at Preston were not offering importance to the info exhibited by process control graphs otherwise they would have became aware their quality problems.
The quality director then decided to bring the plant under control. He along with his team then researched the decisions they made immediately when the curl problem appeared and they tweaked the process. The team used a couple of 'shut-down guidelines' which allowed the operations to halt a line if they thought the product these were making was of substandard quality. This resulted in throwing away almost 64 large size rolls and about $10000 well worth of scrapped product.
Daily researching of the control graph data
The control graph data was then debated by the personnel that was held away from production while doing this.
There was uncertainty among quite a few credited to no production but it was vital as it received all the 3 switch operators talking about quality issues and control chart data. This induced a positive atmosphere among the staff and boosted the morale of the shop floor team. It led to remarkable advancements on quality forward and improved efficiency of herb. The further progressive action used quality management by the place was the implementation of Statistical process control. They did zero-based examination to bring the costs down by lowering labor costs. They commenced downsizing process. The less quantity in workforce means that they must produce good quality newspaper in the first place to avoid inspection process. The flower workforce then made a decision to develop a portfolio for the ideas of new product which would enhance their confidence. The most significant idea was of protowrap where the new print wrap was able to be repulped.
Preston Company made earnings after Holiday of 2000 after a period of 2 years. Moreover, they had made such a improvement that these were beginning to be seen at corporate level. This brought on Horsepower (Hewlett-Packard) to keep these things bid for his or her new product. It got continuous 90 days of profits plus they also received the new agreement from Horsepower. The plant life new quality strategies and ideas allowed them to produce products more economically. The most significant gain Preston received by utilizing TQM was that they were able to change the decision made by Rendall-their owners to shut them down. The place not only survived but flourished due to execution of Quality structured principles.
This will be required when we come across problems relating non-conformance of our own supplier products. After faced with the problem, we should have the ability to locate the situation and discover its root cause with immediate impact. This is done by (CAPA) corrective action items. The system put in place should be such that it should itself evaluate the expense of quality and make an effort to initiate the recovery cost process with the provider.
Suppliers should be urged to apply quality systems of their company so that they can certainly reach the grade of products required and also save paying the recovering costs. (Metric Stream, 2010)
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