Production and Operation Management Essay Sample

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Introduction of TOPIC

Q1. Explain the basic competitive priorities considered while formulating operations strategy by a firm?
Competitiveness is at the core of all strategies. Even among them, priorities tend to bring the organisation’s focus on the areas to be dealt with in terms of allocation of resources – people, money, and time. This means that different functional areas with their own capabilities and constraints have to be integrated for the overall corporate strategy. Corporate strategy, functional area strategies, market analysis, competitive priorities, competitive capabilities, and new service/product design are the main operations strategies in any organisation. Operations strategy is formulated to leverage the advantages, absorb the consequences of the variable nature of various functions and provide a dependable implementation programme.

Assessment of strengths
Understanding of the weaknesses
Nature of external environment
Resilience of the internal environment

The policies derived from the operations strategy should be amenable to go along with other functions. Organisation strategy should be such that the strategies of different functions are designed to lend support to one another. Culture of the organisation should be established and nurtured in such a way, that, conflicts are resolved with the overall organisation strategy in view. Operations strategy takes under its umbrella the quality, time, and flexibility. a) Quality: Quality is the driving factor for any organisation. When buying a product, a customer will always think about the value of the money he is investing. Even if the price of the product is high, the quality of the product will provoke the customer to buy it. Typical examples of quality are: Amway, Coco-Cola, Pepsi, Tupperware, Sony, BMW. Quality also includes cost reduction by various methods like Just-In-Time (JIT), Lean Manufacturing, TQM, and TPM. Quality enables the firm to be competitive.

b) Time: Time aspect con

siders that deliveries are made on time to meet customers’ expectations. Time taken to develop and

market new products is becoming very critical in the global environment. To seek more business, organisations should reduce the time taken for each factor during operations. The organisations mainly focus on reducing the time for the list given in the figure below :

c) Flexibility: Flexibility enables to meet the changing demands of customers, in order to develop new processes and materials and to make the organisation more agile in its manufacture.

Q2. a. List the benefits of forecasting
There are three main categories of benefit:

Direct cost savings: savings in expenditure other than labour – print, paper, telephone, travel costs, etc. – that can be directly attributed to the introduction of the intranet. These can usually be calculated in three steps: (1) the number of incidences of expenditure in the time period, (2) the cost of each incidence and (3) the proportion of these that could be eliminated using the intranet.

Labour savings: savings in the amount of time required to carry out tasks as a result of introducing the intranet. These can be expressed in minutes per person per day. To calculate the saving, divide the number of minutes saved by the number of minutes in the day and multiply by the size of the population and the average salary.

Productivity increases: increases in output per person attributable to the introduction of the intranet, expressed as a percentage. Because personal productivity has such a wide range of implications from job to job and organisation to organisation, it is probably easier to convert these to simple labour savings.

b. Explain the significance of plant location decision
Facilities management is an important strategic level decision taken by an organisation. It involves planning and management of the plant location and layout. A plant location cannot be changed frequently since a large capital needs to be invested. Therefore, before selecting a plant location, a long range forecasting is to be made to foresee the future needs of the company. Location decisions are made on the basis of parameters which make it suitable for various considerations of suppliers and markets. While locating a plant, the following long range forecasting needs are to be considered:

The company’s expansion plan and policy
Diversification plan for the products
Changing market conditions
The changing sources of raw materials

Layout means the positioning of various equipments, machineries, and department facilities so as to maximise productivity and valuable space utilisation. They are, in turn, linked to the inventory strategy, such as, make or buy policies. The main concern of the operations manager will be the extent of flexibility he/she has regarding:

What is the list of quantities of different products?
What operations have to be outsourced?
How to deal with surge or wane in demand?

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