In the following assessment, the questions to a case study will be answered first. While answering these questions, the assessment will include the five performance objectives which will be thoroughly explained. Moreover, the three E’s that is Economy, Efficiency and Effectiveness will also be explained. Hence, the link between operation management and strategic planning will be noted. Furthermore, related to the case study itself, we will also come across on how to organize a typical production process.
Additionally, the importance and nature of operational management will be shown by first of all, explaining its importance, the need to produce safely and a system diagram will also be done.
Finally, in relation to the case study, relevant techniques to the production of an operational plan for a typical business will be applied. During this process, quality will be defined and how it can be maintained. A network plan will also be produced and will indicate the resultant critical path.
Inventory Management at Flame Electrical.
1. Task1-Lo2&Lo3 (2.1, 2.2, 2.3 and 3.1, 3.2, 3.3)
2.3: Define what you think the five performance objectives mean for an operation such as Flame Electrical and justify which one is the most important?
Operations management can be defined as an area where managers are assigned to design and control the production process and redesign the operations of the business in producing goods and services. The objectives of an operation are very large especially for a business like Flame Electrical as it distributes the products itself. Operations management can affect stakeholders also either positively or negatively.
In operations management, there are five performance objectives. These five performance objectives are as follows:
All the operations performance objectives are important. This is because without one of them the business would not be able to analyse what is missing in their business.
But the most important performance objective of Flame Electrical would be quality. Quality is the only performance objective that has a greater impact on customers. If the quality of the product or service of Flame Electrical is not good this affects the business and customers negatively. As stated in the case study, “Excellent service is the foundation of our success”. Hence, we can note that good quality service is their priority.
2.1&2.2 : “It can be difficult to find the best mix of effectiveness, efficiency & economy as there are so many ways to obtain value”. Critically analyse this statement in relation to cost and excellent service.
Nowadays it is very important to make use of the 3 E’s in a business because competition has increased all around the world. The 3 E’s are Effectiveness, Efficiency and Economy. With the 3 E’s, it helps any organisation to remain flexible and to always be prepared for any difficult situations in the future. Many businesses do not survive as they focus only on profits. Hence its preferable to focus on long term strategies.
The first E is Effectiveness. Effectiveness helps to improve the performance of a business and to achieve the goals that has been set. A business knows that it has succeeded in effectiveness when its goals has been achieved in time.
The second E is Efficiency. Efficiency helps to reduce the wastage of resources in a business. In other words, the business uses its resources properly. Due to this, costs of the business may also decrease.
Finally, the third E is Economy. Economy involves only the financial side of the business. The management find ways to reduce costs to be able to achieve future goals. Moreover, when costs are reduced, the business is able to provide better service to its customers.
Having these 3 E’s is perfect for a business, however, it is quite difficult to find the best mix of the 3 E’s, Effectiveness, Efficiency and Economy. This is because being effective and efficient at the same time is difficult. Being effective means that the business is improving quality, in other words, it is called quality maximisation. As for being efficient means using less resources as possible to reduce costs, that is cost minimisation.
Quality maximisation focuses on improving the standard of products and services. For Flame Electrical, quality is very important as its aim is to satisfy its customers. Cost minimisation is the reduction of costs in a business. The aim is to produce goods with less costs but which is of good quality.
The main tension between quality maximisation and cost minimisation is that the business has to produce low cost products with good quality. This is because maximizing quality can be quite expensive and time consuming and hence this goes against cost minimisation which makes it difficult to maintain low costs. Therefore, this can result in unsatisfied customers, bad reputation of the business and a decrease in profits.
Thus, it can be said that is difficult to have the best mix of the 3 E’s as a business would want to improve both costs and quality of its products.
3.1: How can the application of Linear programming be beneficial to the operations of Flame Electrical?
Linear programming is a mathematical method used to find the best or optimal solutions when a business is having problems to make decisions with their resources to achieve goals of objectives. There are three steps when using linear programming:
The application of linear programming can be beneficial to the operations of Flame Electrical by helping the business to make better quality of decisions. As stated in the case study, the managing director decided to pay incentives to the staff as a way to motivate them. By using linear programming this can help the manager to make better decisions on the staff.
A second way on how linear programming can be beneficial to Flame Electrical is by making use of all the resources that are available. In other words, there is no wastage of resources in the business.
3.2&3.3: Discuss on the importance of inventory planning highlighting the process involved as well as the strategies that can be adopted.
Inventory is an important asset for a business but it is also quite expensive. Many businesses want to balance inventory levels by using cost minimisation as its goal. Low inventory results in unsatisfied customers which is not good for the business. But with inventory planning all this can be controlled. There will be no wastages of resources and this will help to reduce costs and improve the business itself.
The inventory process undergoes the following:
Inventory is stored at the Raw Material and Finished goods stage in the process, which is called Inventory Storage. However, at the work-in-process and assembly stage it is called the Inventory Processing.
The strategies that can be adopted with inventory planning is that demands of customers are satisfied very quickly. This is an advantage for the business as this leads to satisfied customers and an increase in profits.
Another strategy that can be adopted is to avoid supply shortages and delays in deliveries. This can be done by businesses if they stock inventory properly to protect themselves from wastages and excess of shortages.
Hence, it can be noted that inventory planning is important for a business as it helps the business to maintain the right balance between high and low inventory to minimize costs in a business.
2.Task2-Lo1(1.1, 1.2, 1.3, 1.4)
1.1&1.3: Explain the importance of operations management in relation to the strategies of the selected organisation.
The selected organisation is the United Basalt Products which is a business that produces goods such as blocks. Operations Management is a process which converts inputs such as raw materials into outputs as in finished goods. Without operations management, it would be difficult to follow the process of production properly.
Operations management also involves strategies of a business. Operations strategy focuses at long-term issues on how to manage the raw materials which produce the products that is blocks. It is important for The United Basalt Products to control its raw materials because without them the business will come to a halt.
Operations strategy does not only help in the control of raw materials but also helps in decision-making at the top of the organisational tree. This is called the top-down perspective of operations strategy. As for the bottom-up perspective is to view strategic decision as a collection of actual experiences. With the help of operations management, strategies are well maintained and applied to the united basalt products(UBP).
1.4: Produce a systems diagram to illustrate the operations of the business
1.2: Is there a need to produce on time, to cost; to quality and within the law? Discuss
On one hand, yes there is a need to produce on time. This is because when producing the products that is blocks on time, there would not be any delays in delivering the blocks for construction in its various destinations. Not producing on time can have a quite negative impact on the business. This can lead to unsatisfied customers, decrease in profits and bad reputation of the business.
There is a need to produce to cost. If the business exceeds the costs this will only affect the business negatively. The business will not be able to invest in other things to achieve other goals as costs are too high. Moreover, they will have to decrease the purchase of raw materials which will only result in the decrease of production. When producing to quality, the business only gains from anywhere. Customers are satisfied, the business gains good reputation. The only disadvantage is that when providing good quality products, costs are higher. But if the business’s goal is to maintain good quality then costs is not such a problem for them.
A business must always follow the rules and regulations either from within the business or externally that is the government. It is an ethical approach which is good for the business. Therefore, the practices of the business should always be legal. Otherwise this can lead to bad reputation of excessive costs such as fines.
Hence, it can be noted that the need to produce to these 4 factors is important or else this will affect the business negatively.
3.Task 3-LO4 (4.1,4.2,4.3)
4.1&4.3: Explain how quality could be defined and maintained in the context of Flame Electrical.
Quality can be defined as being similar to specifications, fitness for use and being valued for the price paid. In other words, the quality of the products should be according to the demands of the customers. The product should be able to perform well for its intended use which will then prove that the product is of good quality. Furthermore, the product must be valued for the price paid that is if quality provided is excellent the price will definitely be higher. However, if the product is of bad quality the price will be lower.
In Flame Electrical, the quality of service and products being provided to customers is good. This is because customers are very satisfied as their demands are fulfilled quickly. But a change can happen at any time and hence quality must be maintained. To maintain quality, Flame Electrical can use the Total Quality Management philosophy. That is first of all, Flame Electrical must always strive to improve continuously. Secondly, always find the problems of quality and solve them as fast as possible. Additionally, they should put customers as their priorities and always keep checking changes in demand. Finally Flame Electrical must focus on customer needs either internally of externally.
Thus, with these, Flame Electrical will be able to maintain quality in its business and continue to be successful and achieve its aims.
4.2: Produce a network plan and indicate the resultant critical path
Resultant Critical Path: A, C, D, E
Thus to conclude, operations management is important for a business as it helps a business to stay successful. In other words, it helps a business to reduce costs, improve quality, do proper inventory planning and many more.
Due to operations management, a manager can control and function its business properly and prepare the manager to face harder challenges and situations in the future.
1.Home - The United Basalt Products Ltd
In-text: (Ubpgroup.com, n.d.)
Your Bibliography: Ubpgroup.com. (n.d.). Home - The United Basalt Products Ltd. [online]
Available at: http://www.ubpgroup.com/en/home.html [Accessed 2 Jul. 2016].
2.Objectives of Operational Performance
In-text: (Smallbusiness.chron.com, n.d.)
Your Bibliography: Smallbusiness.chron.com. (n.d.). Objectives of Operational Performance. [online]
Available at: http://smallbusiness.chron.com/objectives-operational-performance-77937.html [Accessed 1 Jul. 2016].
3.What is quality? definition and meaning
In-text: (BusinessDictionary.com, n.d.)
Your Bibliography: BusinessDictionary.com. (n.d.). What is quality? definition and meaning. [online]
Available at: http://www.businessdictionary.com/definition/quality.html [Accessed 3 Jul. 2016].
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