BMPJ 6603 Managing Operation
1.0 Capacity Panning
Capacity planning refers to identifying and determining the kind of labor, tool, as well as equipment capacities that are necessary and when they are required. In the manufacturing sector, capacity is often planned based on labour or machine hours that are available within a specific plant. Thus, this illustrates that operational managers engage in capacity planning because it assists them in planning for quantity or scaling of output. This demonstrates that capacity planning is the process that companies or enterprises use to establish their output rate that a specific facility can achieve. When a company fails to plan its capacity correctly, it affects customer experience and satisfaction because of late delivery orders and operating with unmotivated personnel. Operational managers manage to use capacity planning to compare the specific requirements with the current capacity, allowing them to make decisions on the adjustments needed to improve the company’s capacity.
1.1 Importance of Capacity Planning
1.1.1 Capacity Limits the Rate of Output
Capacity planning plays a significant role in determining the ability of a company or business entity to meet the future demand for its various products and services. Planning is a continuous process that can be developed with the emerging changes that emerge as the company or enterprise carries out various activities and operations.
1.1.2 Capacity Influences the Operating Costs
In capacity planning, capacity is identified and determined based on the estimated demand. There exists a difference between actual demand and the expected demand. This implies that there emerges either excess capacity or under capacity. Idle or excess capacity increases the cost per unit of output, while under capacity facilitates the loss of sales.
1.1.3 Capacity Planning increases a company’s level of competitive advantage
Indeed, capacity planning is advantageous because it raises a company’s level of global competitiveness. Competition is high in the globalized market and economy, and this has made companies to seek for alternative ways of increasing their global level of competitiveness. Capacity planning is both short-term and long-term oriented, illustrating that it increases the capacity of a company to address various operational issues.
1.2 Procedure for Capacity Planning
1.2.1 Assessment of Existing Capacity
The capacity of a company or enterprise can be measures based on outputs or inputs. In the case of manufacturing concerns, the output measure is the most appropriate. This includes automobile plants, steel plants, breweries, power companies, as well as canneries. Companies that have service concerns like airlines, universities, theatres, hospitals, as well as warehouses can measure their capacity based on inputs.
1.2.2 Forecasting Future Capacity Needs
Short term capacity requirements estimation can be through forecasting the product demand at the various stages of the life cycle of the product. It is quite difficult to estimate long-term capacity because of the uncertainties of both technology and market. Capacity forecasting allows companies to determine the gap between the current capacity and the estimated capacity to make the necessary adjustments. For instance, a company that manufactures two products may find that one has a low demand in winter while the other has a low demand in summer.
1.2.3 Identifying Alternative ways of Modifying Capacity
In case the existing capacity fails to meet the forecast demand capacity, it is crucial for operations managers to seek for additional shifts that can be employed to expand capacity. Expansion allows companies or business entities to provide economies of scale, allowing them to meet the forecast demand.
1.2.4 Evaluation of Alternatives
Various alternatives for the expansion or reduction of capacity are articulated from technical and economic viewpoints. The reactions of the local community and the employees should be taken into consideration. The main techniques of evaluating alternatives include cost-benefit analysis, queuing theory, as well as decision theory.
1.2.5 Choice of Suitable Course of Action
After evaluating various alternatives, the last step involves selecting the most appropriate one. The choice made is based on the evaluation made concerning a company’s capacity to satisfy the demand for various products and services.
2.0 Importance of Meeting deadlines and orders
2.1 It enhances customer experience and satisfaction
In most cases, customers expect companies to deliver their orders in time and in the shortest time possible. This means that delivering orders within short periods meets the desires and expectations of customers. Customers desire to interact and carry out business with companies that deliver the expected products without delay. Making timely deliveries is vital because it promotes customer experience and satisfaction. Customer satisfaction is associated with the emergence of customer loyalty, which is critical for business growth and development.
2.2 It Enhances Productivity
Meeting deadlines and orders is accomplished when businesses create and develop a culture of teamwork within employees, commencing by setting different goals and objectives that are achievable. This ensures that all employees are willingly committed to the roles and tasks they are given, encouraging an open communication network between employees and the management. Operating with a motivated and encouraged workforce is an added advantage, and it enhances the productivity of both an individual and the company as a whole.
2.3 It Maintains a Positive Credit Score
Companies that manage to meet deadlines and orders benefit from the initiative because they end up maintaining a positive credit score. A company’s credit score reveals how well the business is doing in the market. When companies meet deadlines and orders, they ensure that their accounting books are in order, and employees and creditors are paid in time. This helps a company to maintain a positive credit score, which is useful for enhancing business sustainability.
2.4 Time Management
In the business sector, time management is essential because it allows companies to accomplish the desired goals, missions, as well as objectives within the expected timeframe. Missing deadlines and orders are often as a result of poor time management. It is vital to keep projects, orders, as well as work schedules on track because it allows a company to evaluate the progress made and the areas that require additional adjustments. Time wasting affects business operations, and companies fail to meet deadlines, making orders to be delivered late. This affects customer experience and facilitates customer dissatisfaction.
2.5 The Just-In-Time (JIT) Concept
JIT promotes an efficient production in a company or business and delivery of the essential parts in the precise quantities, at the right time and place while making use of fewer facilities. This means that JIT is a production method that aims to improve a company’s overall productivity by eliminating wastes, and this leads to improved quality.
2.6 Benefits of JIT
2.6.1 Product Cost
JIT reduces the production costs because of the reduction of the manufacturing cycle time. In addition, JIT enhances the reduction of wastes and inventories, which reduces operational costs. JIT also reduces the production cost because it helps companies to eliminate non-value adding operations.
2.6.2 Quality
JIT manufacturing improves the quality of products because it emphasizes on the continuous quality improvement programs. In business, it is vital to improve the quality of the product because it is a strategy that has been associated with improving customer experience, satisfaction, as well as loyalty.
2.6.3 Design
JIT allows companies or business enterprises to respond to fast engineering changes. In the current generation, technological advancements have improved, and this means that companies have managed to create alternative designs that can be taken to shops quickly.
In this case, Griggs Company can use JIT to identify and correct the various obstacles they are facing in the production process. Since their inventory has hidden problems, JIT would be appropriate considering that it allows a company to increase inventory turnover, and in return, reducing the hold and all connected costs. The JIT approach aims at eliminating the necessity to carry large inventories and incur more carrying and other related charges to the manufacturer. Since Griggs company is a product-oriented company, JIT would be appropriate to use to minimize the delays caused in making deliveries and meeting production deadlines.
3.0 The Concept of Lean Operations
Lean operations refer to a means of running a company or organization by prioritizing customer satisfaction while at the same time making use of as few resources as possible. The primary objectives of lean operations include creating value for esteemed customers and also eliminating wastes. Companies produce too much waste during the production process, and it is vital to take into consideration the environment in all business operations because it enhances sustainable environments and businesses. It is crucial to demonstrate that companies that utilize lean operations focus more on efficiency. The lean operations concept allows companies, organizations, as well as businesses to do more with less. This means that they manage to create value and increase their profits.
3.1 Benefits of Lean Operations
3.1.1 Increases Efficiency
The primary objective of lean operations is to improve efficiency. Lean operations ascertain that everything in the company or plant works well and as expected, improving processes and increasing profits. When all operations are in place and order, a company manages to be efficient because it ensures that everything works similarly to a well-oiled machine.
3.1.2 Elimination of Waste
Lean operations focus on the reduction of wastes, which allows companies to reduce costs and incur more profits. Eliminating waste is one of the major problems most companies operating in the manufacturing sector are trying to address, especially considering the global age where environmental concerns have increased. As a result, companies have managed to find alternative ways of production in an attempt to reduce waste. When a company manages to minimize waste, they create a strong brand and image that allows them to grow and develop. Thus, lean operations are a strategic way of eliminating waste and increasing profits. Some of the main areas that Griggs can employ lean operations, include inventory and transportation. This will assist the company in ensuring that they have sufficient stock to satisfy customer demand, which promotes optimization.
3.1.3 Quality
It is vital to recognize and understand that lean operations focus on improving efficiency and reducing waste. This implies that lean operations also have a strong emphasis on quality. By abolishing waste and inefficiency, a company that uses lean operations produces quality products. This is important in the world of business because customers have the desire to purchase goods that are of high quality. Griggs company can implement lean operations in the production process to ensure that they produce shoes that meet the expected standards or requirements. This will ensure that they produce quality shoes that are competitive in the globalized market and economy. Therefore, lean operations are associated with improving the quality of products and services offered by a company or organization. High-quality products are accomplished when companies focus on customer value, another main objective of lean operations. This implies that Griggs Company can manage to address most of the problems they are encountering by initiating lean operations in various business areas like inventory, transport, production, as well as jobs.
4.0 Waitrose and the Delia Effect
Advertising and the use of special offers have been regularly used by stores in the supermarket industry to increase overall demand and individual and seasonal products. The supermarket industry has sort for alternative ways of marketing various products in an effort to attract more customers to improve sales, revenues, as well as profits.
Waitrose, a well-known high-end supermarket chain, changed its working policy of not working with celebrity figures to endorse or promote their various products. Waitrose managed to sign two famous celebrity chefs to recommend the company’s products on a contract that runs for three years. Delia Smith, who is a recipe writer, TV presenter, as well as a leading author, managed to join forces with Heston Blumenthal, an individualist chef known for bacon and egg ice-cream, cooking using dry ice and other various innovative creations in the kitchen, to spearhead the advertising campaign.
The campaign involves the two celebrities shooting a sequence of TV adverts and appearing on different billboards and featuring in some magazines. Waitrose’s advertising strategy focuses on demonstrating various seasonal products utilized in a recipe every other week, in TV ads, and backed up by posters and in house specific offers. The adverts are in the form of a short cookery program, where one or both cooks demonstrating the recipe. Some of the commercials last the entire advertising break of not more than three and a half minutes. Richard Hodgson, the company’s advertising director, revealed that the company had developed a culture where there are new ideas every week. He continued and elaborated that, “Sometimes it will be a recipe, sometimes visiting a supplier or farmer, maybe even demonstrating a kitchen utensil.” This means that the company was dedicated and committed to creating innovative and creative adverts in an effort to attract more customers and increasing product sales and profits.
Waitrose’s distribution partner, Ocado, has restructured its company website to ensure that customers can order various products directly from the online platform. Technological advancements in the current society have improved the efficiency and effectiveness of companies and business enterprises across the globe. As a result, Waitrose has allocated various prime locations on the verge of refrigerated isles with all the necessary ingredients for the weeks’ campaign combined together, as well as on a special offer charge.
The Shortcomings
It has not been smooth, however, because the campaign encountered a lot of criticism for the timing of a specific advert for Delia Smith’s rhubarb and ginger brulee. The advert was initiated very early in the year, and British rhubarb growers could not manage to meet the high demand. The well-known occurrence of the Delia effect demonstrates that Waitrose sold enough of the plant, having sold 61,000 desserts in a period of four days. This was the same quantity of desserts that they were selling in about twelve weeks. As a result, the British growers failed to meet the spiked demand. Britain’s rhubarb is commonly grown by small scale farmers in a small area between Bradford, Wakefield and Leeds called West Yorkshire. The area is known as the Rhubarb Triangle. Earlier in the year, growers manage to force it by deciding to grow the plant in sheds that have been heated, and have limited capacity. Janet Oldroyd, one of the members of the Yorkshire Rhubarb Growers’ Association, revealed that the season’s crop had been delayed as a result of bad weather, which reduced output. Another source from Waitrose revealed that sales of rhubarb were extreme in the company after the recipe had been published online, and it had to source from outside to satisfy the increasing demand.
In addition, a Delia recipe meant for fish risotto led to a backlash from even the most loyal and die-hard Delia customers and fans after it was described as ‘vile’ on the suggestion and discussion section of the company’s website. One of the customers wrote, ‘I bought the very expensive ingredients for the seafood risotto expecting to lay on a treat for my family. We all had one mouthful and gagged. It was disgusting to say the very least. The entire meal went in the bin, and we all had toast instead.’ This initial comments concerning the recipe left Waitrose with an excess stock of the recipe’s ingredients.
There are specific requirements that should be considered when planning these campaigns for Waitrose to gain a better understanding of the factors that impact the supply of various products and how much the demand is likely to be. This must be carried out within the supply chain, and the Waitrose supermarket requires to develop a flexible plan in order to prevent further problems. Their success relies on their ability to enhance capacity planning and promote lean operations.
Waitrose should first evaluate and review its capacity to understand their production capacity. This will enable the company to identify the existing capacities and compare it with the expected demand. The current demand for their products is high, and the suppliers have failed to satisfy the increasing demand. This means that the company should monitor their supply chain to ensure that they obtain the required ingredients or materials for the preparation of recipes. Waitrose has recorded an increase in demand, which has encouraged its clients to be seasonal with their good selection. With this, the suppliers can manage to meet the demands of the supermarkets more easily compared to the past. It is vital to balance the supply chain because it is a crucial component of the organization that keeps them moving towards the stipulated goals, missions, as well as objectives. Capacity planning will be efficient for Waitrose because they will manage to evaluate their capacity and the demand. Capacity planning will improve the quality of their products, considering that it focuses on quality, improving efficiency, as well as reducing waste. The demand for Waitrose’s products is high, and the company has to set long-term initiatives to ensure that its business manages to thrive, and it is sustainable.
References
Delia Smith and Heston Blumenthal to star in Waitrose ads Harry Wallop, Consumer Affairs Editor Published: 3:11PM GMT 03 Mar 2010 Telegraph online
Delia Smith causes rhubarb shortage by Stephen Adams Published: 9:18AM BST 04 Apr 2010 Telegraph online
The risotto rebellion: Anger of Delia fans left gagging on her ‘vile’ seafood recipe Jo McFarlane 3rd May 2010 Daily Mail online