Operations Management Concepts, Service Sector Growth, And Project Management Essay.

Having successfully completed this topic you should be able to:

• discuss fundamental operations management concepts;
• describe similarities and differences among operations;
• explain the role of the operations function in pursuit of an organisation’s strategic goals;
• describe the functions of an operations manager;
• explain the significance of the services sector in an economy; and
• describe the growth in the service sector.

Fundamental Operations Management Concepts

WIG (Wagga Independent Groceries) is in process of developing better network between the departments and plants within the operating boundaries. For developing the network, project “Wide Area Network” is conceptualized. As a first step, business case is developed (PM-Foundations, 2011). While preparing business case, the high level stakeholder register is prepared with their requirements, roles and responsibilities (ProjectTimes, 2014). After the formation of team, the very first step that is development of WBS (Work Breakdown Structure) is done by decomposing the overall project requirement (ProjectSmart, 2017). Accordingly the WBS is developed .

The activities or tasks under each WBS are identified (PMA.doit.wisc.edu, 2007). All major activities under each WBS are properly listed down. Duration for each activity is calculated by considering the risks and available resources. After properly sequencing the activities using precedence diagram the overall duration and critical path of the project is calculated using early start, late start, early finish and late finish dates (AcqNotes, 2016).

The critical path is calculated as A (Start of Project) ---> C (Functional design review) ---> D (Ordering of equipment) ---> G (Preparation of Site) ---> H (Installation of equipment & other related items at site) ---> J (Orientation & Initial Support) ---> K (Review after Installation) ---> L (Acceptance of system)  using precedence diagram and rechecked by using “POM for Windows” software. 

All critical activities in the project are noted in red border (refer figure number 2). As we can understand the sum of duration of activities in series can calculate the overall duration of project, so the overall duration (refer table 1) is calculated 24 weeks.

Name of Activity in CRITICAL path	Duration of activity (in weeks)
A - (Start of Project)	1
C - (Functional design review)	3
D - (Ordering of equipment)	2
G - (Preparation of Site)	4
H - (Installation of equipment & other related items at site)	7
J - (Orientation & Initial Support)	3
K - (Review after Installation)	3
L - (Acceptance of system)	1
Overall	24

Table 1 (Overall duration of project)

All the resources and efforts need to be directed to complete the critical path activities at the earliest to complete project on or before schedule of 24 weeks. The slack or float is the duration by which any activity can be delayed without effecting the final date of project completion (EasyProjects, 2014). It is calculated by subtracting late finish and late start or early finish and early start of the activity (AmEagle, 2011). Accordingly slack of all the activities are obtained (refer table 2).

Task	Early Start	Early Finish	Late Start	Late Finish	Slack
A - Project Start	0	1	0	1	0
B - Technical requirements and Design	1	3	2	4	1
C - Functional design review	1	4	1	4	0
D - Equipment ordering	4	6	4	6	0
E - System prototyping	6	10	10	14	4
F - Pre-Configuration & Testing	6	8	12	14	6
G - Site preparation	6	10	6	10	0
H - Site installation	10	17	10	17	0
I - Documentation Set-up	10	13	14	17	4
J - Orientation & Initial Support	17	20	17	20	0
K - Post-Installation Review	20	23	20	23	0
L - Formal system acceptance	23	24	23	24	0

Table 2 (ES, EF, LS, LF, Slack of all the activities)  

As mentioned in part 1 that the overall duration of project is 24 weeks, out of which activity H (Site Installation) has the maximum duration of 7 weeks. Now because of outsourcing the activity H, as decided by System manager will impact the Schedule of the project and budget accordingly and by reducing the duration of activity H to 3 weeks from 7 weeks shall be as developed

using POM for windows software. This has resulted in multiple critical paths rather than just one, but at the same time has reduced the overall schedule duration.

As we can observe the overall duration reduced from 24 weeks to 20 weeks. So, there is saving of 4 weeks that is project will complete 4 weeks before schedule, hence if we consider $ 30,000 is the expenditure for an extra week, and then there shall be saving of the same amount per week.

Role of Operations Function in Organizations

Let, Total budget of Project = ‘X’

Additional cost incurred by outsourcing activity H = $ 80,000

Therefore, revised budget became = ‘X’ + $ 80,000

Saving by reducing overall duration of schedule = $ 30,000 x 4 days = $120,000

Therefore, change in overall budget = ‘X’ + $ 80,000 - $ 120,000 = ‘X’ - $ 40,000

So, the project is benefited both ways by reducing the overall duration and even kept the budget under baseline.

Hence, it can be concluded that, it is a smart decision taken by System Manager to outsource the activity H and reduce the risk of delay which could cost $30,000 per week for disruption in operation. 

There are various methods of schedule network analysis like “Critical Path method”, “Resource leveling”, “Schedule compression”, “What-if analysis” (GreyCampus, 2017). Out of all these above techniques, only the Critical Path Method” is the method by which the overall schedule can be managed easily. In critical path method, the activities are loaded with data like early start, early finish, late start, late finish and float / slack. When some chain of activities are linked to each other, while calculating the forward path the early start and early finish dates are calculated. By adding one day to early finish date of its predecessor gives the early start date of the activity and by adding the duration of the activity to its early start date generates the early finish date of the activity and the chain of this calculation continues till the last activity in the chain. Now we need to get backward by first putting the early finish date same as late finish date of last activity and subtract the duration of activity from late finish date will produce the late start date, then the late finish date of its predecessor activity can be calculated by subtracting one day from late start of the activity and again by subtracting the duration of predecessor activity form its own late finish will generate its late start and the chain of this calculation continues up to the first activity to generate the late start and finish dates of all activities (MindTools, 2017). The difference between the late finish and early finish will calculate the float or slack of that activity. Even the resources can also be loaded in the network schedule with cost data too. CPM is very much useful to calculate the forecast, earned value analysis etc. (umsl.edu, 2002). CPM helps in identifying the most essential task, provide comparison between plan and actual (SmartSheet, 2017). These are well managed by many project management software like Microsoft project, Primavera, etc. Whereas other options available are done by only the schedule duration controlling by leveling the assigned resources or compressing the schedule by allocating more resources. 

After plotting the location of suppliers the following coordinate graph is generated which we shall discuss for selection of site location for Wagga Class Furniture.  

We need to conduct the cluster study for using the location coordinates of the suppliers (dc.uwm.edu, 2013). After plotting existing supplier (refer figure 4A), we need to develop approach to divide the coordinates for taking decision in selection of site location. By looking at the location plot of suppliers the major chunk of suppliers can be divided in two locations by putting a virtual line through Y-axis just in between that is at (Y=500 and X varying from 0 to 1000). After this we can observe that the supplier number 4, 6, 8, 10 & 12 are falling below Y axis 500 whereas, the supplier number 1, 2, 3, 5, 7, 9 & 11 are falling above Y axis 500. Now, let us calculate the number of orders falling below and above Y axis 500.

Significance of Services Sector in the Economy

Case – I (Below Y axis 500) Case – II (Above Y axis 500)

Supplier & number of Orders: Supplier & number of Orders:

4 (Leather) = 10 Nos. 1 (Fabric A) = 65 Nos.

6 (Foam Padding) = 100 Nos. 2 (Fabric B) = 35 Nos.

8 (Plastic) = 30 Nos. 3 (Fabric C) = 25 Nos.

10 (Fasteners) = 22 Nos. 5 (Spring Coil) = 52 Nos.

12 (Rocking Mechanism) = 12 Nos. 7 (Foam Padding) = 80 Nos.

9 (Fabric Guard) = 36 Nos.

11 (Cardboard Boxes) = 35 Nos. 

Total (Case-I) = 174 Nos. Total (Case-II) = 328 Nos.

Therefore, we can easily select the probable location for Wagga Class Furniture should be at upper half portion of Y axis 500. Now we need to further go into deep and find the better location in upper half portion.

Now if we consider a virtual vertical line at the center of upper half portion, that is (X axis 500 and Y axis from 500 to 1000) and do similar study as above:

Case – I Case – II

(X - 0 to 500, Y – 500 to 1000)   (X – 500 to 1000, Y – 500 to 1000)

Supplier & number of Orders: Supplier & number of Orders:

2 (Fabric B) = 35 Nos. 1 (Fabric A) = 65 Nos.

11 (Cardboard Boxes) = 35 Nos. 3 (Fabric C) = 25 Nos.

5 (Spring Coil) = 52 Nos.

7 (Foam Padding) = 80 Nos.

9 (Fabric Guard) = 36 Nos. 

Total (Case-I) = 70 Nos. Total (Case-II) = 258 Nos.

Therefore, we can easily select the probable location for Wagga Class Furniture should be at right side of upper half portion. Now we need to further go into deep and find the better location in right side of upper half portion.

Now if we consider a virtual horizontal line at the center of right side of upper half portion, that is (X axis 500 to 1000 and Y axis 750) and do similar study as above:

Case – I Case – II

(X - 500 to 750, Y - 500 to 750)   (X – 500 to 750, Y - 750 to 1000)

Supplier & number of Orders: Supplier & number of Orders:

1 (Fabric A) = 65 Nos. 5 (Spring Coil) = 52 Nos.

3 (Fabric C) = 25 Nos. 7 (Foam Padding) = 80 Nos.

9 (Fabric Guard) = 36 Nos. 

Total (Case-I) = 90 Nos. Total (Case-II) = 168 Nos.

Therefore, we can finally select the probable location for Wagga Class Furniture to be between the coordinate (X – 500 to 750, Y - 750 to 1000) as drawn in below final location after doing all calculations related to location study.  

Finally after studying all above criteria we can select the location of Wagga Class Furniture at right side of upper half portion. The best location to have clear access with maximum weighted supplier shall be at (X=500, Y=800) coordinate. But there are in addition to above considerations, various other factors we need to also take in to mind before selection of final location for Wagga Class Furniture. 

Growth of the Services Sector

The above method is only using the distance factor of location study type. Where we can only find the best location for proposed Wagga Class Furniture with respect to the location of supplier, whereas many other factors we need to take into consideration before finally selecting the plant location. The other options which we can consider are the style of operation as it will decide the mode of operation between the plant and supplier, traffic in between the site and supplier is the big factor to reduce the direct cost as the more traffic there will be more time required to travel distance and obviously the fuel cost will also increase, parking and other accessibility factors are also very much important in doing the analysis as it will impact the Wagga Class Furniture’s future growth as all need to get easily accessible to the area otherwise we may face constraints in the number of buyers and new customers may face difficult in reaching to the location (Entrepreneur, 2015). We also need to check the competition present in the location because it may affect the profit margin and even the employee retention will be a big challenge for the company, local labor market is also a very crucial factor for deciding the location as the location if labor pool is not available then the resource cost for the company will go up whereas at the same time when the resource pool is in nearby location the cost of hiring workers will definitely be in own control and even get the opportunity to negotiate with the resources for getting better productivity o the company, location in and around the plant must be empty to plan for some expansion in future if required as this will provide extra facility and flexibility to Wagga Class Furniture  (SBA, 2017). We need to even consider the expenditure target of Wagga Class Furniture and study the history and rent for the location which can be afforded so that after doing all exercises for selection of site we should not be surprised by knowing the high range of cost of facility for rent and even sometimes we may miss some location where the distance cost analysis is more attractive than other location (Entrepreneur, 2015). In addition to all above physical issues, few other factors also we need to consider before selection like “Dominant Factor” of various sectors of type of labor, quality of people or customers available in nearby location (WisdomJobs, 2017). Likewise there are various factors we need to consider before selection of site or location depending upon different types of industry or plant we are going to set up.

By entering the data into POM for Windows software, the following result or outcome to get a combination of vehicle to move and have a minimum cost is pasted below (uits.columbusstate.edu, 2010). 

Refer figure 5, we can see that the total cost or profit that is optimal cost is $2,160 by obtaining the above combination of flow of electric cars within the city from three different sources (A, B and C) to four separate destinations (D, E, F and G) (labsistemtmip, 2007). The method of starting used is “Any starting method” used to solve the analysis (prenhall, 2017). This is a method by which all the details of combination and permutation calculations are done at the background and a perfect possible result output is obtained for doing further planning and change in combinations.

Project Management Case Study

The solution obtained (refer figure 5) provides the options for obtaining or minimizing the moving costs of electric cars. On the basis of result obtained by doing the analysis, it shows that if the cost of route from source A to destination D is kept $25, from source B to destination D is $10, source C to destination D is $15, source A to destination F is $25, source B to destination G is $30 and source C to destination E is $60. As this diagram result has not obtained any dummy row for demand matching or any dummy column for source matching shows that the source and demand ratio is perfectly matched. Otherwise in case of incorrectness in the data or information regarding the source and demand will always produce a separate row or column in case of demand or supply respectively.

These are the benefits we obtained by using POM for Windows software for Transportation module. But it has few limitations too, which we shall discuss in next section.  

In previous section we observed how POM for Windows software is used to develop the solution to the new policy obtained by Enviro Cars to provide the scheme of ‘return the car to the location most convenient for you’. By doing so, Enviro cars may need to actually expense more for obtaining customer satisfaction. But the system still has some limitations and which can be more refined to get data in different practical issues faced in regular days. The limitations and their support system which are being provided by other useful software.

Total Planning, Project Crashing, and "Best Fit" in Forecasting are a couple of cases. POM can't decide action criticality files or probabilistic venture finish times, nor display "join the briefest line" or "moving" in holding up lines (stern.nyu.edu, 2000).

Issue Size / Modeling Flexibility: when all is said in done, the greatest size of issues that can understand utilizing POM is generously not as much as the comparing size in HOM or WinQSB. For instance, the Forecasting module in POM permits a most extreme of six factors and 90 perceptions contrasted with 20 factors and 1000 perceptions in HOM Xpress-MP is other programming where we can utilize distinctive method of transport alongside the diverse source and goals as in POM (ed.ac.uk, 2000).

POM for Windows has the restrictions of getting yield or conjecture for travel request. These estimates are Travel gauging models are utilized to anticipate changes in travel designs and the use of the transportation framework because of changes in territorial improvement, socioeconomics, and transportation supply. Displaying travel request is a testing assignment, however one that is required for objective arranging and assessment of transportation frameworks. There are many reasons why it is significant to have a GIS as a fundamental piece of a travel request estimating bundle. To begin with, GIS makes it workable for arranging models to be a great deal more precise. For instance, arrange separations depend on the genuine state of the street organize and a right portrayal of roadway exchanges. Second, the entire displaying procedure is more productive. Information planning is enormously encouraged and the database and perception capacities get mistakes before they cause demonstrating issues. For these reasons, less staff time is expected to execute and keep up travel models. A third vital favorable position of a GIS-based displaying framework is simply the utilization of the GIS and GIS-determined estimations specifically in the demonstrating procedure. For instance in TransCAD, diverse displaying conditions can undoubtedly be inferred and connected for various geographic subareas. It additionally brings new and truly necessary capacities for measuring geographic openness (nptel, 2011).

The key preferred standpoint of the nonexclusive model is that its structure does not change when the nearby standards concerning the courses change. The quantity of factors in the nonexclusive model however is colossal, and henceforth, it is for all intents and purposes difficult to count every single possible course. We thusly work with a confined rendition of the model, including just a little subset of the factors (diva-portal, 2005). 

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2017, from https://explore.easyprojects.net/blog/project-management-101-floatslack ed.ac.uk. (2000). Applications of optimization with Xpress-MP. Retrieved May 1, 2017,from https://www.maths.ed.ac.uk/hall/Xpress/FICO_Docs/Xpress-booka4.pdf 

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https://pma.doit.wisc.edu/plan/2-3/how.html  

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