Operations And Production Management Systems: A Case Study

Modernized production systems

Discuss about the Operations and Production Management Systems.

Operations entail all the activities needed to form and deliver an organization’s goods or services to its customers. In our case operational management has been used to determine how well Hawkesbury Company satisfies the needs of the customers. The mission of the operations function will be expressed in terms of productivity, profit and competitiveness between products. Logistics in production enhances the careful use of resources thus management failed to include logistics in the company operations; this resulted to the wastage and mismanagement of resources. The production system comprises both the technology used, division of labor and information flow. The fact that the customer is price sensitive and strict on delivery time increases the pressure to the manufacturing firm. However despite the nature of increased efficiency in the manufacture of a kitchen cabinet, the products sales have outgrown that of the standard kitchen and volume capacity in the firm as well. The improvement of the system to produce a unique model has led to increasing in productivity and increase in sales volume. The direct responsibilities of Mei as the manager are portrayed where he critically examines the tradition of manufacturing and identify the need for customer’s opinion to meet his/her needs.

The aspect of changing nature of the operations in Hawkesbury Cabinet Pty ltd has been discussed in the case study where the traditional manufacturing processes are put aside to give way for modernized methods characterized with highly specialized machinery which increase the operations efficiency. The manufacture of standardized kitchens has more costs incurred which leads to a decline in profitability of the company hence Mei have decided to focus on unique designs according to client specifications. “Mellvin (1994) states that new design produces greater revenue and has the largest production capacity compared with standard k due to the introduction of new skills in designing”. The customers accept the unique model and methodology of manufacturing adopted by the company. There are inevitable circumstances of which leads to increase in pressure due to the nature of the client known as ‘specs’ builders.

Division of power

The company designs and manufacturers kitchen cabinets and belong to Fung and Mei , the two owners  distributed managerial responsibilities and some of the duties they had to fulfill include; managing of the operation process, improvement of the system, embracing design, planning, control and operations in strategy, formal identification of roles.  Earlier before the recent production changes the company had focused entirely on custom made kitchens where clients were given the opportunity to consult with Mei for a unique design specifically for the individuals.

Division of power

The company uses high quality general purpose machines to provide the kind of flexible products that the clients desire of a wide variety of custom designed cabinets. The process of painting is done on the fully assembled cabinets in an assembly area that is well controlled in the rear of the facility. The final process of finishing is done in the same area as the painting and as a reason growth has become large and a continuous process. ”Winslow (2002) said the existence of varying tastes and preferences of the potential buyers keep the producers on suspense.”  Fung and Mei became more and more popular with their client base becoming more and more diverse because of the good reputation out of their quality goods and high performance levels.  Fung holds the position of a master cabinet maker whereas Mei competencies are that of an interior designer. Through over time, Fung duties had evolved due to the increasing capacity of the company and the rising needs, this led to a new role assigned to him in the position of production and operations manager.  Mei has always had an interest in the overall managerial of the company which comprised of the financial activities.

The use of same equipment for both the custom made cabinets and the same crafts people led to competing on the same processing time with the limited machinery to work with. This resulted in the waiting period to increase for completion of one task and overall contributes to partially completed jobs. The effect of the new builders on the Hawkesbury operations is that pressure in processing due to a reduction in time spent in manufacturing. This is enhanced to meet client deadline since the builders ‘kitchen were becoming increasingly important and popular in the market.

The builders’ kitchen contributed 60% of the company’s volume and 75% of the revenue generated by the company in total. The rest 40% volume in production capacity was for the standardized kitchens and the revenue generated was 25%. The financial effect of the builder’s kitchen would be an increase in profit made in producing the builders’ line of kitchens.

The total output  of Hawkesbury Cabinet Pty Ltd and manufactures- custom built kitchen is not sufficient for supply to all the builders thus the  company sales has to increase, however the company had been signing low volume contracts to ‘specs’ builders although they maintained a good standard. This results in a reduction in the limited range of batches being made into smaller batches. These specifications of batches lied between single kitchen up to five kitchens of the given qualities or specifications made. Another challenge encountered was that of Stringent delivery requirements by the client builders who were also price sensitive than custom- made price buyers.

Production processes

Multitasking

“Friedrick (2003) Multitasking of the two activities of manufacturing the kitchen cabinets and the custom designed cabinets which were being carried out at the same time in a manufacturing facility.”The single facility cannot accommodate a higher production level due to inadequate resources unless it is enlarged.

Re-scheduling

Regular scheduling has been witnessed due to sales of the builders’ lines increasing. Prioritizing over the cabinet kitchen led to abandoning of the standard cabinets to leap a higher benefit from the higher sales and profit margins. ”Edward (2001) argues that Wastage in the company has been an issue where the components of the standard kitchen are scattered all over in the manufacturing firm as more attention is paid to various production departments”

The company does not utilize the resources efficiently and minimizing the cost of production is neglected in this case. Costs associated with the company standard builders increased steadily as a result of the non-utilizing the resources. “Champy (1999) states that excess money could have been used in production processes in the firm tied up in the material inventory, finished goods  and work in progress. “ Stock holding costs and other stock-age costs became rampant due to the excess inventory that the company had incurred and thus hired a new warehouse in the nearby. Standard and custom orders faced the challenge of pro longed lead time for a number of days. This led to the delay of the promised deliveries and longer time was spent to deliver the orders. Mei the general manager was disturbed by the prolonged delay of the orders because he had a role to play in the responsible management of the company. He faced challenges dealing with the clients who had made new orders to the company.  The issue of increased volume work in the process led to a tremendous change in the previously well-organized manufacturing area to into a factory which was clogged up with work partially completed. “Burnetas (2001) said that the manufacturing capacity of the firm was put to the limit due to the current operations systems of lagged production and hence no space left for further expansion of the business.”

Conclusion

The two partners have to obtain knowledge of the global trends in the field of supply chain management in order to meet customer ever changing demands. The company has to encompass logistics in its operations to reduce wastage. The logistics will ensure that standard cabinet components which are left lying partially uncompleted work are well accounted for and carefully used. The customer expectations have skyrocketed; new experts in the field of design with more creativity to provide the client with the expected standards are to be hired. The operations management is an integral position of the above company hence there are areas where operations functions and the skills of an effective operational manger are strongly tied to the organization’s lasting success. To counter the issue of increased volume of work the company has to hire new personnel and buy machinery and apply technology that will assist in reducing the partial work into completed work. They must configure a product system which will be most efficient and affective for the overall improvement in designs and processes.

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