Operations Management: Supply Chain, Cost, Quality, Location, Efficiency, and Stock Management | Cas

Task 1: Understanding Operations Management in Manufacturing Companies

Task 1(20 marks):

Pick one context from below. For that context answer all the questions that follow:

Steel manufacturer
Toy Manufacturer
Construction company
Mobile manufacturer
Bread manufacturer
Furniture manufacturer
Tyre manufacturer
Beer manufacturer
Textile manufacturer

a) Depict the supply chain with two upstream and two downstream tiers (no explanation needed) [4 marks]

b) What would be the Operation Manager’s roles and responsibilities [4 marks] (150 words limit)

c) What would be cost (the different cost elements), speed, quality and flexibility from the perspective of that context? Explain each individually [4 marks]. Thereafter, separately explain as to which among them would be the order winning attribute (from a market perspective) and why? [1 marks] (150 words limit for the whole question)

d) Explain each of the factors that you would consider in choosing a suitable location for that context.The factors should be presented in order of importance (most important first) and justified [5 marks] (150 words limit)

e) Would inventory management be important for the context? If yes, why? [2 marks]

Task 2 (10 marks):

Read the Uber case study below and answer the questions that follow.

Case study on Uber Technologies, Inc.

Uber Technology, Inc., is unsettling the traditional taxi business. In over 40 countries and 240 markets around the world, Uber and similar companies are challenging the existing taxi business model. Uber and its growing list of competitors, Lyft, Sidecar, and Flywheel in America, and fledging rivals in Europe, Asia, and India, think their smart phone apps can provide a new and improved way to call a taxi. This disruptive business model uses an app to arrange rides between riders and cars, theoretically a nearby car, which is tracked by the app. The Uber system also provides a history of rides, routes, and fees as well as automatic billing. In addition, driver and rider are also allowed to evaluate each other. The services are increasingly popular, worrying established taxi services in cities from New York to Berlin, and from Rio de Janeiro to Bangkok. In many markets, Uber has proven to be the best, fastest, and most reliable way to find a ride. Consumers world-wide are endorsing the system as a replacement for the usual taxi ride. As the most established competitor in the field, Uber is putting more cars on the road, meaning faster pickup times, which should attract even more riders, which in turn attracts even more drivers, and so on. This growth cycle may speed the demise of the existing taxi businesses as well as provide substantial competition for firms with a technology-oriented model similar to Uber’s.

Task 2: Operations Management Challenges Faced by Uber

The Uber business model initially attempts to bypass a number of regulations and at the same time offer better service and lower fees than traditional taxis. However, the traditional taxi industry is fighting back, and regulations are mounting. The regulations vary by country and city, but increasingly special licensing, testing, and inspections are being imposed. Part of the fee charged to riders does not go to the driver, but to Uber, as there are real overhead costs. Uber’s costs, depending on the locale, may include insurance, background checks for drivers, vetting of vehicles, software development and maintenance, and centralized billing. How these overhead costs com-pare to traditional taxi costs is yet to be determined. Therefore, improved efficiency may not be immediately obvious, and contract provisions are significant 

In addition to growing regulations, a complicating factor in the model is finding volunteer drivers at inopportune times. A sober driver and a clean car at 1:00 a.m. New Year’s Eve does cost more. Consequently, Uber has introduced “surge” pricing. Surge pricing means a higher price, sometimes much higher, than normal. Surge pricing has proven necessary to ensure that cars and drivers are available at unusual times. These higher surge prices can be a shock to riders, making the “surge price” a contentious issue.

Questions:

1) The market has decided that Uber and its immediate competitors are adding efficiency to our society. How is Uber providing that added efficiency? [5 marks]
2) What five operations management challenges would Uber be facing (assume pre covid times)? [5 marks]

Task 3 (10 marks):

Read the McDonald’s case study below and answer the questions that follow.

Managing stock to meet customer needs - A c

McDonald's is one of only a handful of brands that command instant recognition in virtually every country in the world. It has more than 30,000 restaurants in over 119 countries, serving around 50 million people every day. All businesses face challenges every day. One of the major challenges facing McDonald's is managing stock. Stock management involves creating a balance between meeting customers' needs whilst at the same time minimising waste. Waste is reduced by: 1) Accurate forecasting of demand so that products do not have to be thrown away as often; 2) Accurate stock control of the raw materials.

Stock management involves creating a balance between meeting customers' needs whilst at the same time minimising waste. This is an increasingly tough balancing act. As customer tastes change, McDonald's needs to increase the range of new products it offers, so the challenge of reducing waste becomes even greater.

Task 3: Managing Stock to Meet Customer Needs at McDonald's

Old System: In the past, stock ordering was the responsibility of individual restaurant managers. They ordered stock using their local knowledge, as well as data on what the store sold the previous day, week and month. For example, if last week's sales figures showed they sold 100 units of coffee and net sales were rising at 10%, they would expect to sell 110 units this week.

New System: In 2004, McDonald's introduced a specialist central stock management function known as the Restaurant Supply Planning Department. This team communicates with restaurant managers on a regular basis to find out local events. The team builds these factors into the new planning and forecasting system (called Manugistics) to forecast likely demand of finished menu items (e.g.Big Macs).

Types of stock:

Raw Materials: The raw materials are the ingredients that will go into producing the finished product. For McDonald's, these will include the buns, beef patties, paper cups, salad ingredients and packaging. These are delivered to the restaurants between 3 and 5 times a week. The raw materials arrive together on one lorry with three sections so that each product can be stored at a suitable temperature. The three sections are: i) frozen; ii) chilled; iii) ambient which means foods that can be stored at room temperature. This applies to items such as coffee or sugar sachets.

Work-in-Process: Work-in-progress refers to stocks that are in the process of being made into finished product. A Big Mac consists of a bun, two beef patties, lettuce, cheese, pickles, onions, sauce and a small amount of seasoning. The restaurant will only combine these items just before the customer orders them so the Big Macs are hot and fresh when served.

Finished products: Finished products are goods that are ready for immediate sale to a customer. At any one time, a restaurant will have a range of products ready for sale. Many of these will include finished products like Filet-o- Fish, Big Macs and side salads.

Using Stock: At McDonald's, all raw materials, work-in-progress and finished products are handled on a First In, First Out (FIFO) basis. This means raw materials are used in the order they are received. Therefore stock is always fresh because products are sold in the order they are made. If the process First In, Last Out (FILO) was used, then the finished product would be dry and unappealing because the first one prepared is the last one sold

Stock Management: Holding too much stock carries costs, so McDonald's runs a lean stock control to save money. Stock management is the process of making sure there is enough stock at all times to meet customer demands whilst minimising expensive waste.

In the past, managers would have had to check their delivery for any shortages and input every item they had received. The system now automatically generates a delivery note that gives the exact quantities and descriptions of the delivery. All managers need to do is simply click 'confirm' on WebLog.

Questions:

1) What do you think are the benefits of the new stock ordering system to McDonald’s and its customers?[5 marks]
2)  What operations management related challenges have McDonald's outlets been facing during Covid?[5 marks] 

Task 4 (10 marks):  

Choose any large car company and conduct research on that company using secondary sources of information (published articles, reviews, websites).

Then write a 400 word report on how the company is ensuring quality in its products and services. You will need to discuss all the different strategies and actions it takes on designing (of cars), sourcing of parts/components, manufacturing, distribution and retailing to meet the quality requirements of its customers. Please cite your work appropriately and you will need to provide at least 6 references you used at the end.