Coursework of Operations Management

Comparison and contrast of operation problems among Executive Holloware ltd., Oilpartz ltd. and London zoo

Summary
In this article, three operations management related cases are studied and analysed. The writer compares and contrasts
similarities and differences in these cases in the following aspects: the transformation process model, types of operations,
the objectives of operations. By looking into more detailed problems in each case, those more complex items such as
quality improvement, process planning, capacity planning, scheduling/loading, are also illustrated. And finally, some key
factors concerned with operations improvement and strategy are given to the cases.

Operations management is the term used for the activities, decisions and responsibilities of operations managers who
manage the production and delivery of products and services. Because the functions, characteristics are different in various
companies, operations management themes will not always be the same in those societies. In the cases we studied, for
example, Executive Holloware and London Zoo have to tackle the biggest problem of quality, while Oilpartz Ltd (in the
case of I'll phone you back) is mostly concentrating on the capacity planning. Before we go deeper into those problems,
let's first look at the basic similarities and differences in those companies.

The transformation process model

All operations conform a general model of INPUT-TRANSFORMATION-OUTPUT, however, every operation has its
specific items. Executive Holloware and Oilpartz Ltd process materials because they are transforming their physical
properties, unlike them,
London Zoo processes customers, because they are concerned with transforming their psychological state, providing them
with entertainment and education.

Those inputs are different too. For the transformed resource, known as resources that are treated, transformed or converted,
Executive Holloware and Oilpartz Ltd transfer raw materials, while London Zoo transfers customers. For the transforming
resources, known as resources that act upon the transformed resources, three companies all need adequate and qualified
buildings, labour, information, but animals are unique to London Zoo, while machineries are unique to Executive Holloware
and Oilpartz Ltd.

The outputs from transformation processes are products and services. It is obvious that Executive Holloware and Oilpartz
Ltd give out products, that's why their outputs are tangible, storable, transportable, non-simultaneous (products are always
produced prior to the customer receiving them), low-customer contact (customers have a low contact level with the
operations which produce products). London Zoo provides services, that's why their outputs are totally different from that
of the former two ones, their outputs are intangible, non-storable, non-transportable, simultaneous, high-customer contact.
Types of operations
Although all operations are similar in that they all transform input resources into output products and services, they do differ
in four important respects:
The volume of their output;
The variety of their output;
The variation in the demand for their output;
The degree of 'visibility' which customers have of the production of the product or service (also called the degree of
customer contact).

The volume dimension

There are four critical factors in this dimension: repeatability, specialize, systemization and unit cost. In Oilpartz Ltd, they
never accept orders for repetitive, high-volume work, working procedures are not standard, workers can operate on all the
four types of machines, that's why they are doing a low-volume output. But Executive Holloware is the leading supplier in
the top-quality holloware, they are doing a high-volume output as well as London Zoo, which has a customer range of 4,000
to 18,000 everyday.

The variety dimension

Since Oilpartz Ltd is baring with complex customer needs, they are very flexible in producing. Their operation is high-
variety. The output of London Zoo and Executive Holloware are relatively simple and fixed, their operation is medium-
variety.

The variation dimension

The customer numbers in London Zoo are greatly affected by factors such as holidays, weather, London Zoo accordingly
has to change its capacity, managers will sometimes have to anticipate the visitors figure, thus the variation dimension of it
is high. While, Executive Holloware Oilpartz Ltd processes with moderate-variation.

The visibility dimension

As we mentioned before, the goods of Oilpartz Ltd and Executive Holloware is low-customer contact, their visibility
dimension is thus low-visibility. By providing face-to-face service to customers, London Zoo has a high-visibility.

The Objectives of operations

Every company, no matter what goods or service they provide with to their customers, has its own operations objectives.
Basically, there are five 'performance objectives' and they apply to all types of operations.
You would want to do things right; that is , you would not want to make mistakes, and would want to satisfy your customers
by providing error-free goods and services which are 'fit for their purpose'. This is giving a quality advantage to your
company's customers.
You would what to do things fast, minimizing the time between a customer asking for goods or services and the customer
receiving them in full, thus increasing the availability of your goods and services and giving your customers a speed
advantage.
You would want to do things on time, so as to keep the delivery promises you have made to your customers. This is giving
a dependability advantage to customers.
You would want to be able to change what you do; that is, being able to vary or adapt the operation's activities to cope with
unexpected circumstances or to give customers individual treatment. This is giving a flexibility advantage to the customers.
You would want to do things cheaply; that is, produce goods and services at a cost which enables them to be priced
appropriately for the market while still allowing for a return to the organization. This is giving a cost advantage to the
customers.
Here is the overview of detailed meaning of performance objectives to three companies.

Detailed meaning of performance objectives

FactorExecutive HollowareOilpartz LtdLondon Zoo

QualityCustomers are satisfied
with those luxury
cutlery and table ware
item.
There's no flaw in
the final goods.
Produce according to the
complex and special
customer orders, and
make sure that the final
components are flawless,
100% to the customer
needs.Customers are satisfied
with the service
throughout their visit.
They experience what
they want to gain from
visiting the zoo, they're
happy when they're out
of the zoo and want to
come back.
Speed
There are sufficient
goods in the distribution
shops.
Customers are easily to
buy the table wares as
soon as they want.
For those unexpected and
urgent orders, they can
offer the final goods as
soon as they can.Zoo can offer the
Services as soon as
customers ask for them,
such as food catering,
car parking. Especially
in those rush hours,
speed is critical.
Depen
-dabilityDistributors can receive the
the goods when they
were promised.
Provide the goods to the
Customers according to
the due date of the order.Customers can receive
the service when they
were promised, for
example, they can see
the animals directly,
don't have to wait.

FactorExecutive HollowareOilpartz LtdLondon Zoo

FlexibilityThey produce a wide
range of products, from
those top-quality
hollowware to items
for less expensive.They can produce special components in request of customers, sometimes change their level of outputs
because orders are not in the same quantity all the time. And also, the delivery time can be changed.Zoo can introduce new
Animals, new exhibit
area, new services to the
customers, they are capable
of changing the level of
capacity according to the
visitors figures.
CostReworking and customers
returnsBe careful on each
producing procedure,
since the raw material are
expensive. Avoid
working overtime since
it will add the cost.Make full use of the
investment
Since resources are not
Sufficient.

** Those with shadings are of extreme importance to the companies.

Main problems in the cases

In the three cases, because of the different outputs of those companies, some of the performance objectives are critical and
vital to certain companies, while some are of less importance. In order to meet those objectives, operations managers have
to tackle those complex problems such as quality planning and control, , capacity planning and control, operations
improvement, etc. In the following article, we will go through the problems in the companies.

The quality problems

All operations regard quality as a particularly important objective. In some ways quality is the most visible part of what an
operation does. Furthermore, it is something that a customer finds relatively easy to judge about the operations. Quality is
important to Oilpartz Ltd, because they're the professional producing company of those complex and special components;
quality is important to Executive Holloware, because they're aimed at top end of the market and commanded high price, and
their poor quality has been a burden on the cost; quality is important to London Zoo, because they want to increase visitor
numbers in order to survive in a hard time for zoos.

Fortunately, by carefully selecting the order types and giving full attention to each step, Oilpartz Ltd manages to maintain
an exceptional quality almost all the time. But story is not the same in Executive Holloware and London Zoo. The biggest
problem they are facing is quality. There's 5% of return of products from the retailers, and 5% of rejected from the final
inspection stage in Executive Holloware. London Zoo is totally not sure how customers judge the quality of the service
they provide.

When we are diagnosing quality problems, we first should check whether the product or service meet the expectations of
customers, and whether there's gap between the customers' perceptions of the product or service and their expectations of it.
If the latter exits, there must be other gaps elsewhere. They are:
Gap1: The customer's specification-operation's specification gap
Gap2: The concept-specification gap
Gap3: The quality specification-actual quality gap
Gap4: The actual quality-communicated image gap

In Executive Holloware, there's an obvious gap between quality specification and actual quality. We can see that there is
high frequency of scratches and bruises in the assembly line, even the final goods which arrive to the retailers exit the same
problem. They don't have a clear definition of what is scratches and bruises, what is the standard of semi-finished and
finished goods. The internal quality services are rather poor, workers don't care what kind of semi-finished goods they are
'throwing' to the next stage.
Meanwhile, by doing the questionnaire, London Zoo is trying to find out the gap between service concept and the way the
organization has specified the quality of the service internally, the gap between the customer's specification and operation's
specification of quality.

Quality planning and controlling

Quality planning and controlling can be divided into six steps:
Step1: Define the quality characteristics of the product or service.
Step2: Decide how to measure each quality characteristic
Step3: Set quality standards for each quality characteristic.
Step4: Control quality against those standards.
Step5: Find and correct causes of poor quality.
Step6: Continue to make improvements.

Step1: Define the quality characteristics of the product or service.

Executive Holloware's internal quality assurance department only inspect the final goods in the daily work, however, those
quality problems lie in each step. They should give a clear definition of quality to every semi-product phase, explaining
what is 'scratch' and 'bruises' to the workers on each step.

By doing the questionnaire, London Zoo is trying to define their quality of service. It is good for them to develop the
explanation of zoo service by means of benchmarking the 18 determinants of service quality. In their anticipation, the
performance score will give out the perception of the quality, and the priority scores will give out the customers'
expectations. Since resources such as investment of money, human resources, are not sufficient enough for all the
improvement. London Zoo tries to find out ten priorities to be first considered, if the final score doesn't match the recent
performance scores, that means, London Zoo has to improve those criteria. By looking at the table of priority overall
scores, we first pick up ten aspects and compare them with the performance scores.

Priority
Sequence Aspect of VisitExpected
Performance
ScoreRecent
Performance
Score Gap
1Happiness of animals4.791.96-2.83
2Visibility of animals4.782.08-2.70
3Care of animals4.653.77-0.88
4Overall, as day out4.104.39+0.29
5Commitment to animals3.824.37+0.55
6Number of animals to see3.782.88-0.90
7Educational experience3.673.58-0.09
8Cleanliness and tidiness3.542.76-0.78
9Comfort of animals3.531.73-1.80
10Commitment to visitors3.392.86-0.53

It is obvious that those 10 priorities are what customers expect from visiting the zoo. Although customer choosing criteria
may change under different situations, for example, parking is critical when visitors are over 6000, however, it is not
included into the 10 priority by looking at the overall scores, the overall scores are by far the balance of the whole situation,
those gaps with the negative scores are urgent to be met, the more negative the score is, the more urgent the situation should
be changed.

Step2: Decide how to measure each quality characteristic.

All quality definition should be able to be measured with the quantitative figure or describable peculiarity. In Executive
Holloware, dimensional accuracy can be measured on a continuously variable scale (for example, diameter, length)
scratches and bruises can be measured with attributes which are those assessed by judgement and are dichotomous, i.e. have
two states, (for example, smooth or not smooth) .

In London Zoo, the quality characteristic can be given a continuously variable scale as well as the attributes. For example:

Aspect of Visit
Variable Attribute
Happiness of animalsHow happy is the animals?Are the animals happy to
live in the zoo?
Visibility of animalsHow visible are the
animals?Can you the visitors see all
the animals?
Care of animalsHow much care does the
animals receive?Are the animals receiving
good care?
Overall, as day outWhat should customers
feel when they are out?Are customers happy when
they are out? Will they
come again?
Commitment to animalsHow commitment is the
zoo to the animals?Is the zoo commitment to
the animals?
Number of animals to seeHow many animals can
the visitors see?Is the number enough for the
customers to see?
Educational experienceHow much education
can the zoo give to the
customers?Are customers satisfied with
the education the receive in
the zoo?

Aspect of Visit
Variable Attribute
Cleanliness and tidinessHow clean and tidy is the
zoo?Are customers satisfied with
the cleanliness and tidiness?
Comfort of animalsHow comfortable are the
animals?Are the animals comfortable?
Commitment to visitorsHow commitment is the
zoo to the customers?Is the zoo commitment to
the customers?

Step3: Set quality standards for each quality characteristic.

Not leaving the quality problem to the last step, each semi-product leaving each step in Executive Holloware should has its
own standard, otherwise, it can't be passed to the next stage. By given a clear definition and measurement in the last two
steps, it's easy to set up the quality standards in this step.

This step is critical to London Zoo, because without a good standard, everything will still be in a mass. What they should
do next is to find out what the acceptable level of each quality characteristic, for example, how many animals customers are
hoping to see in the zoo. They can do it with more customer surveys or adopt some benchmark in other zoos.

Step4: Control quality against those standards.

Not only just inspect the final products, QA department in Executive Holloware should also pays attention to each step.
That will give the company a complete controlling system.. Moreover, workers on the assembly line should be incentive to
inspect the quality spontaneously.

Since London Zoo provide service to the customers, except for those objective quality characteristic, they should have good
control of the service quality of their staff. From the performance score, we can see that those staff helpfulness, catering etc
are extremely low, in order to give the customers a complete image of the zoo, employee performances will be a important
controlling point.

Step5: Find and correct causes of poor quality.

With a solid standard in each producing step, Executive Holloware will be able to trace back the origin of the quality
problem and mend it. Maybe the operation method is wrong, maybe the process is not capable enough. Those sampling
basis inspection should be concentrated on one batch of products, not like the way Paul Stone uses, he takes a random
sample at various stages, which can't explain the origin of the problem.

Step6: Continue to make improvements.

Since operations improvements are concerned with all aspects of operations management, we will discuss about this theme
in the last part of the article.

Capacity planning and controlling

Oilpartz Ltd and London Zoo's performance objectives in speed, dependability, flexibility are tightly related to capacity
planning and controlling. Oilpartz Ltd has to work out the timesheet for the complex orders, and London Zoo experience
difficulties when the visitor figure is big. Capacity of an operation is the maximum level of value-added activity over a
period of time that the process can achieve under normal operation conditions.

When we are trying to do the capacity planning and controlling, we usually follow three procedures, they are:
Step1: Measure the aggregate demand and capacity levels.
Step2: Identify the alternative capacity plans.
Step3: Choose the most appropriate capacity plan.

Step1: Measure the aggregate demand and capacity levels.

The visitors in London Zoo are largely influence by weather and holidays, the demand is rather hard to predict, however, its
loading is infinite.

The demand for Olipartz Ltd is relatively stable, since its loading capacity is finite, they have to carefully calculate the
capacity before giving promises to any customers. Without considering the Nitro chemical orders, the average ratio of
load/capacity for processing machinery and for operators are 1.8 weeks and 2.1 weeks, the shortest delivery time is 3 weeks,
theoretically, they are able to accept some extra work. Adding the demand of Nitro, those two figures go to 2.2 and 2.78,
but Nitro asks for the goods in two weeks, it seems that they have to work overtime or deny the order. However, since they
have two turning machines, and considering the bunching of load, things may be different.

Step2: Identify the alternative capacity plans.

London Zoo may chase the demand plan in the way of varying the size of the workforce or using part-time staff in order to
meet the fluctuated demand, or they can manage demand like giving special offers in those off-peak time, etc.

Without consider the Nitro order and working overtime, we first design the Gantt chart ( Appendix 1) in three ways, they
are
Due date (DD)
First come, first served (FCFS)
Longest operation time first (LOT)
In the three ways, bunching of load in turning process are all considered, since the deliver date of Gamma Gases and Delta
Engineering are quite late, the bottle neck will be on Alpha Oil and BP. But in the last two ways, products of AL are first
to be produced, that's why they can't deliver the goods to BP on time. When we see that DD is efficient, we then consider of
adding the demand of Nitro Chemical, fortunately, the work can be done on time.

Step3: Choose the most appropriate capacity plan.

Economically, using part-time staff and facilities, managing demand in London Zoo will be better ways. And for Olipartz
Ltd, producing in the sequence of Due Date will solve all the problems, thus the company will deliver the goods to all the
customers without working overtime and any delay. The cost is controlled, profit is made, performance objectives are
reached.

Operations improvement
Since the customers' expectations are changing all the time, operations improvement will thus never stop. For those three
companies, after they solve the urgent problems, they will have to look back again the performance measurement.
Sometimes, they will have to find new performance standards and make continuous improvements or breakthrough
improvement. The operation managers have to do the "trade-off" all the time.