Performance Objectives of Superior Maintenance Services - Term Paper Example

Operations Management at Superior Maintenance Services, Inc. Introduction Superior Maintenance Services, Inc. (SMS) is a janitorial and maintenanceservices provider in the Philippines, established in 1965. It is currently the acknowledged industry leader being the largest in the country. It has 4,000 contractual workers servicing over 500 client banks, airlines, shipping companies, embassies, call centers and telecoms, factories, golf courses, country clubs, shopping malls, high-rise office buildings and condominiums, restaurants, schools and churches. Over the years, it has enhanced its services through the development and production of its own custodial cleaning solutions using chemicals directly imported from producers abroad. It also manufactures its own cleaning equipment and materials in order to assure clients of no downtime in maintenance operations. Through the help of the government agency for technical education and skills development it has developed a manpower training programmeand is considered industry partner for skills development in this sector. With its widespread popularity and good reputation, it has recently diversified its offerings to include marketing and distribution of other organisation's products through joint venture agreements, such as those for restroom odourcounteractant dispensers, floor mats, electronic air cleaners, waterfree urinals, air fresheners, liquid soap dispensers, and rent-a plant services. Business operations at SMS include massive recruitment of potential workers, manpower training, client sourcing, client servicing, manpower deployment and deployed manpower monitoring and supervision, and customer accounting. A full time staff of 30 employees handle administrative services such as accounting and finance, personnel administration, recruitment, marketing and sales, and accounts management through regular coordination by account officers with clients as well as deployed personnel at client premises. Performance Objectives According to Slack et al (2004), there are five operations performance objectives: speed, quality, flexibility, dependability or reliability, and efficiency, which includes cost-effectiveness. Speed is the length of time to serve customer orders for products or services, from the moment a customer order is placed up to the time a product or service is delivered. The performance objective of speed is to lessen this length of time. At SMS, speed is a very important objective because normally, a client requests for janitorial or manpower services because of a present and usually urgent need. The ability to serve such requests speedily is critical, otherwise the client may opt to place the order with a competing service provider. To help assure a ready supply of manpower for deployment purposes, continuous recruitment and training is conducted by SMS. Qualified recruits are immediately asked to undergo training to prepare them for immediate deployment as soon as assignments are confirmed with the client. Trainees pay a minimal fee for to cover the cost of materials used during training, consisting of reading materials. At times, some qualified personnel have already joined another organisation. But sine, the manpower pool is large, service delivery times are maintained. The cost of recruitment and training are borne by the company as part of its operating expenses. Quality is the degree to which products and services meet the specifications promised by the organisation to its customers. And to achieve a high and consistent quality, a set of standard procedures must be stringently followed to ensure quality service as well as high-quality products manufactured. In terms of quality service delivery, SMS ensures that the workers it deploys are sufficiently skilled and qualified to perform the services they have to deliver by making them undergo the standard training which is a combination of lectures, demonstrations and hands-on drills and exercises. Moreover, since SMS manufactures its own cleaning solutions, equipment and materials, it has complete control over the quality of these implements and not dependent on the quality of products provided by external suppliers. For on-going contracts with clients, account officers of SMS regularly conduct site visits to gather feedback from customers as well as check on the deployed personnel. There is also a help desk maintained at the SMS administrative office to respond to customer and worker issues and concerns. These processes help ensure immediate resolution of problems when they occur. Flexibility refers to the ability of a process to be adapted to the changing needs of the customers. Although regular service contracts at SMS mean at least 3-month engagements of at least 5 people each, some clients have requested for less number of people or more people for less than 3-month durations. Smaller client organisations need less people, while some clients need additional people but only for a very short duration, especially during special events. SMS is flexible with such arrangements beyond the regular but tacks on surcharges. Moreover, since SMS clientele sometimes require temporary manpower services beyond the regular janitorial and maintenance personnel, it willingly accommodates on a best effort basis such requests as for drivers, clerical staff, peons and the like. Accommodating these types of requirements is not so difficult as most recruits have multiple skills. Reliability and dependability is the extent to which processes perform as expected. For SMS, this means being able to provide the required skilled manpower as needed by its clients, as well as the implements they need to perform their tasks. As earlier mentioned, SMS addresses this objective through the continuous recruitment and training process, the manufacture of its proprietary cleaning solutions, equipment and materials, close supervision of client accounts and personnel deployed to these accounts, and the on-call help desk maintained in the administrative office. Cost measures the cost of resources necessary for delivering the service or producing the product. Each organisation attempts to minimise cost. Actual costs are usually determined on the basis of the other performance objectives (Choenni et al. 2003). Of the five performance objectives detailed above, the most vital for SMS' success in its marketplace are speed and reliability. SMS must be able to deploy manpower to serve its client's requirements at the shortest possible time, otherwise, the client will look elsewhere for another service provider. Closely related to this is reliability. SMS must be a reliable provider of the service it offers. Mistakes such as unskilled, unqualified or uncouth personnel are unforgivable by clients which result in cancelled contracts, disadvantageous to the company reputation. Since most client representatives are HR or Personnel Managers who all belong to the same professional circle, damaged reputations are easily spread through word of mouth which would be detrimental to SMS. The other performance objectives are of course, also important, especially cost, which ensures that the business is viable for it to sustain itself; quality, upon which the company has built its name over the years; and flexibility, which helps SMS maintain good relations with its clients. Although SMS is still currently the industry leader, it is facing tough competition from very many small recruitment and deployment firms that have sprung due to demand for these types of services as well as the growing unemployed sector who are willing to accept temporary jobs even at lower wages. SMS maintains a policy of providing mandatory wages and employee benefits to all its employees which sometimes makes it uncompetitive in the marketplace. There is also new competition for recruitment and deployment firms which have not been traditionally involved in janitorial and maintenance services but have diversified into this service to augment their business revenues. Moreover, there are big conglomerates which have also set up their in-house janitorial and maintenance service companies to service all their subsidiaries. Thus, SMS faces competition not only in the arena of client sourcing but recruit sourcing as well. Operations management in a service business must focus on carefully managing the processes that will ensure efficient and effective delivery of the service. It includes substantial measurement and analysis of internal processes (McNamara 2008). These processes involve the nature and role of services in the economic environment, design of the services being offered, and the management of these services. The primary areas to be addresses in managing service operations, such as SMS are demand and capacity management; marketing, focusing on customer understanding; human resources; and the use of technology (Klassen 2004). JIT and Waste Reduction According to the Toyota executive, Taiicho Ohno, there are seven types of waste (Baudin 1999). One is overproduction, such as when those in-charge of the start of the process load up on the inputs without consideration of whether those put into the process would be needed by downstream operations. At SMS, there does seem to be waste generated by the continuous recruitment and training process. Necessarily, more recruits are being trained and sourced than are actually needed for deployment to clients. The next type of waste is waiting, when parts of a process need to wait or are idle while waiting for another part of the process to complete. At SMS, waiting wastage occurs with the training department when they have to wait for the optimum number of recruits to be gathered before they can conduct their training. There is also waiting waste when workers are already ready and available for deployment and there are no jobs for them to do. The next type of waste is transportation, when parts of a process spend more time moving around the system rather than being transformed. At SMS this type of waste occurs when candidates for deployment are sent for validation by client and candidates are rejected for whatever reason. This situation then requires additional coordination between the account officer and the client as well as new selection of a candidate by the deployment section. The next type of waste is in processing, when a process malfunctions and does not produce the expected result. At SMS, processing waste occurs at several stages. First is in the recruitment process, when recruiters expend resources and are not able to get recruits. Next is in the training process, when trainers complete the training and the trainees do not successfully meet requirements. Next is in account management, when account officers expend resources and are not able to meet with designated client representatives due to uncoordinated schedules. Another process waste occurs in payroll processing for deployed personnel when time records are not submitted on time and need to be followed up. The next type of waste is excessive inventory. In SMS' case, this is related to overproduction. The next type of waste is unnecessary motion. In production operations, this includes operators leaving their work stations to fetch necessary materials that should have been at arm's reach. At SMS, unnecessary motion usually occurs in the administrative processes of accounting, recruitment, training, marketing, when designated personnel have poorly planned their daily tasks. The last type of waste is making defective products because they need to be re-worked, re-inspected or scrapped. At SMS, this type of waste occurs when a recruit who has undergone all the other processes never gets deployed. Hines & Rich (1997) describe a toolkit consisting of seven tools that can be used together to produce a framework for identifying and eliminating wastes. They contend that the existing tools for analysing value streams are limited in scope and cannot be integrated with one another and the seven tools they propose eliminate this problem. The first tool, process activity mapping is used for developing solutions to reduce waste. Next, the supply chain response matrix is used to identify the activities which constrain the process, so that they can be improved. Next, the production variety funnel helps the analyst understand how products/services are produced. Next, quality filter mapping is used to identifying where quality problems occur. Next, demand amplification mapping is used to analyse the increase in demand variability throughout the supply chain. Next, decision point analysis is used to identify "the point in the supply chain where actual demand pull gives way to forecast-driven push". Finally, the last tool is physical structure, which aids in developing a high-level understanding of the supply chain. The value stream analysis tool can be used to select which tools mentioned above should be used under certain circumstances, by developing weights to determine the usefulness of each tool for identifying waste. The weightings used are dependent on the industry being considered since some wastes are more relevant in some industries than others (Lee 2001). Wasteful processes of all types have been identified at SMS. Overproduction is being addressed by balancing customer requirements with manpower pooling activities. Management has set both a target and a limit for the number of processed recruits that should be maintained in the manpower pool database at any given time for the current requirements. This limit is reviewed quarterly so it can either be decreased or increased. Since all the staff handling recruitment and training have the same qualifications and skills, training personnel are used for recruitment and vice versa depending on the need at hand, to eliminate waiting waste. The other types of waste are being addressed by job re-evaluation, goal setting, and performance appraisals for the different full-time personnel. "Just In Time" is a phrase that originated at Toyota and describes how material should be processed and moved in order to arrive "Just In Time" for the next operation (Strategosinc 2008). Since SMS is not a manufacturing organisation, it does not implement the Just-In-Time method in a strict sense. However, regular review of service operations processes are being conducted to reduce waste and help ensure attainment of business objectives. Savings from Waste Reduction At SMS, savings from waste reduction are being realized in several areas. With the streamlining of recruitment activities, cost, effort and time have been reduced. Recruitment activities are planned into a definite quarterly schedule which consists of conducting job fairs, visits to local government employment offices and running employment advertisements. Costs are laid out in detail and a forecast of number and type of recruits are set. At the end of the quarter, actual performance is reviewed and compared with costs. This allows the organisation to determine if some activities are not effective in terms of producing recruits or because of high costs. Wastes from the training function have also been addressed. The large training room which can accommodate 50 trainees has been subdivided. Currently, training is conducted in a smaller room with only 5-10 participants in a batch. The smaller batch has been effective since training delivery was found to be more successful with more trainees passing requirements due to closer coordination by the trainers. A system has also been implemented to reward points to the recruiter whose recruit passed training and eventually got deployed. This helped ensure the sourcing of quality recruits, which reduced transportation and processing wastes. Operational costs in marketing and account management activities have also been reduced with well planned work schedules where client calls are conducted regularly and grouped according to geographical areas, so as to minimize travel costs. With the strict implementation of job goal setting and regular performance reviews, productivity of administrative personnel has also increased, thereby reducing processing, unnecessary motion and other wastes. Conclusion The five performance objectives of speed, quality, flexibility, reliability, and cost are all important to Superior Maintenance Services' service operations, with speed and reliability being the most vital. To accomplish each of these objectives, various wasteful processes occur. Using Ohno's seven types of waste, it was found out that every type of waste exists in SMS service operations. There are wastes in overproduction, waiting, transportation, processing, excessive inventory, unnecessary motion and making defective products, which have been identified using value stream mapping tools. Through the identification of these wasteful activities, SMS has been able to address the problem areas to improve its operations, reduce waste and help attain business objectives. References Baudin, M. 1999. Lean production: the end of management whack-a-mole. Retrieved 18 November 2008, from http://www.mmt-inst.com/End_of_management_whack_a_mole.html Choenni, S., Bakker, R. and Baets, W. 2003. 'On the Evaluation of Workflow Systems in Business Processes.' Electronic Journal of Information Systems Evaluation Volume 6 Issue 2 (2003) 33-44. Retrieved 18 November 2008, from http://rds.yahoo.com/_ylt=A0geu7i8JyJJRqEATnpXNyoA;_ylu=X3oDMTEyanZlcGFrBHNlYwNzcgRwb3MDNwRjb2xvA2FjMgR2dGlkA0Y4MjRfODg-/SIG=12ffn2c0u/EXP=1227061564/**http%3a//www.ejise.com/volume6-issue2/issue2-art5-choenni.pdf Hines, P. & Rich, N., 1997. 'The Seven Value Stream Mapping Tools.' International Journal of Operations & Production Management, 17 (1), 46-64. Klassen, K. 2004. Service Operations. Retrieved 18 November 2008, from http://rds.yahoo.com/_ylt=A0oGklmKkyJJNFQBZRdXNyoA;_ylu=X3oDMTEzZ3Fia3IxBHNlYwNzcgRwb3MDMjUEY29sbwNzazEEdnRpZANGODI0Xzg4/SIG=12p0hgqrd/EXP=1227089162/**http%3a//www.decisionsciences.org/DecisionLine/Vol35/35_2/35_2books.pdf Lee, B. 2001. Value Stream Mapping. Retrieved 18 November 2008, from http://rds.yahoo.com/_ylt=A0oGkwgdNiJJpj8BPW5XNyoA;_ylu=X3oDMTBzamo4dnVjBHNlYwNzcgRwb3MDMTkEY29sbwNzazEEdnRpZAM-/SIG=11v7e3j4s/EXP=1227065245/**http%3a//webs.twsu.edu/whitman/papers/lee.pdf McNamara, C. 2008. Operations Management. Retrieved 18 November 2008, from http://www.managementhelp.org/ops_mgnt/ops_mgnt.htm Slack, N., Chambers, S. & Johnston, R., 2004. Operations Management. 4th ed. London: Pitman Publishing. Strategosinc. 2008. Just In Time, Toyota Production System & Lean Manufacturing. Origins & History Lean Manufacturing. Retrieved 18 November 2008, from http://www.strategosinc.com/just_in_time.htm Read More