Operations Management Project- New Business - Assignment Example

?Operations Management Project- New Business (Valet Parking Services & Car Wash Services) Table of Contents Part Introduction 4 Market Influence 4Mission 5 Goals and Objectives 5 Organisational Strategy 5 Part 2: Forecasting 6 Likely Steps in the Forecasting Process 6 Likely Forecasting Technique to Predict Future Demands 7 Importance of Forecasting For the Business 7 Part 3: Product Design 7 7 Strategic Importance of Product and Service Design for the Business 7 Key Factors of Product and Service Design 8 Main Sources of Design Ideas 9 Importance of Legal, Ethical and Sustainability Considerations in Product and Service Design 9 Part 4: Capacity Planning 10 10 Importance of Capacity Planning 10 Way of Measuring Capacity 10 Key Considerations for Capacity Alternatives 10 Tools for Preparing Capacity Plan 11 Part 5: Process Selection and Facility Layout 11 11 Strategic Importance of Process Selection for Company Operations 11 Process Types of the Business 11 Key Process Facilities 12 Part 6: Work Design and Measurement 13 13 Importance of Work Design 13 Basic Work Design for the Business 13 Application of Work Design and Measurement Concept 13 Part 7: Location Planning and Analysis 14 14 Importance of Location Planning 14 Factors Influence on Location Decision 14 Importance of Location Planning In Operations Strategy 15 Part 8: Quality Control and Management of Quality 15 15 Importance of Quality Control 15 Quality Control Tools 16 Factors Driving Service Quality 16 Control Chart for Quality Process 16 References 18 Part 1: Introduction ABC Corp is an organisation intending to start a new business dealing with Valet Parking Services and Car wash Services in Al Mirfa city. The business will provide the customers with two major services that include parking services and washing services. Within the parking services, the business will provide the customers with parking and storing facilities by imposing certain amount of fees. On the other hand, relating to washing services, ABC Corp will provide customers with three fundamental services that encompass external car washing, internal cleaning and detailing. Market Influence The vehicle industry can be regarded as the central theme for this business. Since the number of vehicles has increased in recent days, the requirement for parking as well as washing has also increased by a certain extent. The parking service as a business has become quite popular in recent times as the amount of space for car parking is quite limited particularly in urban areas of Al Mirfa. The parking industry is spurred by new construction. Since new construction has gradually increased in recent days, prospect for profitability in parking industry also increased. In line with the parking industry, washing segment has also become an effective money-making opportunities for businesses. It is to be stated that as there are no such washing shops present in Al Mirfa city, thus there will be no direct competition for ABC Corp in that area to provide washing and parking services to the customers. These are the key marketing influence or factors that have been considered for staring the business. Mission The mission of the business is to become the first choice for customers for taking the parking and washing services in Al Mirfa and to achieve sustainable development. ABC Corp is dedicated to provide the customers with crucial parking and washing experience. It will focus upon delivering deliberate efforts toward the accomplishment of gaining greater customer satisfaction and value while providing employees with outstanding recompense. Goals and Objectives The key business objectives of ABC Corp are: To be observed as premium parking and washing service business in Al Mirfa To maintain a high profit margin To maintain a gradual and steady growth in profit To expand the business in different locations within five years of business operation Organisational Strategy In Al Mirfa, there pertains the occurrence of numerous festivals such as “Al Gharbia Watersport festival”, “Al Dhafra Camel festival”, “Al Ghabia International festival”, “Liwa Date festival” and “Al Gharbia Falco festival” among others. Thus, the business will attempt to take this opportunity by providing parking services to the travellers who desire to attend these festivals. The business will provide flexible parking services to the customers, where they will be allowed to extend their parking services as they desire. Furthermore, the business will also provide quality services to the customers generating greater value towards them. With respect to washing services, the key business strategy is subjected towards providing complete car washing, special cleaning for customers and car polishing services. The strategy is to provide services on one-to-one basis. The prime objective of the business is to make customers feel valued about the care and maintenance of every car. Apart from providing better washing services, the business will also concentrate on developing such system which can provide quick and effective washing. It will help to maintain a low expense and thus attain significant profits. Part 2: Forecasting Likely Steps in the Forecasting Process In case of ABC Corp, five key steps can be duly followed in order to forecast the demand and sales of the services that it would provide to the customers. The five steps have been portrayed hereunder. 1. Identification of objective of forecast: At the initial phase, the reason for forecasting would be identified which would assist in developing the marketing plan and planning the capacity of services. 2. Formation of time prospect: After identifying the forecasting objectives, the period of forecasting will be decided. In other words, whether the forecasting would be developed on monthly, quarterly or yearly basis, would also be determined in this phase. 3. Selection of forecasting technique: In the third phase, the likely forecasting technique will be selected on the basis of resources available to the business along with the complexity of forecasting. 4. Undertake the forecast: After choosing the forecasting technique, the business would prepare forecast report for specific services within certain time period. While forecasting, appropriate data will be assessed and assumptions would be made accordingly. 5. Observation of accuracy: As there lay several forecasting techniques, after presenting the forecast, the techniques would be monitored as well as observed about assessing their accuracy. The observation would help to make proper approach and assumptions about the forecasting of services (Ozcan, 2009). Likely Forecasting Technique to Predict Future Demands There exist numerous forecasting techniques that can be chosen for predicting the demand and sales of different products or services. In this regard, the techniques might include qualitative methods, quantitative methods and time series method among others. As the valet parking and car washing services are new in the business market, qualitative forecasting techniques would be used. There are several qualitative techniques such as Delphi technique, market research and nominal group technique that are available for the purpose of forecasting. In order to predict the future demand, the market research technique would be used. Importance of Forecasting For the Business Every business decision require considering certain type of forecast. Sound forecasts of demands and trends are necessity for a business in order to cope up with seasonality, unexpected changes in demand level, competition and strong fluctuations in the economy. A conduct of sound forecasting also helps the businesses to deal with the likely trouble in the market arising from the presence of existing market competitors (Chambers & et. al., 1971). Part 3: Product Design Strategic Importance of Product and Service Design for the Business Product and service design is quite important for any business because it helps to satisfy the customers. It is the objective of every business to constantly satisfy the customers in order to survive in the competitive business market. This can only be accomplished by developing the existing products or services or by creating new products or services. The design consists of several aspects such as research, product and service life cycle, safety, dependability, maintainability, supervisory and legal aspects. For ABC Corp, service design is important because it can contribute to attain significant revenues. Development of new services can definitely provide the opportunity to set premium pricing. This can be considered as critical factor for the success of business. The key purpose of service design for ABC Corp would be to develop service with excellent functionality and to generate greater appeal to the customers. As customers demand increases constantly, service design can help to provide them with increased variety of services and thus it can act as competitive advantage for the business. Key Factors of Product and Service Design There are several factors which are important for service and product design in any business. Size of business: The size of business is quite vital for determining product and service design. Since, the organisational structure differs according to small and large business, the product and service decisions can also differ accordingly. Business life cycle: Business tends to proceed by the following of different phases. As business move toward these phases, necessary changes in product and services are required to rejuvenate the business. Business environment: The business environment where the organisation is operating and aspects such as economic situation, social and cultural state, regulatory atmosphere and technological condition among others are important for designing the services. There are several key questions which are also important concerning product and service design. For instance, in order to develop certain services, ABC Corp must consider questions such as, if there is demand for the services in the market? If the business have the capability to provide the services to the customers? Does providing the services make any sense from the viewpoint of profitability? and If the services match with the present service offerings?. Main Sources of Design Ideas There are several sources for service design ideas. For instance, ABC Corp can gain idea about designing services through establishing a clear communication with the customers. Furthermore, the current employees of the organisation can also recommend for developing new services for customers (Panneerselvam, 2012). Importance of Legal, Ethical and Sustainability Considerations in Product and Service Design Every business is regulated by certain rules and regulations which are intended to prevent any harmful aspects that are to be used in product and service design. Thus, ABC Corp needs to abide by the legal and ethical aspects of business while designing new services. Legal and ethical aspects are hence important for the business, as it will help to fix any kind of faults in the initial phase of design. As a result, law and ethical issues also assist in avoiding any possible harm to the customers. On the other hand, sustainability also needs to be considered by ABC Corp while designing the services. There are four characteristics of sustainable service design that needs to be prioritised by ABC Corp which comprise life cycle of the services, value of the services, renovation of the services and reutilisation of services. Each aspect helps to make the services sustainable in the long run (Panneerselvam, 2012). Part 4: Capacity Planning Importance of Capacity Planning Capacity planning is important for the business because it helps to reach to optimal level fulfilling the demands of the customers by a greater level. Way of Measuring Capacity While measuring the capacity of business, it is effective to select one-way measurement which does not necessitate any kind of modernisation. Capacity can be measured with respect to each product or services or by the availability of input. In case of ABC Corp, it will measure the capacity with respect to services. For instance, in case of parking services, the capacity will be measured by number of parking vehicles and in case of washing services, the capacity will be measured by number of car cleaning in a day. Key Considerations for Capacity Alternatives There are several restraint issues that can be faced by ABC Corp with respect to measurement of capacity such as human aspects, operational procedure, organisational policies and other external environmental factors. Thus, in order to resolve these restraints, every potential alternative solution must be assessed. Certain key considerations for developing capacity alternatives are training and development of employees, better quality assessment along with control process and development of operational procedure among others. Tools for Preparing Capacity Plan Appropriate tools can help to prepare the capacity plan for a business. With respect to ABC Corp, demand forecasting tool can be used in order to understand the demand of services and prepare capacity plan accordingly. Part 5: Process Selection and Facility Layout Strategic Importance of Process Selection for Company Operations Process selection plays a vital part for any business. Relating to the business of ABC Corp, it will allow ABC Corp to provide safe and reliable services by taking into concern logical design and efficient capacity planning. Through process selection, various kinds of processing can be understood. It allows the business to better recognise the approaches of operational process which can fulfil the unbalanced requirements of customers. Process Types of the Business There are several process types which can be used in the business operations such as constant, recurrent, batch, labour-intensive, inflexible, flexible and mechanical approaches. Constant Operations: In constant operation process, the operational system generates continuous services. This type of process is usually performed by machines. Constant operations include repetitive processing where an organisation condenses highly standardised services (Panneerselvam, 2012). Recurrent Processing: In recurrent processing system, organisations generates low amount of services with greater variability of processing necessities (Panneerselvam, 2012). Batch processing: In batch processing, the system generates moderate quantity of similar services (Panneerselvam, 2012). Job Shop Process: In job shop process, the operational system renders service with fluctuating provisions on the basis of customers’ requirements (Panneerselvam, 2012). Automation Process: Automation process includes use of machines which can operate different business processes spontaneously. It can be flexible where set of machines are designed to manage intermittent processing and generates similar services (Panneerselvam, 2012). Manual Process: Manual process involves use of human labour in order to produce different services. It can provide various level of customisation to the operation. In parking services, manual process will be used. It will provide high level of flexibility to the operations and provide customised services to the customers. On the other hand, with respect to the washing services, ABC Corp will use repetitive processing. It will provide similar cleaning and washing facilities for every level of customer. It will help to provide standardised services to the customers with low level of variability. Key Process Facilities Facilities links to the formation of divisions, segments with concentration on movement of services. There pertain numerous key process facilities which would be vital for ABC Corp like product or service facility, process facility, fixed position facility and hybrid facility (Panneerselvam, 2012). In case of ABC Corp, the likely facility layout that would be used for the service operation is process facility. In this layout, various processes such as internal cleaning operation, external cleaning operation and polishing among others would be handled through various processes. It would be appropriate for this business because, this facility layout is able to deal with several processing requirements. Part 6: Work Design and Measurement Importance of Work Design Work design would be an important element of business operation in ABC Corp. It is basically used for describing two basic approaches like efficiency of operations and behavioural approaches. It determines the procedure about how different jobs will be performed (Chase & et. al., 2006). Basic Work Design for the Business The selection of work design in any business is subjected to activity level of task, i.e. whether the concentration is on production procedure, fixed workshop, employee interaction with machinery, and employee interaction with other employees. In the service business of ABC Corp, employee interaction with machinery design would be best. In this design, the focus is on effective use of time and equipment (Chase & et. al., 2006). Application of Work Design and Measurement Concept Since the business is about full service, it will require both automation system and manual labour in order to provide the services. It will offer greater convenience to the customers. At first, the exterior portion of vehicle will be washed and dried. Additionally, employees are used in order to clean the interior portion of vehicle. Thus, success in this work design requires proper combination of employees and equipment (Chase & et. al., 2006). With respect to work measurement, there are two basic methods namely time study and work sampling. In ABC Corp, time study measurement concept would be followed. As a part of time study, every work will be defined with respect to time. Furthermore, any kind of delay in work process would be recorded separately through the execution of time study (Chase & et. al., 2006). Part 7: Location Planning and Analysis Importance of Location Planning ABC Corp will require certain planning concerning location in order to develop service facility for the business. Location planning is vital for the business because it helps to enhance the ability of ABC Corp for satisfying the customers’ and also for increasing revenue. The valet parking business can be characterised as crowd, particularly in festive seasons. Thus, without proper location planning, ABC Corp will cater greater traffic and will fail to provide better parking services to the customers. Besides, location planning also helps to optimise the space for better use of parking as well as washing. It plays integral part for strategic planning procedure for valet parking service and car washing service (Stevenson, 2002). Factors Influence on Location Decision There are several factors that have been viewed to be influencing upon the location decision of business. With respect to locating the site of business, the key factors that need to be considered are land, transportation, market and labour among others. While recognising the business location, it is vital for considering that whether the site is suitable for further expansion of business or not. Apart from that, the market is also vital factor for identifying the location of business. The business will be located where it desires to serve the customers in order to gain maximum revenue. The factor concerning employees also imposes significant impact upon the location decisions. Since the service business requires employees to perform different tasks, the different valuable aspects like employment availability, pay structure, efficiency of employees, approach of employees toward work and influence of labour union among others would be considered while locating the business. In order to plan the location, the driving factors which can impact on the sites need to be considered such as availability of raw material and prospect of making profit among others. Besides, the advantages and disadvantages of a specific location will also influence the location planning of the business at large (Stevenson, 2002). Importance of Location Planning In Operations Strategy Location planning has considerable importance in operation strategy of business. Location planning helps to determine the sales, because if the location is small, it will impact on the business operations and hence, the organisation will lose considerable amount of sales. Furthermore, location planning also determines the capacity of operation and therefore helps to fix any issue with respect to technology and cost structure (Martinich, 2008). Part 8: Quality Control and Management of Quality Importance of Quality Control Quality control would be quite vital for ABC Corp because it can ensure that the services are designed and provided to fulfil and surpass the expectations of potential customers. Quality control helps to certify that certain operational procedures are performing according to standard level. Thus, any kind of deficiencies in service quality can be corrected. Poor service quality not only leads towards customer dissatisfaction, but also harms the reputation of business by a greater level resulting in lessened profitability and loss of potential customers (Ograjensek, n.d.). Quality Control Tools There are several tools which can be used by an organisation in order to control the quality. In case of ABC Corp, check sheet, control chart and Pareto chart would be used in order to control the quality of services. Check sheet is a simple tool which is executed for monitoring the frequency of certain incidents. On the other hand, control chart helps to demonstrate the consistency of different faults lie within the services of an organisation. Finally, Pareto chart will help to display different error incidents on the basis of frequency. It helps to prioritise the most important tasks which need to be concerned by the organisation in order to enhance the quality of services (Questetra, Inc. n.d.). Factors Driving Service Quality In ABC Corp, the factors which will determine the service quality comprise number of sick time of employees, number of errors in service operations and number of defects in providing parking along with washing services such as defects in furnishing and any kind of scratches in vehicle body while parking or washing. Control Chart for Quality Process Following is the control chart which will be used in order to control the number of defects in parking services as well as in washing services for ABC Corp. References Chambers, J. C. & et. al., 1971. How to Choose the Right Forecasting Technique. Harvard Business Review. [Online] Available at: http://hbr.org/1971/07/how-to-choose-the-right-forecasting-technique/ar/1 [Accessed May 03, 2013]. Chase, R. B. & et. al., 2006. Operations Management. Tata McGraw-Hill Education. Martinich, J. S., 2008. Production and Operations Management: An Applied Modern Approach. John Wiley & Sons. Ograjensek, I., No Date. On Importance of Statistical Quality Control in a Quality Management System. Proceedings. [Online] Available at: http://www.stat.fi/isi99/proceedings/arkisto/varasto/ogra0503.pdf [Accessed May 03, 2013]. Ozcan, Y. A., 2009. Quantitative Methods in Health Care Management: Techniques and Applications. John Wiley & Sons. Panneerselvam, R., 2012. Production and Operations Management. PHI Learning Pvt. Ltd. Questetra, Inc. No Date. Seven QC Tools. BPM Suite. [Online] Available at: http://en.q-bpm.org/mediawiki/index.php/Seven_QC_Tools [Accessed May 03, 2013]. Stevenson, W. J., 2002. Operation Management. McGraw-Hill Irwin. Read More