The Companys Operations Management System - Essay Example

OPERATIONS MANAGEMENT Operations Management Overview Operations management is a component that underlines nearly all corporate and business environments. Operations management refers to the processes involved in a product’s transformation into a retail commodity (Stevenson, 2007; Krajewski and Ritzman 1999). It involves the complex array of elements that go into making a product a profitable good. Managing these processes is critical to a company’s financial success. The present research examines the operations management of two production facilities, one produces lettuce and the other produces celery. The research considers the ways that these companies can improve their operations management by reducing a bottleneck that has identified in the process. Input Transformation Output Model Transforming Resources The case study considered a two main forms of production processes that are notable in terms of the input transformation output model. The first production transformation process involved the transformation of lettuce into consumer goods. Following this model the occurrence with the lettuce has a number of inputs. Of course, the primary input in the transformation process is the lettuce itself. However, the comprehensive nature of the model involves a host of other inputs that contribute to overarching understandings regarding the organization’s production and output. The first input in these regards is the labor involved in the transformation of the lettuce into a consumer good. The labor costs can begin with the costs associated with the agricultural production of the lettuce. In terms of the specific labor costs associated with the case study, these labor costs include paying the individual to physically remove the lettuce from the field. This lettuce is then placed onto a conveyor belt that rotates around the production facility. In addition to this human resource cost, there is also a human resource cost associated with the individuals packaging boxes at the production plant. Rather than having the boxes pre-made, these production processes of constructing boxes are put-together at the plant itself. Another associated labor costs are those related to the truck drivers at the production plant. The truck drivers at the production plant wait for the packages to be placed into the trucks and then leave after the trucks are filled. In addition to human resource inputs, production at the treatment plant involves a variety of other miscellaneous elements. Energy costs are one major element. Energy costs involve the utilities associated with the conveyor belt that is one of the elements on the production cycle. Energy costs also involve lighting for the production facility. Finally, production also entails the petroleum costs that are incurred by the trucks driving to and from the plant. The final input is production expenses; most notably these expenses include the actual costs of boxes that are used to package the lettuce. The celery operations management location has a number of similar inputs. Of course, the major input are the general costs associated with agricultural production of the celery. The celery plant similarly has human resource costs. The human resource costs at the celery plant involve the individuals removing the celery from the fields and placing them on the conveyor belts. The next human resource cost is the individual removing the celery from the conveyor belts. Removing the celery from the conveyor belts takes a small amount of time but it is another input on the transformation scale. The energy costs in terms of utilities of running the conveyor belt is another notable input that goes into the transformation scale. Transformed Resources The above-noted inputs that are entered into the input output transformation model constitute the transforming resources because these resources are implemented into the process of transforming these inputs into an element that eventually results in contributions that go into the transformed resource. In both instances, it would be easy to simply indicate that the lettuce as retail product and the celery as retail product are the transformed resource. However, such a view does not fully take into account the nature of operations management as involving production processes. As such, the transformed resource is the value embodied in the lettuce as a component of the above-mentioned contributed inputs, and the value embodied in the celery as a component of the above-mentioned contributed inputs. Flowchart Fig. 1 Organizational Delivery Process Flowchart The above chart, Fig. 1, is an organizational delivery process flowchart for the operations management embodied in both the lettuce and the celery production. In the first input the celery and lettuce and still situated in the agricultural fields prior to being picked. The second level inputs are parallel because they occur simultaneously, but they are occurring in different locations. The first input involves the individuals physically removing the lettuce and celery from the fields and placing them on conveyor belts. As this is occurring, other people are concomitantly packaging cardboard boxes that will be used to contain these vegetables. In the next stage of the organizational delivery process, individuals physically remove the lettuce from the conveyor belts and package it in the boxes that were just put-together by individuals at the production plant. In the final stage of the organizational delivery process, individual remove the packaged lettuce and celery and place it on the trucks that they transport the vegetables as retail goods. To a great degree, the above processes are highly efficient and no readily apparent bottleneck in the system exists. However, even as the system may not have a bottleneck, there is room for the system to improve its overriding efficiency level. When this is taken into consideration, the main bottleneck in the organizational delivery process would be the added time it takes for the individuals to remove the lettuce and celery from the conveyor belts and to place them in the packaging. Impact of the Bottleneck System on Performance Objectives Bottlenecks are prominent characteristics of operations management. The notion of a bottleneck is something that extends beyond operations management, but also is a prominent aspect of lean manufacturing. The bottleneck in this process has been recognized as being “the resource that requires the longest time in operations of the supply chain for certain demand” (Lean-manufacturing-japan.com, 2014). More specifically, bottlenecks are points in the operations where an overflow occurs because the workflow demand is not able to be met and a point of congestion occurs (Investopedia, 2009). Bottlenecks in operations management involve a wide-array of characteristics. In some instances, bottlenecks are the temporary result of a shortage of supplies. In these instances, the company is short-handed in certain areas and these areas contribute to understandings that slow-down the process of operations management. In other instances, bottlenecks are not temporary conditions, but are instead the result of inefficient operations management processes. In the case study, the main bottleneck appears to be largely the result, not of a temporary shortage of input elements, but rather the result of a significant inefficiency in the overriding operation management design. As noted, the specific bottleneck in the operational process is the delay between the time when the lettuce and celery are placed on the conveyor belts and the time in which they are packaged for shipment. Many might consider that this bottleneck is not of major concern because the conveyor bottle operates as a means of giving the workers in the production plant time to catch-up with the workload. It also conceivably aids the workers in that it allows them an effective means of taking the vegetables and packaging them without having to directly take the vegetables from the individuals removing them from the fields. While this may appear of little concern in the short-term, over the long-term this process accumulates and results in higher degrees of costs associated with running the assembly line, as well as overall lost productivity. A number of theoretical models have been proposed that address bottlenecks in the operations management process. One of the most notable such responses to bottlenecks in the production process is the theory of constraints. The theory of constraints is a system that has been identified to address bottlenecks and develop solutions them to improve the overriding process flow (Isixsigma.com 2014). The theory of constraints has been recognized as being constituted by a five-step process: “1. Identify the process’ constraints; 2. Decide how best to exploit the process constraint; 3. Subordinate everything else to the above decisions; 4. Evaluate the process constraint; 5. Remove the constraint and re-evaluate the process” (Isixsigma.com 2014). When implemented in succession, the theory of constraints is recognized by researchers as constituting an effective way of identifying and improving an operation management system’s bottleneck forms of inefficiency. Implementing the theory of constraints to the case study is an effective means of addressing the bottleneck issue. Following the theory of constraints first involves identifying the process constraints. As was established, the process constraints this matrix were the extra time it took the lettuce and the celery to be removed from the conveyor belt and placed into the retail packages. The second component of the theory of constraints – deciding how best to exploit the process constraint – is the most important consideration within the process of solving the bottleneck. There are a multitude of avenues through which this bottleneck issue could be more effectively exploited. One such method would be to entirely remove the conveyor belt system from the operations management process. Instead of having the conveyor belt system in place, the individuals packing the lettuce and celery into boxes would then be tasked with directly taking the celery and lettuce from the individuals removing it from the agricultural fields. While for small amounts of production this method might prove effective, it seems that over long periods there would be considerable delays in the process because the people taking the lettuce and celery would be forced to wait for the people to pick it from the fields in certain situations and this would result in a considerable bottleneck in addition to the earlier bottleneck. Rather than implementing the above noted improvement, it appears that instead the most effective approach to reducing the bottleneck problem would be to reimagine the way workers remove the celery and lettuce from the conveyor belt. The current situation occurs through workers removing the vegetables from the fields and placing these vegetables on the conveyor belt. The conveyor belt then moves in a circular fashion and the workers remove the vegetables at different intervals and package them. While such packaging is effective, in many instances the vegetables go around the conveyor belt a number of times before a worker is finally able to remove and package it. As a means of rectifying this bottleneck, a more effective process would involve a conveyor belt that does not simply move in a circular rotation, but instead is structured like assembly line production. This would have an assembly-like conveyor belt structure that goes in a straight line rather than in a circular fashion. The conveyor belt would be extended out into the lettuce and celery fields. The workers in the fields would then remove the celery and lettuce and place it on the conveyor belt. A series of employees would then be waiting at the other end of the production facility and when a parcel or celery or lettuce entered into view the individual would remove the vegetable and package it. This method is considerably more effective than the circular conveyor belt for a number of reasons. The circular conveyor belt method functioned through requiring an intermediary between the removal of the celery and lettuce and the placing of these vegetables on the conveyor belt. In the new format, this individual would be removed because the farm workers would directly place the products on the conveyor belt. The circular conveyor belt also created a number of challenges in terms of the ways that it contributed to misunderstandings regarding the amount of lettuce and celery needing to be packaged. By changing to a linear structure, management would be better able to recognize how many employees were needed to ensure that the vegetables inputs were precisely met by the human resource numbers. When the vegetables increased to the point that there were too many for the workers at the assembly-line to keep up, then management would add more employees to the assembly line so there would not be a bottleneck at all in the process, but instead complete efficiency. Overcapacity in Operational Process There are a number of instances in the operational process where overcapacity appears to be a notable problem. As noted, the main area where overcapacity appears to be a problem is in terms of the vegetables being placed onto the conveyor belts as in these instances the vegetables are not taken off and packaged in a reasonable enough time frame. Another notable example of overcapacity occurs in terms of the agricultural fields. In these regards, it is possible that the fields produce more vegetables and lettuce than can be consumed by the target market. As such, in some instances this market may result in the vegetables and lettuce going to waste. This is such that increasingly better projections need to be implemented in addressing these challenges. Another area of overcapacity may be the packaging that is used for the lettuce and celery. In these instances, the company may purchase more packaging than is necessary for the production process. This packaging then is not used in as efficient a way as could otherwise be used. This results in the packaging gong to waste and there being a significant amount of product being wasted in the process. The collection of these understandings attest to the need for the company to increasingly be aware of overflow in the operations management process in order to achieve the greatest levels of efficiency (Heiser, Render, Weiss, 2004). Opportunities for Improvement in Operational Process In addition to the above mentioned improvement suggestions, there are clearly a number of other opportunities for improvement in the operational process. Addressing the remaining opportunities from improvement necessitates one return to the theory of constraints. The remaining components of this theory had noted that it is critical to “3. Subordinate everything else to the above decisions; 4. Evaluate the process constraint; 5. Remove the constraint and re-evaluate the process” (Isixsigma.com 2014). As the above decision had been to establish a linear assembly-line conveyor belt, the company could further bring these elements into consideration by amending all elements related to such concerns in the total package. In terms of subordinating everything to the above decision, this would mean that the individual packaging the boxes that will be used to contain the vegetables would be used concomitantly with the assembly-line. When production on the assembly-line reached a level that was too high for existing employees to keep up, this individual would stop making boxes and join the assembly line. When the assembly-line slowed down, this individual would return to making boxes. This process ensured that there would be a consistent flow of employees available to meet the demands of the conveyor belt. These employees labor would also not be wasted if capacity slowed because then these employees would return to the packaging boxes responsibilities. This circular pattern would allow the company’s operations management to achieve the greatest level of efficiency without any amount of bottlenecks. This improved efficiency would result in the company being able to maintain high profit levels and achieving the greatest degrees of competitive advantage in relation to other companies in the industry. Ultimately, this is critical to the company’s success (Flynn et al. 1990). Conclusion In conclusion, this research has examined operations management in relation to its implementation in a case study involving the transformation process of lettuce and celery. Within this spectrum of investigation, the research demonstrated that the company’s operations management system was largely effective in the many ways it addressed the transformation process. However, the research identified a critical bottleneck area in terms of the wait time that existed between placing the vegetables on the conveyor belt and removing them for packaging. This bottleneck area, however, was addressed through proposing a solution that would implement a new type of conveyor belt. This system was further reconfigured using the theory of constraints as the overarching theoretical model. Ultimately, reconfiguring the company’s operations management was effective in terms of the many different ways the company could achieve greater levels of efficiency in its processes. This then resulted in the company achieving high levels of competitive advantage. References Heizer, J. H., Render, B., & Weiss, H. J. (2004). Operations management (Vol. 8). Pearson Prentice Hall. Investopedia, (2009). Bottleneck Definition | Investopedia. [online] Available at: http://www.investopedia.com/terms/b/bottleneck.asp [Accessed 6 Aug. 2014]. Isixsigma.com, (2014). Applying Theory of Constraints to Manage Bottlenecks. [online] Available at: http://www.isixsigma.com/methodology/theory-of- constraints/applying-theory-constraints-manage-bottlenecks/ [Accessed 6 Aug. 2014]. Flynn, B. B., Sakakibara, S., Schroeder, R. G., Bates, K. A., & Flynn, E. J. (1990). Empirical research methods in operations management. Journal of operations management, 9(2), 250-284. Krajewski, L. J., & Ritzman, L. P. (1999). Operations management. Reading, MA ua: Addison Wesley. Lean-manufacturing-japan.com, (2014). Bottleneck (Constraint) | Lean Manufacturing. 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