OPERATIONS MANAGEMENT POE
Aggregate planning is to create a plan that utilizes the resources of the organization to meet or exceed the expected demand. It also used to make long-term, intermediate and short-term decisions that directly impact the company.
MPS is the process that helps manufacturers plan which products and related quantities to produce during certain periods. MPS is proactive in that it actually drives the production process in terms of what is manufactured and what materials are procured. MPS also serves a bridge to sales as it informs them about what is available to promise to customers and when deliveries can be made.
Material requirements planning (MRP) is a production planning, scheduling, and inventory control system used to manage manufacturing processes.
Enterprise Resource Planning (ERP) is the theory that incorporates the entire supply chain, including sales, orders, supply replenishment, scheduling, manufacturing and distribution.
Relationship with one another
The aggregate plan balances the capacity with demand and the MPS translates this plan into numbers of specific products in time frames whereas ERP (Enterprise Resource Planning) comprehends a whole set of commodity processes that a Company like Jaguar needs to run its business such as Financial, Sales, Purchasing, Logistics, Production and also Planning which is based mainly in MRP (Material Requirement Planning) that is a calculator that uses the Sales Master schedule, Material Master, Product Structure, Stocks and previous orders information to generate a liquid demand for each necessary part number (manufactured or purchased) to achieve the Master Schedule.
Therefore the relationship of these concepts is then interlinked.
Aggregate planning does not distinguish among sizes, colors, features, and so forth. For example, with Jaguar’s manufacturing, aggregate planning would consider the total number of cars planned for not the individual models, colors and options. When units of aggregation are difficult to determine equivalent units are usually determined. These equivalent units could be based on value, cost, worker hours, and similar measures.
According to Kruger-Ramphal-Maritz (Third Edition) These concepts can help Jaguar to be lean as by using aggregate planning to forecast production demand, Jaguar will better be able to predict their staffing requirements, helps them to plan which products and related quantities to produce during certain periods, scheduling, and inventory control system used to manage manufacturing processes as well as incorporate the entire supply chain, including sales, orders, supply replenishment, scheduling, manufacturing and distribution.
According to Kruger. Ramphal. Maritz (Third Edition) They explain the capacity concepts as follows:
Effective Capacity – Effective capacity is the maximum amount of work that an organization is capable of completing in a given period due to constraints such as quality problems, delays, material handling.
Actual Capacity – the actual capacity of a factory production line to generate an output under the given constraints of raw materials.
Output Capacity – the maximum level of output that a company can sustain to make a product.
Design Capacity – Design capacity refers to an estimated capacity, usually based on vehicles per day or design hourly volume that is used to determine the design of a highway.
Inputs Capacity – the measure that provides on indication of the level of effort level of variable inputs required to produce the capacity outputs.
Jaguar should consider utilizing the output measures at it counts the finished units from the process such as cars that Jaguar manufactures per week. This measure is best used where there is low variety in the product mix or limited customization.
Process utilization, process efficiency and demand management must all be considered in tandem. Improvements in efficiency can often reduce utilization as more output is achieved with fewer resources in less time. In such a situation, the decrease in utilization will be beneficial. Conversely, short term ramping up of production to meet spikes in demand, which drives down overall yields, will increase utilization and decrease efficiency resulting in some instances in an overall decrease in organizational performance.
Long term – This horizon is a longer than one year. The long time horizon is the results of the procurement of the assets required, which is such that it cannot be done over a shorter period. In this time horizon, we look at the manufacturing of the Jaguar S.
Medium term – in this horizon, planning can be undertaken on a quarterly or monthly basis. The time horizon of this planning can be between 6 and 18 months.
Short term – In this horizon the length varies from 1 to 30 days in to the future. The decisions mostly influence the scheduling of work with the production unit. Its purpose is to reduce the variance between the planned and actual output.
Jaguar should consider using long-term goal is something you want to accomplish in the future whereas Medium-term provides checkpoints along the way and short-term reducing the variance between the planned and actual output.
Capacity is the maximum level of output that a company can sustain to make a product or provide a service. Planning for capacity requires management to accept limitations on the production process.
An operations Manager can choose from the following:
Making use of overtime or idle time
This may be difficult to meet large increases in demand and overtime can be costly and may drive down productivity. Absorbing idle time may be difficult.
Making use of contract or part-time workers
This is useful for filling unskilled or low skilled positions. It can be more easily achievable in the service sector than in the manufacturing sector.
Changing inventory levels as necessary
Increase in low periods to meet high demand later. Costs: storage, insurance, handling, obsolescence, and capital investment.
Shortages may mean lost sales
Subcontracting or outsourcing work with other organization
Meet peak demand, may be costly assuring quality and timely delivery may be difficult. Thus exposes the customers to a possible competitor.
Managing the workforce by hiring and dismissing employees
The basis of this option is hiring new workers during peak-demand periods and laying them off during low demand periods.
Demand Option – The four common demand options primarily focus on market aspects apart from backorders which is strictly operational management in nature.
Mixing products or services to counteract each other seasonally
Attempting to influence the demand for a product
Utilizing backlogs or back ordering during peak-demand periods
Utilizing different pricing strategies to stimulate demand during periods of low demand
Creating new demand
The case study demonstrates how complicated it can be to deal with the unpredictability of demand and how difficult this can be to match this to the supply of goods and services and still have an efficiently run operation. The difficulty of meeting customer shopping patterns (demand) with what the suppliers and therefore Jaguar can provide (capacity) is a complicated timing issue.
Providing the right amount of vehicle at the correct time requires careful planning and investment decisions.
There are 2 things Jaguar must consider when looking at production of their vehicles:
• How much can they make?
• How much does the market require?
Jaguar may experience many changes and fluctuations in the demand for its products or services and must be able to maximize opportunities of demand without having excess capacity. Since the medium-term can be between 6- 18 months, it is imperative that Jaguar changes production quantities cause an adjustment of cycle time to match demands in the medium term. In this rapidly changing market environment, assembly lines must quickly adapt to changes in order to remain competitive. Therefore, an approach for assembly line balancing should be developed, which allows a faster adjustment of assembly lines in order to respond to fluctuations in demand. This approach focuses on two aspects: to respond to quantity as well as model-mix fluctuations. In order to increase volume flexibility, workers are allocated to the assembly stations thus pre-planned cycle times can be operated without the need of huge rebalancing. Furthermore to accomplish more flexibility in variants, operations are assigned to stations according to their impact on the assembly task time.
Since Capacity is about the quantity of a product or service that can be made within a given time period. Jaguar should evaluate the costs involved and the tradeoff between satisfying customers and the costs of production. Having too little capacity to respond to customer demand may mean missed opportunities and annoyed customers, however under-utilized capacity is a waste of resources resulting in higher costs.
Therefore the decision to alter capacity has to be taken carefully in line with future predictions of demand.
Abele, E., Elzenheimer, J., Liebeck, T., Meyer, T.: Globalization and Decentralization of Manufacturing. In: Dashchenko, A.I. (ed.) Reconfigurable Manufacturing Systems and Transformable Factories, pp. 3–13. Springer, Berlin (2006)
According to Kruger.Ramphal.Maritz When a lean production system is implanted, there is no build-up of WIP inventory.
The demand and production tempos cannot be seen as matched, because at the end of the year the exact demand requirements have been achieve.
Waiting time waste
Unnecessary motion waste
Product defect waste
Source: Kruger – Ramphal – Maritz
Overproduction waste – This occurs when products are produced before required in excess of the predicted demand.
Waiting time waste – This occurs when waiting occurs at any time in a process. This could be the waiting for customers, customer orders, inventory, finished goods or workers in the process.
Product defect waste – This may influence customer satisfaction which could in the end result in customers severing their relationship with Jaguar
Jaguar has gained ground by eliminating or reducing waiting period thus improving the productivity of their workers and reducing costs.
4.3 According to https://www.pipefy.com/blog/business
Bottleneck: is a constraint that impacts the process’ output not allowing it to achieve the determined goals. Therefore in the case of Jaguar, the Operations manager will have to use the various 5S methodology:
Sorting out – Sort the necessary from unnecessary tools for their team.
Set in order – Minimize process wastes by organizing the work environment.
Shine- spic and span – Keep your equipment in a perfect state and utilize it to the full potential.
Standardize – Standardize their work process.
Sustain – Sustain any changes that he has implemented and set up for continuous improvement.
Support – During this stage the support functions assist the operations functions in improving quality standards.
Source: (Kruger.Ramphal.Maritz, Third Edition)
Jaguar should consider the following quality dimensions:
Describes the efficiency with which Jaguar achieves its intended purpose.
In case of Jaguar S-type, one will have to ensure things like acceleration, handling, cruising speed, and comfort.
This dimension has to do with attributes of a product that supplement the product’s basic performance. These include the “bells and whistles” contained in the product.
This refers to the propensity for a product to perform consistently over its useful design life, the perception is the better quality, the better reliability.
This refers to the situation when the specifications of the product are within the prescribed tolerance.
This refers to the degree to which a product tolerates stress or trauma without failing.
This refers to the ease of the maintenance and repair of a product or the provision of back-up service.
This term refers to the product’s subjective characteristics that appeal to the sense of taste, touch, hearing, sight and smell.
This is quality based on the user’s opinion. This is influenced by brand names, advertising, image and price.
This refers to the degree to which the product protects users before, during and after use.
This reflects the degree to which the product could have a destructive effect on natural resources
There are four primary types of benchmarking:
Internal benchmarking is a comparison of a business process to a similar process inside the organization.
Competitive benchmarking is a direct competitor-to-competitor comparison of a product, service, process, or method.
Functional benchmarking is a comparison to similar or identical practices within the same or similar functions outside the immediate industry.
Generic benchmarking broadly conceptualizes unrelated business processes or functions that can be practiced in the same or similar ways regardless of the industry.
In the case of Jaguar, they will have to use the competitive benchmarking in order to understand and to strengthen and also improve the potential of their vehicles.
Bringing about change within the organization by changing the mindset of senior executives.
Challenging current practices and processes.
Creating improvement within the organization.
Flow chart – It is a picture of separate steps of a process in sequential order (McMahon, 2008). Its purpose is to identify problem areas and non-value adding processes.
Control chart – These are charts with an indication of upper and lower tolerance. Its purpose is used to study how a process changes over time and the data are plotted in order.
Check sheets – It is a structured, prepared form for collecting and analyzing data (McMahon, 2002). Their purpose is there are used to ensure that certain activities and tasks are completed and they serve the purpose of data collection.
Flow charts could be best used in lean manufacturing as it is a simple charting process to highlight individual steps within a specific process. It is also very useful and easy way to highlight value adding and non-value adding steps within a process, it also can often give you a clear standardized process flow document to use as the standard for working when you have made your improvements (McMahon, 2008)
Title: Environmental sustainability
Environmental sustainability tries to avoid the depletion of non-renewable resources. Environmental sustainability is important because humans tend to be bad at systems thinking. Environmental sustainability professionals are employed to help balance, or improve, the human role in environmental systems.
According to (Kruger.Ramphal.Maritz, Third Edition) Environmental sustainability involves making decisions and taking action that are in the interests of protecting the natural world, with particular emphasis on preserving the capability of the environment to support human life.
Furthermore, it is explained that the Operations manager should realize that the earth’s resources are finite and that organizations cannot carry on stripping the earth of its natural resource, therefore a good operations manager drives down costs, but at the same time uses scarce resources wisely. Operations managers should strive to find new and improved methods and processes to produce better and stronger products using less material.
The statement is therefore, incorrect as the importance of environmental sustainability can’t be overstated because it allows Jaguar to focus on the long-term environmental impact of their activities. With this, the focus should then be on prompting action rather than awareness, because it’s not enough to have knowledge of the issues within the automotive industry. To support the environmental activities, Jaguar created initiatives and programs which include the generation of an old derelict Brownfield site rather than using valuable green space, energy management – a new gas- fired boiler house which replaced the old coal fired one, recycling the new X200, The new power house has led to a 95% reduction in Sulphur dioxide emissions. These things will go a long way to changing the way everyone at Jaguar thinks about supply, production and recycling and making sure that they can answer tough questions about the impacts of their activities on the environment.