MASTER OF BUSINESS ADMINISTRATION AWARDED BY NOTTINGHAM TRENT UNIVERSITY

ASSIGNMENT SUBMISSION FORM

Note: Students must attach this page to the front of the assignment before uploading to WECSERF. For uploading instructions please see the help file online Name of Student: Zubair Saleem Student Registration Number: KL102047 Module Name: Managing Operations Strategically Module Number: Assignment Title: Submission Due Date: August 16, 20`09 Students Electronic Signature:
Plagiarism is to be treated seriously. Students caught plagiarizing, can be expelled from the programme

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Assignment Form MBA Jan04

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CONTENTS Executive Summary 1.0 2.0 02

Introduction--------------------------------------------------------------------- 04

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INTRODUCTION

Operations management is basically a systematic implementation, directions, analysis and control of all the processes included to transform the inputs into finished goods and services.

Operations management processes and functions mostly comprises the usage of equipments, tools, machines, facilities, materials, energy, employees, strategies, information and many other physical and non physical assets as inputs within the organizations. Or in other terms operations strategies comprise of 5 Ps i.e. Product, Plant, Processes, Programs and People.

The operations managers are thought to be responsible for the management of each and every step or process of transformation of inputs into finished products and services.

The techniques of operations management are basically used to obtain these finished products and services with the best possible usage of inputs.

In the turbulent global business market the competition is always increasing due to many reasons like ICT (Information communication technology) innovations, ISO standards, WTO free market approach, customers / consumers knowledge enhancement, entrance of many Global Giants in the markets and many other reasons.

These competition increasing reasons create a very much competitive market environment and organizations need to achieve competitive advantages to sustain and compete in such competing and innovative market environment.

Processes and operations vary in products and services as well as from industry to industry. These products and services are tangible and intangible respectively and require some inputs for customer oriented outputs and to transform them with best possible efficiency.

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The new concepts and innovations make Manufacturing and servicing industries to be more customers oriented and dont only rely on the products and service outputs but operate the industries for customer satisfaction and outputs are now not products and services but the Customer response on these output products.

To achieve the positive customer response, sustain and compete in the market organizations have learnt and implemented many better strategies like Lean Manufacturing, 5 S strategies, Kaizen, Six Sigma, Process Capability Analysis, Benchmarking, Statistical Process Control, Total Quality Management, Knowledge Management Systems and many other enhanced ways to produce products and services to be more specified and customer oriented.

Operations management is not only implemented on industrial basis but each SBU is also output producing unit and managers of those departments can also implement operations management strategies to improve efficiency, productivity and best possible quality. The organizations may have Pre and Post SBUs/ departments and the pre-department is termed as the supplier of the post-department while post department is termed as customer of the pre-department.

The operations strategies may also vary from industry to industry and can also vary according to requirement like planned and unplanned or deliberate and emergent strategies.

Mostly the deliberate and emergent strategies both are tried to be planned but sometimes in unexpected situations some unplanned strategies are also taken into account to solve the problems.

The planned strategies mostly are also found in tacit as well in explicit form dependent on the firms information strategies.

To be more specific, in this piece of work we will be discussing about the operations management of the Textile industry and for that I have chosen one SBU of Yunus Textile Mills, Karachi, Pakistan where I was working as Textile Engineer and as an employee will try to address the operation functions and strategies more efficiently.

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Yunus Textile Mills was originated in 1999 and mainly three management teams have been changed until now. The management team working now is called Farooqians and they are working here from past five years.

In Dyeing department the employee strength is about 180 and comprises of six fabric dyeing machine. Please refer to Appendix 1 for the organization structure of this industry.

The supplier of this department is Bleaching department while its customers are printing and finishing departments or sometimes Folding department depends upon Final customer requirement.

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PRODUCT QUALITY PROBLEMS

Organizations may vary from machines, expertise, processes, procedures, products and strategies. The main purpose of manufacturing of a product leads us to the concept of supply and demand and thus the focus on markets, customers and consumers.

Customers and markets set their standard and specifications on the basis of the demand of the product.

After setting these standards a manufacturing industry is thought to be perfect on these standards and specifications or in whole Quality of the product.

Industries always try to be under these specifications to give the better quality and meet customer and market requirements to sustain / compete in a competitive market. When products go through their Product Life Cycle, they pass from different stages from their introduction to Decline stage and industries always try to expand their PLC by using their competitive advantages to maximize their profits.

During the manufacturing products come in contact with many of problems depending upon product size, lot size, and industrys competitive advantages like its expertise, technology, finance, strategies etc. These products which are affected by those problems are termed as Defective or Wastage.

The quality problems can come because of many internal and external causes but if we generalize them or look them from broad perspective then these quality problems or defects are yield of two main causes in manufacturing of the products as given below;

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COMMON CAUSES

Common causes are basically those causes of defects or quality problems which are temporary and occur due to mistakes of workers, sudden accidents, unexpected machine breakdowns and power failure etc.

For example in a Textile industry during the dyeing of the fabric, where continuous solution tanks are being made/used and suddenly the color of the fabric goes out of the customer specifications due to mistake of the color making worker in weighing the color un-accurately, mixing more water, increasing heat of burners or any other unexpected human error etc.

Also in almost all manufacturing industries transportation of goods is kept in sight with priority and if the output of each machine exceeds or any worker keep them in the way of others or its own machine transportation way, then this may cause hindrance in transportation of raw material when its needed and may cause machine stoppage.

Machine stoppage can also be caused due to sudden power failure and any poor maintenance problems and this machine stoppage also causes defects or defective products, like defective bottles in bottle industry, burnt fabric in textile industry or any other defect which doesnt lie under customer specifications.

SPECIAL CAUSES

Special causes of poor quality are termed as permanent and repeating problems in manufacturing of the product.

These special causes are those problems which come during manufacturing due to mistakes of management and strategic team. These include mistakes in plant layout, machines setting, selection of process route etc.

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For example a product can be manufactured within the specifications by 4 machines but management included 5 machines in the process route and due to this product faces more % of defective problems on the 5th machine. Or in plant layout, management doesnt realize the future transportation and working space required then workers and products will always face problems and will not be able to give required efficiency.

But special causes are not easily detectable because of less focus of workers on these management responsibilities and they will always try to solve the problems on their hand and will not be able to highlight the problems if first common causes are not solved completely.

Special causes can accidently be highlighted or can only be detected once the common causes are solved.

REMOVAL OF COMMON AND SPECIAL CAUSES OF POOR QUALITY

Common causes are mostly termed as more easily detectable and are temporary so doesnt repeat always.

These common causes can be detected by using Fish Bone Diagram or Ishikawa diagram and statistical process control system as given in below.

FISH BONE DIAGRAM Fishbone diagram was originated by Kaoru Ishikawa and because of this it is also known as Ishikawa diagram. This diagram is also known as Cause and effect diagram because this diagram is used to find out the real causes which lead to one single effect or the problem.

Kaoru Ishikawa is also known as one of founder of modern management and he also pioneered the quality management process for the Kawasaki shipyard.

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In Cause and effect or fishbone diagram causes are arranged in terms of their level or significance with the problem. This will help to find out the route causes to identify that where basically problem occurs.

Causes and effects are mainly arranged and viewed from four main perspectives i.e. Men, Machines, Materials and Methods for manufacturing sector while for administration and services sector the four main views are Equipments, People, Policies and Procedures.

Here one thing is very important to consider that fishbone diagram is mainly used to solve the common causes first in order to enhance the special causes of problems.

As Yunus Textile Mills is facing problems of Products defects, Recalls, Wastage and Frequent machine break downs so using fishbone diagram we will try to address how to apply this diagram to find out the main route causes which help to solve them.

As we are bound by words limit so we will discuss only one problem and will assume the same method of using fishbone diagram for the other problems.

As we have already discussed that the problem of defective goods or quality problems can be caused by workers, machines, materials and process routes or methods.

Looking more precisely details of these causes of quality problems are as given in the following figure.

Manpower

Machines

Product defects / Quality Problems

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Materials

Methods

STATISTICAL PROCESS CONTROL

ACHIEVEMENT OF EFFICIENCY IN PRODUCTION

LEAN MANUFACTURING

Lean Manufacturing technique was basically derived from the Toyota production strategies which are very well known as Toyotaism.

Lean is basically combination of different manufacturing techniques leads to the reduced production cycle with production based on customer and consumer focused. Or in simple words we can say Lean manufacturing refers to creation more values with less effort.

Mainly Lean manufacturing techniques yield three main perspectives;

a) Flexible or Responsive Production Environment b) Capability of Rapid or emergent Improvement c) Careful Application of Resources

To achieve these three main targets of Lean manufacturing Toyota refers the implementation of some very important strategies as given under each section of the targeted achievements.

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These recommended strategies can be highlighted as in the following diagram.

Flexible/Responsive Production Environment

Capability Improvement

for

Rapid Careful Resources

Application

of

Structured Manufacturing

Flow

Employee Involvement

Level

Load

and

Balanced Flow

Small Production

Lot

Control visibility 5S

Through

Preventive Maintenance

Setup Reduction Fitness for Use

Supplier Partnerships

Quality Focus

Pull System

Source: http://www.buker.com/lean-manufacturing-education.htm

To achieve these strategies, organization not only require focus on the tangible resources but also on the intangible resources like expertise and culture of the employees and organization.

Lean manufacturing technique as we described is careful usage of resources which can be seen from the Lean perspective of achieving the following targets/results.

EXPECTED RESULTS Lead time reduction 50%90% 45%55% 40%60% 40%60%

Quality costs reduced

Inventory reduced

Floor space reduced

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Manufacturing reduced

costs 20%40% 5%-20%

Purchasing costs reduced

KAIZEN

SIX SIGMA

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INVENTORY MANAGEMENT SYSTEM Inventory of any organization includes the Raw materials, Work in progress (Goods in process and finished goods.

Inventory management system is the management of all these types of Inventories in the best possible way to minimize the cost, improve efficiency and achieve best possible usage of resources. According to Microsoft Corporation (2007) Tighten inventory management processes increases operational efficiency across your business improves customer service and reduce inventory and distribution costs with inventory management.

The storage of inventories is like holding your financial resources and keeping costly goods with the industry and organizations always try to reduce the inventories to use that excess of money for the development, efficiency and production of more goods which helps to increase organization profits.

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The inventory management system is always kept in sight and is controlled to reduce purchasing costs, visibility of inventories, reduce time frame and in overall improve customer satisfaction.

Inventory management system is used to reduce the inventories to its minimal required level and for this, companies set some levels for the inventories as given in following figure.

These upper and lower indication levels, minimal and maximal levels are basically set to analyze critically the stock and to take corrective actions when the inventories goes up or down the limits.

Mostly these levels and requirement levels are being analyzed critically with different software and programs used in the industries and these software are directly linked with the data of input and output of any inventory within or out of the system.

In inventory management system some factors are very important and are always kept in sight to have the better efficiency of inventory management system as given below.

Suppliers View

Operations View

Customer View

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Number of suppliers Supply time Expected unavailability

Machines availability Capacity available Transportation time

Orders from Customers Transportation time Orders deadline

Past experiences with suppliers Working capital cycle Other expected orders Life of the materials before use Percent of wastage

CURRENT INVENTORY MANAGEMENT SYSTEM

Yunus Textile Mills as is operating in Karachi Pakistan where the prices of land were very much less in 1999 and company was built on about 4 acres or about 174500 Sq foot. This company has its one weaving unit with about 700 weaving machines, two huge stitching units and one processing unit with all the wet processing departments.

The dyeing department is one SBU of processing department and its raw material comes from Bleaching department as well from the main stores.

RAW MATERIALS STORAGE

The main stores are very huge and have are on about fourth part of the whole industry.

These main stores contain raw materials for weaving and processing departments while the finished goods are always tried to send to customer from Folding department of processing and weaving.

These huge stores contain raw materials of almost all qualities of fabric and the fabrics are being forwarded to weaving and processing according to requirements.

But as the suppliers of the company are its own sister companies, so there is no proper calculation of the raw materials and many of the qualities of fabric also kept from

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years because of cancellation of orders or due to no any levels set for the raw materials of each quality.

This is still happening because of no any usage of computerized software and also because of no any proper link of marketing department with the inventory management team.

WORK IN PROGRESS

The fabric in progress is always kept on huge batchers (Rollers) within the department and its management is under the respective departments.

These batchers follow the kanban system and different colored cards are fixed for each department.

The fabric flows from first to last department and is sent to the customers after folding.

The fabric of dyeing department comes from the bleaching department and is processed under the dyeing team custody.

Here one thing is must to be kept in sight that the marketing and planning department schedules the fabric six months before its production and if the production is done after one month, the fabric remains in the processing department for more five months until its shipment which causes lot of problem for workers in transportation etc.

The inventory is based on the planning department which try to schedule the fabric as per orders but mostly the fabric arrives in the main stores just within one month of order and passes its five months within the organization.

Fabric property is that always its strength loses and many of the impurities add to the fabric within these five months as well the cotton fabric is made of Cellulose and is very much affected by the bacteria which results poor quality of finished goods.

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FINISHED GOODS

The finished goods of the dyeing department as we discussed that are kept within the department until their shipment.

Also due to very long working capital cycle department faces lot of capacity problems.

Mostly the fabric is being processed within dyeing department takes about 6 to 8 hours or may increase if the order is of more than 25000 meters.

But dyeing department relies on the marketing department and waits for their orders to take fabric on machines and process it and the same is for all departments.

While the marketing department tries to schedule the fabric according to customer order deadline and sometime due to human errors if any fabric is left and order deadline comes very near then marketing and planning department schedule that fabric on first priority.

These management mistakes affect the other orders and sometimes these priorities goes in the critical situations.

PROPOSED INVENTORY MANAGEMENT SYSTEM

Yunus Textile Mills as a very huge industry have lot of technology, financial and operational resources.

Organizations can even connect the sister company suppliers to supply the fabric to the departments just in time it is needed but as the order quantity is so high so mostly it faces such problems. Not only this industry but almost all huge production industries dont have much focus on their inventory management and because of this the wastage occurs or

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company hold lot of money in terms of inventory which can be used for achievement of more financial goals of the organization.

Yunus Textile Mills as a huge industry can use different methods for its inventory management like Materials requirement planning (MRP) or Just in Time (JIT) systems. But as we discussed that in fabric industry different quality of fabrics are used and orders bases on the quality like the count (Width) of thread, Number of threads in warp (Length) and Weft (Width) of fabric. These qualities vary from customer to customer and order to order.

While Materials requirement planning (MRP) system schedules and requires raw material inventory with reference of its sales. In this the materials are kept on certain levels and as the level decreases the level is again maintained.

This type of management is already followed by the Yunus Textile Mills along with Kanban system but as we have seen this doesnt work in textile industry. So company can only for Just in time (JIT) inventory management system.

JUST IN TIME SYSTEM

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REFERENCES

1. www.microsoft.com/dynamics/nav

Inventory

management

in

Microsoft

Dynamics NAV, Microsoft Corporation, 2007

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