nAmIB I A U n IVERS ITY OF SCIEnCE AnD TECHnOLOGY

FACUL TV OF MANAGEMENT SCIENCES

DEPARTMENT OF MARKETING & LOGISTICS.

QUALIFICATION: MASTERS of LOGISTICS and SUPPLY CHAIN MANAGEMENT.

QUALIFICATION CODE: MLSCM LEVEL: 7

COURSE CODE: OSM912S COURSE NAME: OPERATIONS MANAGEMENT

SESSION: JULY 2016 PAPER: THEORY

DURATION: 3 HOURS MARKS: 60

1st OPPORTUNITY EXAMINATION QUESTION PAPER

EXAMINER(S)

Prof. Eugene Madejski

MODERATOR: Mr Rainer Ritter

INSTRUCTIONS 1. Answer ALL the questions.

2. Write clearly and neatly.

3. Number the answers clearly.

THIS QUESTION PAPER CONSISTS OF 5 PAGES (Including this front page)

CASE STUDY 1: WELDON HAND TOOLS.

Weldon 1-13nd Tooi<S, one of the most succE<SSful of the European hand loot manufacturers, decided to move into

the 'woodworking' tools market. Previously its products had been confined to car maintenance, home decOf'ating and genaral hand tools. One of the first 'P·TOducts which it decided to manufacture was a ge09rBI-purpo,o...e 'smoothing plane'. a tool which smoothes and shapes wood. Its product designars d8Wsed a suitable des.ign and the company's

work measurement engineEf'.s estimated the time it would take in standard minutes (the time to perform the task J:ilus allmvances for rest etc.) to perform each element in the as.sarbly process. The marketing department also estimated the ·likely demand (for the whole European market) for the

nsv product. Its sales forecast is .shown in Table 7.3. The marketing department was not totally confident of

its forecast, howevec. 'A .substantial proportion of demand is !*ely to be export sales, which we frnd difficult to predict. But whatever demand does tum out to be, we will have to TBacl quickly to meet it. The moTB we 1mler fhase parts of

the market, the more wa are into impulse ooying and the more sa.Jas we lose if wa don 't supply.·

This plane was likely to be the first of ｳ｡ｾﾷ･ｲ｡ｬ＠ similar planes. A further model had ai!B3dy been ｡ｰｰｲｯｾＭＧｂ､＠ for launch about one year after this. and two or t hree further

models were in the planning stage. All the planes were similar, merely var,;ng in length and width.

Table 7.3 Sales rorecast tor smootlllng plane

Trmeperiod

Year 1 1st quartEf' 2nd quarte-r 3rd qu3l!Ef' 41!1 quarter

Year2 1sl quartEf' 2nd quarte.r 3rd qu3ll€f' 4th quaner

Valume

98,000 units 140,000 units 140.000 units 170,000 units

140.000 units 170,000 units 200.000 units 2.30,000 units

Table 7.4 stanoaro times ror eaell element or assami:JJy task In stanoarCl minutes (SMJ

Bement

Press operations Assembl9 poke subassembly Frt poke suba'SS€'ll1bty 10 frog Rivet adjusting lever to frog Press adjusting nut screw 10 frcg

TOTAL PRESS OPERATlCNS

Bench operations Fit adiJSting nut 10 frog Fit lrog ｳ｣ｲｾｷ＠ to frog Frt kncb to base Frt handle to base Frt frog subassat'.bly 10 ba-se Assemble blade subas-sembi'J ａｳｳ･ｭ｢ｾ＠ blade subassembly. cl:amp

and label to base and adjust Make up box and \\Tap plane, pack

and stock

TOTAL ASSEMBLY AND PACK TIME

Time in standard minutE!'S (SM)

0.12 0.10 0.15 o.oa 0.45

0.15 0.00 0.15· 0.17 0.15 o.oa

0.20

0.20

1.60

Designing the manufacturing operation It has been decided to assemble all planes at ona of the

company's smaller factory sites where a whole workshop is unused. Within the workshop there is plenty of room for expansion if demand proves higher than forecast. AJI machining and finishing of parts would be performed at the main factory and the parts .shipped to the smaller site where they would be assamb1ed at the available workshop.

An i:dea of the assembly task can be gained from the part-i-ally aploded view of the product (seoe ｆｾｧＮ＠ 7.21 ). Table 7.4 gh'lls the 'standard time' for eacil element of t he assembly task. Some of the tasks are described as 'press' operations. These usa a simple mechanical press that applies sufficient

force for simple bending, riveting or force-fitting operations. This type of press is not an ex_pensiYe or sophisticated piece of technology.

S/A = subsssemtly

Figure 7.21 Partially explode<! view or too new plane

Costs and pricing The standard costing system at the company imrolves adding a 150 per cent overhea-d charge to the direct

laboor cost of manufacturing the product, and the pro-duct would retail for the equival.ent of around €35 in Europe wh&re most rotsilers will s&ll this type of product for about 70-120 per cent more than they buy n from the manufacturer.

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Question 1.

How many staff should Weldon Hand Tools employ?

Provide rationale for your human resource proposal, including basing it upon the case study assembly

tasks. 12 Marks.

Question 2.

What type of facilities and technology will Weldon Hand Tools need to buy in order to assemble this

product? 12 Marks.

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CASE STUDY 2: SERVICE ADHESIVES.

ｂｾﾷ＠ Dr Ran Bhamra, Lecturer in Enginooring Managamant, Loughborough Uni\•ersity.

'I'm not sure why we've nEwer succood.ed in roolly get-ting an improvement. initiative to take hold in this company. It isn't that we haven''t boon trying. TQM, ｌｾ｡ｮ Ｎ＠ even a limifBd attempt to adopt Six Sigma; we 'v:e tJied them afi I ｧｵｾｳ＠ that we just havM't yet found the right approach that fits us. That. is why ｷｾﾷｲＺ･＠ quite GXcited about what we saw at Happy Products' {James Eroadstona. Opecations Director, Service Adhesives Umited).

Service Adhesives ltd was a mid-sized company founded over twenty years ago to pmduce specialist adhesives, mainly used fn the ｦ｡ｳｴ ｾ ｭｯｶｩｮｧ＠ consumer goods (FMCG) businass \\'here any adnesive had to 'be guarante-ed 'non-irritating' {for ex.ampfe· in personal care products} and definitely 'noo-toxic' (for exampl.e in ｦｯｯ､ｾ｢｡ｳ･､＠ products). Largely becaus.e of its patented adhesive fumrufatio:n , and its outstanding record in dewloping rnev.· adhesive pro-ducts, it has aLways been profitable. Yet, although its sales revenue had continued to rise. the last few years had seen a siCM•dOI\'n in the company's profit margins. According to Service Adhesives senior management there were two masons for this: first. production costs w ere rising more rapidly than sales revenues, second, product ｱｵ｡ｦｲｴｾ ﾷＮ＠

whlle acceptable, was no longer significantly better than competitors'. These issues had' been recognized by ｳｾｮｩｯｲ＠

ｭ｡ｮ｡ｱＮ･ｭｾｮｴ＠ for a number of y-ears and ｳｾｶ･ｲ｡ｬ＠ improve-ment. initiatives, focusing on product quaf'ity and process improvement, had attempted to reverse their declining posi-tion rnfa:ti.ve to competitors. However, none of the initiatives had tuU;r takan hold and delivered as promised.

In reC9nt years. Service Adhesives Ltd had tried to embrace a numoor of initiatives and modem operations philosop.hies such as TOM (Total Quality Management) and Lean; an had proved disappointing, with l'ittle resulting change within the business. It was never Clear why these steps t01vards modem ways of working had not been successfuL Some senior managemsnt viewed the-staff as ｢ｾｩｮｧ＠ of <bel'ow-average' skills and motivation, and ver>• reluctant to ｣ｨ｡ｮｧｾ Ｍ There w as a mlatively high staff tum-ｯｶｾｲ＠ rate antd the company had recentry started ｾｭｰｬｯｹｩｮｧ＠shont-tsrm contract labour as an answer to controlling i ts fluctuating orders. The majority of the ｳｨｯｲｴＭｴｾｲｭ＠ staff

were from sastem f:uropean Union member s tates such as Poland and the Czoch Republic and accounted for almost 20% of the total shop-floor ｰ･ｲｳｯｮｮｾｌ＠ There had been some issues wi th temporary staff not adhecing to quali,ty procedures or referring to ·written material, all of which was written in f:nglish. Despite this, the company's manage-ment saw the use of migrant labour as ｬ｡ｲｧ･ｬｾ ﾷ＠ posiitive: they were hard-working and provided an opportunfty to

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save costs. HCM•ever !here had boon some tension ootwoon temporary antd permanent employees over what was soon as a perceived thrsat to their jobs.

James Broadstone, the Operations Director of Service Adh.esiws. was particularly concerned about the failure of their improvement initiatives and organiz:ed a number oi visits to other companies wifh similar profiles and alSo to a coiLiple of Service ａ､ｨ･ｳｩｾﾷ･ｳＮ＠ CI:Jstomers. It was a visit to one of their larger customecs, calted (bizarrely) 'Happy Products' that had particularly enthused the senior management team. 'It was like ent.ering another world. Their processes arn different from ours, but not that different. But their plant was cleaner. the flow o.f mat£Nials seemed smoother, their st:Jff seerood purposeful, and above all, it seemed effiCient and a happy ploce to wo11<. Everybody realfy did work. as a team I thklk we have a Jot to Jearn from them. f'm sure that a team-based approoch could be impte.mMtoo fust as sucC9ssfu/fy in our plant' (James Broadstona).

ｈ｡ｰｰｾ ﾷ＠ Products were a global company and the market leaders :in their field. And although their various plants in different parts of the world. had slightly different approaches to how they organiz:ed their production operations, the· groJp as a whole had a reputation for excellant human resource management. The plant visited ｢ｾﾷ＠ Service Adhesives was in thG third year of a five-year programme to introdoce and embed a team-based work structure and culture. It had won the coveted in:tema!ional 'Best Plant in Division' award twice within throo years. The clear ､ｲ ｩ ｾ･ｲ＠ of this si!Jccess had been identified by the award-judging panel' as its ｩｭｰｬｾｭ･ｮｴ｡ｬｩｯｮ＠ of a team-based work structure. The Happy Products plant operated a three-shift system over a 24n operation cycle making diapers {nappies) and health-care products and was organized into three distinct produc! araas. each. containing at least two production fines utiliz:ing higtlly complex toohnology. r:ach, production line was staffed

by five operators (with additional support staff serving the wh.ole plant). One operator was a team leader responsible tor 'first-l ine management' . A secooo operator was a spe-｣ｩ｡ｬｬｾﾷ＠ trained health and safety repcooentative. A third was a trained quality representative who also l'iaised wilh the Quality Department. A fourth operator was a trained main-tenance engine-er, w hile a fifth was a non-specialist, ' floating'

operator. The team had support from the production pro-cess engineering, quality and logistics departments.

Most problems encountered in the day-to-day opera-tion of the line could be dealt with immediately, on the line. This ensured that production output, product quality and line efficiency were controlled exceptionally well. Individual team roles enabled team members to contribute and take great satisfaction in the knowledge that they played a key part in the success of the organization. The team spe-cialist roles also gave the opportunity for networking with counterparts in other plants across the world . This inter-national communication was encouraged and added to the sense of belonging and organizational goal orientation. Teams were also involved in determining annual perform-ance targets for their specific areas. Annually, corporate strategy identified business direction, and developed per-formance requirements for each business division which, in tum, tittered down to individual plants. Plants devised strategic targets for their sections and the teams them-selves created a list of projects and activities to meet (and hopefully exceed) targets. In this way the individual operator on the shop floor had direct influence over their future and the future of their business.

So impressed were Service Adhesives with what they perceived to be a world-class operation, that they decided that they should also consider following a similar path towards a team-based work organization. They were obviously missing the organizational 'cohesiveness' that their customer seemed to be demonstrating. Until that time, however, the management at Service Adhesives Ltd had prided themselves on their traditional, hierarchical organization structure. The organization had five layers of operational management from the plant director at the top to the shop floor operatives at the bottom. The chain of command was strictly enforced by operating procedures entwined with their long-established and comprehensive quality assurance system. Now, it seemed, a very different

Question 3.

approach was needed. 'We are very interested in team-ing from the visit. We have to change the way we work and make some radical improvements to our organization's operational effectiveness. I have come to believe that we have fallen behind in our thinking. A new kind of organiza-tional culture is needed for these challenging times and we must respond by teaming from the best practice that we can find. We also must be seen by our customers as forward thinking. We have to prove that we are in the same league as the "big boys"' (James Broadstone).

At the next top team meeting, Service formally committed itself to adopting a 'team-based organizational structure' with the aim of 'establishing a culture of improvement and operational excellence'.

Service Adhesives currently employ up to 20 per cent of their workforce on short-term contracts.

What effect will this have on the proposed team-based working structure? 12 Marks.

Question 4.

In considering a transition from a traditional, organisational work structure to a team-based work

structure, what sort of barriers are Service Adhesives likely to encounter? Think about the formal

structures {e.g. roles and procedures) and the informal structures {e.g. social groups and

communication). 12 Marks.

Question 5.

Employee empowerment is a key element of team-based working; what difficulties could Service

Adhesives fact in implementing empowerment? 12 Marks.

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