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Executive Summary
Operations Management department mainly oversees the designing of product while
controlling the production process. It ensures that business operation are both effective with
respect to meeting customers requirement and efficient in terms of utilizing fewer resources
to produce the required output. It converts the inputs into outputs through transformation
process by adding values to the former. The operations of the company must be monitored
and managed properly so as to reap maximum benefits out of minimum investments.
The aim of this study is to understand the role and importance of operations management for
the efficient and effective production of the goods and services. Extensive research through
books and websites has been done.
The study has been divided into two tasks. The first task explains the importance of
operations management for Baumhaus Wholesale Furniture and analyzes the operations
function of the given organization. It has also explicated the Three Es and tension between
cost minimization and quality maximization. Evaluation of five performance objectives has
also been carried on. The second task elucidated the linear programming, evaluated critical
path and network planning and explained the need for operational planning and control of
production process. The layout has been designed for the Baumhaus Furniture and Critical
Path Method has been employed for preparing bathroom unit At last, Quantity Management
techniques have been discussed.
Table of Contents
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Executive Summary...................................................................................................................3
Introduction................................................................................................................................3
Task 1.........................................................................................................................................3
LO 1 Nature and Importance of Operational Management.......................................................3
LO 1.1 Importance of Operations Management for organization..........................................3
LO 1.2 Analysis of Operations Management.........................................................................3
LO 1.3 Evaluation of Operations Management through Process Model...............................3
LO 2 Relationship between operations management and strategic planning............................3
LO 2.1 Importance of Three Es..........................................................................................3
LO 2.2 Impact of Tension between cost minimization and quality maximization.................3
LO 2.3 Significance of the five performance objectives........................................................3
Task 2.........................................................................................................................................3
LO 3 Organizing typical production process.............................................................................3
LO 3.1 Linear programming..................................................................................................3
LO 3.2 Evaluation of Critical Path Analysis and network planning......................................3
LO 3.3 Importance of Operational Planning and Control......................................................3
LO 4.1 Application of relevant techniques for the production of an operational plan...............3
LO 4.1 Define operational outcomes and possible Layouts of Furniture..............................3
LO 4.2 Network plan for resultant critical path.....................................................................3
LO 4.3 Project Management and Quality Control Techniques. improve operations.............3
Conclusion..................................................................................................................................3
References..................................................................................................................................3
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Introduction
Operation management practice has been key to achieve competitive advantage for
organizations no matter they are in service or manufacturing industry. It addresses the various
questions encountered by them in its choice of manufacturing technology, maintenance of
quality etc, by establishing performance measures using scientific tools and techniques. It
main aim is to control the costs and keep it at its minimum and increase the revenue through
careful planning and control (Mahadevan, 2010).
For the current study Baumhaus Wholesale furniture supplier has been selected. They have a
great range of furniture designed in-house and provides services to retail outlets, Internet
Traders and drop-shippers, Hotels and Hospitalities and also to commercial buyers
(Baumhaus wholesale Furniture, 2014).
Task 1
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Figure: 1; Source: Made by Student (2014) based on Kachwala & Mukherjee (2009)
The key elements of an operations system, for the Baumhaus Furniture, are as follows:
Input: To start off with a production process one requires inputs like land, labour, capital,
raw material etc. The Baumhaus Furniture must have a sufficient capital, to support their
everydays requirement and relevant manufacturing processes and technologies so as to
produce high quality products (Tomar, 2009).
Transformation Process: They are central or focal point of the operations system and ensure
the conversion of inputs into useful outputs by either acting upon or carrying out
transformation of other elements. The main transforming resources for Baumhaus Furniture
will be staff and facilities i.e. equipment and process technologies etc. (Mahadevan, 2010)
Output: The operation system uses inputs to produce a value added product/ finished goods
as an output required by the customer through the process of transformation. It may include
finished goods, maintain good relations with furniture retailers etc.
Operations management is important for the Baumhaus Furniture as no strategy will be
successful without proficient operation management as it need to understand how the goods
and services, they are manufacturing/ fabricating, are produced and delivered, and how the
various activities of operations should be established.
LO 1.2 Analysis of Operations Management
The Baumhaus furniture company supplies doors, wall units, bathroom unit etc. to the
retailers (Baumhaus wholesale Furniture, 2014). With the advent of process concept,
managerial function at Baumhaus focuses on continuous improvement and elimination of
errors. They have achieved it by following the PDCA (Plan, Do, Check and Act) Cycle, a
concept given by Wlater Schewarts and popularized by Edward Deming. The key
components of PDCA Cycle of Baumhaus furniture are as follows:
Plan: The Baumhaus Furniture spends considerable amount of effort, data and time to work
out plan before starting their work for the bulk orders like furniture for offices, furniture
rework for the house etc. They choose the best alternative which consumes the least amount
of resources on a time phased manner while satisfying the maximum wants.
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Do: Once they prepared the plan they execute it. However, they always made it sure that
resources like woods, machines and labours are available as decided and calculated at the
planning phase which must be available in right quantity, quality, time, place and cost. The
plan is executed with the help of sequential process flow chart.
Check: Even during the execution phase, they keep a check on the process, by periodically
measuring the defined control points, that it is as per the planning or any deviation is being
noted. In case of deviations, Baumhaus Furniture has back up actions so that deviations can
be rectified with required corrective actions.
Act: In case they have identified the deviations, they check out the root cause of the same and
take preventive and corrective actions so that it can be brought back to the track. However,
they note these deviations and its cause so that it can be avoided in the planning phase of next
order.
Besides, following the PDCA Cycle, they also ensure the safety of their workers and are
within the laws and regulations of UK.
LO 1.3 Evaluation of Operations Management through Process Model
All operations, producing goods and services, use the process of transformation to do the
same and so are used by the Baumhaus Furniture. They use the available resources to change
the condition or state to produce outputs. This process model works on the concept of system
theory. System can be defined as set of components and inter-relations between them which is
so configured that it produces desired outputs while operating in the context of its
environment (Gibson, 2006). A thorough analysis of systems will help managers of
Baumhaus Furniture to deconstruct a process and make improvements in the same or
introduce a new system with due regard to planning, structure and relevance.
Open and Closed System: Open system takes into account the interaction of environment,
and considers that as environment changes continuously, the operations must also change and
adapt to the environment change. Whereas closed system view treats operations as an
independent of its environment (Brown, et al., 2013). The Baumhaus Furniture follows the
concept of open system where they collectively take into account the changes of
environment, trends, requirements etc.
Probabilistic and Deterministic System: Probabilistic system states that the occurrence of
given events cannot be predicted. However, there behaviour can be described in terms of their
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probability, with certain degree of errors attached to the predicted behaviour. On the other
hand, deterministic model states that occurrence of all events for the given situation is known
with certainty. The Baumhaus Furniture follows the deterministic model as if they plan for set
of work.
Sub-Systems and System-Interfaces: Every system has sub-functional or components
called sub-system, that full-fill the condition of system itself. At the same time, they also play
a specialized role in the operation of main system. System Interface is the area of contact
between one system and other having well defined boundaries (Sauber & Vetter, 2013). The
Baumhaus Furniture works in its sub-systems wherein inputs, through transformational
process, are converted to output.
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Hence, Baumhaus tries to maintain and improve its quality by incorporating some practical
efforts of reducing costs.
LO 2.3 Significance of the five performance objectives
All businesses frame strategies to seek survival and competitiveness within its environment in
the long run. Operations Management provides a proactive approach within the organization
to achieve the said objective through its fiver performance objectives represented below:
Five Performance Objectives
Baumhaus Furniture has to assure that they are fulfilling most of the dimensions perceived
important by their client.
Dependability: It indicates the reliability that Baumhaus Furniture owns towards its
customer i.e. doing things consistently and delivering it on time (Brown, et al., 2013).
Baumhaus must fulfil its adherence towards price performance, Safety, Schedule, delivery
performance and must keep its promises towards its customers.
Speed: It shows the ability of the Baumhaus Furniture to deliver its products with as short
time delay as possible between the order placed by the customer and delivery made by the
company (Jones & Robinson, 2012). However, there are five kind of speed i.e. Quote
generation, Delivery Speed, Production Speed, Delivery frequency and New Product
development Speed (Jones & Robinson, 2012).
The analysis of above five performance objective will help the Baumhaus Furniture in
understanding their performance with respect to the set standard.
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Task 2
The Critical Path Analysis will help the Baumhauss managers in allocating the resources in
best possible manner and hence, can minimize the time and cost for the given order.
LO 3.3 Importance of Operational Planning and Control
Planning and control are the two most important of the managements process wherein
planning involves consideration of input allocation at various junctions of production
management so as to achieve the defined output (Chary, 2009). On the other hand, controls
are the corrective measure taken by the Baumhaus Furniture when there is variable in actual
output from the desired one by aligning the actual with the planned output. Hence, planning
mainly consists of evaluation and determination of utilities and products inputs to achieve
the desired goals and objectives (Chary, 2009). Some important techniques of operational
planning and control are as follows:
Techniques of Operational Planning and Control
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Activities
Design open bathroom unit
Get approved from the client
Order and receive the raw materials
Build open bathroom unit
Select Colour
Select Style
Finish Work
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LS (LF-t)
ES (max. of
immediate
predecessor)
LF (Min. of
LS)
EF
ES+t
Slack
(LS-ES;
LF-EF)
1 (Critical Path)
2 (Critical Path)
4 (Critical Path)
7 (Critical Path)
for Baumhaus Furniture. The first step will be to identify the problem which will be written at
the head of the fish.
This step will followed by Brainstorming Session of sales team, managers, field workers etc.
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Conclusion
Being a manufacturing firm, Baumhaus furniture has to control its production while
converting inputs into outputs through transformational process so as to maximize profit and
reduce costs. They can use the performance objective to check their performance against set
standards. It can control quality through quality circles, fish bone analysis, six sigma etc.
critical path method will help in finding critical path and avoiding any delays in production.
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References
Baumhaus wholesale Furniture, (2014) Our Solutions. [Online]
Available at: http://www.baumhaus.co.uk/common/pagedetail.aspx?PageCode=solutions
[Accessed 22 September 2014].
Brown, S., Blackmon, K., Cousins, P. & Maylor, H., (2013) Operations Management: Policy,
Practice and Performance Improvement. New Jersey: Routledge.
Chary, S., (2009) Production and Operations Management. New Delhi: Tata McGraw-Hill
Education.
Galloway, L., Rowbotham, F. & Azhashemi, M., (2012) Operations Management in Context.
New Jersey: Routledge.
Gibson, P., (2006) Cruise Operations Management. Burlington: Elsevier.
Gupta, R. M., (2011) Project Management. New Delhi: PHI Learning Pvt. Ltd..
Jessop, A., (2014) Performing critical path anaalysis, New Zealand: Project Learning
International Limited .
Jones, P. & Robinson, P., (2012) Operations Management. Oxford: Oxford University Press.
Kachwala, T. & Mukherjee, P., (2009) Operations Management and Productivity Techniques.
Delhi: PHI Learning Pvt. Ltd.
Karanjkar, A., (2008) Manufacturing and Operations Management. Pune: Nirali Prakashan.
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Tomar, R., (2009) Commercial operations management: Process and Technology to Support
Commercial Activities. New Delhi: Global India Publications.
Waters, D., (2007) Operations Mangaement. New York: Cengage Learning.
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