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2) Elaborate the operations management scene in Kenya today by using real companies as

examples to support your answer (10mks)


The scope of Operations Management (OM) has changed significantly in the last several decades
in Kenya. Starting from Re-order Point (ROP) to
a) Enterprise Resources Planning (ERP) it refers to a business management software
typically a suite of integrated applications that a company can use to collect, store, manage
and interpret data from many business activities, including: Product planning, cost,
Manufacturing or service delivery, Marketing and sales, Inventory management and
Shipping and payment. ERP provides an integrated view of core business processes, often in
real-time, using common databases maintained by a database management system. ERP
systems track business resources cash, raw materials, production capacity and the status of
business commitments: orders, purchase orders, and payroll. All this activities in the last
decades were done manually in most Kenya supermarkets such as Uchumi ,Tuskys and
manufacturing companies such as Menengai and others but reentry they have adopted the
technology.
b) Supply Chain Management (SCM) - Supply chain management (SCM) is the oversight of
materials, information, and finances as they move in a process from supplier to manufacturer
to wholesaler to retailer to consumer. Supply chain management involves coordinating and
integrating these flows both within and among companies. It is said that the ultimate goal of
any effective supply chain management system is to reduce inventory (with the assumption
that products are available when needed). Companies in Kenya have recently implemented
the concept of supply chain management after they realized its benefits.
OM has gone through a long way in terms of scope and techniques being used by Kenya
manufacturing companies such as Baburi cement and Bidco .
a) JIT philosophy- An inventory strategy which companies in Kenya has recently
employed to increase efficiency and decrease waste by receiving goods only as they are
needed in the production process, thereby reducing inventory costs. This is done by
companies such as Menengai Company Nakuru.
b) Lean production- due to the need to eliminate waste companies in Kenya has adopted
this strategy. Lean production is a systematic method for the elimination of waste

("Muda") within a manufacturing system. Lean also takes into account waste created
through overburden ("Muri") and waste created through unevenness in work loads
("Mura"). Working from the perspective of the client who consumes a product or service,
"value" is any action or process that a customer would be willing to pay for.
c) Agile manufacturing - is a term applied to an organization that has created the
processes, tools, and training to enable it to respond quickly to customer needs and
market changes while still controlling costs and quality. An enabling factor in becoming
an agile manufacturer has been the development of manufacturing support technology
that allows the marketers, the designers and the production personnel to share a common
database of parts and products, to share data on production capacities and problems
particularly where small initial problems may have larger downstream effects. It is a
general proposition of manufacturing that the cost of correcting quality issues increases
as the problem moves downstream, so that it is cheaper to correct quality problems at the
earliest possible point in the process.
All this modern techniques have significantly changed the ways how Kenyans design and
analyze the operations. Traditional OMs in Kenya is about to move from a function of the
organization to the supply chain, starting from suppliers of suppliers to customers of customers.
Along the supply chain, not only goods and services but also all sources of cash, credit, and
information need to be managed.
3) Explain the practical contributions that are seen from Japanese manufacturers in the
world of operations management (10mks)
a) Continuous improvement
Kaizen, also known Continuous improvement as is a long-term approach to work that
systematically seeks to achieve small, incremental changes in processes in order to
improve efficiency and quality. Kaizen can be applied to any kind of work, but it is
perhaps best known for being used in lean manufacturing and lean programming. If a
work environment practices kaizen, continuous improvement is the responsibility of
every worker, not just a selected few. Major process improvements often occur through a
series of smaller initiatives, summarized in the Japanese word kaizen, or continuous

improvement. In the classic example, Toyota dramatically reduced its die-changing time
over a two-year period. In 1970 it took the company four hours to change a die for a
1,000-ton stamping press. Six months later, the changing time had been cut to one and a
half hours. The management then, under the leadership of Taiichi Ohno, set the
formidable goal of reducing the time further to just three minutes.
b) Just in time manufacturing- Just-in-time (JIT) manufacturing is a production model in
which items are created to meet demand, not created in surplus or in advance of need.
The purpose of JIT production is to avoid the waste associated with overproduction,
waiting and excess inventory, three of the seven waste categories defined in the Toyota
Production System.
Toyota adopted JIT in the Toyota Production System (TPS), as a means of eliminating the
seven wastes. However, it was not at the Ford Motor Company that Toyota
representatives saw the JIT model in action. When Toyota toured plants in the United
States in 1956, Ford had not yet fully implemented the JIT model. It was at Piggly
Wiggly, the first self-service grocery chain that Toyota representatives saw JIT
demonstrated and that was the model they based their system on.
c) Lean manufacturing- Lean manufacturing or lean production, often simply "lean", is a
systematic method for the elimination of waste ("Muda") within a manufacturing system.
Lean also takes into account waste created through overburden ("Muri") and waste
created through unevenness in work loads ("Mura"). Working from the perspective of the
client who consumes a product or service, "value" is any action or process that a
customer would be willing to pay for. Essentially, lean is centered on making obvious
what adds value by reducing everything else. Lean manufacturing is a management
philosophy derived mostly from the Toyota Production System (TPS) (hence the term
Toyota is also prevalent) and identified as "lean" only in the 1990s. TPS is renowned for
its focus on reduction of the original Toyota seven wastes to improve overall customer
value, but there are varying perspectives on how this is best achieved. The steady growth
of Toyota, from a small company to the world's largest automaker, has focused attention
on how it has achieved this success.

d) Value addition- TPS and similar Japanese manufacturing techniques distinguish between
activities that add value to a product and those that are logistical but add no value. The
primary even the sole value-added activity in manufacturing is the production process
itself, where materials are being transformed into progressively functional work pieces.
Most other activities, such as transporting materials, inspecting finished work, and most
of all, idle time and delays, add no value and must be minimized. When processes are
examined for potential improvements and cost cutting, reducing non-value-added
activities is often the highest priority. Conversely, processes that add the most value, even
if they are expensive, will usually not be compromised to achieve lower costs at the
expense of quality.
e) Six sigma- is a set of techniques and tools for process improvement. It was introduced by
engineer Bill Smith while working at Motorola in 1986 .Six Sigma seeks to improve the
quality of the output of a process by identifying and removing the causes of defects
(errors) and minimizing variability in manufacturing and business processes. It uses a set
of quality management methods, mainly empirical, statistical methods, and creates a
special infrastructure of people within the organization, who are experts in these methods.
Each Six Sigma project carried out within an organization follows a defined sequence of
steps and has specific value targets, for example: reduce process cycle time, reduce
pollution, reduce costs, increase customer satisfaction, and increase profits.
f) Transportation- The Toyota Production System also recognizes waste in the excess
movement of items or materials. In general, the more transportation required, the less
efficient the process, since moving goods back and forth is normally not a value-adding
procedure. Transport waste is usually addressed by changing the layout of a factory, its
geographic location relative to its customers, and so forth. While sometimes
transportation problems can be mitigated through automation, the ideal under the
Japanese system is to minimize it altogether. Cell and flexible manufacturing layouts are
one approach to controlling transport waste.
g) Quality by design- Another feature thought to be defining in Japanese manufacturing is a
marked attention to quality throughout the production process. Specifically, under the
influence of such luminaries as W. Edwards Deming and Joseph M. Juran, Japanese
manufacturers have sought to achieve quality by designing it into the production process
rather than simply trying to catch all the errors at the end. As noted, POKA-YOKES can

serve this function either by halting/correcting a faulty process or by alerting a worker to


a problem as it occurs.
h) Market-driven pricing-In contrast to the traditional practice of setting prices by
marking up some percentage over the cost of manufacturing, the Japanese system
attempts to identify the market-determined price for a good and then engineer the
manufacturing process to produce at this price profitably. Under this principle, increases
in costs are not passed on to the consumer in the form of higher prices. As a corollary, the
only way for a firm to increase profitability is by lowering costs; lower costs may also
allow the company to be profitable yet deliver products at the low end of the pricing
spectrum.
i) Worker flexibility - Maximizing returns on human capital is another goal of Japanese
manufacturing practices. Driven by the theory that human time is more valuable than
machine time, the Japanese system attempts to optimize labor efficiency by deploying
workers in different ways as order-based production requirements fluctuate. The main
two dimensions of this flexibility are skills and scheduling.

4) Explain the network planning models that help operations management in project
planning (10mks)
The three basic project planning techniques are Gantt chart, CPM and PERT. All monitor
progress and costs against resource budgets.
Gantt chart - A Gantt chart is a type of bar chart that illustrates a project schedule. Gantt charts
illustrate the start and finish dates of the terminal elements and summary elements of a project.

Terminal elements and summary elements comprise the work breakdown structure of the project.
Modern Gantt charts also show the dependency (i.e., precedence network) relationships between
activities.
Gantt chart advantages
a) Allows for efficient organization In order for a Gantt chart to be successful, you first
need to identify project elements or tasks. If you are using this type of chart you are
essentially forced to focus on what truly needs to be done, thus making you somewhat
more organized and encouraging a potentially higher chance of success.
b) Helps establish timeframes Because many project elements often depend on other tasks,
it can be tough to deduce how long one task should take and when to start and finish it by.
Gantt charts use bars to indicate how long a task should take and what this does is give
you a better perspective of the total project, and timeframe as a whole. Just be sure to
consider time factors outside of the project such as holidays.
c) Highly visual Gantt charts are visual, and give you an excellent way to instantly see and
comprehend all of the different elements in once place, thus bringing thoughts and ideas
together. Beyond that the visuals provide users with an easy to see chart of what needs to
be done next.
Critical path method
CPM or Critical Path Method is a mathematical algorithm of the events used to monitor the
progress of a multitasked project in an organization. It is also used to estimate time required for
the completion of the project.

Advantages of CPM implementation


1. The CPM makes it easier for the project managers to build a team and create human
network for efficient handling of a multitasked project.
2. The CPM binds the entire team together and motivates the human resources in timely
completion of the tasks in a project.

3. The CPM takes into consideration the requirements well in advance to complete a project
in the most efficient way possible.
4. With help of the CMP the project managers can determine the duration and estimate exact
time and cost of the project. It helps to monitor human resources, and the direct and
indirect costs associated with the project.
5. The CPM assists the project managers in planning schedules, monitoring tasks, and helps
control the project expenses.
Program Evaluation and Review Technique (PERT)
Program Evaluation and Review Technique (PERT) is a scheduling method originally designed
to plan a manufacturing project by employing a network of interrelated activities, coordinating
optimum cost and time criteria. PERT emphasizes the relationship between the time each activity
takes, the costs associated with each phase, and the resulting time and cost for the anticipated
completion of the entire project.
Advantages of Pert:
The following advantages are derived from the pert:
1. It compels managers to plan their projects critically and analyse all factors affecting the
progress of the plan. The process of the network analysis requires that the project planning be
conducted on considerable detail from the start to the finish.
2. It provides the management a tool for forecasting the impact of schedule changes and be
prepared to correct such situations. The likely trouble spots are located early enough so as to
apply some preventive measures or corrective actions.
3. a lot of data can be presented in a highly ordered fashion. The task relationships are
graphically represented for easier evaluation and individuals in different locations can easily
determine their role in the total task requirements.
4. The PERT time (Te) is based upon 3-way estimate and hence is the most objective time in the
light of uncertainties and results in greater degree of accuracy in time forecasting.

5. It results in improved communication; the network provides a common ground for various
parties such as designers, contractors, project managers etc. and they must all understand each
others role and contributions.

References
Operations and Production Systems with Multiple Objectives. John Wiley & Sons. ISBN 978-1118-58537-5.
Malakooti, Behnam (2013). Operations and Production Systems with Multiple Objectives. John
Wiley & Sons. ISBN 978-1-118-58537-5.
Taiichi Ohno, Toyota Production System, Productivity Pres 1988