April 03, 2009

Operations Management Lesson 8 Exercise

Operations Management Lesson 8 Exercise

Process map a process (or use one you have already compiled earlier) and assess each process step to decide whether or not each step adds value from Lean thinking perspective. Pay particular attention to delays and quality checking points. Assess the throughput efficiency of the process. Is a demand-pull or Kanban system used to control flow?

For this exercise I will map a process of the same company as in lesson 7 exercise Play.com. The process I will describe from the Lean thinking perspective is which processes are activated when a customer orders a DVD movie. Womack and Jones (1996) describing the Lean thinking perspective perceive economies-of-scale as largely inefficient and wasteful. The transition from mass to lean based processes was originated in Japan within manufacturing. Western manufacturers were amazed by the efficiency of Japanese car manufacturers and their Kaizen (Constant Improvement) philosophy. This philosophy implies that one should: Make when needed, with perfect quality, produce no waste and produce at the minimum cost

Play.com uses in many ways the Kaizen approach in their inventory and customer management. The concept of “value” is crucial in the Lean thinking philosophy. Play.com uses for the most part Lean in planning and operations management. A lot of items such as DVD’s and CD’s sold on Play.com are seasonal and that prevents long term planning. Like their competitors they have seasonal sales where superfluous stock is being sold at lower prices adding flexibility to the stock and capital management.

In the following example we will see the flow of the DVD movie arriving from the producer to the Play.com inventory and further on to the end customer.

A DVD movie title is produces at the factory. It is a new release of a very popular Movie.

There is a great interest for this movie and many customers of Play.com pre-order this movie.

The Lean system using the Kanban philosophy implies that the inventory control is more efficient that the regular inventory control. Play.com need to apply operational control and be responsive to customer demand for this particular DVD. If it is out of stock in high season the customers will simply order it elsewhere, at places such as Amazon.com or CDWow.com or many others.

Production of product - at the External Factory

Outside the scope of Play.com's influence

Registration as available in stock

The registration of product coming to stock is shown on the Web as available in stock.

Ordering of product - on the Web Portal www.Play.com

Say a DVD movie by customer. Play.com has excellent throughput efficiency compared to other similar sites. The ease of use and transparency is also excellent as all prices are delivered so no extra charges are added to your order. It is a perfect example of Lean thinking in demonstrating a high degree of operational effeciency and responsiveness.

Logistics and the Shipment of product -

If the DVD is in stock it will take about 1 week to receive it in your mailbox. I live in Norway and sometimes it arrives the same week as ordered. The DVD's are sent from the State of Jersey which I guess is another way of cost and tax saving for Play.com and their logistics operation. The product shipment and delivery status may be tracked on my personal page when I log in.

Invoicing

The ordered DVD is invoiced when ordered. The CRM system that is used has already all information needed stored when you log on. It is quite easy to add or remove ordered products before you confirm purchase.

Replenishing stock (ROP)

There should be a message informing the stock management that a certain product is sold out or the stock needs to be replenished.

The re-order point may be a weak point in this system. I've been using Play.com for a number of years and when I order products that are not in stock they sometimes do not show or ever get beyond the "awaiting stock" stage. The reason for this may be that the product is not ordered at all or that some pre-orders are "forgotten" by the system.

wl

In any case, there should be rigorous stock control for effective stock management and just-in-time delivery of products. The frequent almost constant sale of DVD's outside seasonal sales campaigns at bargain prices indicate that there are improvements to be made in the Stock control management.


March 08, 2009

Operational Management Lesson 4 Exercise

Operational Management Lesson 4 Exercise

Blog-Question: For a product or service of your own choice, complete a QFD matrix that relates customer requirements to design characteristics. Justify your entry.

The Art Deco Building

The term Art Deco was coined from the Exposition des Arts Decoratifs held in Paris in 1925. The Art Deco buildings were the buildings of the future when first designed: geometric in shape, sleek and dramatic in form. They represent a brand new expression within the architecture and arts.With their cubic forms and zigzag designs, art deco buildings embraced the machine age. During the roaring twenties and the early thirties, jazzy Art Deco architecture was the rage. Not surprisingly, these buildings were the response to the demands of its age. Like any style, it evolved from many sources.  Art Deco architects often lavished their buildings with symbolic images.

                                                            CHR

                                                            Chrysler Building - New York 1928

Modernism was not just another style - It presented a new way of thinking about architecture. In OM terms the designing process was simplyfied and an art deco building were in general cheaper to build and more functional than the architecture that was predominant before 1920-ies. In some cases use of exclusive materials and ornamentation however made these buildings very expensive.

Time-to-Market factor was perfect in terms of a large number of new ideas coming in with the industrial age, and people wanting to forget and put behind the horrors of the Great War.

Customers wanted something new with functionality and elegance in expression. The stress was on effectiveness in form and glamour in ornamentation (just look at the sunburst motive on the top of the Chrysler Building).  Motives like sunburst, were were the sign of the adoption of the new wave in the society and expression of the modern new Art. Art Deco buildings were modern in a sense that they started to use materials like aluminum, stainless steel, marble and expensive woods. In some cases this was also the expression of showing everybody that one is being able to afford to construct in these expensive materials.

                                  buthouse

                                                Art Deco building - Des Moines, Iowa

The Quality-Function-Deployment (QFD)-matrix (Slack et al. 2006) shows correlation between demanded quality and quality characteristics that a product/service or in this case a building should have. QFD matrix ensures that the design of a product/process is aligned with the customers' demands, as well as to detect how its features affect the product/service's design and which benefits it has for the customers.

1. Demanded Qualities (What's) from customers contracting buildings of this type would be:

  • Functionality
  • Affordability
  • Symmetry
  • Glamour
  • Effective design
  • Ornamentation
  • Symbolism

2. Regarding the functional importance (How's)  to customers one may point out the following aspects:

  • Luxury expression
  • Elegance
  • Use of Industrial materials
  • Modernist
  • Streamlined
  • Geometric
  • Pompous
  • Opulent
  • Futuristic

The relationship between WHAT'S and HOW'S is always interesting to study. However, in Art, more than in most other disciplines one may say that usual business or even logical rules may not apply in every sense. Art Deco building shows however that functionality may indeed be expressed in a luxurious way which in itself is contradictory, and that symbolism may both be pompous and futuristic at the same time.

                             qfd matrix

Conclusion:

The relationship between demanded Quality and characteristics of an Art Deco building show strong correlation between functionality, design and customer preference for something new and unseen until its time in art and architecture. The designing concept was the expression of the new age and modernisms that was in opposition to the old values and traumas of the First World War. The Art Deco buildings' design huge success was copied in several waves later in the 50-ies and 80-ies.

artdeco_ct.jpg

Art Deco Appartments showing the strong influence of the functional architectural design. Here in Cape Town, South Africa


February 22, 2009

Operational Management Lesson 3 exercise

OPERATIONAL MANAGEMENT LESSON 3 EXERCISE

In the OM lesson 3 exercise I will take a closer look into process of Creation of Human Species by Ernst Haeckel (1834-1919) Most of us are maybe more familiar with his famous colleague Charles Darwin's Origin of Species theory. 

EH

His process of evolutionary theory is mainly in line with Darwin's but it differs in one important regard. Haeckel believed that the "inheritance of acquired traits"which is a hypothesis about a mechanism of heredity by which changes in physiology acquired during an organism's lifetime will affect the future generations of that organism. This means that for example in a process of training and enlarging muscles or singing thoughout one's lifetime, we transfer these characterisics on to the next generations. Oversimplyfied, this may explain why children of actors become actors themselves, or two brothers end up as Formula 1 drivers.

Until very recently, we have not been able to understand the functioning of human genome ( and still do not to a great degree)and the process how we inherit certain characteristics from our ancestors. Using terms from the Process Analysis we may say that Haeckel redesigned the existing Origin of Species theory described by Darwin. He rejected Darwin's "Selection of Species" as the only point of reference in which species transfer their characteristics to following generations.

In Haeckel's process flow, such developments are just as much the sum of experiences, practices and acquisition of characteristics that change an organism during its lifespan. These changes will then be transfered to a next generation. Studies in the 1920-ies and later prove him to a great extent right, although his arguments may be deemed as oversimplifyed today and to a certain degree wrong.

Haeckel was one of the pioneers in this field and is among other things father of term "ecology". In this exercise I will try to describe the process flow that ended up with creation of the modern Man (Homo Sapiens) from the early primitive mammalians (Promammalia). I will for the sake of space limit this process to mammals and omit the amphibians, fish, bacteria aso.

origin_of_species_chart.jpg

Modern Man (Homo Sapiens) traces its origin from Primitive mammals that were contemporary with dinosaurs. Through adjustments to the environment the mammals have become more specialised and have to a greater extent taken over the Earth from reptilians. 

This is when early Semi Apes come to scene. They are forefathers to later apes and ultimately to humans. Through the process of natural selection and adjustment to nature, semi-apes evolve to Apes as we know them today. Some of them are becoming flexible to changing weather conditions and adjust their food habits to meat as well as plants and nuts. Improvements made in quality and variety of food that was easier to find and has higher nutritional value leads to increasing of need to start using tools.

Ape Men have many of the same characteristics as modern humans do. By this point in the evolutional process simple tools are being used and we are starting to see elements of a rudimentary society with division of labour. Dependability on each other is high. So is speed by which they manage to gather food or find shelter. All these new winnings come at a lower cost then ever before. Our closest relatives chimpanzees and gorillas share more than 90% of our DNA.

The final step in the process of creation of Modern Man is however still not revealed. If we use the "process mapping" there is unquestionably a "missing link" there.There has been many errors on the way too, one may argue as a result of poor detail design, ending in extintion of several species of early humanoids such as Pithecantropus or Neanderthals.



Below:

Pedigree Of Man - by Ernst Haeckel


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