Deck 14: Operations Management: Managing Vital Operations and Processes

Question 1

"Total customer service is the goal toward which most organizations should strive." To what degree is this statement correct? [LO 14-2]

Answer 1

An organization can be described as an entity having multiple people working to achieve a collective goal of the company they are working for.
The statement is correct because of the following reasons:
• By making customers happy, an organization gets lot of other customers to buy their services and products.
• It helps in promoting the products and services of an organization and hence helps in increasing the business.
• By having more customers, organization needs to increase their production and earn huge profit from their sales.

Question 2

THE WALL STREET JOURNAL CASE IN THE NEWS [LO 14-1, 14-2, 14-3, 14-4]
Big Data Brings Relief to Allergy Medicine Supply Chains
A severe allergy season in parts of the country is pressing providers to get the right medicine to the right pharmacies at the right time.
What are some of the advantages of using big data when it comes to increasing customer satisfaction? What are some disadvantages?

Answer 2

Big data mining by the supply chain in pharma industry of country U has helped many vendors to escape from loss of sales due to shortage or out of stock. The pharma and drug industry has been able to predict and forecast accurate demand and seasonal trends for the allergic medicines using data forecasting tools and techniques using big data.
The company B in the pharma industry is employing data analytics experts who use various techniques and advanced modelling tools in data handling for predicting demand. The allergy season requirement was predicted by the company B by gathering data from multiple sources well in advance and supply chain is well managed with the help of data mining. The company B became successful by supplying the stock of the allergic medicines across country U at right time, avoiding the loss of sales arising due to out of stock using data tools.
Companies can speed up their customer responsiveness with the use of big data. Using big data has the following advantages:
• Big data helps to predict and forecast demand for the product requirement well in advance, and customer can be served at right time using the forecast from the big data.
• Companies can serve the customers by maintaining right amount of stock and can avoid the loss of sales arising due to shortage of stock. Big data uses information collected from real time data sources and can predict the demand for a product. This enables the firms to maintain stock and serve the customers even at peak time.
• Big data allows the firms to look at data reports, analyse them and customize them on a daily basis. These reports help the firms in decision making process to make changes to the products as per the customer's requirement and need.
• Big data contains the customer's information as well, which is used by the companies to build good relationship with the customers. The customer's queries are well attended within less time using CRM (customer relationship management).
• Big data consolidates the information from retailers and helps the retailers to operate with lean supply chain and helps to work with consumer goods that has more demand in the market. Customers can be satisfied by providing the product as and when required.
The use of big data helps to increase the customer satisfaction by making the product available at right time without any shortage, and provides the product as per customers' need and taste at a higher speed. However, using big data incurs cost in the form of recruiting expert team and software maintenance. Experts with special skill set can only work on big data. Also in spite of all the efforts of experts, the data is just a prediction and can never reflect the perfect results.

Question 3

How to Build Flat-Screen Displays
You are an operations management consultant who has been called in by the management team of a start-up company that will produce flat-screen displays for PC makers like Apple and HP. The flat-screen display market is highly competitive, so there is considerable pressure to reduce costs. Also, PC makers are demanding ever higher quality and better features to please customers. In addition, they demand that delivery of your product meet their production schedule needs. Management wants your advice on how best to meet these requirements. The company is in the process of recruiting new workers and building a production facility.
What critical lessons can these managers learn from operations management?

Answer 3

Operations management can be described as administration of business practices which help in creating higher efficiency as much as possible in the organization.
The critical lessons that managers can learn from operations management are as follows:
• A manager can learn about managing operations of the organization and ways to implement planning in the operations to boosts productivity.
• Mangers can learn the techniques of decision-making process by minimizing risks related to the business and the organization.
• He or she will learn about process control tactics for smooth running of the operations and management.
• They can learn about identifying the economic drives of their organization and plan the future objectives and goals according to that drive.

Question 4

Managing a Production System [LO 14-1, 14-2]
Choose an organization with which you are familiar-one that you have worked in or patronized or one that has received extensive coverage in the popular press. The organization should be involved in only one industry or business. Answer these questions about the organization.
What product attributes do customers of the organization desire?

Question 5

After implementing efficiency improving techniques, many companies commonly lay off hundreds or thousands of employees whose services are no longer required. And frequently, the remaining employees must perform more tasks more quickly-a situation that can generate employee stress and other work-related problems. In addition, these employees may experience "survivor's guilt" because they kept their jobs while many of their colleagues and friends were let go.
How big a layoff, if any, would be acceptable? If layoffs are acceptable, what could be done to reduce their harm to employees?

Question 6

What is CRM, and how can it help improve responsiveness to customers? [LO 14-2]

Question 7

How to Build Flat-Screen Displays
You are an operations management consultant who has been called in by the management team of a start-up company that will produce flat-screen displays for PC makers like Apple and HP. The flat-screen display market is highly competitive, so there is considerable pressure to reduce costs. Also, PC makers are demanding ever higher quality and better features to please customers. In addition, they demand that delivery of your product meet their production schedule needs. Management wants your advice on how best to meet these requirements. The company is in the process of recruiting new workers and building a production facility.
What kinds of techniques discussed in the chapter can help these managers to increase efficiency?

Question 8

THE WALL STREET JOURNAL CASE IN THE NEWS [LO 14-1, 14-2, 14-3, 14-4]
Big Data Brings Relief to Allergy Medicine Supply Chains
A severe allergy season in parts of the country is pressing providers to get the right medicine to the right pharmacies at the right time.
What strategies can companies employ to keep their supply chains lean while addressing the overall quality of their products?

Question 9

Managing a Production System [LO 14-1, 14-2]
Choose an organization with which you are familiar-one that you have worked in or patronized or one that has received extensive coverage in the popular press. The organization should be involved in only one industry or business. Answer these questions about the organization.
What is the output of the organization?

Question 10

Managing a Production System [LO 14-1, 14-2]
Choose an organization with which you are familiar-one that you have worked in or patronized or one that has received extensive coverage in the popular press. The organization should be involved in only one industry or business. Answer these questions about the organization.
Does its production system allow the organization to deliver the desired product attributes?

Question 11

After implementing efficiency improving techniques, many companies commonly lay off hundreds or thousands of employees whose services are no longer required. And frequently, the remaining employees must perform more tasks more quickly-a situation that can generate employee stress and other work-related problems. In addition, these employees may experience "survivor's guilt" because they kept their jobs while many of their colleagues and friends were let go.
Either by yourself or in a group, discuss how to think through the ethical implications of using a new operations management technique to improve organizational performance.

Question 12

What is efficiency, and what are some of the techniques that managers can use to increase it? [LO 14-4]

Question 13

How to Compete in the Sandwich Business
Form groups of three or four people, and appoint one member as the spokesperson who will communicate your findings to the whole class when called on by the instructor. Then discuss the following scenario.
You and your partners are thinking about opening a new kind of sandwich shop that will compete head-to-head with Subway and ThunderCloud Subs. Because these chains have good brandname recognition, it is vital that you find some source of competitive advantage for your new sandwich shop, and you are meeting to brainstorm ways of obtaining one.
Identify the product attributes that a typical sandwich shop customer wants the most.

Question 14

Managing a Production System [LO 14-1, 14-2]
Choose an organization with which you are familiar-one that you have worked in or patronized or one that has received extensive coverage in the popular press. The organization should be involved in only one industry or business. Answer these questions about the organization.
Try to identify improvements that might be made to the organization's production system to boost the organization's responsiveness to customers, quality, and efficiency.

Question 15

Why is it important for managers to pay close attention to their organization's production system if they wish to be responsive to their customers? [LO 14-1]

Question 16

Ask a manager how quality, efficiency, and responsiveness to customers are defined and measured in his or her organization. [LO 14-2, 14-3, 14-4]

Question 17

THE WALL STREET JOURNAL CASE IN THE NEWS [LO 14-1, 14-2, 14-3, 14-4]
Big Data Brings Relief to Allergy Medicine Supply Chains
A severe allergy season in parts of the country is pressing providers to get the right medicine to the right pharmacies at the right time.
In what ways does Bayer's operations management system help improve the company's efficiency?

Question 18

Go into a local store, restaurant, or supermarket, and list the ways in which you think the organization is being responsive or unresponsive to the needs of its customers. How could this business's responsiveness to customers be improved? [LO 14-2]

Question 19

How to Build Flat-Screen Displays
You are an operations management consultant who has been called in by the management team of a start-up company that will produce flat-screen displays for PC makers like Apple and HP. The flat-screen display market is highly competitive, so there is considerable pressure to reduce costs. Also, PC makers are demanding ever higher quality and better features to please customers. In addition, they demand that delivery of your product meet their production schedule needs. Management wants your advice on how best to meet these requirements. The company is in the process of recruiting new workers and building a production facility.
In what ways can these managers go about developing a program to increase quality?

Question 20

Managing a Production System [LO 14-1, 14-2]
Choose an organization with which you are familiar-one that you have worked in or patronized or one that has received extensive coverage in the popular press. The organization should be involved in only one industry or business. Answer these questions about the organization.
Describe the production system that the organization uses to produce this output.

Question 21

After implementing efficiency improving techniques, many companies commonly lay off hundreds or thousands of employees whose services are no longer required. And frequently, the remaining employees must perform more tasks more quickly-a situation that can generate employee stress and other work-related problems. In addition, these employees may experience "survivor's guilt" because they kept their jobs while many of their colleagues and friends were let go.
What criteria would you use to decide what kind of technique is ethical to adopt and how far to push employees to raise the level of their performance?

Question 22

How to Compete in the Sandwich Business
Form groups of three or four people, and appoint one member as the spokesperson who will communicate your findings to the whole class when called on by the instructor. Then discuss the following scenario.
You and your partners are thinking about opening a new kind of sandwich shop that will compete head-to-head with Subway and ThunderCloud Subs. Because these chains have good brandname recognition, it is vital that you find some source of competitive advantage for your new sandwich shop, and you are meeting to brainstorm ways of obtaining one.
In what ways do you think you will be able to improve on the operations and processes of existing sandwich shops and achieve a competitive advantage through better (a) product quality, (b) efficiency, or (c) responsiveness to customers?