Instructions
In this assignment describe and analyse an operation (service, manufacturing or combination) with which you are familiar, for example: a shop, restaurant, transport system, doctor’s surgery are possible examples. If you are unsure, please discuss this with your tutor who will give some guidance on your choice of organisation/case study. Your assignment should address the following questions:
1. How the different inventories and/or assets of the organisation currently are managed? Explain why this might be good, bad, indifferent or a combination of these. (15)
2. Draw a detailed Operational Delivery Process for your organisation/case. (15)
3. From the illustration in point 2, indicate where the organisation’s delivery system may fail to meet its performance objectives. Provide a discussion to clearly demonstrate your understanding why each performance objective is not being met. (30)
4. Discuss how one lean approach (theory or technique or tool) could be utilised by your organisation/case in an attempt to improve meeting its performance objectives discussed in point 3. Provide a discussion to clearly demonstrate why you think the lean approach could aid each performance objective being met. (30)
5. Draw two key conclusions from your work that you think are significant findings in helping your organisation/case improve its Operational Delivery Process. (10)
Operations Management Assignment Brief
| Module title and Module code: | Operations Management 35548 | Level 5 |
| Title of assignment | Lean Operations. | |
| Programmes undertaking the assignment | · BSc (Hons) Business and Management Studies
· BSc (Hons) Business and Management Studies (with Professional Experience) · BSc (Hons) Business and Financial Management · BSc (Hons) Business and Financial Management (with Professional Experience) · BSc (Hons) Human Resource Management · BSc (Hons) Human Resource Management (with Professional Experience) · BSc (Hons) International Business · BSc (Hons) International Business (with Professional Experience) · BSc (Hons) Business Management with Law · BSc (Hons) Business Management with Law (with Professional Experience) · BSc(Hons) Enterprise Leadership and Management · BSc (Hons) Marketing · BSc (Hons) Marketing (with Professional Experience) |
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| Date Issued | W/C 28th September 2015 | |
| Hand-in Date | Before 16:00 on 4th December 2015 via ‘TurnitIn’ | |
| Assignment Weighting | 25% | |
| Word Limit | It should be a maximum of 1,500 words. Your word count is from the introduction to conclusion sections. Therefore, it does not
include title page, contents page, reference section, appendices etc. |
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| Presentation Criteria | Your assignment will be presented in report format, being clearly structured using numbered headings, sub-headings etc. It is not necessary to include an executive summary at the beginning of the report. Your assignment should be presented using Times New
Roman (TNR) 12 font, 1.5 line spacing |
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| Format | You must endeavour to use theory explicitly at all stages, but do not spend too much time describing a theory. While you must be explicit about the theories, models, techniques etc. that you use, you can assume that the reader is familiar with them. What the
reader requires is evidence of your ability to understand and apply the theory, and learn from in order to support the development of |
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your findings and/or ideas.
You must cite all sources on which you have relied, for example textbooks, journal articles, web pages etc. using the Harvard Bibliographic referencing system. If you do not cite all sources, then you may be accused of plagiarism, and that may endanger your success in passing the module. If you are in any doubt about how to reference your work, please obtain guidance from the library and/or your academic librarian(s) for this module.
Please do use diagrams, illustrations, tables, graphics etc. wherever these are helpful, and remember that these do not count towards your word limit. If you do use these, please do not put them in the appendices if they are part of your discussion. Appendices are the appropriate places to put supporting material, however, remember if the reader is satisfied with the main points of your discussion; the supporting information within the appendices may not even be reviewed. |
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| Learning Outcomes (from module specification)for this assignment. | Intended Learning Outcomes
Knowledge and Understanding 1. Recognise the role of Operations Management in contributing to the realisation of organisational objectives in a competitive global environment. 2. Utilise a range of tools and techniques in order to aid decision- making in complex and unpredictable contexts across a range of business sectors.
Transferable/Key Skills and other Attributes 7. Plan and manage time effectively by organising their own work, monitoring their own progress and meeting targets. 8. Apply problem solving skills in specific areas of Operations Management. 9. Undertake advanced information searching from a range of sources. 10. Effectively communicate information, arguments and analysis in a variety of forms to specialist and non-specialist audiences using a range of media. |
| Assignment Background | Operations Management (OM) is an important aspect of business (Slack et al, 2013; Greasley, 2013; Patton et al, 2011). Both service and manufacturing organisations use OM to ensure they are competitive and assist in providing and maintaining good levels of customer service (Johnson et al, 2012). Developing an Operational Delivery Process (ODP) of an organisations working can be advantageous both for both the customer and organisation (Bamford and Forrester, 2010). Subsequently, once an ODP has been developed and understood it should be possible to determine why it works well, or not well, and to recommend possible production related improvements that will assist both parties concerned.
References · Bamford, D R and Forrester, P L (2010). Essential guide to Operations Management: concepts and case notes. John Wiley. |
| ISBN 978-0-47068-816-8.
· Greasley A (2013). Operations Management, Third Edition, John Wiley. ISBN 978-1-11997-854-1. · Johnston R; Clark, G and Schulver, M (2012) Service Operations Management: Improving Service Delivery, Fourth Edition, Pearson. ISBN 978-0273740483. · Slack, N; Brandon-Jones, A and Johnston, R (2013). Operations Management, 7th Edition. Pearson. ISBN 978-0-273-77620-8. · Patton, S; Clegg, B; Hsuan, J and Pilkington, A (2011). Operations Management. McGraw Hill. ISBN 978-0-0771-2617-9. |
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| Assignment Task | In this assignment describe and analyse an operation (service, manufacturing or combination) with which you are familiar, for example: a shop, restaurant, transport system, doctor’s surgery are possible examples. If you are unsure, please discuss this with your tutor who will give some guidance on your choice of organisation/case study. Your assignment should address the following questions:
1. How the different inventories and/or assets of the organisation currently are managed? Explain why this might be good, bad, indifferent or a combination of these. (15) 2. Draw a detailed Operational Delivery Process for your organisation/case. (15) 3. From the illustration in point 2, indicate where the organisation’s delivery system may fail to meet its performance objectives. Provide a discussion to clearly demonstrate your understanding why each performance objective is not being met. (30) 4. Discuss how one lean approach (theory or technique or tool) could be utilised by your organisation/case in an attempt to improve meeting its performance objectives discussed in point 3. Provide a discussion to clearly demonstrate why you think the lean approach could aid each performance objective being met. (30) 5. Draw two key conclusions from your work that you think are significant findings in helping your organisation/case improve its Operational Delivery Process. (10)
NB: · Please add CRN, your name and student identity number to the header of each page of your report. · University lateness and plagiarism rules apply. |
| Assessment Criteria | See standard grade descriptors for level 5
Formal feedback provided by lecturer via ‘TurnitIn’. |
Research Paper
McDonald’s Operations Management
During the day to day activities of a business, there should be proper management of operations to ensure optimum production of both goods and service. Operations Management will oversee and control these production services to ensure that they are efficient and that resources are utilized efficiently and effectively to meet an organization’s target (Wren and Bedeian, 2009). Operations management is mainly concerned with cost, quality, speed, flexibility as well as dependability of activities producing goods and services. This paper will explore the operations management activities of McDonald’s Restaurants.
McDonald’s Restaurants are currently the world’s leading dealers of fast hamburger foods. It was founded in the year 1940 in the United States by two brothers, Maurice and Richard McDonald and began as a barbecue restaurant and later restructured into a hamburger stand in 1948 (Derdak, and Jay, 2004, p. 108). Ray Kroc joined the two brothers in 1955 as a franchise and later bought the chain and transformed it into a worldwide recognized restaurant. The chains currently operate in 118 countries, with 35,000 restaurants serving more than 68 million customers daily (Alexander, 2012).
Inventory Management
McDonald’s Restaurants operates on a Just-In-Time (JIT) basis for inventory management. JIT ensures that customers are supplied or served just in time (Wren and Bedeian, 2009). McDonald does not begin preparing their foods until a customer places an order. Under an old system, McDonald’s used to pre-cook many hamburgers and store them within favorable conditions for a period and dispose of what they could not sale (Atkinson, 2005). The introduction of new and faster technologies of cooking, for example, bun toasters, has allowed McDonald’s to prepare food fast enough to meet an order. A customer is provided with an order within a very short period while the finished product is placed in inventory for the shortest time possible.
Advantages
JIT has been advantageous to McDonald’s restaurants in several ways. Improved quality is the most notable advantage evident from their fresh burgers. Hamburgers prepared from fresh are of higher quality and healthier to consumers. This is due to orders are being acted upon after a customer places and customers do not have to wait for long before having their food. Another advantage is the reduction of costs(Atkinson, 2005). Burger parts, beef, buns, cheese, etc. are very perishable and can spoil within a very short period. This was common in the old system where they had to have large inventories of food to meet the demand of customers anytime; most food would be disposed of as they would spoil within a short period. Mc Donald’s used to sell their food at a high price to cover the losses. With JIT, minimum losses are incurred, meaning their food would be cheaper to the consumers.
Disadvantage
A common disadvantage would be the troubles related to meeting unexpected orders when the inventory level is low. JIT does not allow for safety stock meaning that, in a case of an abrupt high demand, McDonald’s can face a huge crisis (Ashani, 2009). However, the advantages dominate as compared to disadvantages; JIT, therefore, suits the chain’s inventory management strategies.
Operational Delivery Process
| Customer Order |
| Customer Sales Representative |
| Order Queuing |
| Purchasing |
| Vendors |
| Receiving |
| Warehousing |
| Production |
| Delivery Personnel |
| Customer |
| Accountant |
Flow of Information
Flow of Materials
Delivery System Performance
The McDonald’s delivery system shows that all departments work together to perform a task. From the first point of customer ordering to the final delivery of good to the customer shows that information is shared between each and every individual within the chain (Dixon, 2010). However, the chain may not be well prepared to meet the customer demands due to inefficiencies from the warehousing department. Warehouse receives and stores what has been ordered and delivered to them, and food products being perishable, they always have to be vigilant and reduce wastage. The warehouse can fail through different ways; three are discussed below.
First, warehouse depends on information from customer sales representative. Customers require a variety of foods from McDonalds, which should be available in their warehouse any time. This requires the warehouse to be highly flexible and take a keen interest in the information about customers’ preferences so as to keep relevant stock. Customers also have variations in demand for products, for example, cold drinks or hot food (Dixon, 2010). Warehouse department should be vigilant of these variations not to stock irrelevant inventories at the wrong time of the year, therefore undermining the dependability of McDonald’s Restaurants.
Another problem facing warehouse is the volume of inventory. McDonald’s restaurants serve millions of customers in a day, meaning that they should store optimum inventories to meet the demand. Sudden unpredicted demand may occur, and because warehouses never kept enough inventories, will put the restaurants in jeopardy. A high demand may also be predicted and high inventory level being maintained, but a circumstance occurs where low demand is experienced, this means that all excess inventories will be just waste (Brand, 2006).
Lean Approach
McDonald’s are not the only restaurant operators in the market; they continue to face growing competition and customers also press for a higher quality of their products. They, therefore, have to review its operations with an aim of reducing costs at the same time maintaining high-quality foods. McDonald’s have to adopt a lean approach that will assist their chains maintain a competitive high profile and ensure their success (Carrigan, and De Pelsmacker, 2009, p. 677). One of the lean practices is discussed below.
Eliminating Waste
A major cause of losses and quality compromise for McDonalds was waste food. Foods get spoilt within few hours; it, therefore, became a priority to eliminate wastage within McDonald’s through:
- Reducing Overproduction
Old methods saw McDonald’s prepare large batches of hamburgers and store them in favorable conditions. This helped them meet demands within a short time, but most of the hamburgers went bad, ruining the quality of their burgers and damaging their image. JIT method was introduced where hamburgers were only made when a customer places an order. New technology allowed this to be done within very few minutes, therefore eliminating overproduction and wastage.
- Waiting time
Improved technology integrated within both ordering and cooking will reduce the time before a customer receives their food. A computerized system should be used to communicate orders to the production section within a very short period, and the cooking machinery should be quick to prepare food within a minute, this ensures efficiency in time management.
- Inventory Management
McDonald’s should reduce most of its inventory to reduce holding costs. At the same time, it should be able to meet demands as they are made. The Just-In-Time method of inventory control will assist them meet the optimum inventory within their warehouses.
Conclusion
Operations management in an organization is an important factor in achieving the set objectives. Operations management assists an organization to achieve its competitive edge in a dynamic environment (Malakooti, 2013). An organization should, therefore, manage its operations effectively to ensure as it translates to the overall performance of the organization. McDonald’s success depends on the proper management of its inventory that will ensure that the restaurants meet their customer demands at the same time maintaining low inventory hence low costs.
Just-In-Time technique used by McDonald’s Restaurants keeps very low inventory. In this system, food is made only when ordered by a customer, and not in anticipation of a customer as done before (Montgomery, 2012). McDonald’s have modern cooking technology and ordering system that ensures that customers’ orders are received and acted upon within a very short time. This means that McDonalds keeps low holding costs which will translate to higher profits. Quality will also be upheld as fresh burgers will be used as opposed before. Wastes are also reduced by this system meaning that McDonalds continue to dominate the food market.
References
Alexander, R., 2012, Which is the World’s Biggest Employer?. BBC News, [Online] 20 March. Available at:< http://www.bbc.com/news/magazine-17429786 >[Accessed 27 November 2015].
Ashani, N., 2009, Inventory Management, Articlesbase, [Online]. Available at:< http://www.articlesbase.com/businessarticles-833454.html>[Accessed 27 November 2015].
Atkinson, C., 2005, McDonald’s, a Guide to Benefits of JIT. Inventory Management Review. [Online] 10 November. Available at:< http://www.inventorymanagementreview.org/case_studies/index.html>[Accessed 27 November 2015].
Brand, R., 2006, Chipotle founder had big dreams. Rocky Mountain News, [Online] 23 December. Available at:< https://www.highbeam.com/doc/1G1-156328505.html>[Accessed 27 November 2015].
Carrigan, M., & De Pelsmacker, P., 2009. Will ethical consumers sustain their values in the global credit crunch?. International Marketing Review, 26(6), 674-687.
Derdak, T., and Jay P., (2004). McDonald’s, International directory of company histories.3rd ed. St. James Press, pp. 108–109.
Dixon, N., 2010. An Analysis Of How McDonalds Delivers Its Products And Services. Slideshare, [Online] 20 March. Available at:< http://www.slideshare.net/nicoledixon/an-analysis-of-how-mc-donalds-delivers-its-products-and-services>[Accessed 27 November 2015.
Malakooti, B., 2013. Operations and Production Systems with Multiple Objectives. John Wiley & Sons.
Montgomery, D., (2012). Statistical Quality Control: A Modern Introduction. 7th ed. John Wiley & Sons
Wren, D. A., Bedeian, A. G., & Wren, D. A. (2009). The evolution of management thought. Hoboken, N.J., Wiley.
