Operations Management BSYS604 Assignments Semester 1 2017 ASSIGNMENTS Due Part 1Ass 112noon Mon 03/04/17 PaAss2 12noon Mon 22/05/17 Length Ass 11,500 words Ass 2 2,500 words (This includes only the body of the report and excludes wording on diagrams, tables the executive summary, references, and appendices.) Style Business report (structure provided) Weighting Ass1,15% of the final grade Ass 2, 35% of the final grade Submission Hard Copy Ground floor WF and Turnitin Assessment 2:Case Study Due date Week 11 12 noon, Monday 22/05/2017 Weighting 35% Type Case study Length 2500 Submission Hard Copy Ground Floor WF (Bar coded cover page) and Turnitin Requirements Details will be provided in class Programme learning goals 1. Be self-directed, reflective learners 2. Be knowledgeable in their major field(s) of study 3. Be critical enquirers and creative problem solvers 4. Be able to make business decisions that take into account social, ethical, environmental and global dimensions 6. Be effective communicators Paper learning outcomes 1. Develop an understanding of the role of operations management in the context of organisations. 2. Introduce and develop an appreciation of operations management principles and techniques so as to be able to apply this knowledge in practice. 3. Develop the ability to analyse specific operational problems and to propose solutions. 4. Develop an understanding of the whole systems approach to achieve levels of world-class performance for organisations. Objective The aim of this assignment is to develop skills enabling the analysis of a case study applying operations management theory. Requirements Assume you are an Operations Management consultant. You have been hired by ‘Your Friend’ to recommend an operations management approach for the business. You are to work with one other consultant of your choice (or by yourself) and together submit two reports. The issues that you need to give in-depth advice on have been agreed with the Managing Director and are as follows. The two reports must be delivered on the dates agreed (see front page). Report Structure and Contents (marking criteria) Ass1 Ass 2 Executive Summary X Introduction Identify the main issues and outline the structure of your report. X X Value Chain Draw and discuss the key features and complexities of the value chain network for the organisation.Include several tiers for some materials and services. X Measuring Operational Performance Choose a set of specific measures that could be used to manage the operational parts of the business. You will need to explain why you have chosen the measures, how you will collect the data, and discuss any problems you anticipate in collecting actual data. X Strategy Recommend an operations strategy and explain the reasons for your decision and the implications for the business of your chosen strategy. X Process Strategy Determine the process strategy that will be most appropriate. Explain your choice. Discuss the Operations Management issues associated with this choice. How will you manage these issues? X Process Design Draw a likely Flowchart and Value Stream Map for your business. Discuss the implications of your design on the design of your assembly plant. Choose sensible numbers (they are not in the case). X Capacity Discuss how future capacity requirements over the next five years should be determined. Suggest a strategy for expansion, and explain the issues that you will need to manage for your chosen strategy. X Location Decide where to locate the assembly plant and warehouses. You will need to identify and discuss possible locations and the key factors that you need to consider. Your choice of location must be clearly explained based on a systematic approach. You will need to consider sources of materials and locations of customers. X Layout Design a factory layout. Choose a layout type and explain the reasons for your choice. Draw a diagram showing your layout and explain the reasons for the design. X Additional Recommendations In addition to the above requirements you have been asked to give any other advice to the Operations Manager that you think is important for him/her to consider for theoperation of the business. Note: This advice must relate to the operations management aspects of the business. X Conclusion X X References X X X These sections will be submitted and assessedwithin either Assignment 1 or 2 of the report as indicated in the table above. When you submit Assignment 2 please include Assignment 1 as an appendix. This is necessary so that the marker can check for consistency.Assignment one will not be remarked. Scenario Your Friend The introduction of robots has the potential to revolutionise how we live.Robots will increasingly be able to take on the character of people. They are able to learn individually and so adapt to the particular needs of their owners, they can become true companions. They are also able to be constructed out of materials that make them appear far friendlier than in the past and be soft to the touch. They are able to respond in a sensitive and caring way as appropriate for the needs of their owners. There are several categories of people for whom a robot friend could be helpful. Some people that are often alone and having a friend would beparticularly important for stimulation and friendship. The elderly, those living alone, children with no siblings, sports people needing a training companion, and people with disabilities are categories of people for whom a suitable robot could be invaluable. These are just a few situations where having a suitable robot as a friend could significantly change their quality of life. The ability for the robot to learn and adapt are particularly important along with skills that demonstrate empathy. The friend robot needs to also be able to perform helpful tasks such as playing a game, making a cup of tea, preparing a meal, helping an incapacitated person go to the toilet or get dressed and many other tasks that may be specific to a particular person’s needs. A friend robot has several advantages over having a pet. Friend robots are much easier to care for, are predictable without being boring and are unlikely to cause damage to property. The robotswill have several different models, each focused on a different category of person as indicated above. In addition within each category there will be different models some models being more competent than others, that is, having a wide or narrow range of functionality. The various models will need to be programmed to meet individual needs, and maintained as service failure may have significant consequences for the owner. They need to be modular in design so that new innovations can be retro fitted to earlier models of robot. This is important because the cost though decreasing is significant, owners need a way to retain their initial investment while also investing in upgrades. A business opportunity has been identified by a New Zealand company called ‘Your Friend’ to start a new business, import the component parts for the companion robots from either China or Europe, assemble them in New Zealand. The robots would be supplied into the New Zealand and Australian marketdistributed either through a few selected retailers or direct through the internet. The proposal is to import the main components of the robots from a mix of the three manufacturers that are located in Germany, Italy and China.This will mean there are significant transit times. Purchasing strategies and processes will need to be carefully thought through, as well as supply and storage strategies for raw materials, components and finished goods.Your Friend are manufacturers of simpler robots and also run a small leasing business primarily so that potential customers can experience the product before buying. There is some maintenance required for the robots to ensure a high level of reliability. A regular testing programme is needed to ensure that the robots are in good condition at all times so that customers are not embarrassed by the robot failing at a critical time. There are several hygiene requirements that must be considered, it is essential the robots are hygienic in every way. It is against the trend to initiate manufacturing in NZ (most manufacturing is being outsourced to Asia) but the owners of the business are confident that with excellent operation management skills and appropriate levels of automation requiring small numbers of employees it will be possible to have a competitive manufacturing facility in NZ. The facility will need to be well designed and well managed, operations management will be the key. Each of the overseas manufacturers has several different quality levels available for the core components appropriate to meet the requirements of the various market segments in NZ and Australia. It is likely that several of the minor components, collectively representing a significant proportion of the total robot, will be available from New Zealand manufacturers at competitive prices. The Managing Director is concerned that the product launched on the local market is of a consistent and high quality, but he is also concerned that the price points will position the product within the grasp of the market segments selected. The models to be assembled locally will vary as mentioned above in features, speed, and capability. There will be a variety of models to suit different types ofneeds.Each market will require different key product features.The price of components is important, but there are other criteria that need careful assessment before entering into relationships with suppliers. The robots will have different price points in the different markets that reflect the different productswith features designed to meet the requirements of the different customer groups. The larger the quantities of parts ordered the better the discounts that can be negotiated. However since the technologies involved are changing quite rapidly there is a real risk of obsolescence. Also, if large quantities of parts are stored, storage costs and damage are a concern. There are other disadvantages of buying in bulk. Some of the components are both high value and easily damaged so special security and care will be needed in the handling of some components. Often it is not practical to repair the damage so much stock could be wasted if the appropriate management is not in place. Any damage and consequent disposal of components will be costly and will need to be minimised. Some components used in the robots are a little bulky so it may not be cost effective to air freight them. The lead time from order to receipt is important allowing for manufacture and then shipping to New Zealand. This has been one reason Chinese rather than German or Italian manufacturers are preferred; the lead time on delivery is less from Asia than from Europe. Unfortunately the quality from some of the Asian suppliers has been quite variable during the product trials and this could lead to customer dissatisfaction. The components will be delivered to Your Friend factory in boxes within standard shipping containers. It is expected that some models will be produced in low volume. Market research has indicated that there will be a reasonable volume required of the core products. There will need to be several different domestic models. Wherever possible, a base model will be used and then variations added to meet the specific requirements. Because of the nature of the technology there will be some specialised processes that will be needed in the building of the robots. The owners of Your Friend are determined to ensure that the factory is designed to be ergonomically friendly. They want to create a positive business culture to develop a good reputation that ‘Your Friend’ is a great place to work. High quality and high quotas of output will be expected. The business is expected to be highly competitive, and there will be competitor products that are entirely made overseas with lower labour costs than is possible in NZ. It will be essential that a good reputation in the market is quickly established. When designing the business processes it will be necessary to remember that there will be a significant transit time to ship parts to New Zealand. This will mean it is important to think through storage issues and purchasing arrangements to ensure that the NZ factory does not run out of components during manufacture nor have excessive stock to store. The Managing Director is very concerned that the storage costs are kept to a minimum at all points in the supply chain; the supply of finance is limited so the level of working capital is lower than the Managing Director would like. It is expected that the largest New Zealand market will be in the Auckland area, though there are significant market opportunities outside of Auckland. Initially, it is intended to establish the market in New Zealand (probably Auckland) and then expand in about two years to the east coast of Australia focusing on the Sydney area. It is hoped to have the first product into the New Zealand market within nine months. There are issues to be considered about where stocks of finished product should be held. There is a need to make the product available for prospective customers to view and in some cases trial. This is because of the novel nature of the product at this stage in the product life-cycle; the new technology needs to be operated to build confidence. There is a concern about how a product that has been trialled should be stored and maintained when it is returned and held for subsequent customer trials. It is important for Your Friend to move quickly to ensure a first mover advantage in the market. Because the competitors have existing manufacturing capability it is expected that they will be able to achieve a very competitive cost base. Your Friend currently has property in Wiri South Auckland quite close to the southern motorway that has been developed around an existing business of building industrial robots. This business venture (Your Friend) represents diversification from their existing business. There are three large sheds in good condition on the site, one that is 20m wide and 50 m long, and the other two are approximately 18m wide and 25m long. Some or all of these sheds could be converted into an initial factory, though there may need to be additional buildings. Some of the existing building will still be needed by the industrial robots business. There is an alternative greenfields site available at a very low cost that is located very close to the major shipping port of Tauranga. This site is more central for transporting product throughout New Zealand but further from the main Auckland market. The Tauranga site offers the opportunity of constructing a purpose-built facility that may lead to greater production efficiencies in the long run than modifying and partly fitting within the constraints of the existing buildings in Auckland. In total, the Tauranga option will be more expensive initially. This is a concern for a business with very little capital. Damage to the imported parts may occur in transportation and also in the warehouses especially if warehouse space is not suitably designed for storage and handling of the drone components. Some warehouses being considered for initial use are available in the market at a low cost which is highly attractive. Because the low cost warehouses are old, the floor levels are uneven, the roofs leak in some places, and security is a concern. Good truck turning areas and docking space are important. The business must consider future expansion when making decisions related to locations. Finding stock in poorly designed warehouses is difficult and wastes time. Poor stock management systems will result in stock being frequently moved, this adds cost to the operation, and will probably result in damage. Having selected the site it will be important to design the factory layout to minimise the labour requirement but also create a good working environment. It is necessary to minimise the materials handling within the factory, shifting sub-assemblies unnecessarily is expensive and can lead to damage. It is expected that the robot components will be delivered to your factory in boxes from the various suppliers. The core processer will be provided in one piece. There will be about five mechanical subassemblies and ten separate electronic components from the overseas source plus components sourced from within NZ.The internet is going to be important as an advertising medium and also as a means for prospective customers to view technical data, view pictures of the product, and place orders. Source: Prepared by Rodger Chesterfield, Senior Lecturer AUT University. Instructions Assignments must have the standard AUT cover sheet completed and signed. Assignments must be typed using one and half spacing. Font size must be 12 Arial or New Times Roman. Staple in the top left corner, do not use plastic sleeves or covers. Use the structure provided for your report. Reference all ideasand quotes taken from others using the APA format. The number of words in each of your assignments (excluding refs and words directly associated with diagrams) must be noted at the end of your assignments. The word count has flexibility of +/- 10%. Do not repeat large pieces of factual information from the case. Submit in hard copy at ground floor WF and to Turnitin. Plagiarism may result in a zero mark and other disciplinary action. Notes You may need to make some assumptions about the business or other practical issues that are not explicit in the case. Please state all assumptions you make. You will need to demonstrate your understanding of the material covered in the course and apply the theory to this case. Do not give generic or general answers; your answers must be specific to the case. Your answers must be in depth. If you choose a companion consultant who is not able to complete the consulting task with you it is your responsibility to complete the consulting task alone or find a replacement who is currently enrolled in your stream of Operations Management. Groups of consultants working on the assignment must be no larger than two. When you submit Assignment 2 you must also submit as part of the same single document Assignment 1 as an appendix. By the end of week 3 you must notify your lecturerby email stating your stream number and who you will be working with (the preferred option), or if you intend to work alone. It is expected that you will need to provide good quality diagrams to communicate your answers effectively for some sections in the report. Words directly associated with diagrams are excluded from the word count. Late submission of your assignment is likely to be penalised at the rate of 10% per day. Marking Schedule Operations Management Assignments (2) Detail of criteria provided on page 2 & 3 of this document Mark Allocation Assign 1 Mark Given Assign 1 Mark Allocation Assign 2 Mark GivenAssign 2 Executive Summary 15 Introduction 5 5 Value Chain 13 Measuring Operational Performance 13 Strategy 13 Process Strategy 16 Process Design 16 Capacity 16 Location 16 Layout 16 Additional Recommendations 15 Conclusion 5 5 Creativity/ originality/ evidence of depth of thinking 5 10 References (APA), layout, structure, grammar, presentation,sections included as requested, instructions followed. 6 10 Total Assignment mark 60 140 Course mark 15 35 Comments (most comments in assessment text)