Operations: A Strategic Approach To Service And Manufacturing

Running head: OPERATIONS: A STRATEGIC APPROACH TO SERVICE AND

Operations: A Strategic Approach to Service and Manufacturing

Susan Ognek

American Intercontinental University

Operations Management for Competitive Advantage

MGT636-0704B-01

Dr. Ray Eldridge

November 17, 2007

Abstract

Going Inc. faces the daunting task of increasing profits in both the service and manufacturing sectors. As the Operations Manager for Going Inc., it will be the responsibility of this department to put forth a proposal to increase overall profitability in both sectors. As the next few weeks’ progress, certain aspects of this proposal will be offered for your consideration. Section One will concentrate on the overall differences in strategy and what needs to be addressed for these two divisions.

Operations: A Strategic Approach to Service and Manufacturing

Introduction

The primary driving forces of Operations Management (OM) are demarcation from the competition, low cost to add to profitability, and reaction to any number of scenarios (Heizer & Render, 2007). There are ten specific decisions that assist in achieving these goals. They will be discussed individually and their strategic importance to service and manufacturing will be delineated.

Goods and Service Design

The product is what we offer to the public. The goods provided are more than likely something physical, something that creates an inventory or item for resale. A service, on the other hand is not a physical item. For Going, Inc. it is either a flight on the airplane (a service) or the purchase of a private jet (a goods). Both have goods and service designs attached to them. The design of these goods and services entails cost, value, and human resource decisions that affect the process of them, whether tangible or not. Built into this process are the limitations of cost and quality (Heizer & Render, 2007).

For our service division a multi-pronged approach is necessitated. We must concentrate on lowering costs of in-flight service without cutting quality. We must increase the rates on the on-time percentage, security, and maintenance delays. On the manufacturing end, we must concentrate on shortening lead time for new orders, on inventory and inventory management problems, number of vendors, and scheduling of both employees and manufacturing. All of which affect the product (Heizer & Render, 2007).

Quality

Quality, from the customer’s perspective, is the anticipation and desire of what they want. From Going, Inc.’s point of view it is anticipating their needs and wants and providing them with tight cost controls, high standards, and consistency. For service this might mean continuing to provide a fine dining experience, but it definitely means flights leaving and arriving on time and having planes ready for departure. Manufacturing’s quality concerns are production delays, poor waste management, inventory controls, and customer warranties (Heizer & Render, 2007).

Process and Capacity Design

Process and capacity designs are also in inherent in both sectors. While the customer does not become directly involved in production design they are decidedly involved in the service process. They are, or should be, considered part of the process by Going, Inc. It is their feedback, purchase, and return to the service that determines the success or failure of the business. However, Going Inc.’s manufacturing division is facing serious problems as respects its warehouse location and limited assembly capacity. The current plan allows for only three planes to be simultaneously assembled, which further impacts the speed and flexibility of production (Heizer & Render, 2007).

Location Selection

On the service front we appear to be suitably situated to meet our customers’ needs. However, an analysis is needed to determine the profitability of all these numerous locations. The warehouse location is currently 20 miles away from the assembly hanger, while corporate headquarters are in a different time zone and 1600 miles away. The location of the headquarters may be a moot point; however a feasibility study or inquiry is indicated as respects the warehouse and or assembly hangers (Heizer & Render, 2007).

Layout Design

The layout design of hubs, ticket offices, warehouses, assembly areas, and even the home office can and will affect both divisions. Proper design layout can increase productivity on both sides of the equation вЂ" from the customers’ ease of use of ticketing offices to the assembling of new craft to the maintenance and repair of fleet planes to the assistance received from the home office. Each layout, of each location, will need to analyzed, perhaps by an efficiency expert (Heizer & Render, 2007).

Human Resources and Job Design

Arguably, our most important asset at Going Inc. is our employees. On the service front, they project our image to the public. On the manufacturing front, they project how well our product is produced. More specifically our service employees need to meet the criteria in order to successfully deal with our customers needs and problems. Manufacturing needs experienced technicians to perform their jobs to the highest of standards. Therefore, Going Inc. must revaluate and make drastic changes