Mg7.02 Advanced Operations Management Answers Assessment Answers

LO 1:Discuss alternate perspectives of operations strategy concepts.

LO 2:Critically analyse main operations decision areas.

Discussion, application, and analysis of the concepts.

• Competent and convincing manner reflecting full understanding of models/frameworks/concepts
• Evidence of understanding the topic
• Evidence that individual understands the assessment.

Examples used to demonstrate relevant concepts

Answer:

To approach this task, I will use fit20 New Zealand to explain the perspectives on operations strategy. I explain how fit20 uses these perspectives to develop operations strategy.

Fit20 New Zealand is medium sized franchise developed in the Netherlands. The company offers high intensive strength training programs at their fit20 studios. The franchise provides 20 minutes services per week with a trainer or in the fi20 studios.

Operations Typology

According to Slack et al. (2009, pp.99-22), the 4Vs are as follow:

· Volume

· Variety

· Variation

· Visibility

Volume: Looking at Slack et al. (2009, pp.19-22), operations dimension in terms of volume is understood through systems and repetition of the processes which lead to operations process standardization. Although, according to Heizer and Render (2006, p.10) standardization and automation of tasks is problematic because of variability of customers interaction and demand for innovative products and uniqueness. They also claim that services are knowledge based thus is difficult to automate and inventoried. In this regard, in the case of fit20 providing training services to its clients, is knowledge based, therefore not affected by the volume dimension of operations.  This means that according to Slack et al. (2009, pp.99-22), there is repetition of jobs in fit20 with less systemization.

Variety: Slack et al. (2009, pp.19-22) explained that variety sees the operations of the company being flexible for variability of market offers. The cost may be higher than those of standardized operations as the company try to meet the customers’ needs. In reference to fit20 case study, the customers’ uniqueness of their services means their operations have high variety as they are flexible, complex and try to serve the customers’ expectations in terms of both their market research and trainers’ recruitment. These inevitably add to the unit cost of service provisions.

Variation: this means operations changes in terms of capacity due to the variation in demand for the service of the company. For instance hiring of more staff to meet the growing demand for fitness (Slack et al, 2009, pp.19-22). However Greasley (2008, p.10) illuminate how the service requirement for simultaneity between the service provider and the environment, lead to variation in the services performance, as workers make mistakes and are likely to vary their actions on a day-to-day basis. In this, fit20 witness high variations in demand thus they are continuously changing capacity. The company staff capacity is over 100 but the company has other contractual experts in the reserve who are contracted to fill the change in capacity when demand changes.

Visibility: According to Slack et al. (2009, pp.19-22) visibility is show much the customers are able to experience from the operations’ activities or how much customers are able to see in operations as exposed by the operation management. The visibility of services is part of its delivery system where customers are actively engaged. Fit20 has high customer contact which increase their operations cost.

Operations perspective

Slack and Lewis (2009) define operations strategy as simply how the organizations meet their objectives. It is what operational changes and adoption process to meet immediate and long-term objectives. Slack et al. classify strategic decisions into four perspectives, namely: Top-down, Bottom-up, Market requirement-based and Resource based.

Top-down perspective: This perspective focuses on the holistic objectives of the whole organization according to Slack et al. (2009). This strategy is also called corporate strategy because it is concerned with organization as a whole in terms of the sector it compete. The top-down perspective of fit20 is to be a market leader in the health and fitness sector and be a highly ranked fitness training and consultation. To achieve this, the company recruits the best trainers in the industry to respond to the customers’ needs. The company also offers the best fitness studios set ups for the customers, and being flexible to fit their time schedules.

Bottom-up Perspective: This Perspective according to Slack et al. is how the company encounters emerging strategies from the day-to-day experiences in the operation processes. It shapes the company’s strategic operations. This applies to fit20 where it separates home training services with in studio training programs. This help in getting the feedback from the both parts of the program and act accordingly. The perspective has helped the company in recruitment of trainers in line with the needs of the customers. The company has also launched an online community network from which they gain information from the customers’ feedbacks from the experienced of their past training services. The platform has also enabled the company to directly engage the customers and find out what they need.

Market requirement perspectives: according to Slack et al. the organization tries to fulfill the needs of its market. Fit20 responds to the market by gathering the clients’ feedbacks and by providing the top of the art fitness technology and training programs. The company has managed to be competitive in the market by providing flexible services to the customers and being adaptive to their needs. The training staffs also work together to share the client experiences and the required responses.

Resource-based View: Slack et al. argues that resources have significant impact on the operations strategy success, therefore, resources are inherited, acquired and developed to fit the strategic operations of the organization. In fit20, trainers must be qualified to deliver the services intended to the clients. The company being knowledge-based also engages in the capacity building of its staff with regard to the market trends and responses. It has also invested in state of the art studios and fitness equipment which feed the expectations of the clients. Over tome the company has been able to build a pool of customers’ loyalties.

Task Two:

Operations objectives to achieve market requirements

Slacks et al. (2009, p.19-22) explains that a company do things to set things right to avoid mistakes while satisfying their customers and also giving timely deliveries for less operation costs. The author gives five performance objectives namely:

· Quality

· Speed

· Flexibility

· Dependability

· Cost

Quality: Slack et al (2009, pp.19-22) terms this as the organization work to reduce the mistakes in operations process to reduce overall cost. Greasley (2008) argues in terms of service operation variability in performance and customers perception which makes it difficult to maintain consistency in service quality. In the case fit20, in its service quality try to be reliable fitness trainer and responsive to the market needs. The company also shows empathy on trainers’ recruitment and follow ups.

Speed: looking at what Greasley (2008) explanation, speed cannot be used service delivery, however, helps to improve on the time for service deliveries and improved customer experience. In this context, fit20 need to have a state of speed in responding to customers’ requests and time programs.

Flexibility: This is the ability of the company to be adaptive to the market changes and be able to offer differentiated services to the clients (Greasley, 2008, pp.18-20). In this case, fit20, is flexible in training service provision to divergent clients’ fitness needs which include body size, health issues, body size maintenance etc. The variation in health and fitness demand is on the rise and therefore, the company is being flexible in capacity needs.

Dependability: according to Slack et al. this object saves time and cost. This is the consistency and commitment in meeting the delivery time. Fit20 success in the health and fitness sector is a clear indication that it serves large number of customer which means it has been proven to be dependable for service deliveries on time and client schedules.

Cost: This is crucial part of operations management in keeping cost low. According to Heizer and Render (2006, p. 33) to be competitive in the market can be achieved by creating a robust system that is unique than that of competitors. Fit20 low volume, varied services, and better customer contacts increase make costs high which is mitigated by the unique advantage in service delivery and in their social networking site build over time.

Task Three:

Application of different performance objectives in fit20 and Hawke’s Bay Apple Press

Table (according to Slack et al. (2009)).

Performance objectives	Fit20 associated competitive factors	Hawke’s Bay Apple Press
Quality	Timely service delivery to clients. This is how the company respond to client training needs How reliable are trainers to deliver services to customers? The trainers are always available when needed by the client Qualified training and competent staffs Having advanced equipment for fitness training and studio Gaining customers’ loyalty – the number of customers coming back for services is a clear indication of quality training services delivered to customer How the service is fitting to the client time. The service offered need to respond to customer objective for fitness training	Quality of the apple fruits used in the apple press. The company handpicks the fruits that are mature and ripe quality. These ensures that quality standards are maintained The taste, color, and smell of the apple press. Product level of sales- the amount of sales revenue is a measure of how the juice is performing in the market which is dependent on the quality of the apple press Adherence to that nutrition and foods standard set by the authorities in New Zealand Use quality equipment in production of juice.
Speed	Speedy response to customers’ requests – in this case the company send trainers to client premise or their choice studio and they are expected to be there in time and not to keep them waiting because some have tight schedules Responding to customers’ schedules – the company is align services to depending on the availability of the customer.	Lead time from inquiry to quotation. This how much times the company to respond to the customers’ inquiry and quotation of the orders. Lead time from order to delivery of product. The waiting time for delivery should not be long. Lead time to give technical advice to clients.
Dependability	Large number and variety of the customers served by the company speak for its self. It shows that the company is dependable in its service offering Customers’ information and contracts held by the company. Large information means that the company is serving large number of customers.	The number of deliveries made within a specific time. Keeping transactions record of the customers. The company needs to have transactions record for easy retrieval and follow ups.
Flexibility	Responding to accordingly to customer specifications and needs Being able to fit in the time schedule of different clients Adaptive to the new training techniques and equipment Being able to respond to capacity needs in the market	Variety of apple press produced for the market. Responsiveness of the company to markets changes. This is how Apple Press respond to market changes in in terms of competition, demand, and culture. How the company is able to respond to capacity change. New product innovations introduced to the market.
Cost	Varied services offering Customer information and contacts Trainers training programs Variation in services	Cost of producing enough apple for the market. Apple press processing costs. Prices of acquiring equipment needed for production.

Task Four:

Operations strategy matrix for fit20 New Zealand

Quality Timely service delivery Reliability of trainers Customers’ loyalty Customers’ loyalty		Fitness studios grouped by the number of clients in the areas		Information sharing and parenting system spread service ideas
Speed Response to customer request Adhering to customers schedules		The studios are located in areas where they are easily accessible by majority of clients. This will ensure speedy services and accessibility by clients
Dependability Large number of various customers served
Flexibility Adaptive response to customers’ needs Fitting to the customers’ schedules Adaptive to technology in training equipment Responding to changes in capacity		The company investment in competent trainers who respond to the home to home service deliveries.	Online community network provide the information on customers feedback from the services. This will help the company to improve on areas which are weak while providing variety to the customers. Online community also acts as a litmus test for innovative ideas that the company want to introduce in the market.
Cost Training programs Customer information Varied services	Area dominance reduces distribution and advertising costs	Common fitness centers give continuous service to large number of customers		Field counselors with services demand data help the company from wastage from advertising
	Number of studios Location of studios Visit to client’s place	Number of training staff Number of fitness studios Responding to home training needs	Online community networks	Relationship with the franchisee Innovative training services
	Capacity	Supply networks	Process technology	Development of organization

Task Five:

Structural decisions often involve major capital investment decisions, which once made will set the direction of operations for many years to come. They invariably impact the resources and capabilities of an organization, determining its potential future output. It may be prohibitively expensive to change such decisions once implemented, and hence these must be considered to be truly strategic decisions for the organization. It may be much easier to change the organization’s marketing strategy (e.g. its target markets, or its promotional activities) than it is to change its operations strategy with respect to the structural decision areas.

Infrastructure decision areas comprise:

Planning and Control: the systems used for planning and controlling operations.

Quality: quality management policies and practices.

Work Organization: organizational structures, responsibilities and accountabilities in operations.

Human Resources: recruitment and selection, training and development, management style.

New Product Development: the systems and procedures used to develop and design new products and services.

Performance Measurement: financial and non-financial performance management and its linkage to recognition and reward systems.

The efficient frontier

Explanations

Initially most airlines operated at A, B, and C, that is the first class, business class and economy class respectively. The business class became more preferred by customers to the extent the first class was dropped by most air lines. British Airline however decided to add more variety to the first class and make customers’ preference. The companies must produce at

Discussion of the model

To provide the service at A, that is the first class, means the company has varieties of services to offer at that point. The cost is higher and charges to customers also are high. To reduce cost the company offer service at B which is relatively cheaper to the customers and also to the airline given that it has go give up some services be more cost effective at that point. The airline wanted also to serve customer of low income and cannot afford A or B, therefore it produces at C (economy class) where there varieties of services are low and it is more cost effective to both the company and the customer.

To produce more of one service within the production frontier will mean a reduction in the other service variety. Therefore, British Airline had to add more resources to into the business so that it can provide variety of services in first class.

Conclusion

It can be concluded that fit20  as an operation is affected by low volume, high variation and high visibility which leads to high operating costs, as explained by Slack et al. (2009, pp. 19–22) and would thus have cost as a major problem with the operations of the company. Its quality as a service operation cannot be fully measured due to variability in performance and customers being the only ones that can give their own perception of quality. However, their flexibility and effort to meet customers’ specific needs shows they would have a high level of quality judging by the numerous clients they work for. In terms of recommendations to be given to the firm, Boyer and Lewis (2002) report that a firm at times needs to make trade-offs whereby a company chooses for example between achieving low costs or high flexibility. Fit20 as a firm should probably adopt a mass customisation approach as part of their operating strategy to help reduce their operating costs, this, as Slack et al. (2009, p. 47) explain, is to produce customised services for each individual manner but managing to produce them in high volume thereby driving down costs. They also need to increase their competitive advantage which Vonderembse and White (2004, p. 28) says can be done through delivery lead time on their services or market research reports which gives organisation an edge over the competition, and they can also achieve this through differentiation by providing uniqueness, low cost leadership in their sector and adequate response to market requirements, as argued by Heizer and Render (2006, p. 33).

References

Boyer, K.K., and Lewis, M. (2002) Competitive Priorities: Investigating The Need For Trade-Offs In Operations Strategy. Production & Operations Management [online].11(1) pp. 9-20 [Accessed 6 June 2018 ]. Available at:<https://ebscohost.com>.

Department for Business, Innovation & Skills (2010) Small and medium-sized enterprise (SME) statistics for the UK and regions [online]. London: Business, Innovation & Skills. [Accessed 6 June 2018 ]. Available at: <https://stats.berr.gov.uk/>.

Dilworth, J. (2000) Operations management. 3rd ed. Orlando: Harcourt

FreshMinds (2008) FreshFilm [online]. [Accessed 6 June 2018 ]. Available at: <https://www.freshminds.co.uk/freshfilm>.

Greasley, A. (2008) Operations management. 1st ed. London: Sage Publications.

Heizer, J. and Render, B. (2006) Principles of operations management. 6th ed. New Jersey: Pearson Prentice Hall.

Hill, T. (2005) Operations management. 2nd ed. New York: Palgrave Macmillan.

Hill, T. (2000) Operations management: strategic context and managerial analysis. 1st ed. New York: Palgrave Macmillan.

Kleindorfer, P.R., Kalyan, S., and Van Wassenhove, L.N (2005) Sustainable Operations Management. Production & Operations Management [online].14(4) pp. 482-492. [Accessed 6 June 2018 ]. Available at:<https://ebscohost.com>.

Slack, N., Chambers, S., and Johnston, R. (2009) Operations management e-book. [online]. UK: Pearson Education. [Accessed 6 June 2018 ]. Available at:<https://lib.myilibrary.com>.

Slack, N., and Lewis, M. (2008) Operations Strategy. 2nd ed. Essex: FT Prentice Hall.

Times (2010) The Sunday Times 100 Best Companies 2010. The Times [online] 18 February, [Accessed 6 June 2018 ]. Available at:<https://business.timesonline.co.uk/tol/business/career_and_jobs/best_100_companies/best_100_tables/>.

Vonderembse, M.A., and White, G.P. (2004) Operations management: concepts, methods and strategies. 1st ed. New Jersey: Leyh Publishing.

< https://www.freshminds.co.uk/about-us>.

<https://www.lib.strath.ac.uk/busweb/guides/smedefine.htm>