Totally Quality Management

Part I: Essay Questions (25 points)

1. What are current issues in operations and supply management?

Operations and supply chain management is a dynamic field, and challenges presented by global enterprise suggest exciting new issues for operations managers. Looking forward to the future, I believe the major challenges in the field will be as follows:

(1) Coordinating the relationships between mutually supportive but separate organizations.

(2) Optimizing global supplier, production, and distribution networks.

(3) Managing customer touch points.

(4) Raising senior management awareness of operations and supply chain management as a significant competitive weapon.

(5) Sustainability and the triple bottom line.

2. Discuss the role of efficiency and effectiveness in the creation of value.

Efficiency means doing something at the lowest possible cost. Effectiveness means doing the right things to create the most value for the company. Often maximizing effectiveness and efficiency at the same time creates conflict between the two goals. Related to efficiency and effectiveness is the concept of value, which can be metaphorically defined as quality, divided by price.

3. Explain the role that "order qualifiers" and "order winners" play as the interface between marketing and operations.

A well-designed interface between marketing and operations is necessary to provide a business with an understanding of its markets from both perspectives. The term order-winner and order qualifier describe marketing-oriented dimensions that are key to competitive success. An order winner is a criterion that differentiates the products or services of one firm from those of another. Depending on the situation, the order-winning criterion may be the cost of the product (price), product quality and reliability, or any of the other dimensions developed earlier. An order qualifier is a screening criterion that permits a firm's products to even be considered as possible candidates for purchase. It is important to remember that the order-winning and order-qualifying criteria may change over time.

4. Differentiate between a workcenter and a manufacturing cell.

A workcenter layout, sometimes referred to as a job shop, is where similar equipment or functions are grouped together, such as all drilling machines in one area and all stamping machines in another. A part being worked on travels, according to the established sequence of operations, is from workcenter to workcenter, where the proper machines are located for each operation. The most common approach to developing workcenter is to arrange them in a way that optimizes the movement of material. A workcenter sometimes is referred to as a department and is focused on a particular type of operation. Examples include a workcenter for drilling holes, one for performing grinding operations, and a painting area. In many installations, optimal placement often means placing workcenter with large amounts of interdepartmental traffic adjacent to each other.

However, a manufacturing cell layout is a dedicated area where products that are similar in processing requirements are produced. These cells are designed to perform a specific set of processes, and the cells are dedicated to a limited range of products. A firm may have many different cells in a production area, each set up to produce a single product or a similar group of products efficiently. These cells typically are scheduled to produce "as needed" in response to current customer demand. While a manufacturing cell is formed by allocating dissimilar machines to cells that are designed to work on products that have similar shapes and processing requirements. Manufacturing cells are widely used in metal fabricating, computer chip manufacture, and assembly work.

5. Why does volatility of demand have a higher effect on a service delivery system than on a manufacturing system?

Although capacity planning in services is subject to many of the same issues as manufacturing capacity planning, and facility sizing can be done in much the same way, there are several important differences. Service capacity is more time - and location - dependent, it is subject to more volatile demand fluctuations and utilization directly impacts service quality. The volatility of demand on a service delivery system is much higher than that on a manufacturing production system for three reasons.

First, as just mentioned services cannot be stored. This means that inventory cannot smooth the demand as in manufacturing.

The second reason is that the customers interact directly with the production system, are these customers often have different needs, will have different levels of experience with the process, and may require a different number of transactions. This contributes to greater variability in the processing time required for each customer and hence greater variability in the minimum capacity needed.

The third reason for the greater volatility in service demand is that it is directly affected by consumer behavior. Influences on customer behavior ranging from the weather a major event can directly affect demand for different services.

Part II. Problems (75 points)

6. (10 points) A fast-food restaurant serves hamburgers, cheese burgers, and chicken sandwiches. The restaurant counts cheeseburgers as equivalent to 1.25 hamburgers and chicken sandwiches as 0.8 hamburger. Current employment is five full-time employees who work a 40-hour week. If the restaurant sold 700 hamburgers, 900 cheeseburgers, and 500 sandwiches, in one week, what is its productivity? What would its productivity have been if it had sold the same number of sandwiches (2,100) but the mix was 700 of each type?

Productivity1 = Output/Input

= (700+900*1.25+500*0.8)/ (40*5)

= 2,225/200

= 11.125

Productivity2 = Output/Input

= (700+700*1.25+700*0.8)/ (40*5)

= 2,135/200

= 10.675

As a result, if the restaurant sold 700 hamburgers, 900 cheeseburgers, and 500 sandwiches, in one week, its productivity is 11.125.