Business Operating Management

Week 3 discussion question1

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(1) What is the framework for evaluating alternative site locations? What are the qualitative and quantitative factors involved in site selection?

Ans: An alternative site location decision is critical for a company in terms of long-term operation. A site location decision has many criteria for a company to measure. Costs, utilities, closeness to transportation framework, local taxed and payroll, area limitations, and sustainability problems are among the criteria to be thought of. The EPIC framework help companies nationwide to make alternative site locations in a sustainable operation goal. The EPIC stands for economic, political, infrastructural, and competence point of view (Collier, 2017). Those four different points of view help companies recognize strengths (S), weaknesses(W), opportunities(O), and threats(T) of the different areas all over the world.

Qualitative factors are political factors, risks, infrastructure, transportation infrastructure, electricity, telecommunication, and connectivity. Political element means that how easy or difficult for doing business in an area. The most common example of a political element is business restrictions and taxes. Risk is another element that is qualitative because it’s not measurable by numbers. An area that is confronted with higher risks would affect the success of a company (Kimelberg, 2013).

Quantitative elements are environmental, population size, foreign direct investment, number of consumers, cost of labor, education level, and logistic competence. A company has to select the best alternative locations because environmental factors can be quantifiable by numbers and those numbers can impact companies’ long-term operations. The number of consumers is the most direct impact revenue of a company because consumers create the most cash flow in a growing company. Labor costs are another mean element that a company needs to take into consideration. The total cost of operations is related to the cost of labor in the market. Education levels impact the companies’ R&D center. Good education of employees will keep a company innovates better products in the future.

One example of businesses chooses alternative site locations is an alternative healthcare site. In any city, there might some public health emergency or disaster happened. Alternate Care Sites (ACS) created to give health care workers the ability to address patients who were injured in some public event. For example, high school baseball competition, music party on a beach, the final season of baseball competition, etc. Some location needs to be covered, for instance, stadium and school, by ACS. Some facilities, mobile field hospitals, medical shelters, etc. must be included (HHS.gov). When I joined the Balboa Park event last year, I noticed that there some emergency care and healthcare professional stand by their small healthcare shelter all over the Park. This experience let me rethink the importance of the healthcare site location decision.

 

 

 

References:

Collier, D. A., & Evans J. R. (2017). OM 6th. Boston, MA: Cengage Learning.

Kimelberg, S. M., & Williams, E. (2013). Evaluating the importance of business location factors: The influence of facility type. Growth and Change, 44(1), 92-117.

https://asprtracie.hhs.gov/technical-resources/48/alternate-care-sites-including-shelter-medical-care/47

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Week 3 discussion question 2

(2) What are the various facility layouts used today in manufacturing and service operations? What are some of the characteristics of a good layout? What type of layout does your work use? Why does your work use this layout?

Ans: Every business has its facility layouts in order to maximize production and meet its customers’ needs. A layout provides businesses a straightforward work, material, information flow through a network inside a business. Employees, raw material, and the machine should be well organized in order to get the best flow inside a company.

Nowadays, there are four facility layouts companies use nationwide, which are process, product, cellular, and fixed-position layouts. The process layout organizes production processes workflow. A group of workers was formed and they usually do similar works. Products are passed from one workstation to another in this layout. This layout match a firm that produces a variety of small products. A fixed-position layout literally means stationary, not moving. A company provides its goods or service usually remain in a physical location. Some examples of this fixed-position layout are sports events, software installation, concert, etc. This layout needs to have a high-level of planning compared with other layouts. The cellular layout is composed of a small, self-contained group of workers and some machines in a serial order to finish a set of goods or services. This layout performs most of the tasks to finish goods or services. The product layout is suited for goods that need a continuous process. Workstations are organized in a linear shape and products are moving on the linear workstations. This kind of working station has a large capacity to have a large number of goods moving between workstations (Collier, 2017).

A good characteristic of layout including, efficient space utilization, flexibility, accessibility, minimum movement, etc. A company should utilize its space inside the layout system, and make sure there is maximum space to use. Flexibility means the ability to adapt to some level of change. Demands from customers always change and fluctuate, increased flexibility level would help the company save money. Machines may not be used sometimes through years, there should be a place to access and store those machines. The minimum movement of machines and employees means saving more money during movement. This could prevent unnecessary costs such us break materials.

When I go to 24 Fitness near my house, I realized that they use process layout. They put a group of machines together. I could see there is a chest machine area, leg machine, stretching areas, cardio equipment, back muscle training machine, and some working studio for a group of people exercise together. The purpose of the process layout that applied to the gym is that people can do the same series of exercises in the same area and save some time for the next users.

 

References:

Collier, D. A., & Evans J. R. (2017). OM 6th. Boston, MA: Cengage Learning.

Week 3 discussion question 3

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(3) Put your term paper paragraph summary in the thread provided. Ensure that you mention the two types of QM tools (charts) you will use in your paper with a title. The instructor will respond to your summary. Make sure that you will have numerical data for performance metrics. The reason for this post is to prepare you for the paper.

Ans: The process I choose is a cost reduction process. The title of my paper is the cost reduction process of John Deere. John Deere distributes and manufactures agriculture equipment. The firm had annual sales up to $15 billion and operates all most every country in the world. The firm employed 47,000 people worldwide. The problem of the company is the cost of the gatherer chain, the part of the conveyor used in the agriculture industry, is raising several in a row. The project management team needs to reduce the cost of it as soon as possible.

In the as-in condition part, there is a cost reduction process, including review business strategy, analyze spend, set cost reduction targets, identify potential initiative, and prioritize initiatives.

Chart 1

Cost reduction process

Then every company has a customer satisfaction rate. Even though John Deere has a high rate of customer satisfaction, the company still needs to improve and maintain customer services.

An analysis of inefficiencies, causes/ effects, and gaps part, the I will mention the following, complexity cost is too high, marketing failure, competitive market. Complexity cost is too high: A product or a machine has too much element or material itself would make the cost too high.  More configuration in a product, more cost will add in a product. Maintaining too many configurations on a product would reduce profits. Marketing failure makes the selling of the gatherer chain going down several years in a row. In a competitive market, the company has a cost problem that purchases from their supplier. John Deere has purchased a gatherer chain from supplier Saunders. The gatherer chain is a part of the material used in a farm machine called the conveyor system. Also, the aftermarket of the part has some problems. For instance, the cost of gatherer chains are too high, gatherer chain sale units are decreasing for several years in a raw. At the same time, John Deere needs to compete with other competitors in the aftermarkets (Leenders at all, 2006).

Table 2

The profitability of the gatherer chain

This chart shows sell of the material is going down three years in a row, the company needs to solve as soon as possible.

In the to-be condition Proposed Improvement/Solution part, I will mention the process of improvement, including analyzing material cost, collecting data, a potential saving of the material, and negotiate with the main supplier. The company needs to choose the best supplier to negotiate with, which is Mr. Saunders, this supplier has the best quality and JIN delivery service. Before the company negotiates with suppliers, the project management team needs to plan how to negotiate with them, for instance, collecting some data, figuring out the structure of the gatherer chain, planning negotiation strategy, and so on. Second, the company may consider making the gatherer chain themselves.

All in all, this final paper involves a lot of processes, each process has small tasks needs to accomplish. At this point, my term paper still needs to improve in many areas.

References:

JOHN DEERE. (2010). Farm Industry News, 43(4), Farm Industry News, March 1, 2010.

Leenders at all, (2006). Purchasing and supply chain management. Supply Organization. P251- 253.

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