CASE STUDY MBA 108
The issues that involved in the article a Critical Evaluation of Operations Management in
a Manufacturing Company in Sri Lanka and Improving Project Management Practice: An
Engineering and Construction are in terms of operations management concepts. After taking
some strategic decision by company’s top management, company’s operational performance has
been suddenly fallen in unexpected way as last two years.
Demand fluctuations are unavoidable and in these situations organizations need to respond in the
way of level capacity plan, chase demand plan, or demand management (Slack, Brandon-Jones and
Johnston, 2013). In the manufacturing environment, level capacity plan is considered as traditional
and most appropriate strategy but some organizations select chase demand plan which attempts to
adjust rapidly to the changing conditions with limitation barriers of manpower, equipment, material,
and so on (Robinson, 2009). Slack, Brandon-Jones and Johnston (2013) suggest some methods of
adjusting capacity when approach chase demand plan; those are overtime and idle time, varying the
size of the workforce, using part-time staff, and subcontracting methods which help to do rapid
respond to demand fluctuations.
Anyhow recent last two years, ABC Company is facing lots of capacity planning issues and struggling
with on time product delivery mainly after taking some strategic decisions on products transfer within
business units of XYZ group as discussed earlier section. ABC Company has glove production design
capacity around 9,000 dozen pairs per day with target overall equipment effectiveness (OEE) around
70%. But based on top management decision, completely new set of high value products were
transferred to ABC Company from another sister company. Those products have customer demand
around 1,500 dozen pairs per day with more than 20 varieties of products and value added packing
methods. Due to overestimation of their packing capacity, ABC Company management didn’t much
think about methods of adjusting capacity of packing. In addition, the management had given high
priority to transferred high value products meanwhile they didn’t focus on existing high volume
products as it is earlier. It has led to lots of capacity planning and control issues for last two years
such as accumulation of work in process (WIP), on-time product delivery, over-utilization of
production plants, additional product change-over, plant down-time, high reject, high rework,
process control issues, quality issues, manpower issues, and stress on employees. In last year, ABC
Company got many customer complains due to delay delivery of products and quality of value-added
products. It may lead to loss of valuable customers and reputation of XYZ group brand if it is
continuing in same way.
Information gaps between shop-floor management to top-floor management have created lots of
unsuccessful decision as example; products were transferred to ABC Company without adjusting
dipping and packing capacity; most of the decision made with design capacity instead of effective
capacity with chase demand level strategy. Therefore, ABC Company should more focus in integration
of shop-floor to top-floor activities in efficient ways. Because, traditional shop management
processes are manual and time intensive that is why information to top-floor from shop-floor is
getting delay, subject to human error and interpretation. It can lead to wrong decision making by top
management. Decision support systems (DSS) and expert systems (ES) should be improved at ABC
Company to make better capacity planning decisions in way of retrieving and analyzing data with
complex mathematical models, and human expertise and knowledge in particular area of expertise.
It has created biggest challenge to ABC Company in term of process design from top to bottom to
meet better business based on the design objectives of quality, speed, flexibility, cost, and
dependability. ABC Company faced process design issues through the history due to high varieties of
product; anyhow they have managed by mass production because of significant demand. But, after
transferring the new products, they are still facing process barriers in adopting with existing
machineries, technology, and human resource.
Still ABC Company is following batch transaction processing system in case of process design and
control data inputs. It makes more difficulties in making on-time decision by operations mangers and
process optimization. Therefore, ABC Company should implement online transaction processing
system to get accurate data at on-time. External information significantly impaction on process
designs; those are competitor product information, market trends and analysis competitor’s prices,
competitors wage levels, industry production levels, competitors share prices and trends. But, ABC
Company doesn’t have any proper information system to collect external information. Hence, ABC
Company should focus on their internal and external information collection and they should redesign
some of their products which are deviate from theoretical process design concepts and having high
process variability quality issues.
Three years ago, ABC Company implemented SAP Success Factor (SAP-SF) which is executive
information system (EIS) is helping to senior level managers with strategic-level information through
key performance indicators (KPIs). But still there are lots of practical issues with performance
appraisal system, objective settings, and attendant system. But, payroll system is still running as
separate function without integrating with SAP ERP.
The main objective of this project is to automate the manual dipping plants by using robotic
technology. It can increase the productivity and quality for highly complex processes meanwhile it
will reduce the labour cost and process variability due to human error. Therefore, this kind of
automated robotic technology has huge scope not only for to overcome current ABC Company’s
issues but also help to face threat of competitors in future manufacturing. The project should be
completed with required technology and high quality within approved budget and given timeframe.
The project will take approximately four months, around half million USD budget, and significant
company’s employee resources with project team. The detailed project plan is attached with
Appendix section.
First of all, project environmental factors should be considered to effective project management
process in terms of geo-social environment, economy-political environment, business environment,
and internal environment (Slack, Brandon-Jones and Johnston, 2013). The second stage of the project
management is project definition which should be defined in terms of objectives, scope, and strategy.
Then after, project planning is the very important and challengeable process in project management.
It should do for mainly four reasons such as to eliminate or reduce uncertainty, to improve efficiency
of the operation, to obtain a better understanding of the objectives, and to provide a basis for
monitoring and controlling work (Kerzner, 2009).
ABC Company should re-validate, re-design, and standardize the processes which have high process
variability, rejects, and reworks. It can help in on-time deliveries of products, avoiding rescheduling,
and zero in-process inventory. By using detailed process mapping, analytical, and statistical methods
they should eliminate the process wastes in terms of in-process delays, in-process errors,
inappropriate process inputs, excess process capability, and excess capacity. ABC Company should
find out the bottleneck process and attack that by proper strategic move to avoid work in process
(WIP) which can help to overcome company’s most of the operations management issues.
In traditional glove manufacturing processes use lots of hazardous chemical and consume high heat
energy which can impact on company’s sustainably in terms of employee’s health concerns, water
pollution, and greenhouse gas emissions. Therefore, ABC Company should focus on sustainable
process design in terms of social, environmental and financial to adapt to green business strategy.
.