Operations Management Issues Faced by Challinor’s

Operations and Project Management

Table of Contents

Introduction.

Background.

Issues in Operations Management of Challinor’s.

• Supply Chain Management and Lean Management.

Project Management.

• Problems and Opportunities Being Faced By the Organization.
• Underpinning the Success of the Project through Risk Matrix.
• Underpinning the success of the project through Work Breakdown Structure.

Conclusion.

References.

Appendices.

• Work Breakdown Structure.
• Risk Matrix Diagram.

Introduction

The success of any business establishment highly depends on the effectiveness of operations management of that particular organization. It is therefore very essential for every organization to implement an effective operations management that would help in controlling its overall operational activities in a proper and well-defined manner (Kumar & Suresh, 2009). Operations management is therefore the process of organizing, planning, controlling and leading the production or services starting from the manufacturing of products throughout the activities of supply chain management. Like any other department in a company, the organization’s operations management department plays the most important role in determining the overall success of the organization (Slack & et. al., 2010). An effective operations management thus helps an organization in positioning the products and services in the right place and in the right way that would make the most effective utilization of time and cost considerations. It is therefore the operations manager’s responsibility to ensure efficiency throughout the production process. (Fort Lewis College, 2015).

The topic will now address the operations management issues faced by Challinor’s, a small-scale manufacturing of actuators for the aerospace industry. It will also cover the opportunities and problems being faced by the organization. Furthermore, a suitable Risk Matrix and Work Breakdown Structure will be provided in order to underpin the success of the project and thereby create a better experience for the customers with respect to the proposed relocation of the factory.

Background

Challinor’s is a small-scale, West Midlands-based manufacturing company that manufactures actuators for the aerospace industry. The company has developed a good reputation in the aerospace industry, providing customers with the best quality products. The company has worked effectively together with a sufficient workforce of experienced engineers, which is one of the company’s major advantages, allowing consumer production to be more competitive and maintaining the best quality of fault-free service delivery. Altogether, these factors contribute to the successful operations along with the opportunity of the company to expand that would help it in maximizing the overall profit. As the company has been able to gain a significant position in the aerospace sector, various large business establishments are currently showing their initiatives to tie up with the company. Presently, Challinor’s have been offered a contract with one of the largest automobile manufactures of the country, which would be the most wise decision for the company, considering that the driving forces will remain positive, as it will help in maximizing the overall profit of the company. Moreover, it would also be able to diversify its market segmentation that would serve beneficial for the company.

Issues in Operations Management of Challinor’s

Even though, Challinor’s has been operating successfully along with producing the good quality products to the aerospace sector, there are certain issues found in the operations management of the company that restricts its effectiveness of conducting the overall operational activities. The operations management of the company is not based on IT system for managing the flow of work. Rather, the company follows manual systems in conducting various operational activities. This is one of the most critical operational issues that the company has been facing, which further hampers the operational process within its internal environment. The existing IT systems that operate in the company all work in a standalone manner and thus, they are not interconnected with every department of the organization. This is a major disadvantage that is currently faced by the operations management of the company. In addition, the company is also being encountering certain issues related with the supply chain, which is very essential to be sorted out, as it is hampering the operational activities of the company overall.

However, in order to make the operations management of Challinor’s more effective and efficient, it is inherently necessary for the company to implement an integrated IT system that would be interconnected with every department of the organization (Kramer & et.al., 2007). From a generalized perspective, it is arguable in this context that with rapid technology innovation in the current era, it has become very essential for the business establishments to make efficient use of Information Technology in the business process that would help it in developing the performance of work along with better quality products. Moreover, proper application of technology will also help in reducing the costs and expenses related with the manufacturing and production processes that would further help in maximizing the overall profit earning for the company. In context to the case scenario, Challinor’s would be benefited if it can implement Information and Communication Technology (ICT) in the organization that would further contribute in making the operational management of the company more effective (Fraunhofer IAO, 2015). Moreover, the company has been planning to sign a contract with one of the major automobile manufacturers of the region, which would be a great success for the company. Correspondingly, it is very essential for Challinor to develop its operations management strategies by integrating proper ICT that would help in carrying out various operational activities as well as normal business processes in an effective manner along with cost reduction (Tongia & et. al., 2004).

Various modern approaches of information technology, such as cloud computing and Management Information System (MIS) would serve beneficial for the company. Moreover, the issues of supply chain can also be mitigated with the help of an effective ICT. It is worth mentioning in this context that cloud computing refers to an internet based computing technology through which the information and resources are stored in servers even if owned by some third parties. Thus, through cloud computing, the company can reduce its cost involved in information management, it will not be required to purchase their own servers where huge expenses are likely to be incurred (Hengst & Sol, 2001). However, a minimal amount of rent is required to be paid to the third party holding the possession of the cloud computing domain. Another advantage of cloud computing for the company is that the operations manager and other responsible personnel of the company can easily access the information at any point of time as and when required. It would therefore make the operational management of Challinor’s more effective (Torry Harris Business Solutions, 2015). Similarly, MIS would also serve beneficial to overcome the issues of operations management and perform the business activities smoothly. MIS is generally referred to a computer based information system that helps the managers to evaluate, manage and efficiently organize various departments of the organization in an effective manner. Different software tool can be used in the MIS that helps the operations manager to conduct continuous operational activities effectively with lesser time consumption. Moreover, the system also includes various databases, analyzing which, the management can make various decisions related to the organizational developments and plan accordingly (Harsh, 2002).

Supply Chain Management and Lean Management

Apparently, it has been mentioned in the case scenario regarding the issues related to the supply chain of the company that negatively affects the operational process of the company (Zigiaris, 2000). One of the major means to overcome the issue is to implement the concept of lean management in the administrative and manufacturing activities of the company. As per the case scenario, the CEO of the automobile manufacturing company has agreed in providing training to the workforce of Challinor’s regarding the implementation of lean management in the company. Lean management therefore involves continuous improvement of the company, which is mainly of long term basis. Required incremental changes are being management and operational level that helps the company in improving the quality as well as efficiency in both managerial and operational levels (Ahrens, 2006).

Project Management

• Problems and Opportunities Being Faced By the Organization

There are certain problems that Challinor’s is facing, which in turn tend to hamper the normal working process of its business activates. The company has been planning to sign a contract with one of the largest automobile manufacturers of the region in order to diversify as well as expand the business with differentiated products. Therefore, there is a necessity of a large floor loading capacity , which is not available in the company and indicates a major problem for the company to carry out their working activities following a traditional manner. In addition, the company is also facing problems with the operations management systems. The company does not have an Information Technology based operations management system, as a result to which, there is a lack of integration between various departments of the organization. Moreover, the costs and expenses involved in the production of products are also high because of the traditional method of operations management that fails to utilize effectively the available resources. The workflow is therefore controlled with the help of manual systems that would also create a huge difficulty after it will start working with the automobile manufacturing company. Moreover, if the contract with the automobile manufacturer is successful, it has to provide additional space for the manufacturing of their products and due to lower availability of space in the existing facility, the production process may be negatively affected. However, huge demand for the aerospace products in the local market is increasing day by day and thus, it has become essential for Challinor’s to meet the demand for the customers, which will also require more space to produce as well as to store the finished products. Therefore, the availability of limited space will create problems for the company to commence its business activities.

However, in addition to the problems being faced by Challinor’s, there are several opportunities possessed by the company that would help its growth and development along with maximization of its profit. The planning of the company to sign a contract with one of the most famous automobile manufacturers of the country is a great opportunity for the company, as it will help to grow its business and thereby maximize the overall profit. It will also help the company to supply within a much wider market and subsequently, reduce its dependence in a particular sector. Thus, it is a potential opportunity for the company that will help it in the growth and development of the business activities. Moreover, the company has its new I40 manufacturing site located near Telford, which provides an easy accessibility to the aerospace customers as well as the automobile manufacturers, which is a major opportunity possessed by the company that will help it in attracting more customers. Challinor’s has already been able to establish a significant position in the market along with creating customer loyalty. Therefore, easy customer access would provide an added opportunity to retain the existing customers and attract more new customers. However, there is a huge demand for the aerospace products in the West Midlands and in addition, huge inflow of EU currency is available for the establishment of new business in the region, which is also a major opportunity for the company.

• Underpinning the Success of the Project through Risk Matrix

Risk matrix is generally a form of risk assessment tool that helps in accessing the amount of risks associated with a particular organizational process and based on it identifying the most cost effective method of minimizing the risk. It is displayed in the form of a table that contains both rows and columns. The rows of risk matrix display the risks and the columns display the likelihood or the probability of occurrence of risks as well as their impact. Risk matrix therefore helps in appropriate risk assessment in order to define the level of risks in two major categories, i.e. ‘harm probability categories’ and the ‘harm severity categories’. The matrix serves most beneficial for managers and the top level management of an organization in making various decisions effectively, as it makes the levels and types of risks more visible with the help of this simple mechanism (Hertsmere, 2007). However, in order to make the risk assessment more effective, the organizations and business establishments are inclined to prepare their custom made risk matrix, as suitable with the organization. Similarly, in context to the case scenario, an effective risk matrix will help Challinor’s to access the risks involved in the organizational process as well as the severity of risks. Based on the risk matrix as referred to the Appendix, the company will also be able to take proper safety measures that will further help in increasing the total production of the company and at the same time minimize the operating expenses associated with the organization. Moreover, the company has been planning to relocate its business units and therefore, through the help of risk matrix, the rate of project success can be ascertained. The level of risk associated with the successful relocation would highly influence the success and growth of the company (Pinnacle Enterprises Canada, 2005). However, from the risk matrix prepared for the company, it can be seen that there is a moderate risk prevailing for it, if it plans to relocate the factory. Therefore, the management should take effective measures that will help in overcoming the risk factors, on the basis of which, decisions for relocation should be taken.

• Behind the Achievement of the Project through Work Breakdown Structure

Work Breakdown structure (WBS) is one of the most important tools in a project management that divides every part of a project into smaller components that helps in enhancing its level of details. It therefore helps the project manager in planning their work more effectively. For any project, there is a specific time allocated within which it has to be completed. In addition, it is also required to accomplish the project within a stipulated cost involved (Project Smart, 2015). However, with the help of WBS, the project manager can implement the project within a fixed time frame along with the respective costs associated with it. However, in context to the given project, WBS, as referred to the Appendix, would play a crucial role in the successful relocation of the factory. It is a long and complicated process to relocate the factory along with the manufacturing facility and thus, an effective WBS would help in dividing the overall project into various divisions (Brookhaven National Laboratory, 2003). As per the WBS structure of the new factory (refer to Appendix), the overall departments and managers of Challinor’s has been divided into smaller categories who would be responsible for carrying out various activities of the new factory. As the factory will be smaller in comparison to the present facility, the numbers of individuals have also been reduced from the hierarchy.

Conclusion

From the overall analysis, it can be concluded that the success of contract agreement between Challinor’s with a major automobile manufacturer of the region would potentially compliment the growth and development needs of the company in the long run. Even though the Challinor’s has been able to gain a significant position in the market for the manufacturing of aerospace products, various issues in the operations management restrict the company to operate smoothly its business operations. For instance, the disintegration of ICT system in the operations management is a major disadvantage of the company. Moreover, there are also certain issues found in the supply chain of the company. However, based on the increasing demand, the company is planning to relocate its factory for betterment. It has thus become a matter of growing concern, whether the relocation would be successful. Therefore, for determining the level of risk, a Risk matrix has been provided. Moreover, for conducting the project in an effective manner a WBS has also been provided that will help in successful relocation of the factory.

References

• Ahrens, T., 2006. Lean Production: Successful Implementation of Organisational Change in Operations Instead Of Short Term Cost Reduction Efforts. Lean Alliance, pp. 1-87.
• Brookhaven National Laboratory, 2003. Work Breakdown Structure. Project Management Practices, pp. 1-16.
• Fort Lewis College, 2015. Introduction to Operations Management. Journal, pp. 1-38.
• Fraunhofer IAO, 2015. IT for Successful Companies. Information and Communication Technology. [Online] Available at: https://www.iao.fraunhofer.de/lang-en/business-areas/information-communication-technology.html [Accessed May 04, 2015].
• Harsh, S. B., 2002. Management Information Systems. Michigan State University, pp. 1-17.
• Hengst, M. D. & Sol, H. G., 2001. The Impact of Information and Communication Technology on Inter-organizational Coordination: Guidelines from Theory. Informing Science, Vol. 4, No. 3, pp. 130-138.
• Hertsmere, 2007. Risk Assessment Matrix – Guidance Notes. Article, pp. 1-12.
• Kramer, W. J. & et.al., 2007. The Role of Information and Communications Technology Sector in Expanding Economic Opportunity. Economic Opportunity series, pp. 1-50.
• Kumar, S. A. & Suresh, N., 2009. Operations Management. New Age International Publishers, pp. 1-277.
• Pinnacle Enterprises Canada, 2005. Risk Matrix. Technical Review. [Online] Available at: https://www.mtpinnacle.com/pdfs/RiskMatrix.pdf [Accessed May 04, 2015].
• Project Smart, 2015. Work Breakdown Structure (WBS) The Foundation of Project Planning. Article. [Online] Available at: https://www.projectsmart.co.uk/work-breakdown-structure.php [Accessed May 04, 2015].
• Slack, N. & et. al., 2010. Operations Management. Pearson Education Limited, [Online] Available at: https://www.pearsoned.co.uk/media/onlinepreview/slack_9780273731603/assets/pdf/9780273731603_fm.pdf [Accessed May 04, 2015].
• Tongia, R. & et. al., 2004. Information and Communications technology for Sustainable Development. Defining a Global Research Agenda, pp. 7-129.
• Torry Harris Business Solutions, 2015. Cloud Computing – An Overview. Torry Harris, pp. 1-6.
• Zigiaris, S., 2000. Supply Chain Management. Dissemination of Innovation and Knowledge Management Techniques, pp. 1-26.

Appendices

Work Breakdown Structure

Risk Matrix Diagram