MGT502-Spr12

Want to Save Millions? Watch Your Milliliters.

Posted on by luqmanm502

In today’s fast-paced world, corporations cannot stress enough on quality. With increased globalization and the advent of the Internet and social media, people not only have more choices but they are also aware of those choices.

With the clutter of marketing messages consumers are exposed to on a daily basis, brand loyalty is becoming harder to build and maintain. If a customer today has a bad experience with a particular product, he or she is not only likely to switch to a competing brand, but can also be expected to share that unsatisfactory experience with friends, family and others on social networking sites.

Soft Drink Manufacturing Facility

Operations management plays a significant role in the maintenance of quality in an organization’s products and processes. One of the most popular methods for quality control is Statistical Process Control (SPC), an analytical decision-making tool that facilitates the monitoring and control of processes. It allows one to examine a process in order to detect any variation in it that might require correction.

For instance, at a soft drink manufacturing plant, SPC may be used in the production process in which the finished product is filled into PET bottles. The cola filled into a 500mL is hardly ever exactly 500 milliliters; it could be 500.04mL, 499.98mL, 499.93mL, etc. Statistical process control will use a sample of bottles filled at a particular plant to determine the variation in the average volume filled.

I came across a practical application of SPC during an internship at a global manufacturer of consumer goods. A Statistical Process Control analysis at a shampoo-manufacturing facility revealed that the liquid volume filled in 400mL-shampoo bottles was consistently ranging between 400.4mL and 400.9mL. Although this is even less than half a milliliter, a large company could have suffered significant unnecessary costs if consumers were constantly given more than 400mL shampoo in the long run.

Stages of Statistical Process Control

The management suspected that the volume irregularity was not due to a natural or common cause. Control charts constructed for the bottle-filling process confirmed this notion. The variation lay outside the control limits and was therefore due to an assignable cause not part of the original process design. It turned out that one of the levers in the filling machinery was not functioning correctly and allowed more liquid to enter the shampoo bottles than it was designed to fill. The SPC analysis consequently allowed us to identify this problem fairly early and re-calibrate the equipment before much money was lost.

An article by Manus Rungtusanatham in the Journal of Operations Management states that the benefits of SPC are much more than just improved quality and cost cutting. Research has shown that the implementation of statistical process control in production environments works to motivate process operators. As these front-line workers become more satisfied with their jobs, they are more motivated towards continuous improvement and high quality.

With all its advantages, SPC does have some limitations. When performed regularly, continuous inspection can be quite expensive. While the cost may be justified for a large manufacturer such as P&G, is Statistical Process Control as relevant for smaller companies too?

Facebook Rebound!!

Posted on by ahmeda502

Facebook is one of the largest social networking website with more than 800 million users worldwide. It was founded
in February 2004 by Mark Zuckerbergand his roommates. The idea behind Facebook is a limited network between college class mates than expanded
to other colleges gradually growing to become the most used social networking service. The way Facebook grown dramatically fast brings the question, how will Mark Zuckerberg carry on his success?

Last class we learnt about the product life cycle and the 4 stages of it (introduction, growth, maturity,
decline). It was interesting to apply that on one of my favorite websites and see where it stands. From the history of Facebook, it’s obvious that the introduction phase was so difficult for such a young and talented group of Harvard students. The product life cycle was never planned or imagined to reach what they achieved today. Facebook moved smoothly to the growing phase, they concentrated on competitive services with a lot of improvements and options especially with more competitors introduced in the market. Users increased rapidly during the period from 2008 to 2012; however this fact made the debate if Facebook reached their peak and how far the maturity phase is.  Facebook appears to begin maturity phase of product life cycle. growth started to stall in some regions losing more than 7 million active users in US and Canada.

In your opinion, where do you see Facebook after 5 years??

Safety First!

Posted on by mohamedalb502

Safety in the workplace makes a good business sense. A lack of proper safety measures and practices can lead to accidents, added business expenses and missed work days. This is often referred to Lost-Time Injury or LTI and is measured according to hours lost in productivity. Most industrial companies measure their safety performance by maintaining a low level of Lost-Time Injury Frequency (LTIF). Whether to the employer or employee, safety is a valuable investment that helps companies to stay in business.

Developing a work environment that endorses safety in all areas of a business     indicates organizational commitment and awareness to employee wellbeing. There is a number of industry sectors worldwide which have identified the benefits of effective safety management by implementing a comprehensive business management system designed to manage safety elements in the workplace known as Safety Management System (SMS). A company that adopts SMS usually meets the minimum requirements of general health and safety laws by incorporating safety objectives into company goals. Furthermore, a company should promote safety in the workplace through management leadership; employee participation; hazard identification and prevention; and education and training. When identifying safety hazards in the workplace, the company should remove them where possible to mitigate the risks. If the hazard cannot be removed from the workplace, employee should be made aware that they exist and how to avoid them.

Companies around the world losses a hefty amount of money each year due to weak workplace safety implementation that leads to accidents. In the 2005-2006 financial year of Australia, the total economic cost for workplace related incidents and illness was estimated to be $57.5 billion, representing 5.9 per cent of GDP. The cost of workplace related incidents is often divided into two categories: direct costs and indirect costs. Direct costs include property damages, injury or fatality reimbursement, loss of key staff, disruption to business activity, increased workers compensation liability, fines and legal responsibility. Indirect costs refer to the worker’s lost wages, productivity losses, recruiting and training costs, decreased morale and damage to the company reputation. These indirect costs have been calculated at between 8 and 36 times the direct costs.

Providing a safe workplace for employees and customers is vital to all businesses, regardless of size or industry. The relative impacts of workplace safety hazards on Small and Medium Enterprises (SMEs) is greater than on comparable larger enterprises. Generally, SMEs lack readily available credit, and that is why it is essential that they understand the economic benefits of improving and promoting safety; otherwise, they will go out of business so easily if safety to be violated.

A strong investment and implementation of safety culture in the workplace is extremely important to businesses and cannot be compromised as it is considered in the same manner as other elements of business management.

Further Reading: Safe Business Is Good Business

Open Your Doors……………….MBWA is The Best Way

Posted on by khaleda502

Management by walking around
(MBWA) is the best and effective way of managing your company or business,
being in the middle of things makes your more aware and faster to react.
Mangers at the top are often behind closed doors and are not aware of the daily
processes in the organization. Having a large gap between top management and
other employees can very dangerous, in fact it might destroy any successful
business. It’s very important and critical for mangers to monitor all
operations very closely, which is why they need to think about MBWA as a way of
managing people.

Take any large supermarket chain
as an example; often you will never see top management walking around with customers
in the store. All you will see are employees and maybe floor mangers, that is
why by having open doors employees can talk to top management and give them their
ideas. Not only that but mangers can be more contacted with both employees and customers,
by using MBWA they will understand all the on floor activities in the supermarket.
Management by walking around will make the gap between top and bottom small
which will help the overall performance of the store. On the other hand by
having a large gap top management would not understand customer preference,
target market and other important aspects. In the previous example you can see
how effective and critical the gap can be when making big business decisions.

Working environments are linked directly
to effictvness and productivity, which is why mangers need to make sure they
can provide the best working environment for their employees. By being close to
their employees they can determine what is needed to create and find that
productive environment. In my opinion management by walking around is the best
way to move your business forward, even though some might argue that it has
many disadvantages I still think it’s a must in some organizations.

 

Do u agree with MBWA? Does it
have disadvantages? Where does it best apply?            

Which software would you use in OM?

Posted on by Mohammad Masadeh

Which software would you use in OM?

We knew so far many software packages that can be used in operations management.
So far we learned Managing Projects. We know that Gantt charts used to schedule resources and allocate time. We learned that PERT and CPM techniques can help operations managers schedule, monitor, control, an crashing large and complex projects. We got know that PERT/CPM reports and charts are widely available today on personal computers. Some of the most popular programs are Primavera (by Primavera Systems Inc.), Mac Project (by Apple computer Corp.), Time Line (by Semantic Corp.) , and Microsoft Project (by Microsoft Corp.).

We learned Forecasting. We learned different kinds of forecasting approaches, qualitative and quantitative methods. We know that most operations managers turn to software packages such as Forecast Pro, SAP, AFS, SPSS, or Excel.
We learned Quality Management. we learned seven new concepts in quality management and seven different tools and statistical process control (SPC) and Control chart to control the product and service quality. We learned to use Excel to do the task.
I did realize that my company actually used many of these software packages.  Every department had their own desktop software, decentralized data , and no backup.  When we got certified from ISO 9001: 2008, we had revisited our plans and checked the operations with a complete set of documentation for all procedures, systems and activities. Why should we used different software from different vendors?
Why should we have different employee skills and different training? Why should we have different helpdesk and support? Why should we have decentralized database and different backup systems?

We tried to solve this discrepancies and we brainstormed the efficient way to integrate all departments data in one single server and using limited numbers of software from one vendor if possible.

In our case we have Oracle E-business suite, we found “Oracle Crystal Ball” the best software that can do all in one. Now, all the company departments are using Oracle Crystal Ball for Project Management, Forecasting, Projection, Quality control, Risk Analysis, Inventory Management, Loan Management … etc. This software is customizable, you can build your own model using data from the centralized database, integrated with any relational database. Crystal Ball is fully integrated with MS Excel, MS Project so you can download your data to your personal computer and doing your calculations if needed and re import back to the database.  I found the oracle website http://www.oracle.com/us/products/applications/crystalball/index.html that relate to what I present here. The link showed that Oracle offers classroom edition and With over 4,000 customers worldwide, including 85% of the Fortune 500, Crystal Ball is used by customers from a broad range of industries, such as aerospace, financial services, manufacturing, oil and gas, pharmaceutical and utilities.

By now we have one helpdesk. Would you use Oracle Crystal Ball or Excel? But remember that it is integrated to Excel. Would you recommend this software for your organization?

                   

Do you have a Toyota?

Posted on by Bashayer

Do you remember the Toyota recall in Bahrain? Have you ever thought what really went wrong and why Toyota is recalling those vehicles?

I’ve read an interesting paper What Really Happened to Toyota?  that was analyzing the different recall acts of Toyota which took place in USA due to quality and safety issues. The paper analyzed the main reasons behind such issues as the brand image and sales revenue were severely impacted.

 Toyota and its chain of suppliers had always pioneered quality management methodologies of total quality control since they believed that quality, customer satisfaction and profits are deeply connected. Quality is a major component of Toyota’s strategy and production system, and was always looked at as a role model by other competitors, such as Ford, GE and Honda.

So what really happened that made “Quality” suffer?

The paper states that there are two main reasons behind the quality issues:

  1. Toyota executive management always believed that quality should have a high priority, however, when the new management came in, their focus has changed. The new focus was on rapid growth rather than quality. As Toyota expanded in new markets, from 2003 onward their sales grew faster than the company can manage, and therefore, growth had taken priority over the traditional focus on quality. The decisions were made in favor of meeting sales, cost cutting and profit target while sacrificing product development, supplier management and production.
  2.  The second reason is a result of the increasing complexity of car products due to technological changes. Government regulations on safety, emissions and fuel consumption and the rising customer demands for environment friendly cars with luxury features have all added to the complexity level. This point applies to other car manufacturer as well, but due to the continuous demand and market expansion, Toyota was faced with the challenge of changing its production process to meet the demand of safe, clean, fuel-efficient and comfortable cars.

 

Some of the process change decisions were to compress the lead time between exterior design approval and start of sales to less than 20 months. Another change in process was to introduce an accelerated design cycles that have stressed the development and production systems which have created conditions for quality failure.

 Toyota’s supplier management and its performance were also affected by the above two points. To meet the rapid demand and product complexity, Toyota had to outsource engineers and contract with new suppliers because the current engineers and suppliers were not sufficient. Most of those contract engineers and suppliers were inexperienced with Toyota’s standards and practices, and they were overseas (none Japanese speakers) contacts which had lead to coordination and communication problems.

I think that for any company, risk assessment should be conducted before moving with growth and expansion decision. With Toyota, the quality has suffered because they banded their core values of quality and focused on growth.

In your opinion, what went wrong with Toyota?

Blackberry: A Globally Local Phenomenon?

Posted on by hussaa502

I use my Blackberry more than I would like to admit (thanks to the curse of BBM); most Blackberry users do! Canadian company Research in Motion (RIM) has been producing the Blackberry since 1999. Today, Blackberry accounts for 3% of the total mobile sales in the world. Though this may seem to account for a small number, the Blackberry has had significant social implications in the region in the past few years. The Blackberry has redefined the way people interact not only with their phones, but also with one another. Thanks to their instant messaging platform Blackberry Messenger (BBM), RIM was able to make messaging, sharing photos and broadcasting information so easy and so accessible. In doing so, RIM was able to penetrate markets, such as ours in the Gulf, to meet market demand for easy exchange of information and media. Keeping in mind objectives and strategy in a global environment, I will explain this blackberry phenomenon in the context of operations management.

Having this in mind, it is important to understand the RIM, while initially aimed for a business customer base in North America and Europe, was able to diversify into Middle East markets, particularly in the Gulf where mobile phone usage is very high. This issue of globalizing the business explains that RIM was not only able to understand the market at hand, but also learned to improve their operations abroad to attract and retain global clients and talent. In seeing this shift in global markets and adapting to this new commercialized leisure customer base, RIM began providing better goods and services that keep in mind the cultural mindset and markets. They introduced the “display pictures”, for example, to their popular BBM application and made photo sharing instantaneous and easy. Both these features show that this interaction between foreign customers and the supplier (RIM) can lead to new opportunities and extension of the life cycle. This clearly coincides with the fact that blackberries have shown an extended growth in life cycle across Middle East markets in particular, and in doing so, they are also able to improve operations by allowing for the free flow of ideas and creation of an improved product fit for both consumer and producer.

With this new market in mind, RIM needs to think of perhaps hiring more local talent based in the Middle East, in a way to further ensure success in the region. In doing so, RIM can make its mission explicit by allowing for an employee base that understands cultural implications and habits. This could help solidify the strategy for the company and make it more concrete and attainable. By doing that, RIM can continue to produce the Blackberry, ensuring a loyal client base in the Middle East and other global markets that are consistent with its reputation, values, and its ability to generate profits by capitalizing on market and cultural trends.

With new market trends on the way, most notably Instagram which only works on the iPhone (and more recently on Android), how do you think RIM needs to respond to ensure growth, profitability and loyalty by its client base in the Gulf?

Success Eliminating Total Plant Shutdown

Posted on by tariqa502

 

 

 

 

 

 

 

We learned about the Ten Critical Decisions in Operations Management and how businesses apply these decisions for success.

In large industrial manufacturing processes, devices called Analyzers are used to report high level results and system status to the control system at any moment during the process operations. In the petrochemical industry, Analyzers measure, define and report on flow or quantity rates during the petrochemical process.

Many Analyzers are connected to a custom tailored DCS (Distributed Control System) on which all control activities are performed.
This means in effect that controller elements in the manufacturing process are distributed throughout the system in a series of component subsystems, each of which is controlled by one or more controllers. The combined system of controllers is then connected to commuter networks for monitoring and analysis.  Vistanet (computer monitoring network) is one of a number of hardware & software systems used to interface between a number of Analyzers and DCS system.

On July, 2011 during an upgrade of the Vistanet system some of the Analyzer communication reports were lost. This occurred due to faulty processors in the network and a breakdown of the normal input and output communications protocol in the input and output
instruments.   This resulted in a total plant shutdown due to losing the control on the DCS side. Unfortunately, in most cases a breakdown in the DCS system could possibly result in the major slow down in the manufacturing system with other knock on problems and disruptions. On this occasion however, the worse case occurred; that is a total plant shutdown which can cost up to $ 5M per day in losses.

The total possible loses calculate as follows.

Production lost (to flare)………………………………………….,……..….…$ 3.5 M in (24 hrs)

Man-hour to return to commission……………………………,.………….$ 0.450 M

Equipment damage due to emergency plant shutdown….…..……..$ 0.750 M

Penalty payment to local organization due to emission.…………….$ 0.300 M

TOTAL………………………………………………………………..……..…………$ 5.00  M

Immediately after the breakdown,  the production department manager called my manager regarding this problem and my manager assigned me to solve this critical problem by giving me full authority in order to avoid production loses.  This problem was new for me and it had not happened on my watch before, so I faced some difficulties in dealing with it. Add to that the fact that we did not have the correct spare parts available in the company in the warehouse. The pressure was now on.  So I took rapid action. I began by contacting a vendor-supplier in Saudi Arabia to fast deliver to us the replacement materials.  I stressed the urgency of the matter and immediately followed this by preparing a plan and time managed schedule of action in order to try to solve the breakdown problem.

In a series of rapid emergency meetings with my colleagues, (a production supervisor, an engineering specialist, and four on site technicians).  I clarified with them the critical nature of the problem. We discussed my emergency plan and I assigned tasks and jobs according to the rapidly drawn emergency schedule. We worked one long day, found the problems and resolved the communication issues in the production system. The job was completed successfully and safely.

What can be changed to make the critical incident outcome better?

How the ten critical decisions are used in this incident?

 

A poka – yoke yogurt

Posted on by nina

 

 

In our last class our professor discusses the concept of quality and attractive   packaging and how attractive packaging will distinguish a product from another product, which will lead to customer satisfaction. she show us how Heinz Ketchup design their small sample, which is really an attractive packaging and it was the first time to me to see that sample , these concept encourage met o see some of the leading product in Saudi Arabia marker and see dose the quality and  packaging really matter and Is it a part of operation manger work? I’m going to talk about al Marai Company; almarai is one of the biggest food exports in the Middle East, with consumers who see its product as a synonym for freshness and quality.

  Today, almarai is capable of serving top notch products to more than 43,500 outlets within the GCC on a daily basis.  , it is really a big operation to process it in one day, important to note that demand for food in Muslim countries increase during the holy month of RAMADAN. Demand for juice in KSA, for example rise by 20%. In addition, demand for food in KSA increasing during the Hajj season, which occurs 2 months after the end of Ramadan.

  One of the important reason for almarai to have these big operation is the high quality standard to produce their product  one of the method the company is implementing is a poka yoke technique which is to correct possible defect plus source inspection to prevent defects equal zero quality control, poka yoke help the operation manger and worker to process work right at the first time. These techniques can drive defects out of products and processes and substantially improve quality and reliability. It can be thought of as an extension of FMAE. It can also be use to fine tune improvements and process design form six- sigma. The use of simple poka-yoke ideas and method in product and process design can eliminate both human and mechanical errors.

 Almarai chooses combifit for its juices and yogurt, which was a turning point for the success of the company and it was an innovative packaging, the company decided to package its entire range of 1 liter long life juices in combifit premium cartons with combiTwist screw cap. This attention grabbing packaging offer Almarai the opportunity to position its products on retail shelves in a very eye catching way, really sitting it apart from the completion, which is perfectly packaged for customer tastes. ALMARAI has always been synonymous with freshness, quality and service. As an international organization, Almarai has also contributed significantly toward shaping the FMCG( fast moving consumer-good ) industry within the middle East. The company processing and distribution activities within the Middle East are unparalleled.

 The commitment to quality has not wavered since the company’s inception. The company has continued to invest in technology advanced production facilities and recruit right caliber people to better serve their coustomer.  

 Finally, Almarai is the first dairy farm in the world to have been accredited with ISO9002; Almarai also received the ISO9000award, across all its operating division including processing, technical research and development. Destruction and supply chain.

So do you think that packing is an important method to attract the customer? And what is more important the packaging of the product or the quality of the product it self?

 

 

 almarai qualty

 almarai watch watch

Who Wants to Live Forever?

Posted on by layalz502

Marlboro does! The history of Marlboro cigarettes can be traced back to the year 1847 in the country, England. Marlboro cigarettes got its name from a street called Marlborough in London (where the first Marlboro factory was established). The brand was owned by a company called Philip Morris which was largely an England based cigarette company. In the year 1902, Philip Morris the company, created its subsidiary, Phillip Morris USA, in the city of New York. It may come as a surprise to some that when Marlboro was launched in 1924 in the US, the brand was actually targeted at women as its main consumers. The slogan that introduced the Marlboro cigarettes to the fairer sex of the United States was “Mild as May”.

However; later on due to socio-political events on the globe, the market for Marlboro cigarettes during WW II started falling, but reappeared in the 1950′s with a focus on promoting filtered cigarettes. During those times, the majority of cigarettes were non-filtered, thus, Marlboro’s creation of filtered cigarettes appealed to the public awareness of a healthy life. Afterward, a substantial change of advertising was made; all the subtle allusions to women disappeared and the company started to promote Marlboro as a man’s cigarette.

The Marlboro advertising campaign is said to be one of the most brilliant ad campaigns ever made. It transformed a feminine campaign, with the slogan “Mild as May”, into one that was macho and masculine, and which led to significant and immediate effects on sales. By 1957, sales represented a 300% increase within two years.

Now, almost 100 years later since its launch as a woman’s cigarette in 1924, the Marlboro brand is still one of the top-selling brands of Philip Morris and is known globally as the premium brand of cigarettes. Moreover, after so many years of being in the market, Marlboro is STILL in its maturity phase. Irrespective of rising cigarette taxes, increasing cigarette prices and recessionary times, Marlboro cigarettes enjoys its popularity throughout the world and is not affected by any of the above factors. In fact, besides the fact that it is still in its maturity phase; trends show that Marlboro will continue to ride the top for some more years to come. So how can a company that has been operating for so many years remain so successful?

Simply, the leading cause to Marlboro’s success is innovation; even with the success of its main product, red Marlboro, the company over the years kept introducing new tobacco blends and flavors to its customers.  For instance, it is available in different kinds such as, menthol, and clove flavored cigarettes. It is also available in different blends such as, Marlboro Light, Black and Gold.

So the question remains, with so much competition, and after so many years, how can Marlboro remain in its maturity phase rather than start declining? Also, is Marlboro’s success attributed to tobacco being an inelastic product or because people just can’t get enough of that sweet blend? 🙂