Operationsl management assignment

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Operationsl management assignment

  1. 1. OPERATIONSMANAGEMENT
  2. 2. Contents1. Operational function .............................................................................................................................. 3 1.a Operational management at Dell ................................................................................................. 3 1. b Dell’s focus on operation management ................................................................................... 4 1.c Environmental factors affecting the dells operations .................................................................. 42. Strategic operational management.................................................................................................. 6 2.a Operation strategies of dell ............................................................................................................ 6 2.b operation strategy suitable for dell’s operations ........................................................................ 7 2.c corporate strategy and operational management ....................................................................... 83. Organization of operation process ................................................................................................... 9 3.a Factors affecting product design ................................................................................................... 9 3.b Layout of Dell ................................................................................................................................. 10 3.c Approaches to work measure ...................................................................................................... 114. Planning and controlling operations .............................................................................................. 12 4.a Capacity planning for sales operation activity at dell ............................................................... 12 4.b Inventory planning methods ............................................................................................................. 13 4.c Different approaches of quality control adopted by Dell .......................................................... 13Conclusion ................................................................................................................................................. 15References ................................................................................................................................................ 17Operations Management Page 2
  3. 3. 1. Operational function1.a Operational management at DellOperational management refers to an area of management which concerned withdesigning, overseeing and redesigning of business operations in manufacturing ofproducts and services. It helps to ensure that the operational activities such asmanufacturing and other activities are carried out efficiently and effectively by theorganization.The operational management function of dell can be describe as follows,In the dell’s operations it procures its inputs from suppliers and they manufacture someparts required to assemble computers and servers. Moreover with regard toprocurement and distribution functions it manage and supervise the receipts of goods atthe optimum time and deliver the products to the customers on time based on theorders placed by the customers.In supply chain management it uses JIT (Just In Time) system to purchase its computerparts from the suppliers. This JIT system helped them to achieve lot of improvements insupply chain management. It includes cash to cash conversion cycle in supply chainmanagement. Dell was among top 25 companies in AMR list from 2004 onwards.Further it was among top 5 positions in recent years.Though the computer giant had a great customer demand and market growth along withthe decline in the prices and globalization has challenged to the supply chain of Dell.Due to the low cost competition and ever changing customer requirements dell initiateda three year project to change its supply chain by segmenting the supply chain in orderto response to customer requirements effectively and efficiently. Such supply chaindeveloped by Dell has optimum delivery speed, concerned on various productcategories required by the customers and optimization costs while aligning internalprocesses of the company towards the vision of the company. This is the way that thedell applied operational management to its operations.Operations Management Page 3
  4. 4. 1. b Dell’s focus on operation managementAs described, due to the change in the customer requirements and competition from lowcost products has led dell to rethink on its strategies. Accordingly dell was targeting theonline sale which is a untapped market and therefore they are in the process ofimplementing high speed delivery system to its online customers. Accordingly their mainfocus was to deliver high quality product online.Based on factors such as cost efficiency, choices of products, speed delivery to thecustomer and personalized service dell has segmented its supply chain which addressto customer requirements effectively and efficiently. Dell was following the costleadership strategy where they focus on reducing the production cost by eliminating nonvalue added parts. Further they followed total quality management (TQM) to improvethe quality of the products while minimizing the cost and lower defects. Accordingly theyare producing computers with high quality and zero defects. 1.c Environmental factors affecting the dells operationsIt is noted that there are several key environmental factors that affects to the operationsof dell. Political factors o Environmental issues Dell may face to environmental issues with regard to its manufacturing plant across the world such as carbon emission, green house gas etc o Government policies Existing government policies such as policies relates to the employment may affect the dells operationsOperations Management Page 4
  5. 5. o Wars and conflicts among countries Dell’s operational activities may be affected by wars conflicts and civil unrest of countries. o Future legislations Government’s future legislations may be affects to the dell’s operations. o Trading policies Trading policies among the companies may affect the dell’s operations Economical factors o Economic stability of the home country Economic stability of USA which is the home country of dell may be affects to operational activities of dell. Accordingly if the USA economy is stable dell’s operations may also perform well. o Global economic condition Since dell is operating globally, global economic condition may also affect to the dell’s operations. o Market trends Since dell is engaged in computer business market trends around the world may affect to its operations. o Interest rates and exchange rates Since dell is operated all around the world operations may be affected for the changes in interest rates and exchange rates.Operations Management Page 5
  6. 6. o International trade and monetary issues o Specific industry factors Social factors o Lifestyle trends of the customers o Demographic dispersion of customers o Consumer attitudes towards the company and products o Views expressed by media o Consumer buying patterns o Advertising and publicity o Ethical issues o Ethnic/religious factors Technological factors o Technological trends and developments o Research and development expenditures incurred by the dell o Maturing of technology and becoming obsolete o Legislations relating to technological activities o Potential innovation in computer industry o Information and communication 2. Strategic operational management 2.a Operation strategies of dellOperations Management Page 6
  7. 7. Operational strategy has a horizontal relationship with other functional strategies while it has vertical relationship with corporate strategy. It can be noted that there are several strategies that suits for dells operations  Products are manufactured for orders placed by the customers  Products are manufactured to order  Products are developed with the expectation of demand  Make to stock  Products and services are customized according to the customer specifications Out of the above mentioned strategies following strategies are applicable for dell’s operations.  Products are manufactured for orders placed by the customers It can be noted that dell assemble computers upon the request from its customers and therefore this operation strategy can applicable to dell’s operations.  Products and services are customized according to the customer specifications Dell’s strategy is to deliver customer specific computers to customers based on their request. Thus it is more beneficial for dell to implement this strategy as it aligned with the dell’s main activities.2.b operation strategy suitable for dell’s operations The operational strategy that dell adopted is build to order and customized products that suits for customer requirements. Since dell has good customer relationship it knows the customer needs and wants and therefore it has knowledge about theOperations Management Page 7
  8. 8. future customer requirements unless any significant change has occurred in the computer market and technology. It is dell’s strategy to discuss with its customers and identify their future requirement of personnel computers, servers and work stations. Dell was operating in the industry more than 20 year and it gives then a competitive advantage over competitors such as HP and Acer. Therefore the best suitable operation strategy for dell is to manufacture customized products based on the customer request and the build to order strategy where the company expects that the customers will order such product in the future. By this dell can offer various new products every day to its customers and improve its brand name. Other than those mentioned operation strategy dell use direct sales methods to cater to its customers. Under this method without going through dealers and other third parties dell obtain direct feedback from end customers and cater to their specific requirements. This helps dell to obtain a competitive advantage and first mover advantage over the other competitors. The customers also satisfied with such practice as they can directly communicate with the manufacturer instead of a third party.2.c corporate strategy and operational management Corporate strategy refers to the setting overall goals and objectives of the organization that determine the future path of the organization. Such corporate strategy is facilitated by business strategies such as marketing strategy, operation strategy, finance strategy etc. in such context to achieve corporate strategy it is necessary to implement business strategies. Accordingly operational strategy needs to be planned an implemented with the intention of achieving corporate strategy which is the ultimate objective of the organization.Operations Management Page 8
  9. 9. In the context of Dell Corporation to achieve overall objectives of the company they have implemented corporate strategy to follow and operational strategy at the operational level. For example if the corporate strategy emphasize the timely delivery of goods to end customers, the operation strategy ensures the timely supply of parts by suppliers and effective and efficient assembling in the manufacturing plant. Finally timely delivery can be achieved as other activities also taken place effectively on-time without a delay.3. Organization of operation process 3.a Factors affecting product designKey factors affecting Product design can be explained as followsOperations Management Page 9
  10. 10. Reasons to consider these factors in product designing,Out of the total sales of dell 90% of represents to business entities, government officesentities and in most situations personnel computers and work stations are used inmanufacturing plant for production activities or to provide support activities inmanufacturing plants. By identifying the specific requirements of the users dell hasdesigned customized computers which resulted in generating significant amount ofsales for the company. Dell performs this task by identifying the specific requirements ofcustomers whether it is for a hard use or at home use.If dell produces computers that are used at home for factory purposes and vise versathey will not be able to satisfy the customer requirements. Moreover dell needs to takein to account other factors in product designing such as current trends and technologicaldevelopments which might affect adversely to the dells operations.3.b Layout of DellThe operation layout may have a impact on customer or information, material and the distancethey transport. The main concentrate of layout is on the length of travelling and quality of theproduct thereafter.If the operations of the organization including customers, information or materialspasses continuously from one location to another location it will have a impact on thequality of the end product. Next throughput will be affected by the layout where the timespent for transport will be reflected in the operations as well. Finally the space requiredwill be affected to the layout where it has a direct impact on the cost of operations fo theentity.Operations Management Page 10
  11. 11. Process layoutDell’s strategy is to manufacture computers based on the customer requirements andthis it needs to have a flexible layout for manufacturing process which helps to itsstrategy. Most importantly, Dell changed its production in to large scale customizationwhich compelled it to adopt quickly changeable layout which enable dell to perform widerange of different processing requirements. Dell can use this process layout for itsmanufacturing purposes as it is more suitable for dell’s production strategies etc.Process layout is also call functional layout since transforming materials having samefunctional aspects are grouped in to a one set. Using different sectors of conversionresources in many various techniques, products having diverse requirement will bemanufactured where it is very stretchy on developing and it permits to manage withwide series of diverse requirements in processes. in the meantime it is difficult toprovide accommodation with flows crossing similar characteristics and crossings withirregular paths.Cell layoutSuch layouts are use to reduce the complexity of the procedure layout. It use to splitresources with small groups where it can be used with wide variety of goods or productgroup of goods as well.This can be applied only for selected products which needs some precise arrangementto reduce the disadvantages of process layout.3.c Approaches to work measuremajor methods that are use to quantify work and initiating standard are work samplingand time study. Nature of the work itself chooses the alternative of the method that isgoing to utilize in each level. Time study analysis is used for very thorough andOperations Management Page 11
  12. 12. respective operations where work sampling is used in operation that involve long cycletime and which is uncommon.Time studyTechniques used in the stop watch are used in time study. There it can evaluate avideotape for the job or at the same time itself. Accordingly the job / task need to dividein to quantifiable fractions and each part needs to be quantified on timely manner andindividuallyWork samplingThis is a different technique used to measure a activity which is work sampling methodThis includes viewing or inspection of a section of a relevant work related task. Afterthose observations statement can be made about the work activity with based onfindings. 4. Planning and controlling operationsManufacturing ability that need for a firm to manufacture its products can be defined ascapacity planning. Therefore ability can be recognized as highest amount of activity thatthe company can manage at a given time. This can be elaborated by no of maximumunits that the company can manufacture at a given amount of time4.a Capacity planning for sales operation activity at dellDell can use order cycling system in capacity planning for sales activities. Dell can savemoney and time from this system by carrying out checks in regular intervals andreordering the required products which will not adequate when next check takes place.However, since dell has follows just in time procurement technique and direct salesmethod and mass customization of personnel computers and Work stations areproduced according to customer requirements. Further dell is encouraged to maintain alsessor space for stores activities. Which in turn save cost and timeOperations Management Page 12
  13. 13. 4.b Inventory planning methods MRP Planning MethodIf the company can predict the demand company do not need to have a mainmanufacturing plan. Thus MRP Planning used for such items where they use maindemand list to have a material requirement plan.Moreover MRP can be used use for the items which have a strong dependency with thedemand. Min-Max Planning methodIn this method it identify the minimum number of units that need to have on the hand,when reached to the reorder level.. This can be explain to highest amount as well withexceeding limit. Reorder Point Planning MethodCompany may also need to establish stock control technique item attribute to ReorderPoint planning to provide automatic order processing4.c Different approaches of quality control adopted by DellIn order to meet customer requirements Dell provide effective answers as they haveconcentrated on basic standards that can be lead the company to innovative and cuttingedge technology. They have built their strength in the computer market with futureinnovation tactics that enable home office and enterprise level customers to bebenefitted at any time. Dell is in the objective to maintain its products with morechoices that the customers can select by having good rapport with best suppliersmarket in other related felids and keep the cost at a minimum level.Operations Management Page 13
  14. 14. With best partnership and continuing levels of standards, dell was able to maintain andachieve lots of accomplishments and cutting edge technologies. Those are, Display Port which helps high resolution, high performance flat panel displays which uses for display interfaces and applications Standard method management tools on managed nodes, such as storage, servers, switches, printers and client systems Standard formatting for sorting RAID configuration information to enable interoperability between different RAID suppliers.Operations Management Page 14
  15. 15. ConclusionThis report is presented to the management of Dell Corporation in relation to theoperation management of the company. This operation function of dell is identified asactivities relating to supply chain management such as procuring materials required forthe manufacturing to distributing a personnel note book or work station to its customersand services provides after the sales. Accordingly dell has used its order manufacturingstrategy with Just in time system with the intention of increase the efficiency andeffectiveness of its operational activities which concentrated on timely delivery ofproducts to its customers. Further it is also revealed that selling products directly to thecustomers has led dell to reduce its inventory requirements unlike its competitors. This itis not necessary for dell to depend on resellers to clear the stock before technology getsoutdated. It is revealed that dell is aiming at obtain a competitive advantage over itscompetitors by redefining its operational aspects.Further it can be noted that the corporate strategy of dell is aligned with the operationstrategy accordingly top management decisions focused on the future of theorganization is having a greater impact on the operational aspect of the company.Operations Management Page 15
  16. 16. Operations Management Page 16
  17. 17. References 1. Dell,2012,Dell Inc,<Http://www.dell.com> 2. Ferdows, K. and de Meyer, A. (1990) ‘Lasting improvement in manufacturing’, Journal of Operations Management 3. Gartner (2010), Case Study for Supply Chain Leaders: Dells Transformative Journey through Supply Chain Segmentation. 4. Roberta Russell & Bernard W. Taylor 2006, Operation strategy. 5. Dian Inda Sari 2008, Operation and How It Makes Work at DellOperations Management Page 17

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