Operations Management Assignment

UGB 233; Operations Management; Michael Winship

Operations Management – Holly Farm

‘Operations Management is about how organizations produce goods and services.

Everything you wear, eat, sit on, use, read or knock about on the sports field comes to

you courtesy of the operations manager who organized it’s production’.(Slack and

Chambers 2007)

This report will look at the questions that have been raised supporting the case study of

Holly Farm, the report will be structured in the format of a report through listing the

various questions in turn.

Question One – Identify the main micro-operations to be found at Holly Farm .For each one identify the

transformation process including the transforming inputs, the transformation processes

and the transformed out puts.

From reading the case study into Holly Farm it can be said that it is identifiable what the

main micro operations within Holly Farm are which are the following;

Farm Parking

Tours Of The Farm

The Milking Parlour

Ice Cream Production

What are Micro Operations?

Micro Operations can be defined as ‘the major external and uncontrollable factors that

influence an organizations decision making,and affects its performance and strategies.

These factors include the economic factors, demographics, legal, political, and social

conditions technological changes and natures forces’ (www.businessdictionary.com)

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What are Macro Operations?

Macro Operations can be defined as ‘conditions, entities, events and factors

surrounding an organization that influence its activities and choices, and determine its

opportunities and risks, also called operating environment.

(www.businessdictionary.com)

Source; Slack and Chambers, 2007

The diagram above shows the transformation output model of operations it shows that

before goods and services and sent out for the customer to buy there is a

transformation process that must be undertaken first. This diagram also shows that

there are both transformed resources and transforming resources that go into the

transformation process. The transformation process itself as it says on the model must

conform to the model otherwise the process will not be complete and problems will begi

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The transformation processes within Holly Farm are detailed below;

Micro Process Input Transformation Output

Ice Cream

Manufacturing

Transformed -

Ingredients, Cream,

Sugar, Packaging,

Cleaning Products.

Transforming –

Manufacturing

Equipment,

Freezers,

Mixers,Labour

Mix Product,

Package and Label

product, Freeze

Product, Clean

equipment,

Distribute product

Finished Ice cream

tubs ready for

customers. Various

sizes and flavours

for customers to

enjoy. 350 ice

creams made each

day for customers to

enjoy. One flavour

of ice cream is

made each day.

Milking Transformed – 150

cows to be milked.

Turntable for these

150 cows to be

milked on.

Transforming-

Carousel Parlour in

which the cows are

milked. Purpose

built gallery for up to

twelve visitors to

watch the milking

process.

Cows are milked for

about 2.5 hours

during the time of

4.30pm and 7pm.

Spectators like to

view for ten minutes

and can view an

explanatory tape for

five minutes.

The milking process

is complete, with

milk being produced

from the cows.

Tours Transformed –

Trailors for the

visitors to be able to

The trailor allows


access all areas of

Visitors are able to

see all aspects of

the farm, and be

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tour the farm.

Transforming- The

farm staff are

needed to drive the

trailors so visitors

can get around the

farm.

the farm. able to see what the

day to day running

of the farm is like.

Visitor Parking Transformed –

Various coach

companies that are

escorting visitors to

the farm need to be

made aware of how

to get to the farm..

Visitors to the farm

arrive at 11am when

the farm opens to

visitors.

Transforming –

Space for 40 cars in

the car park. A six

space park for 40

seater coaches

The entrance fee to

visitors is four

pound.

Enough space for


park at the farm.

Children and

families can use the

adventure

playground and

picnic area. Visitors

will need to leave at

7pm this is when

the farm closes.

Question Two; Holly Farm has both service and manufacturing operations. What do you believe are the

order qualifiers and order winners of the 2 operations (Farm Visits and ice cream

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manufacture)? Outline the farm visit service operations and the ice cream

manufacturing operation in terms of the five performance criteria outlined by slack et al

(2010). Justify the relative importance of the criteria and explain the relationship to their

order qualifiers and winners.

What are order qualifiers?

‘Qualifying factors may not by the major competitive determinants of success but are

important in another way. They are those aspects of competitiveness where the

operation’s performance has to be above a particular level just to be considered by the

customer’ (Slack and Chambers, 2007)

What are order winners?

‘Order winning factors are those things which directly and significantly contribute to

winning business. They are regarded by consumers as key reasons for purchasing the

product or service’ (Slack and Chambers, 2007)

Figure 1.0 – Order-winning, qualifying, and less important competitive factors

The diagram in figure 1.0 shows clearly the different ways in which order winning and

order qualifiers are in trying to attract customers to want to use the products and

services that they have again.

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Source; University Of Sunderland Lecture Slides 2011


Slack devised five main performance objectives for operations, the diagrams below

illustrate what these objectives are and also what each of the objectives mean.

Five Performance Objectives

Source; Slack and Chambers

Obtained From; University Of Sunderland Lecture Slides

The next diagram shows what each of the performance objective outlined by slack are

and also what they mean to a business. If a business gets all of the five performance

objectives correct this will mean customers will be happy and will use the business

again.

Performance Objective Analysis of Objective

Quality Quality is all about the overall product and

service that is being offered to customers.

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Quality needs to be of a standard that

customers are happy with so that they will

come back to use the products and

services again. In terms of Holly Farm if

Holly Farm delivers the services that they

say that they will and the four pound

entrance fee offers value money this will

represent good quality.

Speed Speed is all about how long it takes for the

customer to get what they are wanting.

Speed is a key performance objective as

customers do not want to be waiting

around for a while. Speed needs to be

quick enough so that customers are not

wanting longer then they would want to

wait. If terms of Holly Farm if Holly Farm

rushes people around the farm during

tours this will result in visitors not coming

back to the farm as they want to be able to

go round the farm and at relaxed pace.

Dependability Dependability is all about trust, can the

business be trusted to do what they say

they will do. If dependability is good

enough for the customer to be happy with,

the customer will return again and again

and make frequent business. In terms of

Holly Farm if the farm delivers on

everything that it sets out in its programme

for the farm this represents good

dependability. Good dependability within

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Holly Farm also relies on whether there is

enough space for visitors to park and

children to play.

Flexibility Flexibility is all about the firm changing

things to adapt to certain situations. The

company differentiating in what products

and services they offer will help them to be

flexible. In terms of Holly Farm being able

to be flexible allows them to offer

customers more activities for them to do at

the farm at short notice, a measure that

will appeal to customers and make them

want to visit the farm again.

Cost Cost is all about doing things that are not

expensive to the customers to the

business. If cost is cheap enough

customers will return and use the services

again. Cost is arguably the most important

performance objective due to the overall

impact to the customer. The business

needs to set a price that allows them to

make a profit on every customer that uses

the services that they are providing. In

terms of Holly Farm cost is what the

customer pays to visit the farm.

As Holly Farm has many parts and operation to it, it can be said that there are many

forms of order winning criteria within the farm. One of the biggest order winners will be

the price that it charges to visitors, Holly Farm is in direct competition with other farms

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and therefore visitors will look at the four pound entrance fee and compare this to what

other farms are charging before they decide to go to Holly Farm. As Holly farm is

charging four pounds this would be considered to be quite cheap and therefore may

encourage visitors to use this farm rather than others, however if competitors offer free

entrance this would deter visitors going to Holly Farm. In order for Holly Farm to make

the price a sure order winner Holly Farm need to ensure that they are keeping an eye

on the competition and continuing to offer a competitive price and attractions for visitors

to enjoy.

Another major order winner qualifier would be the type of ice cream that Holly Farm

sells, Holly Farm currently manufactures four types of ice cream and therefore some

customers might be happy with the choice of flavors that are being sold. Some

customers might not prefer what is on offer and may appreciate a different choice

meaning that whilst the ice cream may please some customers it might not please all. In

order for Holly Farm to make the ice cream that it sells a definitive ’order winner’ it may

want to look at introducing some other flavours to the product range this will ensure that

all visitors to the farm will be able to pick a flavor that is suitable to them.

The Hill framework as detailed below, illustrates how there are seven main reasons why

products win orders. In terms of holly farm it can be said that out of the seven main

reasons the Hill framework identifies the farm do four of these effectively which are;

Price

Quality

Delivery

Service

Hill Framework

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Obtained From; University Of Sunderland Lecture Slides.

Polar Diagram For Holly Farm

Performance Objective Farm Visits Ice Cream Manufacturing

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Quality 3 5

Speed 1 3

Dependability 3 3

Flexibility 3 2

Cost 5 4

The cost of the visits to the farm have the potential to be the order winning criteria for

Holly Farm this is because of it being quite cheap at only four pounds. The price to visit

the farm will be overall what entices visitors to use the farm this is why this has been

given the maximum score. The ice cream manufacturing has been given a score of four

this is due to like the cost the ice cream manufacturing could be the order winning

criteria as visitors may want ice cream that has just been made rather then it being sat

in a freezer for some time.

Speed has been given a low order winning criteria score this is due to visitors to the

farm wanting to take their time around the farm in order to see all that it has to offer.

Speed will not be an order winning qualifier because visitors to the farm would rather

take their time then be rushed about. The speed for ice cream manufacturing has been

given a satisfactory criteria score this is due to the fact that visitors would be prepared

to wait for their ice cream but would not want to wait a long time for their ice cream to be

produced.

Dependability has been given an order criteria score of three this is because the

dependability of the farm to visitors will be determined once visitors have been and

visited the farm. If visitors can depend on the farm to deliver what they say they will this

will help the farm to achieve a more sustainable order criteria score when it comes to

dependability.

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Question Three;

What is the current design (maximum) and effective capacity of 2 of the Micro Operations;

Parking and Milking Parlour Viewing? Are there any problems in meeting demand?

Capacity can be defined as ‘the maximum amount that can be processed within a

specific time’ (Waters 1991)

Total production time available

Capacity = -------------------------------------------------

Time for one unit

Source; University Of Sunderland Lecture Slides.

Type Of Operation Design Capacity Effective Capacity

Parking Car Parking = 40 Cars in

total with 5 people in each

car = 200 people

Coach Parking = 6 coaches

with 40 people in each =

240 people

200 + 240 = 440 people

4 people normally in a car

(this would be a family

based on 2 adults 2

children) = 40 x 4 = 160

Rounding the coach

parking to the nearest ten

which would be 30. (note

30 has been used as this

would be more suitable for

the farm to estimate how

many people are visiting)

30 x 6 = 180 people visiting

180+160 = 340 people

which mean that there is

100 visitors less than

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normal and the capacity

utilistion is 77%

Milking Parlour Viewing Milking Parlour has space

for 12 people in each 15

minute viewing slot. The

milking process lasts two

hours 30 minutes between

4.30pm and 7pm.

There are ten 15 minutes

periods in 2hr 30 minutes =

12x 10 = 120. Therefore

120 people can view the

milking process between

4.30pm and 7pm

The effective capacity for

the milking parlour can’t be

measured this is due to the

effective capacity being

locked at 12 people in each

time slot. This is due to the

amount of headphones

available to view the milking

process.

Question Four; Gillian intends to increase the number of Farm Visitors by 50% how can capacity/demand

be managed to meet this increase?

Holly farm is a seasonal business and therefore only operates during certain times of the

year this is because demand is too low during other times of the year. Demand for visiting

the farm can be best determined through the busiest month of the year for the farm which

is august. The following diagram below shows the demand for the farm during the busiest

times of the year, the diagram will help to illustrate whether the car parking and milking

parlour is able to handle demand during the peak times.

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Demand per Week is 3400/4 = 850 visitors per week

The farm is open four days per week = 850 visitors / 4 days = 212.5 = 213 visitors per

week

Demand is double that of Monday and Friday = 850/3 = 283.33

Friday = 142 Visitors

Saturday 283 Visitors

Sunday 283 Visitors

Monday 142 Visitors

850 visitors in total

What the demand figure shows is that if the if the farm was in peak period of 283 visitors

per day then the car parking can handle the demand however the milking parlour can

only handle 12 people in the 2hrs 30 minutes due to the limit of headphones available to

view the procedure. If Gillian intends to increase the capacity by 50% further car parking

spaces would need to be constructed as the current structure would not support the

increase. Further headphones would also need to be bought so more people can view

the milking process as currently even though there is over 850 visitors a week only 12

people can view the milking process during the hours of 4.30 and 7pm.

References

Books

Slack N and Chambers, Fifth Edition, Operations Management, Prentice Hall,

2007, Operations Management, Page Two

Slack N and Chambers, Fifth Edition, 2007, Operations Management, Prentice

Hall, Page Number Nine

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Slack N and Chambers, Fifth Edition, 2007, Operations Management, Prentice

Hall, Page Number Sixty Nine

Websites

http://www.businessdictionary.com/definition/macro-environment.html - Date

Accessed 5th May 2011

http://www.businessdictionary.com/definition/external-environment.html - Date

Accessed 5th May 2011

Lecture Slides;

University Of Sunderland Lecture Slides, Operations Management, Assignment

Guidance, Slide Number Four, 2011


Guidance, Slide Number Seven, 2011


Guidance, Slide Number Nine, 2011


Guidance, Slide Number Thirteen, 2011


Guidance, Slide Number Seventeen, 2011

University Of Sunderland Lecture Slides, Operations Management, Lecture

Week Three, Slide Number 10, 2011

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http://www.businessdictionary.com/definition/external-environment.html

http://www.businessdictionary.com/definition/macro-environment.html

Operations Management Assignment

Documents

Transcript of Operations Management Assignment