Practice Operations Simulation & Analysis, Part 2

Practice Operations Simulation & Analysis, Part 2

Team C

OPS/571

Practice Operations Simulation & Analysis, Part 2

Introduction

For week 5 Team C had to complete the second part of the practice operations simulation and analysis which consisted of modules three and four. The module four practice simulations was designed to allow each student to control the bidding along with running the rest of the manufacturing process which includes hiring, bidding, production, shipping and receiving. In module four we also examined the impact of constraints and bottlenecks on a manufacturing business. In these modules we had to plan our decision making process as well as assess the difficulties of matching capacity to demand.

Summary of Team Results

In Week 5 Module’s 3 & 4 we learned how to stay on top of the whole operation; from hiring to bidding. We all did fairly well in Module 3, but Module 4 was much harder. As an Operations Manager you are involved in all aspects of the business and it is important to stay on top of it all, or you will be behind. As we learned in Module 4, trying to make sure supplies are ordered, bidding on new accounts and making sure everything is flowing properly is not that easy. Going from Module 3 where we had help and a pretty good understanding, we tried to use the same strategy and we failed. We all took Module 4 twice and what we did the first time we tried to refine or change the second time, but either we got further behind or ahead, but too far to reach our goal. We did learn how to properly bid on certain contracts, but that was our focus at one point, thus making it hard to stay on top of everything else. Module’s 3 & 4 was a true learning experience that tied all we have learned over the last five weeks making us really think on how to improve our strategy and be a better Operations Manager.

Major Decision Points

Just as we did in the first two practice operation and analysis modules this second set of simulations was similar in that we had to apply the forecasting of contracts and HR planning scenarios we learned in class. For module three which included forecasting contracts, along with running the rest of the plant, the simulation gave each team member the chance to bid on contracts and to coordinate with all department heads to make sure there were enough materials available to complete the contracts and that the production area had sufficient equipment. Some of the challenging aspects of this simulation included trying to hold costs down as there were higher shipping costs, materials not delivered in time and the production machinery was not producing very efficiently. All these issues created a bottleneck for production which caused the goods to be delivered to the customer in less than a timely manner.

At the very beginning of the module we were forced to hire an employee and the module also required us to upgrade machinery and the training of a department employee. The downside to the machinery is that it could only be upgraded twice and it was still not utilized more than 15-20% of the time. While bidding on the contracts all team members to similar approaches in that we adopted the tactic of bidding on contracts with the client’s that had the same or similar reputation levels as the company did since other bids were summarily rejected even if we lower the price. By selecting contracts with extended due dates allowed the team to complete some contracts early which helped to raise the level of customer satisfaction rating. With the higher reputation level the team was able to bid on higher priced contracts in order to try and increase profits.

While working the modules a continual assessment of the available contracts, materials on hand, equipment availability, and staff was necessary in order to keep the lines and departments moving forward. Even though the team followed best business practices we still had no control over the rapidly created bottlenecks that occurred when production was inefficient and the shipments were not being delivered complete or timely.

Forecasting & S&OP

Most businesses are looking for an edge when it comes to managing their inventory as accurately as possible. Forecasting requires identifying sales trends, seasonality, and projected sales. In Modules 3 and 4 the team was presented with a scenario where we were given information on what items were going to be popular going into a season. The information allowed team members to stock up on raw materials for items that were going to be made in production going into high demand seasons. The bid department also gave quality information on what bids were going to be possible to get so we could prepare our other departments for the potential business that was going to be sent our way. For example, once team member got their reputation up high we were pretty much guaranteed bids from lower level customers. Having this confidence in our bid department allowed us to order up raw material items required to fill those bids and get a head start in our receiving department. Forecasting allowed us to set the wheels in motion sooner and that helped fill orders on time. Once we made our raw material purchases it was important to accurately purchase the inventory needed to create the products demanded by customer bids. An S&OP system aids an organization in purchasing exactly what they need and align their inventory with customer demands. “So what is S&OP? Most definitions are lengthy and crammed with buzzwords, but it boils down to a means by which companies can align production with actual demand, through the merging of tactical and strategic planning methods across any number of organizational silos. S&OP takes into account product design, raw materials, manufacturing capacity, labor, finance, distribution, marketing, sales and customer service.” (Bowman, 2011) An accurate inventory system allows a company to decrease wasteful spending and maintain inventory that moves throughout the organization without carrying dead stock. Module 4 showed the importance of maintaining accurate inventory level especially when we started with a low reputation and only attracted small bids. We did not have the resources to waste money on inventory that was not needed and had to forecast accurately to make the most money possible on each bid.

Theory of Constraints

The theory of constraints is a managing standard that look at any controllable arrangement as being restricted in accomplishing more of its goals by a minor amount of restrictions (“What Is The Theory Of Constraints?”, 2011-2016). There is always going to be at least a single restriction, and the theory of constraints uses a concentrating procedure to categorize the restriction and reorganize the rest of the association around it. Theory of constraints implements the mutual phrase “a chain is no stronger than its weakest link.” (“What Is The Theory Of Constraints?”, 2011-2016) which means that procedures, establishments, are helpless since the weakest individual or share can constantly harm or break them or at least unfavorably affect the result. The Theory of Constraints is a procedure for a company recognizing the most significant preventive issue that stands in the way of attaining a goal and then thoroughly educating that limitation until it is no longer the limiting factor (“What Is The Theory Of Constraints?”, 2011-2016). When it came to the simulation that our team had to do for the company I know when I speak for the rest of the team that the second module was indeed a task that was very difficult to complete. So, this does tie into the fact of the saying a chain is not going to be stronger than its weakest link. I remember in my module that one of my machine broke down towards the end and I could not repair it enough in time to fix it to get the contract completed which did cause me to fail the module. In the end, it creates a bad domino effect but having one bad thing go wrong that can affect the whole entire company.

Evaluation of Team Members Results

This week’s modules we all decided to take module 4 twice, thinking we can do better second time around. In the end we did a little better, but not by much. Some of our strategies consisted of producing one or two items that use the same material like cotton or keeping the production team busy. By only producing a product that uses the same material like socks or t-shirts, you do not have to purchase new equipment. Another strategy was to ship out products when at least half the order was done, but it did increase shipping costs. When it came to bidding on contracts, it was smarter to bid with companies that had the same reputation as us; which made it easier to win. As the reputation increased, we increased our contracts. Our downfall was we focused on one aspect, instead of the whole operation. An example of this is some of focused on receiving, but neglected production or focused on shipping, but not bidding on viable contracts. Deciding on what is a priority was harder than it seemed, because it caused us to neglect other aspects of business. In seeing where we went wrong the first time, helped the second time around, but it also hindered us to do better on the module.

Defend Best Options

The best performance was for module three, and it was about forecasting and contracts. Furthermore, forecasting the materials of the season allowed for the module three to be completed successfully. With Module 4, it was difficult for the group to complete successfully. Many of attempts were made in different ways by this team. Based on the results, the best option was to produce products that the manufacturing business had the equipment for in stock. The workers had to carefully be picked in order to make sure that the cost of labor did not go over the cost of the project. Also, it was crucial to make sure the production did not stop. The staff members had to be paid even if the machines were running or had stopped running.

Conclusion

Team C had interesting experiences when completing modules three and four. Module three appeared to fairly straight forward however module four was very challenging and required an application of multiple concepts at the same time. Even though all team members failed the fourth module this might not indicate the theory of constraints and learning curve theory could be applied to the simulation because each team member had to make critical decisions as well as override the existing operation processes and to deeply think about each and every step of production. Team C feels that the simulations were useful in practicing the principles of design, supply chain, management, and forecasting.

References

Bowman, Robert J. 2011, April 25. “What is this thing called S&OP?” Retrieved from:http://www.supplychainbrain.com/content/blogs/think-tank/blog/article/font-size2what-is-this-thing-called-sopfont/

Manktelow, J., Jackson, K., Edwards, S., Eyre, E., Cook, L., & Khan, B. (2016). The theory of constraints (TOC): Strengthening your “weakest link”. Retrieved on June 14, 2016, from https://www.mindtools.com/pages/article/toc.htm

What is the Theory of Constraints?. (2011-2016). Retrieved from http://www.leanproduction.com/theory-of-constraints.html