MB0044 – Production & Operations Management (Assignment 2 Answers)
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Master of Business Administration
MB0044 – Production & Operations Management
Q1. Explain Logical Process Modelling and Physical Process Modelling. What are the ingredients of business process?
Logical Process Modelling
Logical Process Modeling is the representation of putting together all the activities of business process in details and making a representation of them. The initial data collected need to be arranged in a logical manner so that, links are made between nodes for making for the workflow smooth. The steps to be followed to make the work smoother are given below:
Capture relevant data in detail to be acted upon.
Establish controls and limit access to the data during processes execution
Determine which task in the process is to be done and also the subsequent task in that process.
Make sure that all the relevant data is available for all the tasks.
Make the relevant and appropriate data available for that task.
Establish a mechanism to indicate acceptance of the results after every task or process.
This is to have an assurance that flow is going ahead with accomplishments in the desired path. Some of these activities may occur in a sequential order whereas some of them run parallel. There may even be circular paths, like re-work loops. Complexities arise when the processes activities are not connected together. Logical processes model consists of only the business activities and shows the connectivity among them. The process model is a representation of the business activities different from the technology dependent ones. Thus, we have a model that is singularly structured only for business activities. Computer programmes are also present in the total system. This allows the business-oriented executives to be in control of the inputs, processes and outputs. The logical process model improves, control on the access to data. It also identifies, who is in possession of data at different nodes in the data flow network that has been structured. A few of the logical modeling formats are given below.
1. Process Descriptions with task sequences and data addresses.
2. Flow chart with various activities and relationships
3. Flow diagrams
4. Function hierarchies
5. Function dependency diagram
Every business activity, when considered as a logical process model, can be represented by diagram, it can be decomposed and meaningful names can be given to the details. Verb and noun form combinations can be used to describe at each level. Nouns give the name of the activity uniquely and are used for the entire model meaning the same activity.
PHYSICAL PROCESS MODELLING
Physical process modeling is concerned with the actual design of database meeting the requirement of the business. Physical modeling deals with the conversion of the logical model into a relation model. Object gets defined at the schema level. The objects here are tables created on the basis of entities and attributes. A database is defined for the business. All the information is put together to make the database software specific. This means that the objects during physical modeling vary on the database software being used. The outcomes are server model diagrams showing tables and relationships with a database.
BELOW ARE THE INGREDIENTS OF BUSINESS PROCESS.
The ingredients that might be used in a business process can be briefly outlined as shown below.
The data, which accomplishes the desired business objective.
Acquisition, storage, distribution, and control of data, which undertakes the process across tasks.
Persons, teams, and organizational units, which helps to perform and achieve the tasks.
Decision, which enhances the value of data during the process.
Q.2 Explain Project Management Knowledge Areas. With an example explain work breakdown structure.
The knowledge areas of project management are the following:
Project integration management cost management, communications management.
Project scope management, quality management, risk management
Project time management, human management, and procurement management.
For a project to be successful, it is necessary to understand its relationship with other management disciplines. Other management supporting disciplines are business legal issues, strategic planning, logistics, human resource management, and domain knowledge.
WORK BREAK DOWN STRUCTURE.
The entire process of a project may be considered to be made up on number of sub process placed in different stage called the work breakdown structure (WBS).WBS is the technique to analysis the content of work and cost by breaking it down into its component parts. Projects key stages from the highest level of the WBS, which is then used to show the details at the lower levels of the project. Each key stage comprises many tasks identified at the start of planning and later this list will have to be validated
WBS is produced by identifying the key elements, breaking each element down into component parts and continuing to breakdown until manageable work packages have indentified.These can then be allocated to the appropriate person. The WBS does not shown dependencies other than a grouping under the key stages. It is not time based- there is no timescale on the drawing. Chart is showing the example of work break down structure.
A Work Breakdown Structure is a results-oriented family tree that captures all the work of a project in an organized way. It is often portrayed graphically as a hierarchical tree, however, it can also be a tabularlist of “element” categories and tasks or the indented task list that appears in your Gantt chart schedule. As a very simple example, Figure 1 shows a WBS for a hypothetical banquet.
Q.3 Take an example of any product or project and explain project management life cycle.
A life cycle of a project consists of the following steps.
Understanding the scope of the project.
Establishing objectives of the projects
Formulating and planning various activities.
Executing the project
Monitoring and controlling the project resources.
Closing and post completion analysis
Phases of Project Management Life-Cylce.
Project management life cycle has six phases:
Analysis and evaluation phase.
Control inspecting, testing, and delivery phase
Closure and post completion analysis phase.
Analysis And Evaluation Phase:
Analysis and evaluation phase is the initial phase of any project. In this phase, information is collected from the customer pertaining to the project. From the collected information, the requirements of the project are analyzed. According to the customer requirement, the entire project is planned in a strategic manner. The project manager conducts the analysis of the problem and submits a detailed report to the top management.
A project proposal is prepared by a group of people including the project manager. This proposal has to contain the strategic adapted to market the product to the customer.
Design phase involves the study of inputs and outputs of the various project stages.
It consists of project feasibility study, preliminary project evaluation details, project proposal, and customer interviews.
It consist of system design specifications, functional specifications of the project, design specifications of the project and project plan.
In execution phase, the project manager and the term members work on the project objectives as per the plan. At every stage during the execution, reports are prepared.
Control- Inspecting Testing and Delivery Phase:
During this phase, the project team’s works under the guidance of the project manager. The project manager has to ensure that the team working under him is implementing the project designs accurately. The project has to be tracked or monitored through its cost, manpower, and schedule. The project manager has to ensure ways of managing the customer and marketing the future work, as well as ways to perform quality control work
Closure and Post Completion Analysis Phase:
Upon satisfactory completion and delivery of the intended product or service the staff performance has to be evaluated. The project manager has to document the lessons from the project. Reports on project feedback are to be prepared and analyzed. A project execution report is to be prepared.
Let us have a quick recap of what is involved in the above phases
Analysis and evaluation phase:
The preparation stage involves the preparation and approval of project outline, project plan, and project budget.
Assigning task to the team members:
The next stage involves selecting and briefing the project team about the proposals, followed by discussions on the roles and responsibilities of the project member and the organization.
The feasibility or research stage establishes whether the project is feasible or not and establishes the risk factors likely to be faced during the course of the project execution and the related key factors to overcome the problem
A detailed definition and plan for the project and its execution is prepared by the team and coordinated by the project manager.
The implementation stage involves the execution of the project as per the plan, this also involves careful monitoring of the project progress and managing the changes, if any, within the scope of the project framework.
Closure and post completion analysis phase:
The final stage involves satisfactory delivery of the product/service to the customers. Upon completion, a project review is to be conducted by the project manager along with team member, sponsors, and customer. Project review process involves discussions about the progress, performance, hurdles that were overcome and problems faced, so that, such instances could be avoided in future projects.
Q.4 Explain PMIS. What Is Difference Between Key Success Factor (Ksf) And Knowledge(K) Factor ? Explain With Examples.
Ans. PMIS (Project Management Information System)
An information system is mainly aimed at providing the management at different levels with information related to the system of the organization. It helps in maintaining discipline in the system. An information system dealing with project management tasks is the project management information system. It helps in decision-making in arriving at optimum allocation of resources. The information system is based on a database of the organization. A project management information system also holds schedule, scope changes, risk assessment and actual results.
The information is communicated to managers at different levels of the organization depending upon the need. Let us find how different stakeholders use a project management information system.
The four majors aspects of a PMIS are:
Providing information to the major stakeholder.
Assisting the team members, stakeholders, managers with necessary information and summary of the information shared to the higher level managers.
Assisting the manager in doing what if analysis about project staffing, proposed staffing changes and total allocation of resources.
Helping organizational learning by helping the members of the organizations lean about project management
Usually, the team members, and not the systems administrators of the company, develop a good PMIS. Organisations tend to allocate such responsibility by rotation among members with a well designed and structured data entry and analytical format.
Example of Key success factors
According to TeachMeFinance.com, a turnkey project is “a project in which a builder/developer contracts to construct a completed facility that includes all items necessary for use and occupancy.”Unfortunately, many turnkey businesses never capture the interest of the buyers. Whether you’re building in brick and mortar or building in computer code, there are several factors critical to the success of your turnkey project.
Know the Business
Several businesses can be set up as turnkey businesses, from food service to copy management to telemarketing and sales. Whichever you decide, it is important to have an intimate knowledge of the business you are building. One key factor in a successful turnkey business is being able to anticipate the needs and desires of the potential owners before they are brought onboard. A salesman, for example, looking to purchase a turnkey sales business will need an office as a base of operations; but since so much of the sales process is done through phones, computers and other electronic devices, the turnkey developer may want to include additional power outlets in the construction of the building, or desks with onboard power strips and surge protectors. These small additions can make a turnkey project a success.
Know the Area
Internet businesses often have nationwide access to clientele, but brick-and-mortar turnkey operations sometimes run into trouble in areas poorly suited to the service they offer. For example,an outdoor food service stand opening in Wilkes-Barre, Pennsylvania, will not do as much business(at least during the winter months) as one opening in an Orlando, Florida, theme park. Knowing the area where you are constructing your turnkey business includes knowing the weather conditions,the dominant demographic, the current popularity and number of businesses like the one you are creating and the average income of the public. Planning a turnkey business that uses these factors to its advantage will make the business more readily sellable.
Turnkey businesses are designed to be ready to operate as soon as the buyer takes ownership. Still, once they are sold, many businesses of this type run into problems when it comes to resupplying, logistics and advertising. Because of this, many buyers are wary of turnkey operations. One way to quell any “down the road” fears is to have this part of the infrastructure accounted for. Make contact with businesses which help advertise businesses, ship products, supply copy paper and any other stock the owner might require. Obtain discounts from as many as possible
Most organisations are aware that in today’s highly competitive environment managing effectively their knowledge is the only way to achieve a sustainable competitive advantage. One of the primary areas to which knowledge management can be applied is the field of project management. An increasing number of business sectors are adopting a project approach to carry outa range of essential activities where valuable knowledge is gained. Knowledge from projects is an important resource for further projects, because projects solve innovative and interdisciplinary tasks. However, the majority of organisations do not manage the information gained through past projects. Failure to transfer knowledge from past to future projects leads to wasted activity and unnecessary expenses by ‘reinventing the wheel’.
Therefore, knowledge management is a critical success factor for many projects. The purpose of this Management Report is to approach knowledge management from the perspective of project management. The main objective is to define how knowledge management can be enhanced within a project by analysing suitable tools and relevant theories. The research is based on the high-speed train project XY of the company XXX. This project is an important milestone for XXX to improve its market position in Spain. T
The knowledge gained through the XY project will be the key factor for the success of the further high-speed train projects. The main finding of the case study highlights that there is a lack of formal knowledge management activities at the project. The project team focuses mainly on personal interaction for transferring knowledge and information technology is not used to its full potential. A hybrid approach to knowledge management for project environments is suggested, taking into account technical as well as human-specific aspects. The main recommendation is to determine a knowledge management strategy, which preferably focuses on transferring tacit knowledge and gives information technology a support function. Other areas of improvement are creating an open and constructive project culture, including knowledge initiatives in reward systems and fostering documented project review sessions. Finally, general conclusions are provided to answer the main research question of this management report.
Q.5 Explain the seven principal of supply chain management. Take an example of any product in the market and explain the scenario of Bullwhip effect.
Ans: Seven Principles Of SCM are:
1. Group customer by needs: Effective SCM groups customers by distinct service needs,regardless of industry and then tailors services to those particular segments.
2. Customize the logistics networks: In designing their logistic network, companies need to focus on the service requirement and profit potential of the customer segments identified.
3. Listen to signals of market demand and plan accordingly: sales and operations planners must monitor the entire supply chain to detect early warning signals of changing customers demand and needs. This demand driven approach leads to more consistent forecast and optimal resource allocation.
4. Differentiate the product closer to the customer: companies today no longer can afford to stock pile inventory to compensate for possible forecasting errors. Instead, they need to postpone product differentiation in the manufacturing process closer to actual consumer demand. This strategy allows the supply chain to respond quickly and cost effectively to changes in customer needs.
5. Strategically manage the sources of supply: By working closely with their key suppliers to reduce the overall costs of owning materials and services, SCM maximizes profit margins both for themselves and their suppliers.
6. Develop a supply chain wide technology strategy: As one of the cornerstones of successful SCM, information technology must be able to support multiple levels of decisions making. It also should afford a clear view and ability to measure the flow of products, services and information.
7. Adopt channel spanning performance measures: Excellent supply chain performance measurement systems do more than just monitor internal functions. They apply performance criteria to every link in the supply chain-criteria that both service and financial metrics.
BULLWHIP EFFECT IN SCM
An organization will always have up and downs. It is necessary that the managers of the organization keep track of the market conditions and analyze the changes. They must take decisions on the resources and make necessary changes within the organization to meet the market demands. Failing to do so may results in wild swings in the orders.
A truck driver delivers beer once each week to the retailer. Then the retailer places an order with the trucker who returns the order to the wholesaler. There’s a four-week lag between ordering and receiving the beer. The retailer and wholesaler do not communicate directly. The retailer sells hundreds of products and the wholesaler distributes many products to a large number of customers. The following represents the results of a typical beer game:-
3.1 The Retailer
Lover’s Beer is not very popular but the retailer sells four cases per week on average. Because the lead time is four weeks, the retailer attempts to keep twelve cases in the store by ordering four cases each Monday when the trucker makes a delivery.
The retailer’s sales of Lover’s beer doubles to eight cases, so on Monday, he orders 8 cases.
The retailer sells 8 cases. The trucker delivers four cases. To be safe, the retailer decides to order 12 cases of Lover’s beer.
The retailer learns from some of his younger customers that a music video appearing on TV shows a group singing “I’ll take on last sip of Lover’s beer and run into the sun.” The retailer assumes that this explains the increased demand for the product. The trucker delivers 5 cases. The retailer is nearly sold out, so he orders 16 cases.
The retailer sells the last case, but receives 7 cases. All 7 cases are sold by the end of the week. So again on Monday the retailer orders 16 cases.
Customers are looking for Lover’s beer. Some put their names on a list to be called when the beer comes in. The trucker delivers only 6 cases and all are sold by the weekend. The retailer orders another 16 cases.
: The trucker delivers 7 cases. The retailer is frustrated, but orders another 16 cases.
: The trucker delivers 5 cases and tells the retailer the beer is backlogged. The retailer is really getting irritated with the wholesaler, but orders 24 cases.
3.2 The Wholesaler
The wholesaler distributes many brands of beer to a large number of retailers, but he is the only distributor of Lover’s beer. The wholesaler orders 4 truckloads from the brewery truck drive reach week and receives the beer after a 4 week lag. The wholesaler’s policy is to keep 12 truckloads in inventory on a continuous basis.
By week 6 the wholesaler is out of Lover’s beer and responds by ordering 30 truckloads from the brewery.
By the 8th week most stores are ordering 3 or 4 times more Lovers’ beer than their regular amounts.
The wholesaler orders more Lover’s beer, but gets only 6 truckloads.
Only 8 truckloads are delivered, so the wholesaler orders 40.
Only 12 truckloads are received, and there are 77 truckloads in backlog, so the wholesaler orders 40 more truckloads.
The wholesaler orders 60 more truckloads of Lover’s beer. It appears that the beer is becoming more popular from week to week.
There is still a huge backlog.
The wholesaler receives larger shipments from the brewery, but orders from retailers begin to drop off.
The trucker delivers 55 truckloads from the brewery, but the wholesaler gets zero orders from retailers. So he stops ordering from the brewery.
The wholesaler receives another 60 truckloads. Retailers order zero. The wholesaler orders zero. The brewery keeps sending beer.
3.3 The Brewery
The brewery is small but has a reputation for producing high quality beer. Lover’s beer is only one of several products produced at the brewery.
New orders come in for 40 gross. It takes two weeks to brew the beer.
Orders continue to come in and the brewery has not been able to catch up on the backlogged orders. The marketing manager begins to wonder how much bonus he will get for increasing sales so dramatically.
The brewery catches up on the backlog, but orders begin to drop off.
By week 18 there are no new orders for Lover’s beer.
The brewery has 100 gross of Lover’s beer in stock, but no orders. So the brewery stops producing Lover’s beer.
. No orders. At this point all the players blame each other for the excess inventory. Conversations with wholesale and retailer reveal an inventory of 93 cases at the retailer and 220 truckloads at the wholesaler. The marketing manager figures it will take the wholesaler a year to sell the Lover’s beer he has in stock. The retailers must be the problem. The retailer explains that demand increased from
4 cases per week to 8 cases. The wholesaler and marketing manager think demand mushroomed after that, and then fell off, but the retailer explains that didn’t happen. Demand stayed at 8 cases per week. Since he didn’t get the beer he ordered, he kept ordering more in an attempt to keep up with the demand. The marketing manager plans his resignation.
3.4 Lessons from the Beer Game
1. The structure of a system influences behavior. Systems cause their own problems, not external forces or individual errors.2. Human systems include the way in which people make decisions.3. People tend to focus on their own decisions and ignore how these decisions affect others.
3.5 Lessons Related to the Learning Disabilities
1. People do not understand how their actions affect others.2. So they tend to blame each other for problems.3. Becoming proactive causes more problems.4. The problems build gradually, so people don’t realize there is a problem until it’s too late.5. People don’t learn from their experience because the effects of their actions occur somewhere else in the system.
Stock variability amplification in a supply chain due to Bullwhip Effect