Production & Operation Management Assignment

1 . Critically evaluate the operation management challenge facing a specific MNC, of your choice-that emphasizes quality.
There are some challenges which are facing by NESTLE

1. How to reduce the cost this is a very crucial problem which are facing by the most of
MNC s because if they will start cut the cost it will directly affect the quality. They are trying to seek how to maintain the quality with reducing the cost. Every company wants to give batter quality product in order to capture the market so they use high technologies and skilled workers, good equipments and machineries and these things make cost heavy.

2. How to understand the market- It is not easy to understand that what are the needs
and requirements of people. Local market condition are changeable with the time, people mind set can be change rapidly so it is very essential to understand global view to provide the products by which people can satisfy their needs and wants. NESTLE every year spend lot of money on Research AND Development to understand the market but NESTLE faced so many problems even

3. Selection of vendor- this is another one problem facing by the most of companies. Products of company are depend on the material which is purchased from vendor if you are not able to select appropriate vendor ,you can face problems like- Bad quality, you do not get material when you need it. NESTLE before selecting the vendor did many research about their past record and Reputation but these all activities seems not sufficient to select appropriate vender.

4. Rising land and labor cost- today there are many issues related to land to sat a factory and labor to get work done there are some countries where businesses are not allowed to actually buy land to operate a business.,. So lack of land is the biggest problem for businesses in the

area. Those determined to operate there must pay for land from another business that already owns the leasehold. NESTLE is facing these problems in CHINA where local governments only sell long-term leases. According to a article in china NESTLE facing another problem which is expensive row material cost and operating cost. Lack of land makes it hard for NESTLE to build new plants and expand their production capacity. 5. Inventory management- to manage a inventory is a very tough task to do because if companies fails to manage inventory cost is became so high as holding cost. Very big problems in inventory management is forecast a future demand and according to future demand order the inventory and manage in such way by which in future there will be no shortage of inventory. In the starting of NESTLE that problem was faced by NESTLE but they had done some batter work to control these problems.

6. Supply chain management-Before making the product and after making the product supply chain management plays a big role as we all know that very well so there will be no doubt that why effective supply chain management is essential to achieve organization s objectives and goals. If a company has done well by making a great product still it does not make any sense until unless it will not deliver to customers at a right time and a right place so manage a supply chain in a effective and proper way to make business successful is not easy as it seems to have. Today there are lot of MNC s which are facing problems related to supply chain management as some problem created by whole seller, some problems created by distributers and some problems are created by management of companies and the consequences are so harmful for the companies .despite of a good product it will fail to perform well in the market because of non-effective supply chain management. MNC s spend lot of money to control these problems and make supply chain management effective in order to make business successful 7.Problems related to decision making- NESTLE(ice cream) right now facing decision making problem regarding to china production unit whether it should be a good decision to run a business in CHINA despite of full knowledge that to run a business there means pay a high cost and even no high market share or shut down the business there. According to a news paper Nestl s share of the market was around 3 percent. 8. Problems related to Quality Control- Control a Quality is mandatory to provide batter quality product. let s have a take example of NESTLE which is facing not much more but a little bit problems in that field .following are some areas where problems are facing by NESTLE asControl on raw material and purchased part-if material is not enough good to make a good product and do not meet quality standard and in expanding time and effort on material that is bad to begin with.

Control on finish goods- replacing products in the field is usually much more costly than doing it at a factory.

9. Problems related to project management- there are some key decisions which are taken by NESTLE if these decisions will not be prove right it will may create a problems for NESTLE.

10. Deciding which projects to be implement- here we take CHINA problem of NESTLE into consideration

11. Planning and designing the project- again we will take above problem in to consideration as what works need to be done in order to get out these problems and how it will be done, what resources will be needed and what will be the budget.

12. Controlling the project resources- this involves managing personnel, equipment and budget, establishing appropriate matrixes for evaluating the project and taking corrective decisions when needed.

13. Deciding when a project should be terminated- sometimes it is batter to terminate the project than to invest many more. If after taking all action Nestle will fail to increase in market share in CHINA then it should terminate business there instead of spending money there.

Q.2 Resolutions to practical operations management problems in the MNC, relevant for the current operating environment1. Establish the globule view by Organization must have open mind (empathy) to establish the global view by which they can learn about solve the problem related to practical operations management as what

ways should adopted to create a demand of their product for eg. Is there any need to improve quality control, what ways are adopted by the other companies.  They have strong ability to learn (learning capability) by which they can learn and think broad about new and innovative ideas which can create demand of their product.  they should change their style or even deny their original vigor and ability to set (change capabilities) 2. Understand the market by- most of companies facing problems in operation management regarding to how to make appropriate decisions as how much production of units will be sufficient to full fill the demand of people and what techniques should be used in operation to make operation successful so there are some ways which can help companies to solve these problems       Batter Research and Development Invest much more on marketing Understand the culture Understand the consumer behavior Understand the social norms Understand different aspect of external and external environment.

      

3. Making appropriate forecast byMaking forecast timely Making accurate forecast Making forecast reliable The forecast should be expressed in meaningful units The forecast should be in writing The forecast techniques should be simple to understand and use The forecast should be cost effective 4. Scheduling- the need for proper scheduling arises from the requirements for the performing multi tasks so companies can do proper scheduling by  Use appropriate techniques for scheduling  Scheduling according to the demand  Scheduling according to situation  Scheduling will be clear and easy.

5. Make a perfect TOTAL QUALITY MANAGEMENT- Organizations should do a hard work to make a perfect quality management .there are some key areas where organizations should consider  Top management- top management has the ultimate responsibility for quality .while establishing strategies for quality, top management must institutes program to improve quality and motivate managers and workers and set an example by being involved in quality initiatives  Design- Quality products and services being with design .this included not only features of the product or services it also includes attention to the processes that will be required to produce the products and the services that will be required to deliver the service to customers.  Procurement- the procurement department has responsibility for obtaining goods and services that will not detract from the quality of the organization s goods and services  Production- production has responsibility to ensure that process yield products and services and confirm to design specifications. Monitoring processes and finding and correcting root causes of problems are important aspects of this responsibility.  Quality assurance- Quality assurance is responsible for gathering and analyzing data on problems and working with operation to solve the problems  Marketing and Sales- this department has the responsibility to determine customer needs and to communicate them to appropriate areas of the organization .in addition, it has the responsibility to report any problems with products and services.  Customer services- customer service is often the first department to learn of problems. it has the responsibility to communicate that information to appropriate departments , deal in reasonable manner with customers , work to resolve problems and follow up to confirm that the situation has been effectively remedied. 6. Determining effective capacity- there are many decisions which have an impact on capacity, there are some factors relates facilities , products or services processes , human consideration , operational factors , the supply chain and external forces.  Facilities- the design of facilities, including size and provision for expansion, is key. Location factors, such as transportation costs, distance to market, labor supply energy sources and room for expansion are also important. Likewise, layout of the work area after determines how smoothly work can be performed , and environmental factors such as heating, lighting and ventilation also play a

 

 

significant role in determining whether personnel can perform effectively or whether they must struggle to overcome poor design characteristics. Products and Service factors- Product and services design can have a tremendous influence on capacity. for example , when items are similar , the ability of system to produce those items is generally much greater than when successive items differ. Thus, a restaurant that offers a limited menu can usually prepare and serve meals at a faster rate than a restaurant with a extensive menu. Generally speaking the the more uniform the output, the more opportunities there are for standardization of methods and materials which leads to greater capacity. the particular mix of products or services rendered also must be considered since different items will have different rates of output. Process factors- The quantity capabilities of a process is an obvious determinant of capacity. A more subtle determinant is the influence of output. Human factors- the task that make up a job, the verity of activities involved and the training skills required to perform a job all have an impact on the potential and actual output; in addition employee motivation has a very basic relationship to capacity. Policy factors- Management policy can affect capacity by allowing or not allowing capacity options such as overtime or second or third shifts. Operational factors- Scheduling problems may occur when an organization has differences in job requirements. Inventory stoking decisions, late deliveries, purchasing requirements, acceptability of purchased materials and parts.

Let s take an example of Motorola which is world s most successful consumer electronics firms. Today it is one of the world leaders in mobile To be cont .. Communication technology, including the manufacture of cellular telephones, paging devices, automotive semiconductors, and microchips used to operate devices other than computers. When Motorola lost their leading position due to facing competition from the Japanese and Japanese firms began to flood the U.S. market with low-priced, high quality telephones and pagers. Motorola was shoved into the background. At first, Managers at Motorola were unsure how they should respond. They abounded some business areas and even considered merging the firms semiconductor operations with those of Toshiba. Finally, however, after considerable soul searching, they decided

to fight back and regain the firm s lost market position. This fight involved a two part strategy; first learn from the Japanese and then compete with them. To carry out these strategies executives set a number of broad-based goals that essentially committed the firm to lowering the costs, improving quality and regaining lost market share. Managers were sent on missions worldwide, but especially to Japan, to learn how to compete batter. Some managers studied Motorola s own Japanese operation to learn more fully how it functioned; other focused on learning about other successful Japanese firms. At the same time the firm dramatically boosted its budget for R&D and employee training worldwide. One manager who visited Japan learned as especially important lesson. While touring a Hitachi plant north of Tokyo, he noticed a flag flying in front of the factory emblazoned with the characters P 200. When he asked what it meant, he was told by the plant manager that the factory had hoped to increase its productivity by 200% that year. The manager went on to note To be cont . Somewhat dejectedly that it looked as if only a 160% increase would be achieved. Because Motorola had just adopted a goal of increasing its own productivity by 20%, the firm s manager soberly realized that they had to Forgot altogether their old ways of doing business and reinvent the firm from top to bottom. Old plants were shuttered as new ones were built. Workers received new training in a wide range of quality enhancement techniques. The firm placed its new commitment to quality at the forefront of everything it did. It even went so far as to announce publically what seemed at the time to be an impossible goal ;to achieve Six Sigma quality , a perfection rate 99.99%.When Motorola actually achieved this level of quality , it received the prestigious Malcolm Baldrige National Quality Award. Even more amazing have been Motorola s successes abroad, especially in Japan. The firm has 20 offices and more than 3,000 employees there. It is currently number three in market share there in both pagers and cellular telephones. Worldwide Motorola controls much of the total market for these product, has regained its numbertwo position in semiconductor sales. Today Motorola generates over 56% of its revenues abroad. Major new initiatives are underway in Asia, Latin and Eastern Europe. The firm has also made headway in

Western Europe against entrenched rivals Philips and Thomson but not content to rest on its laurels, Motorola has set new-and staggering-goals for itself.

Ref- PRODUCTION AND OPERATION MANAGEMENT UPENDRA KACHRU OPERATONS MANAGEMENT William j Stevenson and case study on Motorola s global strategy