OPERATIONS AND PROCESS MANAGEMENT

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Content

I. BRIEF DESCRIPTION OF THE FIRM pg.

II. LOCATION pg.

· Market location pg.

Order custom research paper on OPERATIONS AND PROCESS MANAGEMENT

· Labor offer and cost pg.

· Wages pg.

· Site factors pg.

· Ownership of the build pg.

· Location of the retail sale shops pg.

III. STRATEGY OF BUSINESS AND OPERATIONS pg.

IV. CAPACITY pg.4

V. THE PRODUCTION PROCESS AND THE ARRANGEMENTS

OF UNITS pg.5

VI. NEW PRODUCTS pg.10

VII. BIBLIOGRAPHY pg.11

I. BRIEF DESCRIPTION OF THE FIRM

The firm D&B sh.p.k. was founded on 14 May 15. It is owned by two shareholders who have invested equal capital in it.

The major part of its activity is the production of garments, mainly men's shirts, as well as the production of uniforms for hotel, restaurants, private school students and uniforms for the personnel of hospitals and operation theaters. It also works through orders by special clients such as Banks, Embassies and other various institutions. The firm has a total of 40 full time employees.

II. LOCATION

The company D&B is located in part of the facilities of the former food factory "Ali Kelmendi" in Tirana. Out of the total of 5700 m, 1600 m are used up by its sections and production equipment. The main factors in this location are

· Market location

This is a very important factor which places the product close to the customer. The location in such a place is very convenient and reasonable also in connection with the distribution of garments from the warehouse to the retail sale points.

The firm possesses two retail sale shops in Tirana, one of which is located in the "Myslym Shyri" street, as well as 14 retail sale shops in various cities around the country where it distributes its products.

· Labor offer and cost

The company employs a total of 40 workers. This number of workers is stable for the moment, but given that the firm plans to launch new products in the market in the future, it seeks to increase the labor force at its disposal. The hiring method will be that of choosing among applicants, selecting those who have the best technical-professional abilities and a high level of qualification.

· Wages

One of the other factors is the wages norm, which in this region is lower, compared to other countries.

· Site factors

Another problem related to the location is the site where the factory is to be constructed. The firm has resolved this problem since long ago and has also taken into consideration the various elements in the case of expansion it possesses 5700 m, of which 1600 m are currently utilized.

· Ownership of the building

From the beginning of its activity, this firm has bought the building where the entire production process is carried out. In this manner, it has eliminated from the very beginning some factors related to paying rent or even other dues.

· Location of the retail sale shops

As was mentioned in the beginning, this firm possesses two retail sale shops in Tirana and 14 others in various towns. Regarding the location of the shops in Tirana, the firm took into consideration the following factors

· Purchasing power in the location area

· Competition in the location area

· The uniqueness of the location of the firm and of the competing ones

· The policies of the firm's activity

· The quality of the competition

III. STRATEGY OF BUSINESS AND OPERATIONS

The strategies pursued by the D&B firm at the business level are

- Product development.

This strategy includes the modification of existing products which can be marketed to the consumer through the existing distribution channels. The strategy of the product development is realized

· Adaptation of products to the market needs.

· Development of the product with new models and dimensions.

The strategic objectives at the business level are

· Improving the product quality until European standards are achieved.

· Increasing the market share by 10%.

· Increasing incomes by 10% for the next 5 years.

· Continuous adaptation to technological changes.

· Increasing the variety of products through the production of new ones.

In order to ensure the competing advantage, the product management has developed appropriate strategies and objectives in order to support and implement the business strategy. These objectives are

· The use of quality control systems.

· A small variety of products will allow the increase of the number of produced items.

IV. CAPACITY

Capacity is the basic indicator of the firm's performance. It is the total quantity of a product that can be produced within a given time.

Based on the acquired information, the capacity of the machinery is about 7000 shirts per month. The firm produces an average of 4000 shirts per month. In this case, the strategy followed is that of the capacity leadership, that is the demand is met and the incomes are maximized.

Capacity usage degree = actual output/ projected capacity

Capacity usage degree =4000/7000 = 0.57 or 57%

That is, the capacity of the firm for mass production is utilized at 57%.

The planning of the capacity is a strategic function. Given that the firm has an excessive capacity, it has planned to use that in order to produce new products in the near future.

Although we have over-capacity, the firm delivers the same production quantity per month. As a result, the greatest part of the produced garments is distributed and a smaller part is kept in reserve in the warehouse. This reserve quantity is used to meet the demand for emergency orders. Such a thing is characterized by a high degree of the usage of processes and high productivity.

V. THE PRODUCTION AND PROCESS AND THE ARRANGEMENT OF UNITS

The supplies and the raw materials are taken in Italy and in Switzerland. The stuff moves from the raw materials warehouse to the cutting unit where the cutting is carried out according to the defined standards. Further on they are moved to the production lines, which have been placed in parallel and each of them contains 4 machines each. This is where the entire production process is carried out. The garments come out of these machines and then they move on to the starching and ironing unit. Finally, the product goes through two seam sewing machines and a final ironing is done. After this phase is completed, the product moves on to the control and packing unit. This is where the product quality is checked, the D&B firm labels are attached and the final product is packed. The product then moves to the garments warehouse. A small part of this product is kept in reserve, whereas the other part is distributed to the retail sale shops.

The two production lines are organized according to the product, whereas the product in general is organized according to the processes. The arrangement of the machines is also done according to the processes. As a result, a given space is given to every process and the products move from one process to the other. The arrangement is done in such a manner that similar operations are grouped in a certain part of the factory. The same is true about the labor force. In other words, the firm employs the strategy of positioning by process.

Following is the table of the arrangement and location of machines

The arrangement by process is used by the firm in order to serve different clients. The resources are of the general destination type and call for small capital usage. The use of equipment is high. Moving from one process to the other, there is also time loss. During the arrangement, the architect needs to take into consideration which units need to be placed close to each-other in order to have better organization of work. Following is the diagram of the priorities in the production line arrangement, Fig. 1( Please see annex 1)

The firm D&B, besides mass-production, also produces to fulfill orders of special clients. Its main customers are hotel "Rogner," hotel "Diplomat," embassies, various institutions, etc. The demands of these customers are quite high, in terms of the quality of products. Usually the orders are made when the need for products arises. In this case, part of the machines is used in order to make these products and the other part is used for the mass-production. The important thing is to determine the time of delivery of the various products. Usually the delivery time is acceptable to the customers. The products need to be delivered to the customers within the promised delivery schedule, otherwise they will be unhappy with the firm's service.

I emphasize that the number of customers demanding products by order is always increasing. This shows the seriousness of the firm.

The firm pays special attention to the relationship with competitors. It has a number of competition priorities that make it rank higher. These priorities are

· The low cost that comes as a result of the high level of mechanization and mass-production.

· The fast delivery time realized through the distribution channels.

· The sustainable quality.

· The secure distribution.

· The fast distribution.

When the number of orders is large and the delivery time is short, the firm works with extended hours. The employees are paid overtime for work carried out after hours. The firms pays all duties to the state and pays the workers' insurance, gives awards on holiday occasions, leave, sick leave, etc.The above chart shows the production ratios for the various products.

The firm's managers have to define a standard plan in order to forecast product and sales as well as the orders by different customers. They forecast the actual orders of the clients and the product for at least the following month. The function of the general production level and the other activities that serve for meeting the current sales levels are some of the firm's main goals.

The demand is generally leveled. However, the climax of the demand is in the spring and fall periods. Following is the chart of amounts ordered for all the months of the year

J F M A M J J A S O N D

VI. NEW PRODUCTS

The firm D&B has already entered the phase for projecting new products. It has started the production of various models of shirts for women. Although the product is in the introduction and experimentation phase and the volume is small, it has been received well by customers. So far, there are no competitors that offer the same product. The number of clients is small and the firm needs to make changes in the product from time to time. In this case, the main performance factor is the quality of the product and flexibility.

In the future, it is thought that the range of products of this kind will expand and there is a plan to install a laundry for washing and ironing supplies of restaurants and hotels, which will enable a greater closeness with the clients.

Regarding technology, plans are to purchase a computerized sewing machine that would embroider the firm's initials and meet the clients demands in this sector.

Slack, N.(18) "Operations management" nd edition

Tomes, A. (1) "Operations management principles and practice"

Dilworth, J.B. (16) " Operations Management an applied modern approach"

Everett E.Adam, JR.Ronald J.Ebert(1) "Production and operation management"

Albanian authors Nakuci V., Cepani A., Panariti S. "Menaxhimi i prodhimeve dhe i operacioneve"

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