Translating Strategy Into Action, Essay Example
Executive summary
This report focuses on developing a good model as well as an operational idea that should be exploited and implemented for the successful inception as well as operations of the new site for PKS. The model incorporates some very important ideas exploited by the PKS management to ease the peed with which the operations are streamlined and the new operations are set up. PKS should therefore not ignore that fact that the environmental scanning model that seeks to establish the existing market forces and set out strategies on how to deal with them. Similarly the business market penetration ideas outlined in this paper are helpful in setting out the best market approach to be taken by the company.
PKS should most specifically implement the business quality improvement analysis that seeks to set out a specific model for quality analysis. This is very important because customers do not just buy products but rather the quality in them. By paying the necessary attention that should be paid to quality analysis and quality control, the company will be able to ensure that they set as well as maintain high standards of quality that the consumers will be able to appreciate as well as keep seeking every time. The process of planning management therefore is a whole some process that seeks to construct the desired structures to the satisfaction of the customer while at the same time ensures that the company realizes profits from its operations.
This report has therefore set out a well developed business strategy outlining all the steps starting from customer business plan and strategy to market penetration as well as customer retention.
Company data and history.
PKS has been in the industry for a long period of time giving us a good understanding of the goings on of the engineering industry as well as enabling us through experience and continuous application of knowledge to develop best practice models that enable us to develop high benchmarks for quality as well as be able to predict customer needs and demands. The operations of the company will be both machinery and labor intensive to ensure quality is delivered at all times, our outlay is going to include necessary skills for people to handle the jobs at their different specialties and deliver the expected output.
Our operations in North Carolina will be planned to not only penetrate the market but also instill consumer confidence hence increasing our consumer loyalty and satisfaction. We are going to employ the following personnel and equipment to meet our targets.
Unit | Equipment Employed Units | Personnel per unit | Number of Units |
Division office | General office equipment;
Sedans, pickups, SUV’s to support office staff official travel |
Division VP & Staff; Human Resources;
Finance & Accounting; IT support; Construction estimators & managers; surveyors |
1. |
Asphalt plant | Astec plant;
1 front end loader; 1 bull dozer; 3 pickup trucks |
Plant foreman; 2 plant operators; 1 plant mechanic | 3. |
Maintenance Shop | Shop; wreckers;
contact trucks; service trucks; heavy recovery equipment; mobile rough-terrain crane; heavy transport tractor-trailer |
1 Manager;
1 Foreman; 4 shop mechanics; 4 field mechanics; 3 serviceman; 1 CDL driver |
1.
|
Excavation crew | Pickup trucks;
excavators; bulldozers; compactors; front end loaders; graders; pans; water trucks; off-road trucks |
1 Foreman;
6 heavy equipment operators; 6 laborers; 3 flagmen |
4.
|
Pipe crew | Pickup trucks,
excavator, front end loader, rough-terrain forklift, trench forms |
1 Foreman,;
3 heavy equipment operators; 6 laborers |
2.
|
Concrete crew | Pickup trucks,
concrete mixers, curb machine |
1 Foreman;
2 heavy equipment operators; 6 concrete finishers |
2. |
Paving crew | Pickup trucks;
broom tractors; milling machines; paving machines; steam rollers |
1 Foreman;
6 heavy equipment operators; 6 laborers; 3 flagmen; 1 paving QA technician |
3. |
Dump truck | pickup truck,
30 Class-8 dump trucks |
1 Foreman,
30 CDL drivers |
1. |
This portrays that we will be heavily mechanized hence calling for highly qualified personnel as well as specialized skills to enable us deliver the intended quantity of work to the clients and meet set deadlines for work completion. The specific classification that has been used for both equipment and personnel also aims at helping us identify the specific cost items which will enable us develop a good forecast of our costs. The different cost units have been clearly identified to ensure that budgetary control is exercised to the utmost.
The North Carolina Area is a hotbed of engineering activity. There are over ten engineering firms in North Carolina that are actively competing for construction as well as general engineering contracts in the region (Interactionmedia.Com). This means that for us to have good market penetration we need to plan out our strategy and ensure that we have sufficient resources to offer distinctive brand to the consumers. These other top ten players in the market include: Bayside Engineering Inc, URS Corporation North Carolina, Jordan Jones & Goulding, D. Miller & Associates, PA, HIRE Resolution, IETS, The Summit Companies, Vaughn & Melton Consulting Engineers & Surveyors, N-Focus Design Inc and Emerald Green Construction limited. These companies have the major stake of control on the engineering contracts in North Carolina. If these ten key players in the North Carolina construction industry are taken to control approximately 80% of the engineering contracts, we aim to obtain at least a fair 6% of the engineering contracts in the first six months of setting operations in the region (Building Pros.com). The US census bureau in its economic census of 2002 puts the value of business in the construction industry in the year 2002 in North Carolina alone at $34.385 billion while the revenue generated from Heavy and civil engineering construction at $ 6.02 billion in 2002 (US Census Bureau). This implies that the values have gone up with the increased demand civil works. If we manage to win 5% of these contracts then we will have a revenue stream of $ 1.12 billion
The competitors are currently engaged in procuring major contracts which are the ones used to drive revenue. This however despite being informed by economic viability can pose a serious threat to the operations in that it can as well lead to huge projects spanning long periods and eventually leading to major overruns on the budget and eventually affecting profitability. Some competitors such as emerald green construction have a good practice in the name of building green. This is a practice that we intend to borrow heavily from and utilize to meet our goals as well as ensure that we have a good reputation with our clients in the market to ensure that environmental safety is addressed properly. Most of the competitors listed above are faced by the challenge of focusing on green and environmentally sensitive construction. Our plan therefore is to enter the market as a green construction company and therefore create a history of being environmental friendly in our projects.
Process Analysis Considerations, work Methods & Technology Considerations
Operations Management Strategy
Operation management is widely defined in business as the area the management geared towards the production of quality goods and services. It involves the responsibility and undertaking to ensure the operations of a business are both effective and efficient as well as the management of resources, the distribution of goods and services to customers.
Operations also refers to the production of goods and services, activities that add value in an effort to transform inputs into output as well as ensuring that the quality of the output is compliant, is also under operations management. Production is that facet of operations management that is involved in changing the physical state and quality of goods.
Operations management can therefore be termed as the task of managing the efforts and activities of people, capital and equipment resources involved in changing raw materials to finished products, services or both.
Waters (1999 p52), states that the consideration given to the manner in which the set of central operations are designed, planned, controlled as well as organized to give out useful products or services is operations management. The strategic plans that are employed in ensuring the short term synergy between the different resources as well as the long term attainment of the set goals is what entails operations management.
The interlinking of all these resources for the purpose of ensuring quality output is a task that calls for proper planning hence necessitating operations management. Different scholars have studied operations management and come up with classifications under which operations management has been categorized and extensively studied.
Categories of Operations Management
Though a broad subject, operations management can be split into four major categories and they are namely.
- a) Operations strategy, product planning and design.
- b) Forecasting demand
- c) Quality management.
- d) Measuring and improving performance and managing the supply chain.
Operations strategy product planning and design.
If operations management was to be taken as broken down into various stages, then strategy, product planning and design would make the first stage for the process of operations management. Planning might be taken as the most important step in the operations management process.
Hammer (1996. p29) defines planning in operational management as the process of setting goals identifying the means through which to achieve these goals as well as the timescale to be followed in the pursuit of these goals. It is at this stage that the global outline of the strategy to be followed in the operation is outlined. The allocation of resources is also a very important feature of operations management. This is the most salient feature of strategic management in that it seeks to identify the available resources and apportion them such that they will be utilized maximum and maximum benefits will be derived from these resources.
Though the measures taken in the allocation of these resources are varied depending on the targeted output there are some very basic similarities. These similarities are; first they all seek the most favorable location for their intended operations. This includes finding a good building if it is for production purposes in order to minimize interference from the vagrancies of weather or such other natural phenomena. Second, they identify and choose the best suppliers for their raw materials as well establish the terms of operation of these suppliers; they then engage these suppliers for the purchase of the raw materials. Finally they define a favorable process through which to turn these raw materials into finished products. All these are at times linked together to produce a functional model that is adopted in the production or rather the conversion of the raw materials into the goods or services that the operation targets to produce.
The basic similarity is the manner in which the management always seeks to identify, acquire and utilize these resources and the manner in which the strategic planning aspect seeks to identify the raw materials and other resources that will eventually optimize the output from these raw materials
The strategic operational planning phase will always culminate in a design model to be adopted in operations management.
Once proper design model has been adopted and the resources have been appropriately allocated in the best way based on the available strategic information the process of operations management moves to the next level namely the level of forecasting the demand of the targeted product or services.
It is also at this stage of operations strategy that the management seeks to know identify and validate the best quality standards that are to be applied in the production of the goods or services that are to be produced. Risk management procedures are also scoped identified, validated and adopted for the sake of controlling for any incidental risk exposures that might occur in the actual process of procuring raw materials, producing the goods or services, and passing on the same to the prospective consumers.
Forecasting Demand
This entails the effort to establish how much of the targeted product or service the intended customers will be able to consume in a given period of time. The aim of forecasting customer demand is to ensure that the product output is regulated such that there is no overproduction since this will pose a challenge in storage especially for perishable products as well as bloating the market which might affect prices. Underproduction on the other hand means that there will not be good maximization of the production capability of the entire process hence maximum benefits will not be enjoyed. The process of acquiring raw materials is also planned such that it mirrors the forecasted market demand and therefore avoiding unnecessary hiccups in the production process. Forecasting demand is therefore one of the most challenging aspects of operational management
According to Waters (1999 p. 42), continuing success in customer satisfaction can be ensured by making the right decisions. This is possible through considering the following aspects of demand.
The total volume output needed to supply the entire customer population and satisfy their demand. This is more critical especially in establishing the market volume. In cases where the operation involves the production of goods or services that are varied (one manufacturer making many products through different processes all under one operation), knowing the volume is very vital. This can help in allocating time, and overall overheads required to meet the required volume of output. The volumes of different product varieties may require different time allocation, manpower and skills. As a construction company we will have to put these considerations in mind in developing this strategy. Our key concern will be to ensure that we have sufficient manpower and equipment to ensure that we meet the demand.
The variation in demand. It entails the different demand levels for various products if the company is involved in producing varied products. It also seeks to establish the oscillations in demand during different seasons as well as in different geographical regions. By establish such the operations management is therefore able to establish the best way to change the operations strategy and timings to be able to meet the changes in demand. The completion of these construction contracts is a major determinant of the success of our operations.
Variety of product also determines the differences in product demand. If a certain line is more in demand that the other, then resources ought to be allocated in the same manner to suit the demand for the specific products as well as have conformity to the different swings in variety demand. This ensures that there are no abrupt stops in the production process to make changes to suit the market demands. Operational management therefore seeks to make the entire operation a completed mirror of the changes in demand on the target market, not only in the overall volume, but also in the volumes of the different varieties of products or services on offer.
Establishing the customer contact. This is vital in the process of forecasting the market demand. In determining how much contact is to be made with the customer, the manager is able to estimate how dynamic and responsible the system needs to be. If the customers are to be in constant contact with the system the process should be highly dynamic for them to be responsive to customer demands. This is especially important in the service industry. On the other hand, the customer contact always helps in planning the operations in that they can be planned to mirror any foreseen market changes. High customer contact requires that enough manpower be allocated top meet the customer demand.
Quality management
Quality management is a multifaceted aspect of operational management. (Pyzdek p71) states that quality management has three aspects namely: quality control, quality assurance and quality improvement.
All the three make up a whole process through which the operations managers ensure that they meet their quality obligations as well as the customer demands.
Quality control is a set of deliberate steps that are taken to ensure that the process through which the raw materials are subjected in an effort to make them finished products or services that can be sold to meet the market demands. These are standards that are to be adhered to in order that the products are acceptable and justify both the time and raw materials invested in making them. Similarly the efforts are geared towards ensuring that the services are of good quality to be able to ensure customer satisfaction as well as complete with other service offerings in the market. The quality control not only takes care of the materials to be used but also the process that the materials are subjected in producing the products or services on offer. The established standards of quality in processes and goods in line with international standards such as those stipulated by International standards organization (ISO) have to be put into application.
Quality assurance involves setting up procedure and deliberate steps that are aimed at making a product fit and suitable for the intended purpose. This is done by testing and checking raw materials to ensure that they meet the standards required, ensuring that the appropriate procedures are followed in the reception, storage and conversion of these raw materials into finished products, as well as the confirmation of the quality of these finished products to make sure that they meet the desired standards. Quality assurance makes an effort to ensure that the goods or services so produced mirror the customers’ demands and expectations of the same. The assurance regime reviews the set standards regularly to ensure they are in line with the changing demand and regulatory environment. These changes keep a strict regime to be adhered to for products or services to be acceptable to both the consumers and the regulators. A good quality assurance regime can ensure a successful operation. It sets the standards by which the finished goods or services are evaluated. The systematic fashion that entails a set of steps and process geared towards ensuring that the products meet the customers needs make up the quality assurance process. Operations management therefore aims at ensuring that the entire process is geared towards accomplishing the quality assurance objectives.
Quality improvement is the steps that are taken at enhancing the quality and remedying any anomalies so noticed in the process of carrying out the operations to meet customer requirements. The dynamism of the market environment makes demands on the operations thus they should be structured such that they are dynamic enough to change in line with the customer requirements. Quality improvement is therefore often incorporated as a key facet in any operation management. To avoid doing quality improvement as a crash activity such incorporation ensures a responsive development in quality thereby keeping in line with changes. Quality improvement varies with the nature of product or service being offered and this determines the outlook of the operation since some products demand more rigorous quality improvement procedures than others.
Measuring and improving performance and managing the supply chain.
The operation as a whole requires to be evaluated stringently and regularly to establish its conformity with the set targets and goals. The metrics to be employed in measuring performance have to be chosen carefully as these can be a detriment at establishing the actual performance of the operation. The choice between linear and nonlinear metrics can be is a consideration that the operation manager ought to take after consideration the output of the operation. Operations that give goods are likely to be evaluated on the basis of savings on raw materials and quality of the goods produced. Service producing operations on the other hand require a good understanding of the market understanding as well as the overall customer satisfaction as far as the services produced are concerned. The customer satisfaction is also a key factor in determining the performance of a process.
According to the United States General Accounting Office (1998) measurement of performance is seen as an ongoing monitoring as well as reporting of accomplishments as evaluated as progress towards pre-established goals of the operation. The evaluation is always through a predetermined system. The evaluation can seek to compare different aspects of the operation, as well as measuring the overall performance of the operation. The comparison of the different aspects helps in establishing the areas that may have underperformed and thereby improving them to ensure a smooth flow of the entire operation. The improvement though is not carried out as a tail end activity but rather as an ongoing process.
The measurable performance standards either in terms of goods produced or services delivered or a combination of the two forms the objectives of any evaluation. This is the major objective of any operation. The operations management has, as earlier set out; to always establish measurable objectives for any operation prior to commencement. The establishment of these measurable goals therefore leads to the choice of the metrics to be applied in evaluating the performance.
Performance improvement though daunting is therefore a key ingredient of any progressive operation. The ability of the operation to rejuvenate itself is seen to through a constant effort to improve the overall delivery of the operation as well as maintenance of the quality standards that have been set.
Service Strategy Considerations
Management of the supply chain is also vital in ensuring that the goods or services produced are finally delivered to the target customers and in so doing ensure that maximum gain is derived from them upon delivery. The challenges involved in the management of the supply chain involved the requirement the products are delivered to the target consumers at the right time in the right state and quality so that the forces of demand and supply are maintained. The delivery chain can as well derail the entire operation of not carefully planned and managed. The operation might involve the production of perishables; this might therefore require a quick and efficient delivery to avoid losses. The function of management therefore falls back to the requirement that a good estimate of demand be made to ensure that the process mirrors the market requirements. Poor delivery and inefficient management of the supply process might also lead to customer dissatisfaction and poor performance in terms of meeting.
The metrics for tracking productivity that PKS can use is first use of time based metrics where the performance is based the budgeted time for the project. This will be aiming at establishing the range of time that every project will take. Before a project commences, there should be a established time frame the progress is the evaluated against the set time to ensure that the time frames are adhered to.
The second tool for evaluation is budgetary control. This will be by evaluating all projects against the provisions for their completion. This is done by checking against the various budget lines and ensuring that the budget is adhered to. The third method id by evaluating every unit in terms of time and money spent on it. To do this the days are evaluated in terms of financial returns hence every job will have a hourly charge out rate depending on the personnel and equipment deployed on the job. Every extra hour is counted as an extra expense since more personnel and equipment will be deployed for an extra hour. This is then used to calculate recoveries on the job.
The use of time and budgetary control alone are not effective tools since they might ignore the quality of work done. Time is biased in that one might opt to work very fast hence compromising quality. Budget alone is also not good since raw materials might be compromised by buying cheap raw materials to ensure that the budget is not overrun. The charge out rate method is the best for PKS since t balances the need for quality with the requirement for speed.
PKS will have to settle on jobs that are in line with the resource capabilities to avoid straddling this will ensure that jobs do not spill into each other and therefore lead to budget over rans. This will ensure that we only take on jobs that can be completed in good time and hence for starters will limit the number of projects taken
Location
The best location for PKS operations is in Charlotte area. This is because it is centrally located and thereby granting easy access to all the areas of North Carolina. Besides that Charlotte has a good network of roads hence increasing of mobility as well as giving the office access to other engineering firms hence increasing the ease of technical collaboration. See Index 1
Service Strategy Considerations
The implementation of strategies is based on tactics that are developed and used on the long-term. For the strategies that are adopted to be effective, there has to be clear understanding of the intended end result of these strategies as well as the likely risk areas in the implementation of these strategies. For the strategies to be implemented successfully monitoring is a key concern and it is vital that the strategy be balanced. This therefore necessitates the use of a balanced scored card as a check point for any progress made in the implementation of strategy. Balanced score card is used in translating the mission and strategy of a business unit into quantifiable objectives and measures. It helps counterbalance the external measures of the business performance that touches on shareholders and investor interests as well as the internal measures that evaluate critical business processes and business growth (Kaplan & Norton p73). For the benchmarks set in the balanced scorecard to be achieved, there has to be tactics clearly stipulated for the implementation arm of the organization to methodically employ towards the achievement of the strategic objectives.
The first tactic will be the human resource tactics. The working environment is a key factor that determines whether the employees leave the organization or whether they remain for a long period. The environment also plays a major role in determining whether the employees are highly motivated in their work. This is the first area of concern, if the organization has to achieve its strategic objectives, then it must ensure that its employees are well motivated because motivated employees are productive employees (BPP 2009). Three tactics will be employed to ensure that we record very low employee turnover as well as high employee motivation. The first strategy will be the use of open door policy in the offices. This means that the offices will be operated on an open floor where people will have high interaction. This implies that the employees will get a lot of time to consult share and understand each other thereby increasing the motivation and delivery. The only way to ensure high performance and sustain it is through a change in the management style and this can be achieved through the bosses turning to servants or what is called is called servant leadership (Greenleaf R, & Spears L, 2002.) In this case of PKS which is has high numbers of skilled employees it is important to keep a good human resource management policy to ensure low employee turnover.
The second tactic towards achieving high employee motivation and low employee turnover is the use of troubleshooting and teambuilding sessions. This is where once in every two months, the employees together with the management will be engaged in informal sessions to lay down plans to address any arising issues in the implementation of the strategic plans. In this way the employees will feel very included and feel part of the long term strategy as well as participate in the monitoring and evaluation of the strategy. Finally the other tactic to implement human resource strategy is the use of performance based pay increment. Jobs will be split into small achievable units and projects. These projects will be allocated a time table. The employees will be given bonuses on the savings made in time and finances. Similarly the employees will be evaluated in terms of the work done and quality will be a key metric in evaluating the performance. In this way, there will be an atmosphere of healthy competition as well as good consultation.
Our customer strategies incorporate the marketing strategy as well as customer retention and satisfaction. Being a services organization we will be engaging in vigorous product development as well as our penetration strategy will be through client engage and improved people outlook strategy, this will be through holding serious client awareness campaigns. Through these campaigns we will develop a client analysis matrix through which we will analyze the client’s business needs as well as look at what kind of a design the client deserves. It is through this analyses that we will be able to understand what the client needs and seek to introduce our different designs. While the competition will seek to market their designs to the consumers we will seek to have the consumers identify their needs and it is from these needs that we will develop the designs. The other factor that we will feature in our client analysis is an explanation of how our services will impact on the clients business. We can raise this through tracking our customers and determining how our services have impacted on the client’s business performance. This can be used as a marketing point for our client’s performance
Customer needs will be addressed through two ways. First, there will always be a client engagement meeting that will be used to understand the client’s business concerns as well as the vision the have for their company. After that we will develop a client satisfaction monitoring system that will be used to follow up the client response to the products delivered to them. This will ensure that the customer’s needs are factored in every decision that is made in the process of delivering the client experience. The client will not only feel valued but also feel that his design was implemented fully and the design ownership will be a great factor in delivering this distinctive client experience. In this way we will have sufficient client satisfaction as well as a good business name.
Since our strategy will be to raise our shares value by at least 5% every year, we can only achieve this by raise our net realized profit (BPP Learning Media p.64). This is possible by ageing our debtors and ensuring that all our debts are recovered in a 90 day period. This is possible through making all our clients aware of our credit policy and ensuring that they comply with the arrangements. This also ensures that we keep very healthy books that will help as realize our strategic objectives.
The information technology tactics will be three fold, we will seek to develop a virtual organization and this will call for an effective information technology applications. The virtual organization is therefore described as one consisting of employees who are physically separated and kept apart from one another which results into what has been described as a “company without walls” (Galbraith 91). We will secondly develop standardized communication templates that will enable us to communicate effectively and efficiently within the organization. We will then develop tailor made design software for use in our design development and this will go a long way in ensuring that we deliver quality to our clients. We will then adopt the latest technology in engineering design. This will be through the advanced but careful use of Computer Aided Design. Development of customized software for the design of superior quality building as well as the development of customer friendly and cost saving models will help us penetrate the market with ease.
To measure the effectiveness of our organizations strategies, we will use two approaches; the first will be the client satisfaction surveys. These will give our clients a chance to evaluate how we have performed in the process of delivering the service to them. We will then be able to respond contemporaneously as we develop other client service strategies. The second tactic will be the use of audits. We will perform both systems and financial audits every year. These will help us discern whether we are posting healthy financial performance as well as whether our systems are performing well. We will therefore be able to up our speed and respond to any challenges.
The ethical and legal issues will be addressed by first ensuring that we have an employee compliance training and assessment program. This will ensure that all employees are made aware of any ethical issues that may arise in their areas of practice. We will then regularly engage independent external consultants to evaluate our organizations compliance to ethical standards as well as the employee’s compliance to these standards. Our Corporate social responsibility will be addressed through holding regular events every quarter where we offer our services for free to the public bodies and charitable organizations by holding a charity week. This is where we will select a beneficiary and offer our design services for free. In this way we will be able to attract more customers as well as meet our corporate social responsibility
DMAIC is a very effective tool of product quality management. It can be easily incorporated in PKS strategy since they will need first to Define the project that they are undertaking take for example a road construction project once they have defined, they will then Measure the resources and time needed to complete the project. They then Analyse data available concerning similar projects. The next is to Improve the projects as they move on which poses the biggest huddle in quality improvement. Finally there is Control Planning which includes data planning as well as quality control. This model is good for the construction company since it makes use of a easy for step approach that ensures that every step is evaluated keenly and the steps taken from it are well and clearly thought out. PKS should adopt ISO system for establishing their quality standards and this will go a long way in ensuring that they are compliant with the government regulations concerning the standards of the construction industry.
Quality Improvement Implementation
The use of quality management tools is vital to enhance the efficiency and quality of the drugs produced by my pharmaceutical industry. The production process will not only be more cost effective but also timely. In the construction practice I opted to use Control charts and score sheets for the different suppliers as my quality improvement tool. Two of the biggest drivers towards the establishment of stringent quality management and assurance practices are increased competition and increased government regulation (Juran p. 76). By therefore setting strict standards, we will be able to not only ward off competition for the market but also comply with the regulations of the government.
The steps we will take for quality management will be in two categories. First is the monitoring of the supplies through control charts. Once raw materials are received from the supplier, they will be entered in a control chart alongside the name of every specific supplier. The control chart will monitor the performance of the raw materials both in the initial quality analysis as well as the product analysis. Similarly, the number of hours spent to produce a single unit under controlled circumstances using the raw materials will be recorded. Finally the performance of the finished products in the market will be recorded. The percentage of rejects at every stage is monitored.
Example of control chart
Supplier XXXXX | ||
1 | Quantity Supplied | Quantity rejected |
2 | Budgeted man hours | Actual man-hours used |
3 | Units produced and accepted | Units produced and rejected |
4 | Units accepted by consumers | Units rejected by consumers |
In this way accurate data concerning all the suppliers is kept, the performance of every supplier’s raw materials is monitored and hence a record is kept of every supplier.
The second step involves the establishment of appropriate metrics for evaluating the performance of every supplier through the different stages. Establishing metrics is often considered one of the major challenges in quality management (Goestch p121). This often the case because the metrics have to give assurance that objectivity is maintained in the evaluation process. I would give a rating ranging from 1-10 for all the suppliers. If 10% or less of raw materials fails any stage, they are awarded rating 1. The ratings will be shown as below.
Raw Material % failure | 10 | 20 | 30 | 40 |
Rating | 1 | 2 | 3 | 4 |
By using this process, the raw materials are rated in all the stages and the overall rating is developed. The score card will be prepared and the suppliers will be ranked according to their overall score. Suppliers with high score in the score card are given priority over those with low scores.
The variables in the process include the prices of the raw materials as well as the speed of delivery of the raw material. This is because of two reasons. A supplier can have a high rating but have a low a long waiting time that is a supplier who takes a very long time to deliver the raw materials. Similarly a supplier could have a high score but have very high prices for the raw materials. The best method for controlling this variability is by developing a statistical tracking method where the average prices of the raw materials are recorded. The average price is got from quotations of different suppliers. Similarly by calculating the average lead time, we can arrive at a standard time that a supplier is allowed between the time of placing an order and the time of delivery. Any supplier who shows significant deviation from the established standards of prices and delivery time is automatically disqualified irrespective of their rating in the scorecard.
The process of creating a good quality improvement process includes identifying the areas of concern, establishing benchmarks or standards to be adhered to. The next step involves establishing metrics for measuring the performance of the process being evaluated. The third step involves the actual testing of the process against the set standards. Finally the deviations that are noted are corrected and improvements made to control the process and ensure it sticks as close to the established standard as possible.
To measure that PKS should adopt for quality is the cost per man hour. This ensures that the volume of work done is effectively monitored without compromising on quality. The measurement of work in this method is good since the company will have a graduated cost per man hour scale for the different levels of personnel. This will also ensure that the cost is effectively passed over to the customers.
Conclusion
Operation management is a wholesome process that requires a good insight into the target output of the operation. By approaching operations as a well laid out step by step approach, the manger is able to synchronize the entire process such that it meets the set objectives. These objectives can however only be met through planning of all the other aspects from acquisition of raw materials to the utilization of the same as well as ensuring good quality control and standardization procedures are adopted to assure quality. It is only by ensuring quality in these processes that an operations manager can achieve the set objectives in an operation.
Though an operation is normally designed in bits and continuous steps, the whole operation has to be set such that it works as a well oiled machine otherwise hiccups will be experienced in the execution of the operation.
Bibliography
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