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Pscm 430: Operations Management Question Paper
Pscm 430: Operations Management
Course:Accounting,Finance And Investiments
Institution: Kenya Methodist University question papers
Exam Year:2013
KENYA METHODIST UNIVERSITY
END OF 3''RD ''TRIMESTER 2013 (DAY) EXAMINATION
SCHOOL : BUSINESS AND ECONOMICS
DEPARTMENT : ACCOUNTING, FINANCE AND INVESTMENT
UNIT CODE : PSCM 430
UNIT TITLE : OPERATIONS MANGEMENT
TIME: 2 HOURS
Instructions:
Question One
Domplas
Background
John Smith looked out of his office window into the rural countryside. In all the years of being managing director of Domplas he had never had to deal with problems on this scale before. He and his father had gained a good living from this manufacturing company and it had kept them more than comfortable over the last 50 years. He was preparing himself to meet his newly appointed operations director, who had started this morning. This position had been vacant for over a year because he had decided not to replace ron Jones, who had retired due to ill health. He had decided to take on this role himself for a period in order to avoid the burden of another large directors salary and also because he felt it was not such a difficult job. The state of things on the shop floor was almost the same as it had been 20 years ago and while some improvements had been made, he felt that if anything, Domplas was now failing behind its competition, he accepted now that not replacing the operation director was perhaps not the best of decision, but it had seemed the right one at the time.
The struggling business
The business was struggling. Historically the business had fairly consistent year on year sales of around £18m but these had declined over the last three years down to the figure of £ 14m for the last financial year. The company’s employee numbers were steady at 220 and so far he had not had to make any redundancies. Stock was at an all time high and WIP was also increasing. Domplas produced a variety of small domestic appliances such as electric kettles, coffee percolators and kitchen processing equipment. Competition from the far East was more intense than ever, and Domplas was finding it difficult to compete on cost. As a result profits were well down to just a few percent, and the way things were going the next financial year would be a loss-making year. John was aware that although he could not compete on cost his main customers valued his products, as they were of very good quality and his lead times were quite reasonable at around two to three weeks. Domplas was also good at innovating his design and development team continually came up with new ideas for products that were significantly different. The only issue was that he felt it took too long to convert these ideas into actual saleable products. The designs were there but the manufacturing equipment and machinery appeared to be incapable of producing what was required for example, Domplas could have done with knowing how to produce soft touch controls on its appliance keypads, but somehow its injection mounding department had not been able to deliver what was needed john was aware that the company was very vertically integrated its core competences were the areas of injection mounding and assembly, which John and always considered to be key to producing a good appliance. The only issue with this department was that as volumes for each mounding reduced or as the variety of mounding options increased, staff had to manage a larger number of machine setups. He had managed this issue by keeping some of the older machine and leaving tools in them, and only running them when needed. The company also stamped out all its own metal pressings, and even had a number of small welding cells that manufactured some of the smaller metal components. The volumes of these had also declined significantly due to lack of demand but John liked the idea of being in control and self-sufficient.
Other items such as heating elements were also made in-house, although john acknowledged that the equipment was quite old, and quality problems continually delayed dispatch of some of the lower volume batches to customers. However the culture of his workforce was very positive. All the staff were prepared to work overtime in order to get orders out at the month end.
John felt that the current real business problem was that of the breakeven point for his company, discussion with his financial director suggested that sales of £14m were around the breakeven point and he had some interesting ideas about how they could reduce the business overheads. Conveniently the sitee was split into roughly two halves. He had conversation with a local businessman who was interested in moving into one half of the site, which would effectively have the overhead with the result that the business would become profitable again almost overnight. The new operation director had been recruited because of his expertise on the philosophy and practices of lean manufacturing. John was hoping that this expertise would help him in reducing the footprint of the size by fifty percent and bring the business back into profitability.
You are to take on the role of operations director of Domplas and answer questions below:
In the context of the case study, answer the following questions
Demonstrate how lean manufacturing principles might be applied within Domplas in order to achieve John Smith’s objectives.
(10mks)
Discuss the terms core competencies and vertical integration in the context of the above case study.
(10mks)
Appraise which of Dompla’s manufacturing processes might use outsourced as part of the company’s new appraisal to manufacturing.
(10mks)
Question Two
Describe the design process for either products or services, and appraise the anticipated benefits of using this process in an organization with which you are familiar.
(10mks)
Examine the benefits of using cross-functional teams within the design process in order to deliver better value provide examples from your won experience or from course material.
(10mks)
Question Three
Define the term total quality management (TQM) both as a system and as a philosophy.
(6mks)
Compare and contrast the different approaches to TQM as proposed by Juram, Brosby and Deming.
(14mks)
Question Four
Compare and contrast the challenges’ facing operations managers who operate in increasingly complex global markets for goods and services. (20mks)
Question Five
Explain the stages you would use through in order to benchmark a function or process within an organization of your choice.
(10mks)
Discuss the benefits and limitations of benchmarking.
(10mks)
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