Operations Performance and Management

Operations Performance and Management 1
Operations Performance and Management
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Operations Performance and Management 2
Contents
Introduction..........................................................................................................................3
1 Change In Utilisation Rates...........................................................................................3
2 Capacity planning strategy............................................................................................4
3 Sequencing rule for production plan.............................................................................5
3.1 Table 1: sequencing rule application.....................................................................6
Table 2: solution to the applied sequencing rule..............................................................6
4 Inventory management analysis....................................................................................6
5 Economic Order Quantity.............................................................................................7
6 Managing the Supply Chain..........................................................................................8
6.1 Figure 1: supply chain management....................................................................10
7 Variation of operation processes based on the 4Vs.....................................................11
8 Conclusion...................................................................................................................12
9 References...................................................................................................................13

Operations Performance and Management 3
Introduction
Protective clothing has had little usage in the past, preferably used in hospitals by health
personnel attending to their clients suffering from various illnesses. This has always led to lower
production of these items due to low demand. With the outbreak, Covid-19, demand for
disposable clothing increased. An increase in demand calls for increased production. Production
of these clothing has thus increased.
PART 1
1 Change In Utilisation Rates
Disposable clothing was not required in large numbers prior to the pandemic. The
demand was constant but low. The customers of these were mostly medical staff and persons
working in hazardous environments. The producing company used to produce an average of
200000 packets per month which was quite low compared to optimum production when the
producing plants are efficiently utilised. Efficient utilisation implies 100% efficiency of the
machines (Fredendall and Hill, 2016). Time wasted in the whole production process and when
repairing the machine is also minimised. At maximum efficiency, the company can produce
500,000 packets in a month. Since the disease outbreak, demand rose making the company to
produce 450,000 packets in a month. The utilisation rate is obtained as calculated below (Gogia
et al., 2015; Yu et al., 2016). The production values are approximated in consideration of Top
Glove which manufactures gloves with a capacity of 73.4 billion gloves annually (Tho, 2020).
Which translates to 6 billion gloves a month. The time taken to manufacture 1 pair of gloves is
approximately 200times less than the time required to manufacture a complete set of protective

Operations Performance and Management 4
clothing (coverall, head cap, gloves, and masks) this means that if the company was
manufacturing complete sets it would manufacture 6/200 sets (30000000). Assuming the
Uzbekistan plant is 10 times smaller and each unit consists of 6sets,the company bears a capacity
of 500,000 units.
Utilization rate = actual production
¿ maximum production * 100%
Previous utilization rate = 200000
500000 * 100% = 40%
Current utilization rate = 450,000
500000 * 100% =90%
2 Capacity planning strategy
The current utilisation is at 90% less 10% for the available packets that can be produced.
As the disease continues to spread, there are chances that demand will outweigh the production.
Strategies that need to be implemented to ensure that this does not occur includes:
Creation of additional capacity. The company must invest in growing its capacity as a
manufacturer. Given the rate which Covid-19 is spreading across the globe, the demand will
soon surpass the company’s current capacity. The increase in capacity will equip the company
with the ability to produce more (Carvalho, Menasce and Brasileiro, 2017).
The company can set out a sequential productivity increment plan. Using the chase
strategy, the company can increase the capacity at a rate proportional to the increase in demand.
Such a policy will ensure the company does not overproduce and remains relevant to the market.
The plan will also mean that the capacity will be an increase in steps, for example, a monthly
capacity increase of a percentage equal to the percentage increase in demand (Choi, Chiu and
Chan, 2016).