Comprehensive Operation Management Report: Call Us Plumbing

This report provides a comprehensive analysis of operation management strategies for Call Us Plumbing. It begins by exploring capacity and production planning, examining lead and lag strategies, and proposes methods to enhance machine speed and worker allocation. The report then delves into inventory and stock management, describing Just-in-Time and ABC inventory strategies, and creates an inventory management tool. Furthermore, it investigates supply chain management, illustrating the process for a Fast Moving Consumer Good company and proposing a supply chain management process to improve performance. The report concludes with a discussion on how to implement these strategies, emphasizing the importance of the critical path model for the organization's design and overall operational efficiency. The report aims to prescribe accurate strategies which can be used in order to increase the operational size and meet the increasing demands of the market.

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Running head: OPERATION MANAGEMENT
OPERATION MANAGEMENT

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Table of Contents
Introduction......................................................................................................................................3
1. Capacity and production planning...............................................................................................3
1.1 Capacity planning strategy....................................................................................................3
1.2 Capacity planning strategy for improving operational performance.....................................4
1.3 Implementation of Capacity planning strategy......................................................................6
1.4 Model of an ideal capacity planning strategy........................................................................7
2. Inventory and stock......................................................................................................................9
2.1 Describing two inventory and stock management strategies.................................................9
2.2 Creating an inventory management tool using widely accepted approaches withinCall Us
Plumbing....................................................................................................................................11
2.3 Providing an illustration of ideal inventory management system for the company............13
2.4 Providing an worked example of the use of typical inventory management tool for use in
relation to the current case study...............................................................................................14
3. Investigation: supply chain management...................................................................................15
3.1 Illustrating the process of organization for Fast Moving Consumer Good company..........15
3.2 Supply chain management flow chart..................................................................................17
3.3 Proposing and justifying and supply chain management process for improving
performance of the company.....................................................................................................18
Conclusion.....................................................................................................................................19
References......................................................................................................................................20

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Introduction
Growth in operational demand of a company invites the need of greater operational size and
management, in this assessment for Call Us plumbing there will be evaluation of strategies
which the company can use to meet the increasing operational demands. Strategies in relation to
capacity planning, inventory planning and supply chain planning will be discussed in order to
prescribe the firm accurate strategies which can be used in order to increase the operational size
and meet the increasing demands of the market in the upcoming time. Models and concepts in
relation to these aspects will be discussed in order to make sure that the analogy of the strategies
and plans for the company are authentic and relevant to their current situation.
1. Capacity and production planning
1.1 Capacity planning strategy
Capacity planning is known as a method, which is used by different organisations for
determining or measuring the production capacity need. This process will help in the process of
meeting the changing demands for organisational products (Nadeau, Kenné, Emami-Mehrgani &
Badri, 2016). The use of an appropriate strategy for capacity planning is part of maximising the
capability of the organisation and production within a given time.
There are three different types of capacity planning strategies used by organisations for
production improvement process. Those are a lead strategy, lag strategy and match strategy. The
two different approaches which will be used for improving the operational performance of Call
Us Plumbing are lead strategy and lag strategy.

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Lead strategy- The aggressiveness of lead strategy is more prominent than the other approaches
to capacity planning. The strategy is used by an organisation or company when advance demand
is anticipated (Rossi, Pozzi, Pero&Cigolini, 2017). The main purpose of using this strategy is to
enhance the production capacity and reduce the possibility of customer lose from the
competitors. Using this strategy is also risky due to the unfulfillment of anticipated demand
increase and excessive inventory will be part of the strategy result.
Lag strategy- The lag strategy is known as more conservative than the previous one. This
strategy focuses on the actual increase in demand. For improving the production with this
strategy boosting up the capacity is done after the full stream operation running. Therefore, the
ultimate time of finally following up the demand will cause loss of a customer to other
competitors (Hargreaves, Hart, Jones& Olson, 2015).
1.2 Capacity planning strategy for improving operational performance
Improving the operational performance can only be possible with the best quality of internal
service which will effect on the production and also the quality of the product. Therefore
designing different strategies for achieving the organisational operation performance can easily
and hence the scenario of calling us plumbing supply company Limited.
Enhancing the machine speed- One of the significant difficulty identified as the overstretched
manufacturing and production resources which can be easily overcome by improving the
machine speed. The machine speed needs to be minimised for which analysing the actual rate
and production is essential. For instance, it can be said that analysing the actual speed and
production can be possible by calculating the monthly production of the organisation (Garcia-
Herreroset al. 2016).

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After that, both the minimum speed and maximum speed of the same production amount need to
be analysed. The minimum speed for manufacturing the products includes all different
difficulties identified related to specific material in the time of production. However, the
obstacles in the time of production need to be minimised for increasing the speed of the machine.
In the next step, the cost factor of increasing speed is counted as part of the organisational
expenses. For developing a standardised speed for the machine new equipment might be needed
for upgrading the technology (Chen, Wang& Chan, 2017). Besides that, the increasing speed will
impose some extra cost like extra maintenance, cost of electricity, a different type of breakdown,
etc. But this lead strategy use for capacity planning will generally increase the organisation
production for following up the customer demand.
Enhancing workers on each machine- This organisation is counted as one of the large and
famous manufacturers of plumbing objectives. Due to the increasing number of demand, the
working condition of the organisation has affected which has developed the stuffing conflict and
interdepartmental conflict for the production equipment. Therefore, for grabbing the business
opportunity in the global market and maintaining the quality of the products, Call Us Plumbing
supply private Limited has to increase the number of employees on each of the machine which
will reduce the workload of the employees. The organisation yet not included more labour
(Naderi, Govindan & Soleimani, 2019). The labour cost has increased due to this demanding
market, but it did not identify as profitable for this organisation. Therefore, recruiting new
employees with proper calculation is required. Each of the production machines needs extra
workers who can contribute and can be useful for meeting the market demand. For using this
design, the lag strategy is appropriate. After increasing the speed of the machine, additional
workers in each of the machine will help the organisation in meeting the demand after the

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demand will arise. Therefore, together this design will improve the operational performance
which will not create extra or excessive inventory.
1.3 Implementation of Capacity planning strategy
The capacity planning strategy is reliable with the actual input given for capacity development.
However, there are two different capacity efficiency performance indicators. There are different
diverse factors which impact on the process of reaching capacity development. However, the
primary purpose of capacity planning is to increase the efficiency and utilisation of production.
For instance, the measurement of capacity efficiency rate is possible by dividing the actual
output and effective capacity (Hargreaves et al. 2015). The capacity utilisation can be measured
to buy designing actual output and design capacity. Before implementing the capacity planning
strategy, understanding these different areas are important. The three essential steps for capacity
planning are:
Determination of different service level requirements- Classifying different capacity planning
process for understanding both the system and customers are required. Depending on the system
and demand the requirements need to identify.
Current capacity analysing- After that analysing the present or current capacity is also
important for determining the process for meeting the needs of the customer (Nadeau, et al.
2016).
Developing plans for the future- The third step is associated with developing future business
activities depending on the forecast. For this process, the organisation needs to determine the
future requirements of the market and also analyse the changes that might occur. However, the
changes in the system can create a disruptive situation in the capacity planning process, which
need to overview properly by the organisation.

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The Auckland fuel tax has influenced the market of Call Us Plumbing, which can create
difficulty for the process of capacity planning strategy. Therefore, the organisation needs to
implement a policy, which will be sufficient to reduce the capacity planning strategy. Besides
that, there are both are retailers and supplies that will be beneficial to buy this policy which will
increase the effectivity and utilisation of capacity planning strategy (Fang et al. 2017).
1.4 Model of an ideal capacity planning strategy
The capacity planning strategy can be possible with three different men groups depending on the
timeline. Those are long-range or long-term capacity, medium range and the short-range
capacity.
Figure 1: model of capacity planning
(Source: Rossi, Pozzi, Pero&Cigolini, 2017)
Long term capacity- the long term capacity refers to different steps for capacity development
including designing capacity, production capacity, sustainable property and effective capacity.

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However, in this case, the production capacity is the base maximising the production level with a
real working situation like maintenance, machine breakdown, etc.
The medium capacity refers to the capacity planning where the period is about 2-3 years for
improving the capacity (Rossi, et al. 2017).
Finally, the short-term capacity includes the time frame as per daily week for strategic
planning.
The basic of capacity Management process include the bottlenecks and critical paths as the ideal
theory or model.
The bottleneck process the notes towards the procedure has Limited capacity rather than all over
the process. However, when the longest sequel activities are part of the process, and the
organisation need to uncover each of the methods to complete the process, the process is called
the critical path (Steinke& Fischer, 2016). In this type, there are different visible dependencies,
which include the maximum amount of allowable slack activities. Using the critical path model
is dependable on the kind of organisational design. There are different varieties including
vertical, horizontal and hybrid. The Call Us Plumbing is accounted as both the vertical and
horizontal organisational design. The current situation indicates that the entire relationship with
different suppliers and client are equally responsible for completing the work. Besides that, the
horizontal practice includes workload for the employees. In this type, the employees pass on
their work within themselves for serving the client.
The capacity planning of Call Us Plumbing limited has to focus on the current organisational
requirements for overcoming the situation. However, there are the different problems like
excessive inventory, increased inventory cost, etc. The critical path model will help in analysing
each of the requirements for the process of overcoming the situation (Song, Govindan, Xu, Du,

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&Qiao, 2017). The delay for the project and none optimise production equipment is part of the
problem which needs to overcome by capacity planning. The hybrid form will help the
organisation in maintaining both the suppliers and also the retailers.
2. Inventory and stock
2.1 Describing two inventory and stock management strategies
It is to be mentioned that there are various inventory and stock management strategies which can
be used by Call Us plumbing to manage their inventory and stock and two of them are as
follows:
1. Just in Time inventory management system: Now this management strategy shows the
inconsistency of the conventional management strategy and is known to be more accurate
for manufacturing firms. The model describes various management systems under which
the company only buys inventory and stock for the manufacturing products demanded by
the customers. In such case inventory and stock are managed in accordance to the
customer demand (Wild, 2017). There are three stages of each inventory in which they
are classified which raw material, works in progress and finished goods. Under this
method of inventory management materials only arrive at time of assembling and usage
to deliver products to the customers. It is important to consider that in this process
demand of the market is an important parameter based on which inventory is managed
which means that there is no extra load over the company. This is to manage extra
inventory which they will have to ensure in processing. It is important to consider that in
this way the accuracy of managing inventory and stock increase and accountability of
records increases in an evident manner. Classification of the inventory is done in the

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status of its processing which makes its easier to identify the status of each inventory
which eventually causes the differentiation of the products. It is important to consider that
the dav stage of using this model and strategy of management will help Call Us Plumbing
in better management of inventory in accordance to their increasing demand whereas the
classification of stock can be done in an more differentiated manner. Although the
compatibility of such model to the operational size of the company can be questionable as
it can be said that the model mainly suit companies of small size.
2. Economic order quantity: Economic order quantity is an inventory management
strategy under which there are processes of managing inventory and stock of a company
true mathematical process. In this process the maximum and minimum level of demand
of a certain product is determined based on which the overall calculation in regards of
reorder quantity time at which the raw materials are to be ordered and turnovers are
represented. As it is mathematical in nature the management style is very scientific and
accurate which can also be done in a forecasting manner. Management of a company can
easily for caste the reorder quantity and levels to make sure that at accurate timings raw
materials and inventory are added to maths the protection and demands of the market.Call
Us Plumbing Can use this method of inventory management as an strategy to build an
effective inventory system which is accurate and well managed so that the following can
match the increase of demand in the near future of the company. It can certainly be used
byCall Us Plumbingbut the company will have to employee expertise so that they are
able to calculate accurate amount and quantities which will help the company in
reordering at correct time which will help the company in increasing its operational
efficiency in terms of inventory management and inventory availability within the

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production system of the company. Although it can be said that the forecasting process
which can be done under this system of inventory management cannot meet the actual
results which can even have a detrimental effect over the operations of the firm hence the
company will have to look at this factor before making any decision over the adoption of
search inventory management system (Coelho & Laporte, 2014).
2.2 Creating an inventory management tool using widely accepted approaches within Call
Us Plumbing
Call Us Plumbing Is a supplier of plumbing items in the regional areas of New Zealand and has a
large amount of contractor slumbers and retailers with in New Zealand is order the products of
this company has a customer base of this company is very large and the demand of its product is
also veryphenomenal. It can be said that the company will have to use an effective inventory
management tool to manage its inventory and produce products at a regular rate without any
operational deficiency which can be caused through mismanagement of inventory or stock within
the company. Now there are various types of approaches which are there within the inventory
management system’s study which helps in guiding a company to properly managed inventory
and stock so that the inventory management system within the form is efficient and the company
is able to produce in an efficient manner without any miscommunication office management of
inventory and raw materials within the company. It is to be stated that through the use of
effective approaches which are suitable to the current scenario the company will have to create
inventory management tool helping in overall management of inventory and stock within the
forms operational activity. Currently it is seen that the company renders and produces over
150,000 of individual items alone and supplies over 1 million pieces per year.With growing
demand of its product in the market it is expected that the sales and demand of the company's

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product will tend to increase in the future years which can also go up to 300 thousand pieces per
month which shows that the individual items demand within the market will double in the future
space of time. Hence there will be a lot of raw materials inventory and stock which the company
will have to manage in order to fulfill the demands of the customers and increase the operational
size of the farm in an evident manner without stressing the overall inventory management system
within the company.
The inventory management approaches are as follows:
Conventional approach: under this approach the company will keep inventory under the fifo or
lifo method to further process the raw materials and create business good out of such product and
this is a very conventional management of inventory which study sional in nature and is
conducted by any company through efficiency.
Just in time inventory management approach: Under this approach the company only
considers the current demand based on which future production is done in the company only
order inventory as per the demands of the product and it does not have to manage extra inventory
raw materials for the production which decreases the inconsistency which was there in the
conventional approach by optimising the process of inventory management system.
Economic order quantity: This is a mathematical approach of inventory management system
which is used within a company to make the approach more accurate and scientific in nature it
can be said that the management of inventory through the system is more accurate and time
optimising which helps the company in faster and accurate the orders of inventory in accordance
to the demand of the product and production of the items within the firm.
It has been seen that the above approaches are the three major approaches within management of
inventory system which can be used in order to develop the tool of management of inventory