Operations Management Report: Global Leisure Furniture Case Study

This report delves into the principles of operations management within the context of Global Leisure Furniture Company, a supplier of chair components and leisure furniture. It explores the significance of operations management, its link to strategic planning, and relevant techniques for production. The report analyzes operational functions, emphasizing the importance of efficiency, effectiveness, and economy (3 E's) in minimizing costs and maximizing quality. It examines the impact of cost minimization and quality maximization strategies, highlighting the importance of performance objectives such as cost, quality, speed, flexibility, and dependability. Furthermore, the report discusses linear programming and its advantages, critical path analysis, and network planning in production processes. It concludes with a discussion on designing layouts, project management, and quality control approaches for furniture production.

Operations
Management
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Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1) Importance of operations management.................................................................................3
1.2) Analyzing operation function...............................................................................................4
1.3) Process model.......................................................................................................................4
2.1 Importance of 3 E's................................................................................................................5
2.2) Impact of Cost minimization and quality maximization......................................................6
2.3) Significance of Performance objectives...............................................................................7
TASK 2............................................................................................................................................8
3.1) Linear Programming.............................................................................................................8
3.2) Evaluating critical path analysis and network planning.......................................................8
3.3) Need for operational planning and control...........................................................................9
4.1) Designing of possible layout for producing furniture........................................................10
4.2) Network plan and critical path............................................................................................10
4.3) Approaches can be used for project management and quality control...............................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................15
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INTRODUCTION
Operation management can be defined as an area of management which is usually
concerned with designing and controlling process of production and also in redesigning business
operations in production of goods and services. This process is concerned with planning,
organizing and supervising in context of production and manufacturing or provision of services
(Griffin, 2013). The organization undertaken for this report is Global Leisure Furniture Company
which is a leading and established supplier of chair components and leisure furniture to office
and contract market. This present report is based on understanding the nature and importance of
operational management and also the link between operations management and strategic
planning. This report also focuses on relevant technique to production of operational plan for
organization.
TASK 1
1.1) Importance of operations management
An effective operation can give various types of advantages to Global leisure company.
By being efficient and effective operation management can reduce the cost of products and
service. This operation management further leads in increase in revenue through increase in
customer satisfaction for providing quality of goods and services. It also provides basis for
innovation by building a solid base for operation and knowledge (Benjaafar, Li and Daskin,
2013). Operation management can reduce amount of capital employed by being effective and
innovative in use of resources which is necessary in producing goods and services. There are
several reasons which makes operation management important. Encompasses. Global leisure
company can lead to economic growth and development and also help employees to receive high
wages in order to increase organization profit without causing inflation.
Furthermore, operational management is responsible for final product and service
produced by the input. The final product which will be created will attract consumers and
ensures that organization make profit. If customers demands are fulfilled than business will be
able to began and increase its sales and also will be able to maximize their profits. Decision
having major impact on both cost of producing products and also how well the product are
produced and delivered which have a major impact on revenue (Brown, Bessant and Lamming,
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2013). Global leisure company uses operation management to ensure efficiency and
effectiveness in the organization. Organization must also ensure that they are working well
within the time and able to produce best quality of goods. Producing on time gives Global leisure
company several advantages. This will give them more opportunity to attract their target market
and also will be able to identify their strength and weakness, they can further go ahead of
competitors by making improvements where needed (Becker, Kugeler and Rosemann, 2013).
1.2) Analyzing operation function
Operational function will bring together the raw material with production to make a
perfect product which customer requires. This function helps Global leisure company to improve
its processes and achieve cost savings. It is essential for Global leisure to have right people in
place in order to achieve competent advantage over other rival firms. Organization aim is to
develop high performance team who will work within a culture of continuous improvement.
Employees in Global leisure have opportunity to contribute their ideas in order to achieve results.
Operational manager have to understand that what the overall objectives of the operations
are. These objectives focus on major areas and are listed as quality, speed, dependability,
flexibility and cost. Global leisure company have to purchase woods and fabrics of high quality
for making attractive and delightful furniture (La Rosa and et.al., 2011). Hiring employees and
train them to prepare attractive designs, shades, structure which attracts consumers to buy them.
Location and layout of furniture factory plays a crucial role as global leisure company need to
satisfy their employees demands too. Organization must be easy to reach with low convenience
fare. Operational function is also vital as business are able to produce safely; to cost; to quality;
on time within the law framed by government. Producing things on time give Global leisure
company several advantage as this will give opportunity to organization to attract their target
market and also they can easily identify their strength and weakness in order to gain competitive
advantage (Ramezani, Bashiri and Tavakkoli-Moghaddam, 2013). Organization need to also
ensure that they are able to save unnecessary and unexpected cost and also making use of their
resources in production of final goods and services. This might further help organization to save
their money and control their expenditure and make efficient and effective use of it.
1.3) Process model
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Global Leisure Company focusing on contributing their Capital, Material and Labor
which will lead organization to transportation storage and inspection of all the raw materials.
This process will further help the furniture company for providing facilitating goods to
consumers. This will help mentioned company to increase more of the revenue and productivity.
2.1 Importance of 3 E's
Value for customers money is often treated as 3 E's as it includes Economy, Efficiency
and Effectiveness. In today's competitive world, right balance of implementing 3 E's help
organization to be more flexible and respond with faster pace in order to face current and future
challenges and difficulties (Sapolsky, 2013). 3 E's are often consider as value for money and it
bifurcates as:
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Inputs
Capital
Material
Equipment
Labor
Suppliers
Time
Transformational System
Transportation
Storage
Inspection of raw
materials
Alteration
Outputs
Services
Facilitating goods
Environment
Customers
Competition
Suppliers
Technology
Monitoring and Control

 Economy- it means minimizing cost or resources (i.e. doing things at low price), reducing
cost of inputs Efficiency- performing and doing task with reasonable efforts (i.e. doing things in right
way), right effort allocation
 Effectiveness- degree or level to which objectives are met (i.e. doing things right),
achieving goals to satisfy organizational needs
Global leisure company following policy of value driven profit. It means that the
organization is providing right product with right amount of quality and also the price of product
matching with the market expectations (Grant, 2012). Economy for Global leisure company
covers the financial side on which target is achieved and it is a fundamental way to balance the
sue of resources to achieve right goals at reasonable price. Efficiency on the other hand for
organization shows the right use of all the resources to accomplish goals and objectives.
Efficiency in an organization can be measured by acknowledging process to complete a task and
allocating right amount of resources. Furthermore, effectiveness of Global leisure company is
maintained on basis of achievement of organizational goals. For this, directors and senior
executives are in charge to meet such criteria.
2.2) Impact of Cost minimization and quality maximization
There consist a fair link between Cost minimization and quality maximization. At the
beginning of earlier time period when Global leisure company was struggling, cost minimization
had become important factor. As it was risky for business too but considering economy need top
management of organization too a proactive judgment in order to cut down price of less
demanding and oriented furniture (Gruman and Saks, 2011). This process helped Global leisure
company to secure significant amount of money as sale of those furniture increased and
simultaneously profit of organization too. Cost minimization aimed to achieve most effective
way of delivering goods and service with required level of quality. Benefit of cost minimization
in Global leisure company is that organization can save money but need to have lower unit costs
and another benefit is to have higher profit margin, reinforced cash flow and high operating
profits.
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Moreover, Global leisure company concentrating on maximizing quality and improving
standard of product in order to meet and consumers needs. By adopting best practices to
maximize quality and effectiveness, following designed practice which ensures accuracy and
quality of results. Maximizing quality and improving design of the product constantly can be
time consuming and expensive task for Global leisure company (Zhu, 2014). This process head
against cost minimization as it is difficult for organization to reduce cost but also maintain good
and high quality of product.
2.3) Significance of Performance objectives
The process in which Global leisure company secures and utilizes its resources which
determine extent to which organization can successfully pursue performance objectives. These 5
objectives adds value for customers and satisfy the necessary requirements of them (Kacar,
Irdem, and Uzsoy, 2012). These objectives are Cost, Dependability, Flexibility, Quality and
Speed. Cost- Cost is the ability of organization to produce at minimum cost. This strategy helps
company to achieve the economic strength. Cutting cost of less demanding furniture can
let organization to clear its stock. Quality- Quality means producing goods with specification and without any error or
mistake. Quality is considered as key foundation of any manufacturing business as it
makes goodwill of the firm. Global leisure company have to provide quality of product to
their customers in order to achieve their objectives and keep them happy (Zareei and
et.al., 2011). Speed- Super fast turn around in terms of profit is considered as differentiator which
separate organization from their competitors. In order to have a speed advantage, Global
leisure company have to look at internal chain to increase efficiency Flexibility- Flexibility in an organization requires balancing proficiency to ensure orders
and customer requirements with same level of efficiency. It is considered as ability to
change operations and it constitutes: Ability to change value of production, time taken in
production, introducing and innovating new products.
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 Dependability- Global leisure company have to stand on promises which are made with
customers as it is a important factor that customers are happy and trusting the3 company
(Scheer, 2012). Dependability is the capability to deliver product and services in
agreement with promises made with customers.
TASK 2
3.1) Linear Programming
Linear programming is an mathematical process that has been developed to assist top
management in making decision and is considered as most widely tool for industrial engineering
and management science. It is further considered as an process of taking various linear equations
which relates to some situation and in order find its best value under given conditions. For
manufacturing firms like Global leisure company it includes well defined objective function and
variable should have constraint amount. Further there need to be a alternative course of action
and the decision variable should be inter related and non negative (Chaabane, Ramudhin and
Paquet, 2012). Linear programming is helpful for business, industries, distribution, marketing
and economy. It helps Global leisure company in minimizing cost and maximizing profit as it
plays an important role in management decision also. Managers in organization can easily
calculate sale unit of furniture and prices which can lead to maximization profit or company.
ADVANTAGES OF LINEAR PROGRAMMING
 It helps Global leisure company in achieving best use of productive factors.
 It helps in improving quality of decision within organization.
 It helps in identifying and highlighting constriction point in the production process.
 It helps in providing better tools and formulas for changing the organizational conditions.
Linear programming have a mathematical and graphical solution to a given problem.
Mathematical solution is been done with the help of formulas whereas in graphical it is possible
when there only two decision variables are involved and the problem can be plot on a graph in
order to find execute reason of decision making (Kaplan and Atkinson, 2015).
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3.2) Evaluating critical path analysis and network planning
Critical Path Analysis (CPA) is a technique for process planning which is followed in
step by step way. It consist of series of activities which shows earliest completion of project and
schedule network analysis technique which used to determine the schedule flexibility and critical
path of project scheduled network diagram. CPA is widely sued as a project management tool
which uses network analysis in order to help project managers to solve complex and time
sensitive operations. This analysis is considered as longest course in a project schedule network
diagram (Jiang and et.al., 2012). As stated above, as it is a longest path, it identify duration of
project simultaneously with finish and start dates of the project. Some important points of CPA
is:
 It shows the activities order which needs to be undertaken.
 It shows the activities which are completed and activities which can take place only for
once.
 It shows considering activities which can be undertaken simultaneously in order to
reduce overall time taken to complete whole projection.
 CPA tries to set out individual activities which makes larger project.
Using this tool Global leisure company might ensure that production is completed as
soon as possible and have used resources as efficiently as possible. It also depend upon
information so used to compete the task (Van De Voorde,, Paauwe and Van Veldhoven, 2012).
Moreover, CPA need effective planning so tasks in Global leisure company runs smoothly. After
forming networks and making approximate and initial calculations, progress of particular task
can be examined and also whole network updates as work progress ensures that project
completions is not been delayed. Further advantage of this analysis is that it helps in recognizing
base time duration to finish a task for an organization (Critical Path Analysis. 2015).
3.3) Need for operational planning and control
This conclusion involve arrangement and control of labor or employees, capital input,
material which helps Global leisure company to produce quality and quantity of production
efficiently and effectively. Operational planning and control are genuinely based on predicting
future demands for output of system. But unfortunately, even having best tuned operational
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system, demand of consumers cannot be met with existing system in a given time period because
of new product developments, unpredicted market trends and competitors actions (Zareei and
et.al., 2011). Planning and control is further concerned with managing current activities of the
operation so as to satisfy consumers needs and demands. This technique is concerned with
reconciliation between what operation resource can deliver and what consumer market requires.
In Global leisure company, employees plays a crucial role as they provide direct service to their
customers. Furniture which is so manufactured are puted in showroom. The staff so recruited by
organization helps customers who come in and have a direct communication with them and
ensures that there demands are satisfied (Beattie and Reader, 2013). Management team of Global
leisure company ensures that they regularly receive feedback from their customers and any
complaint regarding services sudden improvements have to be made.
Furthermore, long term planning involves factors such as fixed product and capacity
planning. These long term decisions might affect Global leisure company in long run process.
Product forecasting, scheduling operations and inventory management constitutes part of short
and medium term planning. Operational manager organists operation functions by assigning
responsibilities and creating various structures (Turner, 2014). Control makes the adjustments
which allow the operation to achieve the objectives that the plan has set, even when the
assumptions on which the plan was based do not hold true.
4.1) Designing of possible layout for producing furniture
It can be assessed that the business is required to develop possible design layouts in order
to produce furniture products effectively. Moreover, it consists of varied layouts like process,
product and hybrid layout. In product layout, organization comprises of varied work situations
and manages it effectively in order to develop the product and manufacture it effectively.
Further, hybrid layout is the mixture of both product and process layout. Thus, it can be assessed
that for Global Leisure Company process layout is suitable that assists them to group all the
similar activities together. Further, as a result of this it can be stated that it is crucial for cited
firm to employee professionals and experts of varied fields or areas in the furniture
manufacturing department so that difficult activities or operations can also be performed
effectively (Peng and Lai, 2012). Further, process layout assists the organization that provides
flexibility so that furniture products can be produced effectively and of high quality. Thus,
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business produces furniture products such as office furniture that assists them to manufacture the
final products effective to attract customers. Moreover, mentioned company is focusing on five
crucial factors like cost, quality, speed, flexibility and dependability. Cost will help mentioned
organization to produce best of the products at an affordable price. Quality of products will play
a crucial role in organization revenue growth and sales. Flexibility will help organization to give
easy and safe delivery of products and services which will satisfy their needs in significant
manner.
4.2) Network plan and critical path
The network plan that involves different activities and operations which start from market
research and at the end provide the end or final products to the users or clients. Further, all these
activities need to be planned effectively and in what time the activities will be completed. The
Global Leisure Company is required to undertake a network plan and also decide critical path
that involves the shortest time taken to complete or finish the project (Gruman and Saks, 2011).
However, business plans network plan for packaging process. It is as follows-
Table 1: Network plan for packaging process for Furniture Supplier Company
S.
No.
Activity Activit
y
Name
Duration Precedin
g
activities
1. Carrying out market research in order to assess the
availability of varied types of packaging process
A 15 -
2. Investigating alternatives B 11 -
3. Assessing choices C 8 A
4. Choosing the suitable packaging process D 7 B
5. Primary packaging E 16 C,D
6. Secondary packaging F 20 E
7. Checking the superiority of packaging G 8 F
8. Market testing H 25 G
9. Managing alteration I 10 H
10. Completion J 9 I
Total estimated time (in days) 129
The above drawn network plan assists in assessing the activities and operations which shows that
the maximum time needed in order to finish the packaging process is 129 days.
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Thus, the above drawn network diagram states that there are overall 10 activities or
operations that assists in completing the packaging process effectively and efficiently. By
carrying out all these activities it assists firm in effectively manufacturing the effective range of
furniture products in order to attain customers and enhance the sales and profitability within
business (Zareei and et.al., 2011).
4.3) Approaches can be used for project management and quality control
There are different approaches that can be adopted in order to manage and control the
quality of business so that it assists in maintaining total quality management within firm. This
method or approach helps in delivering best quality furniture products so that it attracts
customers and fulfill their needs and expectations. Furthermore, quality assurance is firm helps
in attaining right quality product to customers and achieves set goals (Chaabane, Ramudhin and
Paquet, 2012). Thus, it is essential for Global Leisure Company to maintain its quality and
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