PGDM Executive 2018-2019

Operations Management

Group Assignments:
1) Birmingham International Airport
2) Turnaround at the Preston Plant
3) Toyota Motor Manufacturing, U.S.A., Inc.

Submitted to: Submitted by:

Dr. Santanu Roy Divya Mohanty
Prabhat Trivedi
Parsooraman Moorthy
Vishnu Shukla (180301020)
Table of Contents
I. Birmingham International Airport .......................... Error! Bookmark not defined.
II. Turnaround at the Preston Plant ............................ Error! Bookmark not defined.
III. Toyota Motor Manufacturing, USA………………………………………………………………….9
Case Study 1 – Birmingham International Airport

Question:

1. Identify some of the micro-operations to be found at the airport. For each one :
(a) Identify the transforming and transformed resources.
(b) State which is the predominant transformed resource.
(c) Describe the output of each micro-operation and say who you think its customers are.

1. Some of the micro-operations to be found at the airport are the following:

 Security checks
 Ticketing
 Baggage Handling
 Building infrastructure and maintenance

(a) Transforming resources for each of them will be as follows:

 Security checks - Passengers
 Ticketing - Passengers’ tickets
 Baggage Handling - Passengers’ baggage
 Building infrastructure and maintenance - Airport building

Transformed resources for each of them will be as follows:

 Security checks - Security guards / staffs

 Ticketing - Ticketing staff
 Baggage Handling - Baggage/counter handling staff
 Building infrastructure and maintenance - Maintenance / cleaning teams

(b) There is no predominant transformed resource as all the micro-operations are important and
independent of each other’s. And the main goal of each micro operation is to offer a better
and secured service to all passengers and staff members working o transiting by the airport.

(c) The output of these micro-operations as follows:

 Security checks: No suspected or unsafe passenger allowed or travelling
 Ticketing: Correct ticket with correct destination delivered
 Baggage Handling: Correct baggage tagging & correct destination
 Building Infrastructure and maintenance: Secure, nice, well-maintained, hygienic

The customers of these micro-operations are: -

 Security checks - Passengers

 Ticketing - Passengers
 Baggage Handling - Passengers
 Building infrastructure and maintenance - Airport staffs, Passengers and public

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 Question 2:

Summarize the job of the Operations Director. What are the main issues/problems he faces in
managing the airport?

The job of the Operations Director is to manage and supervise about 600 of the 700 employees
of the BIA. He also has to manage the day-to-day operations of the airport, develop short and
medium term operational planning. He has to ensure the smooth day-to-day running operations
of each department inside and outside the airport. The Operation Director has the responsibility
to make each of the airport’s operation as efficient as possible and he also has to maintain
continuous improvements and maintain the safety management policy. The operation manager
has to make sure that proper and good process and procedures are in place for day-to-day
running of the airport terminal.

The main issues/problems he faces in managing the airport are:-

a. Take the right decision at the right time.

b. Managing and agreeing on allocations of air-bridges and stands to different airlines.
c. Deal with major incidents such as bomb threats, handling emergency situations such as fire,
ill passengers, urgent evacuations or even death in the terminal.
d. Deal with delays in arrivals or departures, airplane breakdown.
e. Forecasting and planning of new amenities or building in order to meet with increasing
number of passengers travelling.

Question 3:

What do you think Richard Heard actually does every day (how does he spend his time)?

The daily workload of Richard Heard is:

1. Manage and supervise the 600 employees falling under his responsibility. Make sure that all
the Terminal managers and team leaders are managing their respective teams so that to
ensure the smooth operations inside and outside the terminal.
2. Assess, evaluate and coordinate the airport operations activities, safety and security needs.
3. Setting up and coordination of the safety and customer service standards so that all
stakeholders ensure effective operational planning for efficient allocation of infrastructure
to the airlines.
4. Planning and forecasting for future airport services through development of a master plan,
developing short and long term departmental goals and objectives.
5. Ensure that there are plans in place to deal with the day-to-day activity an problems of the
airport, such as urgent evacuation, heavy snowfall, bomb threats.
6. Act as leader and coordinator for the other operations in the airport such as airlines,
handling agents, shop owners and cargo handlers.
7. Ensure that there are contingency plans in place to deal with the day-to-day unexpected
situations such as fire, evacuations, bomb threats, ill passengers or staffs or even deaths in
terminal.
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Case Study 2: Turnaround at Preston plant

Q1. What are the most significant events in the story of how the plant survived because of its
adoption of quality-based principles?

The significant events in the story of how plant survived the crisis because of its adoption of quality
based principles are as follows.

Going back to basics:

Company decided to go back to initial set of process after curl problem was solved. After the curl
problem there was pressure from the higher management to increase the productivity as the company
was making a loss of around $ 10 million a year for two years. The pressure to increase productivity
had changed lot of processes. Going back to the basic meant company was on its way to do the right
thing ignoring the pressure to achieve the productivity.

Shut down rules:

Major factor that compromises quality on the shop floor is the ambiguity about the quality and process
adherence. At Preston, it suffered a loss of around $400,000, because product had to be scrapped,
the reason being operators were in doubt whether to shut the line or go ahead. With the
encouragement to the shutdown rules, the company made it clear that it focuses on increasing the
quality, reducing the cost (rework and scrap) at the cost of productivity.

Daily Reviews:

The process of continuous improvement requires continuous monitoring, identification of problem

and implementing the corrective measures. The process of daily review was started as an activity
monitoring, discussing the daily problem faced on the shop floor and the areas of improvement. As
the saying goes “all of us are smarter than one of us”, the daily meeting ensured that operators were
discussing the real problems, reporting the process improvements and moving in the positive
direction. This also helped in boosting the morale of the employees as it brought a feeling of doing
something right and not doing anything without thinking.

Monthly Review of All shifts:

Going ahead with the daily review meeting where people from only one shift were present,
management also decided to bring the operators from all shifts into the meetings at the same time.
This meant, plant will be shut during that time and company is not producing anything during that
time. This is a cost to a company but management was willing to take that chance so that to bring the
productivity and quality back. This also ensured various problems faced during different shifts and
how they coped up with it. Knowledge is sharing and in these monthly meeting the people from HP
were also invited which ensured that they also get the first hand of experience how much the company
was serious about bringing right processes back.

Convincing the rest of the World:

Everything was coming in place, and COO had turned the corner, two events happened; Firstly, HP did
not give Viper contract and secondly, Rendell decided to shut the plant because of the losses.
Notwithstanding the decision, management team at Preston focused on following to convince HP and
Rendell.

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 1. Improving the quality

2. Reducing the cost

3. Create portfolio of new ideas

Q2. The plant’s processes eventually were brought under control. What were the main benefits of
this?

The plant was brought under control by focusing on following three areas.

1. Improving the quality

2. Reducing the cost

3. Create portfolio of new ideas

Benefits from each of the above three things are as follows.

Improving quality: It was implemented using full statistical process in the monitoring system. To
improve the quality, they also installed quality conscious and problem solving tools throughout the
plant. By December 2009, there were 40 percent fewer people in the plant than two months earlier.
Quality people were down from 22 to 9. The reason quality manager at the Preston quoted was the
plant is making a good product that it does not need more people to control garbage.

Statistical Process Control: Statistical process control was established throughout the plant to ensure
that plant is continuously under monitoring and control. And the same data can be shared with the
client to show the transparency and operational excellence of the company. Statistical process control
also ensured that the quality is not compromised and hence the garbage and rework is reduced to
minimum. This helped company put an operational profit in December 2010, for the first time in last
two years.

Cost Reduction: Cost reduction measure in any company is a painful process. As most of the staff was
aware of the plant being shut down in few months, there was already an atmosphere of apprehension
and uncertainty around. Things that can damage the most on the shop floor is the uncertainty and
ambiguity. If the employees are not aligned with the purpose of the organization, then it can affect
the productivity and the overall quality of the product. The management ensured that the
transparency was maintained throughout the time so that employees understand the business
decision. The decision to layoff was taken because management through zero based assessment
decided that cutting numbers had greater impact on cost than saving the payroll.

Create portfolio of new ideas: With the established process company could investigate several new
products and ideas. It provided the competitive edge to the company and ensured that company is
able to manufacture the products that seemed technically difficult. It produced “Eco wrap” a
recyclable protective wrap that was aimed at Japanese market.

All the above action helped Preston renew relationship with HP and HP asked Preston in the spring of
2010 to work on new trial products. By April 2010, the plant had reported three months of profitability.
This in turn changed the mind of Rendell and at the end of April Rendell changed the decision to shut
down its plant.

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At the end of 2010, Company had captured 75% of the HP’s US printing business and was being asked
to work on several large projects. This showed that through established process Preston has regained
the trust of HP.

Q3.SPC is an operational level technique of ensuring quality conformance. How many of the benefits
of bringing the plant under control would you class as strategic?

As Sampson puts it, one major challenge in maintain the quality is identifying when the quality has
drifted away from what is acceptable. As the Preston was going through the losses for continuous two
years, it was very evident the company as a whole performing badly in every front, that is maintain
quality, cost, and rework.

Implantation of SPC brings the total quality management in the plant and this is the basic requirement
to achieve the quality benchmark for the company to establish itself in the competitive world.

Power emphasizes that operation can be set straight only focusing on the processes. The management
decision to implement statistical process model was aimed at bringing the operational as well as the
strategic benefit to the company. The strategic benefits from the SPC are as follows.

Providing the Competitive advantage: Company established itself as a competent and profitable
player and hence could capture the 75% of the HPs US business. This also shows that the it was the
back end process that provided the much needed credibility to the company in the market in terms of
quality and profitability.

Monitoring and Control: No company grows without learning and assessing itself. It was inculcated
right from the daily review processes to assess what we have done right, where we have faced
problems and what we could have done better. If each and every employee is able to answer these
three questions every day for the company, it will take a company to a different level altogether.
Hence monitoring and control provides a strategic benefit to a company that it is on the path of
achieving its strategic goal.

Continuous Improvement: As the company is continuously monitoring and improving itself, it sets
itself on the path of continuous improvement where the process itself sets to puts operations in self-
correcting mode. This gives company advantage to build new ideas, try out new products and
investigate the complex processes.

Technical Competence to execute the large and complex projects: With established SPC and problem
solving tools at all the locations in the plant, company is able to execute some of the largest and
complex projects for HP. Also, for the Japanese market it could create an innovative product like “Eco
wrap” a recyclable protective wrap that out Preston in the league of competitive and innovative
companies.

To summarize SPC helps achieve operational benefits as well as the Strategic benefits for the company.
The management has to focus on what kind of strategic benefits it wants to derive from the
operational objective. It can be done by setting up the right process and practices in place.

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Q4. Discuss the relationship between the day-to-day tasks and the long-term issues and explain how
Richard manages to oversee both at the same time?

The day-to-day tasks are about making the daily operation as efficient as possible. Good processes
and procedures need to be in place after proper analysis and testing of same. Everyone working in
the operations should be familiar and aware of their daily tasks. Day-to-day tasks also include the
planning of runways, maintaining and agreeing of slots.

Whereas long-term issues are about future plans and forecast, planning of new building project such
as car parks, new shop outlets, people mover system in order to ensure that the terminal has
enough capacity to accommodate the fast growing passenger rate. Negotiate and encourage airlines
to fill the off-peak times.

Richard manages to oversee both at the same time because he has got different managers at
different level of operations to help in the daily management of the terminal and also in the long
term planning. The Terminal Manager deals and sort out all major day-to-day incidents in the
terminal for example make sure that everyone knows what is happening, planes delays and
diversions, evacuation process and procedure, bomb threats or stranded passenger at the airport.
The team of Terminal Manager covers the airport on a 24x7 basis with one senior manager
overseeing each shift.

Operations Duty Manager is an equivalent of the Terminal Manager who looks after the airfield side.
Their jobs consist of dealing with the day-to-day issues such as allocation stand change when delays
occur or arranging for snow clearance if needed.

The Operations Director has weekly communication meetings with the Terminal Mangers,
Operations Duty Managers and the operational planning department to discuss about the
understandings of the actual process and procedure and find solutions or amendments if needed.

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Case Study 3: Toyota Motor Manufacturing, USA, Inc.

Q1. As Doug Friesen, what would you do to address the seat problem? Where would you focus your
attention and solution efforts?

The major problem that Doug, manager of assembly, needs to address is of Seat Problems. Due to
seat problems, production level is decreasing and which resultant leads to increase in overtime
works, lead-time and off-time vehicle inventory.

The major problem that is observed is improper seat quality management in KSF. Most of the seat
problems were occurring because of this mismanagement like, wrong, missing and broken parts,
wrinkles and missing bolster.

Also, KSF inspection of seats before shipping is not proper. There need to check the method followed
by KFS while inspection of seats because several of defective seats are being send as fit. May be by
providing more training to the worker this problem could be solved.

Also, there was ineffective feedback system, due to which Doug was not able to reach the specific
solution for the seat problems. So, by properly sharing and discussing all the feedbacks may give best
optimum solution to the problem.

Q2. What options exist? What would you recommend? Why?

The options for the seat problem are: -

1. Fixing of bolts and hooks in a proper manner – As the members of the teams were trying to
fix the bolt in the front seats they tend to shot the bolt at a wrong angle because of which
cross threading happens. If they can work for 30 sec. more on it then they will be able to
solve this problem at that particular moment.
2. Company was following JIT method because of which seats reaches at TMM on time but
because of this there is no time left for solving any problem related to the quality of the seat
at the time of installation.
3. Back Up for seats – As seats are the delicate object to be installed in a car so any mishandling
can cause damage to it very easily which can cause problem while installation to stop this
kind of problems they must have a backup of the seats in their warehouse.
4. Use of plastic hooks – as company was using metal hook which can cause body of the
consumer some damage to reduce that company can use plastic hooks which will do the
work as well as will no harm the costumers to.

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Q3. Where, if at all, does the current routine for handling defective seats deviate from the principles
of the Toyota Production System (TPS)?

Toyota Production system was based on the principles of Just in Time (JIT) and JIDOKA which stated
that production should be stopped when problems are detected.

a) Deviations from JIDOKA as it implied that production should be stopped when problems surfaced
but as in the case of defective seat problem production was not stopped and car passed through
assembly line with defective seats in it. Car was taken to Code 1 clinic area to detect the problem and
then to overflow parking area for seat replacement.

b) Deviations from JIT principle as it stated that produce what was needed and when it was needed.
So it aimed at reduction of waste and inventory but in routine for handling of defective seats cars were
moved to overflow parking area where seat replacement was done so it resulted in increase in
inventory as well as waste. Secondly seats with no defects were not produced at a time when they
were needed.

These deviations occurred because the production people knew that stopping production was too
expensive and it was possible to finish the car without seats in it.

Q4. What is the real problem facing Doug Friesen?

The production of cars was getting low and as a result the plant reports the shortfall of 45 cars per
shift. The main issue was regarding the car seats.

Friesen found that the designing of small part used in the assembly of the seat was the main problem.
The material of the hook used in earlier models were made up of metal while in the new model it is of
fabric whereas the assembly line was designed for metal hook as a result the hook is getting damaged
at times in the process of assembling the seat and led to the delay in manufacturing of car.

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