Critically evaluate theory of operations management and its contribution to service delivery and productivity.

AIMS

This module aims to provide students with a solid foundation in operations management capability and to facilitate students to acquire knowledge of rigorous operations models to enable excellent performance to be achieved. The aim is to draw from a wide range of settings; healthcare, public services, retail, contact centres and manufacturing to name a few.This module aims to hone several attributes that are important for a management professional: notably; making connections and sense of complex systems; and questioning assumptions.


LEARNING OUTCOMES

Successful students will be able to:

1          Critically evaluate theory of operations management and its contribution to service delivery and productivity.

2          Critically evaluate real world business cases from the perspective of a key decision maker to analyse the situation and decide what to do to address the challenges.

3          Apply quantitative models that will enhance management decision-making or inform management about relevant performance measures.

4          Wrestle with business problems in a group of very accomplished peers from diverse functions and industries to debate the issues, present new viewpoints, counter positions, and build on one another`s ideas.

ASSESSMENT AND FEEDBACK

The module will be 100% coursework.

Individual Assignment:        Case Study - The Paramount Diner

The assignment is divided into five sections. Students are required to complete:

1)    Essay on Theory of Swift Even Flow (30%)

Students should read appropriate material regarding the importance of managing flow and productivity. The key theory to investigate is TSEF (Theory of Swift Even Flow). A list of books and articles* have been suggested to get you started. Students should also perform key word searches to supplement the directed reading. The objective of this scholarship is to help students to critically evaluate operations management relative to traditional management. 

Suggested Key Words

swift even flow – productivity – services – manufacturing – healthcare – patient flow – operations management

You may want to combine a couple of these key words in your search using AND e.g. swift even flow AND productivity

(1,500 words)

2)    Process Analysis

a)    Following the guidelines provided below*, conduct a quantitative analysis of the restaurant operation to identify the bottleneck in the process and to calculate how long customers might have to wait to be served.

b)    Explain how the unusual seating policy is an operations management tool.

(250 words for 2 b)

Cycle Times, Bottleneck Identification & Flow Rate

* Using the Process Flow Diagram in Figure 1 and the information on page 3 of the case, you should calculate the processing time for each of the three steps in seconds per customer

♦ Note that there are two employees fulfilling drinks; you are told how many seconds that one employee can fulfil a drinks order.

♣ Note that there are 2.6 customers per party; you are told how many seconds that the one employee taking payments can process per party. You’ll have to convert this to per customer.

♥ You are told on page 3 how long in minutes that every table turns over.

You need to convert this table turnover time to seconds and then divide by the number of seats in the restaurant to calculate the seconds per customer. However, you should assume only 80% of the seats are occupied by customers at any time. Therefore, make sure to multiply the seat number by 0.8 before completing the calculation.

  • You should now be able to identify the bottleneck step in seconds per customer; this is the cycle time of the process.

To convert cycle time into the Flow Rate that customers flow through the restaurant, use the formula  1 / cycle-time. This will tell you how many customers per second are processed. Remember to multiply this by 3600 to convert the Flow Rate units into customers per hour. This Flow Rate in customers per hour can be used as the value of  (service rate) for the equations in Exhibit 8 of the case study.

Customer Arrival Rates

Waiting time formulae are provided in Exhibit 8 of the case study.

Use Exhibit 6 to analyse the rate per hour that customers arrive. You should focus on the Saturday data as this is the restaurant’s busiest day. To start you off: between 7:30am and 8:30am, 35+45 = 80 customers arrive. You can calculate the number of customers per hour for each of the hours up to 1:30pm.

Use Exhibit 7 on Customer Balking and Reneging to adjust your customer arrival rates. To start you off: between 7:30am and 8:30am, 15 customers either balk or renege. This means that between 7:30am and 8:30am, 80 customers arriving – 15 customers balking or reneging = a net 65 customers per hour arriving. You can similarly adjust your calculations above for each of the hours up to 1:30pm. You could use a table like that in Table 1 below.

            Table 1: Customers per hour arriving on Saturday

Hour Slot

Number of customers arriving per hour from Exhibit 6

Number of customers balking or reneging per hour from Exhibit 7

Net number of customers arriving per hour

Adjust to nearest whole number

 

e.g. 72 goes to 70

e.g. 77 goes to 80 etc.

7:30am – 8:30am

35 + 45 = 80

15

65

65

8:30am – 9:30am

35 + 42 = 77

4 + 12 = 16

61

60

9:30am – 10:30am

 

 

 

 

10:30am – 11:30am

 

 

 

 

11:30am – 12:30pm

 

 

 

 

12:30pm – 1:30pm

 

 

 

 


Once you have completed a similar table for yourselves, choose the highest net customers arriving per hour value (Table 1, column 5) for the calculations below.

This value can be used as the value of  (customer arrival rate) for the equations in Exhibit 8 of the case study.

Worker Utilization

The Utilization equation is given in Exhibit 8 of the case study:

You can calculate Worker Utilization  as you have already worked out  and  above.

Average Number of Customers Waiting for the Restaurant in a Queue

The equation for the average number of customers waiting for service (waiting in a queue) is given in Exhibit 8 of the case study: Lq  2  / (1 -

  • Once you have calculated Lq, multiply this by 1.5 minutes per customer (based on 90 customers per hour) to calculate how many minutes the wait will be for each customer.
  • We are told on page 2 of the case study that the restaurant opens on a Saturday at 8:00am. Exhibit 6 tells us that there are 35 customers in the queue on a Saturday morning before the restaurant opens. Therefore, you need to add this 35 to the Lq value above and multiply this by 1.5 minutes per customer (based on 90 customers per hour) to calculate how many minutes the wait really will be for each customer on a Saturday.

Restaurant Customer Queue Length when Carryout Orders are Being Processed

If the Paramount can process 90 customers per hour, let’s assume that Michael Conlon allows 10% of the customer orders to be carryout orders. This would mean that 9 customer orders per hour were for carryout food and 81 customers per hour could be processed in the restaurant.

  • Use 81 as the value of  (service rate) and recalculate worker utilization  
  • Use this new value of  to recalculate the number of customers waiting in the queue Lq

This will give you a good insight into the impact that accepting more carryout orders would have on queues at the restaurant.

3)    Read the two articles referenced below*** which describe how customers in service industries introduce variability.                                          

a)    Use the knowledge acquired to discuss how customers introduce variability for the Paramount

b)    Discuss whether the Paramount accommodates or reduces this type of variability.

(750 words for 3 [a) & b)]

4)    Using the information from the case study and knowledge acquired from the calculations performed in part 1), students should consider the issue of carryout orders.                                                                                             

Your answer should consider the following issues:

a)    Where has the idea for carryout orders come from?

b)    What are the business motivations for adding this type of service?

c)    What impact will adding this service have on the restaurant customer experience?

(500 words for 4 a), b) & c))

5)    Advise the owner, Michael Conlon, as to the best course of action to take. You should choose between more carryout orders or less carryout orders. There are several reasons why you could justify either of these choices so your answer should describe what these might be****.                                      

(500 words)

**** What factors would tempt Michael Conlon to increase carryout orders?

**** What factors would tempt Michael Conlon to decrease carryout orders? 

6)    Using your knowledge of process kaizen, critique the restaurant’s process design from the perspective of what the Lean philosophy identifies as the three types of waste.           

(500 words)

It is expected that the overall written coursework will not exceed 4,000 words.

 

All published information that has been used in the preparation of the written assignment report should be properly referenced.

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