Operations Management Case Studies Essay

1. IntroductionThis report focuses on the fortune studies of the Levi Jeans contri providedeers and the California Auto Club reengineering customer emolument.It looks at operations gripment as a reference book for gaining a competitive advantage and overcoming potential problems experienced within and organisation or operate onplace.The questions to be reviewed ar as followsJeans Therapy Levis factory scater are assigned to ag aggroups, and morale takes a hit1. What went amiss(p) with Levis blend in to teams in their congeals?2. What could Levis lead d iodine differently to head off the problems?3. Devise a team bonus plan that you think might work and4. Do you think the necessity to move jeans takings offshore was inevitable? Could Levis postulate d iodine anything to avert the problem of increase dig be?A California Auto Club reengineering customer proceeds1. Discuss the customer service process at CSAA and controvert the different phases of the reengineerin g effort2. What tools from the operations consulting tool kit were applied here? Which some other ones would be of value here? Explain and3. Discuss process enablers role developing the novel design.2. What went wrong with Levis move to teams in their plants?In order to respond to two change and complexity, roughly organisations are turning to recentborn, more adaptive behaviors of doing their work, such as flatter organisational structures, more team orientated environments and greater support from technology.2.1 Scientific managementIt is fair to say that pre-introduction of the current teamwork dodging, Levis had in place the ideals of scientific management.Around the turn of the Twentieth Century, Frederick Winslow Taylor had developed a set of ideas knowing to deal grow employees in manufacturing industries to produce more come forward bewilder. Taylors objective was to attain high productivity by eliminating wasteful motions in humankind labour. Hence he divi ded work process into the sm entirelyest elements or motions based on cartridge holder and motion studies, separated intellectual and manual work, searched for the first class employee, who would then be happy and specialised on specific tasks, and provided them with good tools and paid elevated incentives for their high-quality performance.Taylor and his disciples cited the search for efficiency, one best way to do a byplay, as justification for such changes. Because scientific management advisors cl draw a bead oned they understood the natural laws of human demeanour and endurance, they argued that the implementation of scientific management would benefit both workers and society at-large. Nevertheless, skillight-emitting diode workers and their unions a good deal vociferously protested these changes because such practices make their work mo nononous and also trespassed upon what they perceived as their traditional prerogative to manage their own time on the job.2.2 Implement ation of teamsIn 1992, Levis abandoned its old piecework remains, under which a worker repeatedly performed a single, specialised task and was paid according tothe total amount of work he or she fattend. The new system would adopt groups of 10 to 35 to share tasks in the hold of higher(prenominal) organisational performance being gained from empowered psyches on the job(p)(a) together to contribute the best of their knowledge, skills and capabilities.While it was purview the new teamwork system would be more humane, safe and profitable, the negative affect it had on employees and managers ultimately led to the closing down of the U.S. plants. The new system managed to cause conflict amongst employees, damaged morale and triggered corrosive infighting. Furthermore, galore(postnominal) employees complained of shrinking pay packets and increasing workloads.What also could generate contributed to the breakdown of the system could sport complicated singular opinions, were emp loyees open fire face the struggle bet stooln competition over cooperation establishing responsibilities, employees non assessing each others expectations and connecting them with goals and misunderstanding, era it was indispensable for a team to have good communication skills, non-communication promotes confusion.3. What could Levis have done differently to avert the problems?In 1993 Levis hired a consulting firm to analyse the problems, concluding the company should start from glass and include any parties in redesign of pay structures and work processes. In hindsight, it is simple to say that Levis should not have phased out the old system as it seemed to be working. Having said this, with the introduction of the new system, there could have been greater emphasis placed on getting it right. What could Levis had done ameliorate?According to Keogh (2003), motivation is one of the virtu ally loaded nouns in the English language. It has an intrinsic negative, as intimately a s positive, connotation and its trigger is different for each individual. In a corporate context, well-motivated employees can produce a company. Those with poor motivation can generate serious workplace problems.3.1 Abraham Maslows hierarchy of inescapablyIn the late 1960s, Abraham Maslow developed a hierarchical theory of human of necessity. He set up a hierarchical theory of needs in which all the basic needs are at the bottom, and the needs concerned with mans highest potential are at the top. The hierarchic theory is frequently represented as a pyramid, with the larger, lower directs representing the lower needs, and the upper point representing the need for self-actualisation. Each level of the pyramid is dependent on the old level. For example, a person does not feel the second need until the demands of the first have been satisfied.Employees in any organisation, let alone Levis, need rewards. Working long hours and expending much time away from their families takes its toll and rewarding employees represents an end to the means. The first reward, which Levis could have undertaken, relates to Maslows hierarchy of needs. That is, employees feel rewarded with a high amount of self-esteem and a feeling of accomplishment for a job well done. This also ties in with self-actualisation as the employees have endured the more hardships in an industry notorious for low wages and lousy working conditions. Both of these needs are part of Maslows higher order need because they encompass more than just basic survival.3.2 Frederick Herzberg motivator-hygiene theoryIn the late 1950s, Frederick Herzberg, considered by many to be a pioneer in motivation theory, interviewed a group of employees to find out what made them satisfied and dissatisfied on the job. Based on his findings, Herzberg constructed a two-dimensional paradigm of factors modify peoples attitudes about work. He concluded that such factors as company policy, supervision, interpersonal relations, working conditions, and salary are hygiene factors rather than motivators.According to the theory, the absence of hygiene factors can create job dis joy, but their presence does not motivate or create satisfaction. In contrast, he typesetd from the knowledge that the motivatorswere elements that enriched a persons job he found five factors in particular that were solid determiners of job satisfaction achievement, recognition, the work itself, responsibility, and advancement. These motivators (satisfiers) were associated with long-term positive effects in job performance while the hygiene factors (dissatisfiers) consistently produced except piffling-term changes in job attitudes and performance, which quickly fell back to its preliminary level.If Levis took on the theories of Herzberg, whether in the old or new system, employees more than apt(predicate) would have embraced change. From the outset, management, could have ensured employees were happy in their environment, by pr oviding incentives, such as, bonus pay to highlight all of their hard work. As a result, the employees feel they have a sense of job security.4. Devise a team incentive plan that you think might work.An incentive is something that tends to stimulate or spur individual or group action.Incentives ( property, treats, certificates, extra privileges, etc.) are external ways of cause group work. They can be used selectively to build a sense of internal motivation within the group. This is accomplished through another behaviour modification principal paired association (Tracey, 1999).Incentives make group fellow members feel good, and these rewards follow a major accomplishment, then sooner or later the accomplishment itself will lead to a very(prenominal) positive feeling. This, in a nutshell, is the longer term justification for selectively using external incentives.In the case of Levis in is of my opinion that the need for affiliation is a basic motivator of work groups. Belonging to a special group, should have been highlighted, and having the time and resources to hang out with that group is very motivating and engaging, rather than monotonous work. Consequently, providing team incentives that allow group members the opportunity to mix is a very utile strategy in motivating group work(Andrews, 1999). Either incorporating the gain sharing or lump-sum bonuses and individual bonuses would suffice to inspection and repair morale and productivity. Refer to appendix A.5. Do you think the need to move jeans production offshore was inevitable? Could Levis have done anything to avert the problem of increasing labour costs?By early 1997, the writing was on the wall for Levis as their flagship mens denim jean had fallen to 26% of the market share from a high of 48% in 1990.In contemporary business, world companies need to be innovate in order to survive. Innovation is strongly advocated and valued throughout the whole process of production. But scientific management hardly pays any attention to mental institution. Instead, it focuses on dividing the job into small tasks, increasing the volume of output and then speeding up the rate of output. Was innovation for Levis to produce their product in foreign plants?5.1 GlobalisationGlobalisation is the movement of goods, services and money capital or investment across international boundaries and in this way becomes a predominately economic phenomenon sweeping the world. Throughout which, what were formerly national companies become international conglomerates. Hence, countries are no longer seen as unconditional and closed sovereign states, but as part of one big economy.Primarily this shift in thinking is driven by corporate Americas insatiable appetite to open new frontiers in emerging countries, and claim a monopoly on the source and distribution of products. All of which in short is because they are searching for more profit at a lower cost. Globalisation is also heavy backed by internation al consumerism, which is seen as the dominant religion of the era, which means that the fruits of this global production are rapidly sought after and indeed hungrily consumed.Initially this flood of products into the local markets of major economies causes prices to decrease. Whilst this lower cost to consumers contributes to a higher standard of living, it is short lived. Globalisation also brings the world closer to a central economy.In their endless search for greater profits they turn to the less wealthy, such as many of the Asian countries, i.e. Thailand, Taiwan and Vietnam. A large number of the poorer (or developing) countries now have rapidly advance employment rates . This is mainly due to the fact that with a lower standard of living in these countries people are prepared to work for significantly less, and still produce the same product.5.2 Averting increasing labour costsIt is inevitable that in any organisation of Levis magnitude experiencing a tramp in market share, that downsizing be a result because of it.Nowadays, markets have become far more global and dynamic, and the business environment turns more and more complicated and competitive. Employers and employees are faced with plenty of new opportunities and challenges. Also, manufacturing and information technology is getting more sophisticated speedily.To avert increasing labour costs, Levis did inaugurate more employee involvement, thus creating an environment in which people have an impact on finalitys and actions that affect their jobs. This could have been a stayer, if not for the toffee- nosed managers. In a team-oriented environment, employees contribute to the general success of the organisation, working with lad members to produce results. This may have cut out some mangers, thus reducing escalating costs of consulting firms.However, whilst its true that the implementation of self-managing practices in the work place has achieved significant progress in terms of motivation, we must remember that there are always two sides to every story, and bottom line is that many of the U.S. plant were not performing and many workersfelt held back.6. Discuss the customer service process at CSAA and discuss the different phases of the reengineering effort.CSAA were seeking ways in which to make operations better and more efficient. Gregory A. Smith, vice hot seat and general manager of indemnification operations, himself said that it was obvious that the old ways of doing business wouldnt work in the future, and that we necessary to make some fundamental changes. How was CSAA going to implement change to their outdated customer service strategy?6.1 Pre reengineering effortBefore the implementation of the reengineering effort CSAA had seemed like a trusted member of the family to its many members. But under its own admission, and for a need to improve operations, the business process at CSAA needed to go under the microscope.At the time of the old regime, the process es undertaken would not have differed much to many of the large corporations around the world. Addressing customers over the phone, whenever customers needed to rent a car, booking airline tickets, making insurance claims or just general enquiries seemed to be the norm.How they went about this though, as we look at it now, gave the impression of antediluvian times. With regard to how all claims, bookings, renewals and so on were made, by putting pen to paper, often service consultants needed liberation from a paper-intensive and error-prone work environment.Another problem faced by CSAA was that whenever members phoned in and made an enquiry, many of the consultants would refer their problems to other consultants until there was a resolution. Executive president himself saying, about the system, Thats not service thats a pinball effect.According to Cole (2001, p.307) Customer service is one of the well-nigh direct tools we have for building loyalty, attracting repeat business, g enerating word-of-mouth business and boosting profits. It might be full of paradoxes, but customer service can make or break your organisation.6.2 Principles of reengineeringIt would be unprofessional of CSAA to think that all of their problems would disappear without careful thinking and planning. In order for their reengineering efforts to succeed, they needed follow the principles of reengineering initiated by the management unspoilt Michael Hammer. Refer to appendix B.6.2.1 A reengineered job afterwards much deliberation, CSAA devised a new system designed for better customer service centring around a new position called members service consultant. CSAA felt it was time and as Cole (2001, p.8) states, planning involves establishing a goal and objectives and deciding how best to achieve them. What needs to be accomplished? By when? What needs to be done to make it happen? Who is best equipped to do it? As the old saying goes if you fail to plan, you plan to fail. Things dont hap pen by themselves wee need to plan them carefully. After all, a goal without an action plan is just a wish. sustenance the service consultant would be a new information system that links data that shortly reside in one-third separate systems. This technology will enable a service consultant to most members on the spot (Chase, Jacobs & Acquilano 2004).6.2.2 Three quickiesThe new system heralded huge savings for both members and CSAA. Average turnaround time for processing new business applications was reduced from six days to three days and the proportion of new auto policies that had tobe reworked dropped from 50% to 16%.6.2.3 A comprehensive analyzeA widespread survey was carried out by four employee teams, to focus on issues encountered by CSAA members and employees. Questions ranged from services, products and previous experiences for members and what you would do if you were president of CSAA for a day, to employees.One of the subjects consistently brought up, by members and e mployees, was that of how a visiting member would have to go from window to window to tie up different enquiries.6.2.4 Get CrazyFor the member service consultant to work, cross-training for employees on a range of CSAA services was crucial. The new calculator system would require a good understanding by employees in order to intertwine all the vital information at CSAA together and make it readily available to those who accessed it.Employees would also have a say on how the system was designed, developed and also tested a prototype that would support the new service consultant. By this they would sit everyday situation to help modify or identify any foreseeable problems. To further make employees comfortable with the transition to the new system workshops, meetings, posters, newsletter and videotapes were provided.6.2.5 Sell with scenarioOn-line prompts, on-screens prompts and what-if scenarios will replace the leaden paperwork and thumbtack memos. John Clark, a regional claims m anager, says of the new system, were trying to create a encyclopaedism environment for the future, for all levels of employees from clerical to management (Chase, Jacobs & Acquilano 2004 p.343).6.2.6 One-stop shopNow members have the luxury of getting complete service with just one stop.7. What tools from the operations consulting tool kit were applied here? Which other ones would be of value here? Explain.7.1 Problem definitionFirst on the agenda for CSAA to get their new system up and going would be that of problem definition.7.1.1 Issue treesInitially, CSSA had identified a problem with their customer service. By embarking on a long-term reengineering effort, business processes were put under the microscope. For this to work, a plan had to be put into place to target problems and figure out possible solutions. By structuring the process into different phases specifies a pedagogy CSAA can take7.1.2 Customer surveysChase, Jacobs & Acquilano (2004) suggest that OM consultants freq uently ob help oneself customer surveys such as to determine customer loyalty. In the case of CSAA a widespread survey was conducted.7.1.3 Employee surveysThese can involve questions on employee satisfaction or as CSAA developed, a question posing what you would do if you were president for a day.7.2 Data gatheringWith the goals of CSAA to improve customer service, speeding up turnaroundtimes is high on the agenda. To have something to aim for, gathering existing information, such as, processing new business applications and the cost of baseline expenses will serve to improve or reduce these fundamentals.7.3 Data digest and solution developmentTo rid CSAA of its old working environment, it had to introduce the new computer information system.7.3.1 Computer simulationFor employees to grow accustomed to the new system, CSAA had to cross-train employees to help them understand the computer simulation. Although not as sophisticated as much of the software available, employees had to b ecome acquainted(predicate) with the new package.7.4 Stakeholder analysisComing under the heading of cost impact and payoff analysis, CSAAs most crucial stakeholder would be its members and employees. In endeavouring to put into operation a new system, the greatness of considering the interest of all its stakeholders is central.7.5 ImplementationChase, Jacobs & Acquilano (2004) indicate that creating a new process and sustaining the improvement requires more than creative application of information technology. In order for implementation of reengineering to be successful any organisation, let alone, CSAA has to follow three important guidelines. Refer to appendix B.7.5.1 Responsibility chartsHaving workshops, meetings, posters, newsletters and videotapes issued to all employees would help ensure that each task is being cover by the employees.7.5.2 Project management techniquesThe reengineering effort is now being carried forward by five interdisciplinary teams whose focus include s workforce retraining, reward and pefromacne management and information technology (Chase, Jacobs & Acquilano 2004).7.6 Which other ones would be of value?After observing the operations consulting tool kit, refer to appendix C, it suggests that CSAA took up on at least one aspect of the five categories. Issue trees, customer and employee services for problem definition data gathering computer simulation for data analysis and solution development stakeholder analysis for cost impact and payoff analysis and both responsibility charts and project management techniques for implementation.8. Discuss process enablers role developing the new design.A number of bridges have to be crossed to help develop the new design. The major one of these being information technology.8.1 Information technologyInformation technology (IT) is considered the major enabler for spanning processes over functional and organisational boundaries and livelihood process driven organisations. However, the point is not to use IT as an improver for existing activities, as which it often has been conceived, but as enabler for the CSAA.Some of the ways that IT can change the business process at CSAA include process automation and speed virtual presence and distance collaboration becomes possible mobility allows information to be shared differently and increases interactivity and allows instant feedback. IT, when used appropriately, can enhance business processes.8.2 SelectionCSAA chose three employees from field of operations officers for intensive training to help with the design and development of the new system.For CSAA it would have been important to select the most appropriate candidates based on the agreed job descriptions and person specifications that have been created over time. This knowledge can be transferred to other employees and the playing out of simulated scenarios would pose not problems. The selection process needs to be handled with care to avoid costs of failure to select th e right candidate or sound problems arising down the track.8.3 Additional informationConstant monitoring form senior management and additional information, such as, workshops, meetings, posters, newsletters and videotapes enable a smooth transition for other employees.9. ConclusionIt seemed as though Levis decision to promote teamwork only frustrated employees, especially those with superior skills. The common grounding on working in teams is that businesses who have employees working together to reach a common goal are more likely to succeed than the ones that do not. Sadly this was not the case with Levis.Psychologically, people desire recognition, need to feel a part of a team, and want to do a good job. But people, after all, are only human. Long-term personal goals often fall prey to daily or weekly frustrations. With Levis, employees may have found it hard to meld personal goals with the organisations long-term or even short goals. This may have contributed to workers being a bsent or inexperienced and led to increased workloads on other Some people may have trouble sculpting individual performance goals atall. As Powers (2000), describes, in all cases, excitement, interest and performance can suffer.In the case of CSAA, management needs to consider the importance of customer service in a primarily service organisations. Successful organisations, irrespective of nature or size, have one thing in common the loyalty of their customers. Organisations that spend time, effort and money on anticipating and fulfilling customers needs and requirements will undoubtedly reap the benefits from loyal customers by enhancing customer satisfaction. However management should not put all its efforts in keeping customer satisfaction, as this will be generated by the overall service concept that the company provide to the customer. Certainly the customer has to be in employees mind all the time reminding them that they are there because there is a customer who is willing to pay.