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Semester II Examinations 2010/
Exam Code(s)
1APE1, 1APE2, 2APE2, 4BI1,1EM1, 1OA1, 3BC1,
4BF1.
Exam(s) Masters of Applied Science, Bachelor of Engineering, Erasmus, Visiting Students, Bachelor of Commerce, Bachelor of Science
Module Code(s) IE424, IE Module(s) Operations Strategy
Paper No. 1 Repeat Paper
External Examiner(s) Prof J. Antony Internal Examiner(s) Ms. Mary Dempsey Prof. Sean Leen Instructions: Answer Question 1 compulsory (40%) and 2 other questions (60%) All questions will be marked equally. Show all your work clearly
Duration 3 Hours No. of Pages Cover + 4 pages College/Discipline Course Co-ordinator(s)
Requirements : MCQ Handout Statistical Tables Graph Paper Log Graph Paper Other Material
Question 1 Globalcast Case Study (Compulsory) 40%
Globalcast was one of the world‟s largest manufacturers of metal and plastic moulded components to almost every industry, including automotive, consumer durables, telecommunications, computers, power tools, etc. With over 100 manufacturing facilities, it operated on every continent, usually in areas of established or emerging industrialization. In Europe there were large factories in the UK, Germany, France, Spain and Italy, and smaller ones in Scandinavia, Austria, Turkey and Israel.
Every factory was considered to be a semi-autonomous profit centre and was headed up by a general manager. Each reported to a regional manager of one of the divisions (for example, Plastics Division). New business was generated both by national marketing and by word-of-mouth recommendations from existing customers, but most orders were for regular repeat business or for new designs from existing customers.
The role of the small technical sales team at each factory was to follow up enquiries with technical advice visits to the customer, followed by the preparation of quotations. In many cases, Globalcast provided design assistance to the customers. It was the role of the advisor to suggest ways of simplifying the overall design which would be cheaper for the customer, whilst being fast, easy and profitable to produce in the factory.
Mould costs were calculated and quoted too, and in most cases the customer would pay for the moulds from the outset, retaining ownership. Globalcast organized the purchase of the moulds, costing up to £50000 each, and could make a small profit on this activity.
In the late 1990s, the market started to change rapidly. First, major customers such as Hewlett Packard, Dell, Ford, GM and Black and Decker started building new factories in developing countries. These were being established both to exploit the benefits of lower wages and overheads, and as market- entry points for these rapidly developing economies. In most cases, however, large proportions of their output would serve existing markets throughout the world. Because Globalcast was one of the most important suppliers (only about five competitors had worldwide coverage), it was often encouraged by its customers to establish supply factories in the same regions, ideally on adjacent sites. Customers explained that business was, in part, being transferred to their new sites, and since Globalcast had been selected as a preferred supplier, it had the opportunity to benefit from ongoing business development and growth.
Attractive forecasts were provided, but not guaranteed. „Partnerships‟ would be established where Globalcast had the benefit of sole-supplier status to the customer‟s local plant.
The second change was the trend for customers‟ products to be of globally standard designs. This allowed buyers to purchase components for their
Question 2
New forms of technology can affect performance objectives. It is suggested below in the diagram that the three dimensions of process technology namely scale, automation and coupling are often closely linked. Giving examples, explain what impact new process technology has on operations?
Question 3
Operations strategy aims to achieve a sustainable alignment of market requirements with operations resources. There are two meanings for the term “FIT” within the context of operations strategy. Firstly, briefly explain the two meanings and then discuss the “Fit” concept in the context of one case that you worked on during the operations strategy classes.
Few, large units of process technology
Many, small units of process technology Process (technology plus humans) has low acuity and judgement
Process (technology plus humans) has high acuity and judgement
Technology is integrated
Technology is separated
High Low
SCALE
High Low
AUTOMATION
High Low
COUPLING
Cost performance
Flexibility performance
Line of fit
Market
requirements
Operations resource capability
Question 4 TGV Socrates (seat reservation and ticket system)
Sleek, fast and smooth, the TGV trains of France‟s SNCF rail network look more like aircraft than the traditional train. They provide a service which carries passengers throughout Europe at speeds in excess of 175 mph. Inside, too, the trains show the influence of air travel. Seats are wide and comfortable with space for leg-stretching relaxation.
The French press described the TGV as being like „an airbus on rails‟. SNCF also decided to emulate the airlines by buying a high-tech seat reservation and ticketing system which they named after the Greek philosopher Socrates. That was when their problems began.
Design flaws in the booking systems software, combined with inadequate training of SNCF staff, caused chaos for months after the system was introduced. Socrates refused to believe in the existence of some places. Suddenly it refused to issue tickets for Rouen or Barcelona, insisting that neither city existed. It also failed at times to recognize the existence of several of the trains which ran between Paris and Lyon. As a result, the trains made the trip with only four passengers on board. However, these straightforward system design errors have been compounded by overcomplexity of some parts of the system: the automatic ticket-vending machines often stand unused by passengers because they have given up trying to understand how to use them. The graffiti outside the Gare de Lyon station reads „One hour from Lille to Paris ...one hour to buy a ticket!‟ Although the problems were eventually sorted out, the reputation of what was essentially a fast and efficient operation took longer to recover.
a) This case contrasts two operations processes which affect overall quality from a customer‟s point of view. What are these two operations processes and what other operation might affect the customer‟s overall perception of quality?
b) Why did the ticket-issuing and reservations system cause such chaos?
