btec level 5 hnd diploma in business unit 16 operations and project management 528

The relationship between the operations function and other core and support functions of the organization N.. Every organization has an operations function since every organization produ

ASSIGNMENT 1 FRONT SHEET Qualification BTEC Level 5 HND Diploma in Business

Unit number and title Unit 16: Operations and Project Management (528)

Submission date 17th October, 2021 Date received (1 submission)st

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1.3 Operational Functions and Relationship with other Functions in an organization in general 6

2 The implementations of operations management processes within an organizational context 8

2.1 The general operational process 8

2.1.1 Inputs to the process 8

2.1.2 Transformation process 9

2.1.3 Outputs from the process 9

2.2 Key approaches to operations management 9

2.2.1 Six Sigma 9

2.2.2 Lean Principles 10

2.2.3 Total quality management 11

2.2.4 Business process re-engineering (BPR) 11

2.2.5 Scientific Management 11

2.3 A comparison between Six sigma and Lean principles 11

2.3.1 Advantages and Disadvantages of Six Sigma 11

2.3.2 Advantages and Disadvantages of Lean principles 13

2.3.3 Difference between Six Sigma and Lean principles 14

2.4 The development of operations management principles in modern context 15

3 Continuous improvement 16

3.1 Operation and Operations Management concepts at Apple 16

3.2 Improvement Process at Apple 17

3.3 The roles of Lean principles within the cycle of continuous improvement in Apple 18

3.4 The impact of process technology has had upon operational functions and information flows of Apple19

3.5 Differences in the possible application of different operation approach to further improve quality of

products/ services in general 20

3.6 Identify and discuss the operation approaches in Apple 21

4 Recommendations to achieve improved efficiency 23

4.1 Comparison with the methods of other companies in the manufacturing industry 23

4.2 Recommendations for further improvement in the operation efficiency and effectiveness of Apple 24

Conclusion 25

References 26

Table of FiguresFigure 1 The activities of core functions in some organizations 6

Figure 2 The relationship between the operations function and other core and support functions of the organization (N Slack, 2013) 7

Figure 3 All operations are input–transformation–output processes 8

Figure 4 DMAIC improvement cycle 10

Table of Tables

Table 1 Apple profile 5 Table 2 The differences in application of Six Sigma and Lean 14Table 3 Advantages & Disadvantages of TQM and JIT 23

Introduction

Currently, the managing director of Apple Corporation has requested operations management consulting services from Ernst & Young, one of the world's leading management consulting firms In particular, Apple requires a report that provides a detailed overview of the company's operations ideas and and processes According to those criteria, the consultant, who is also the author of this report, shall provide evaluation and recommendations The discussion and recommendations presented in this report will be utilized to enhance Apple's operational efficiency and effectiveness, allowing the company to gain a competitive advantage in the market

Type Public (NASDAQ: AAPL, LSE: 0HDZ, FWB: APC)

Headquarters 1 Apple Park Way Cupertino, California, U.S

Table 1 Apple profile

Apple Inc is an American multinational technology company, that designs, develops and sells consumer

1.2 Operations Management

Operations management is the activity of managing the resources that create and deliver services and products Within the process, operations management makes use of various tools and strategies to increase production output and ensure that customer orders are completed on time (Hayes, 2021)

Operation management involves planning, organizing, coordinating, and controlling all the resources needed to produce a company’s goods and services, it involves managing people, equipment, technology, information, and all the other resources needed in the production of goods and services (Kumar & Suresh, 2009)

Every organization has an operations function since every organization produces services or goods However, not all types of organization will necessarily call the operations function by this name That is why the operations functions also have another name "operational functions'' Operations function is responsible for creating and delivering products or services that meet customers’ demands (Wolniak et al., 2017) They can be divided into core functions and support functions

First, we will cover the three core functions of any organization:

Figure 1 The activities of core functions in some organizations

- The marketing (including sales) function – which is responsible for communicating the organization’s services and products to its markets in order to generate customer requests

- The product/service development function – which is responsible for coming up with new and modified

services and products in order to generate future customer requests

- The operations function – which is responsible for the creation and delivery of services and products

based on customer requests

Figure 2 The relationship between the operations function and other core and support functions of the organization (N Slack, 2013)

Core functions are activities of an enterprise yielding income: the production of final goods or services intended

for the market or for third parties Usually the core business functions make up the primary activity of the enterprise, but they may also include other (secondary) activities if the enterprise considers these as part of its core functions (Fiorentino, R 2018)

In addition, there are support functions that enable core functions to function efficiently and include accounting and finance function, the technical function, the human resources function, and the information systems function, etc The outputs (results) of support functions are not themselves intended directly for the market or for third

parties Operations will need help from Human Resource Department, since numerous competitors may be interested in the manager position The Human Resource Department would give suggestions to Operations in order for them to make better decisions that would impact the company's success (Stevenson, 2002)

2 The implementations of operations management processes within an organizational context

At the very heart of business operations is the production of products or services the input of raw materials, –human resources and capital, the transformation process that turns input into output and the output the – –actual product or service itself Operations extend also to areas such as transport of raw materials, distribution of products or services, advertising and marketing, finance and management (N Slack, 2013) Figure 3 below depicts the general operational process

Figure 3 All operations are input–transformation–output processes

2.1.1 Inputs to the process

Some inputs are used up in the process of creating goods or services; others play a part in the creation process but are not used up To distinguish between these, input resources are usually classified as:

- Transformed resources those that are transformed in some way by the operation to produce the goods –or services that are its outputs

- Transforming resources those that are used to perform the transformation process –Inputs include different types of both transformed and transforming resources

Three types of resource that may be transformed in operations are:

- Materials the physical inputs to the process –

- Information that is being processed or used in the process - Customers the people who are transformed in some way –

Many people think of operations as being mainly about the transformation of materials or components into finished products, as when limestone and sand are transformed into glass or an automobile is assembled from its various parts But all organisations that produce goods or services transform resources: many are concerned mainly with the transformation of information (for example, consultancy firms or accountants) or the transformation of customers (for example, hairdressing or hospitals)

Galloway (1998) defines operations as all the activities concerned with the transformation of materials, information or customers

The two types of transforming resource are:

- Staff the people involved directly in the transformation process or supporting it –

- Facilities nd, buildings, machines and equipment – la

Output is the result (product or service) produced by the process Sometimes the output of one process is used as input for the next Output is the tangible product or service that is delivered at the end of the process Products and services are distinct from one another (Bellgran & Säfsten, 2009) Services are generally in the form of activities or processes, whereas products are usually in the form of physical objects Some services do not necessitate the usage of products In reality, most businesses nowadays mix and create both products and services

2.2.1 Six Sigma

Six Sigma is a method that provides organizations tools to improve the capability of their business processes This increase in performance and decrease in process variation helps lead to defect reduction and improvement in

profits, employee morale, and quality of products or services It emphasizes cycle-time improvements while reducing manufacturing defects to no more than 3.4 occurrences per million units or events (Linderman et al., 2003) In order to apply Six Sigma, DMAIC improvement cycle is used as a tool, which refers to a data-driven improvement cycle used for improving, optimizing and stabilizing operations (Pruitt, 2020)

Figure 4 DMAIC improvement cycle

- Define - in this step the team is formed, the Project Charter is developed, the Costumers’ voice is analyzed,

a process map is created

- Measure - the actual performance is measured

- Analyze the results of measurements, determining the causes of process imperfections and possible

solutions for them

- Improve - the team generates and selects a set of solutions to improve sigma performance - Control ensuring that improvement sustains over time –

2.2.2 Lean Principles

The lean manufacturing principles were formed in Japan Inspired by the Toyota Production System, lean management is a method of managing and organising work with the aim of improving a company's performance, particularly the quality and profitability of its production processes (Essam & Mansar, 2012)

Just-in-time inventory management, Kanban scheduling systems, and other software development approaches are examples of specific lean methods

Lean management helps optimise processes by reducing non-value-added activities (unnecessary operations or transport, waiting, overproduction etc.), poor-quality costs and complications (Goksoy et al., 2011) This method relies heavily on a management strategy that allows employees to work in the best possible conditions Ultimately, the approach has two main objectives: complete customer satisfaction and employee success

2.2.3 Total quality management

Total quality management (TQM) is the continual process of detecting and reducing or eliminating errors in manufacturing, streamlining supply chain management, improving the customer experience, and ensuring that employees are up to speed with training Total quality management aims to hold all parties involved in the production process accountable for the overall quality of the final product or service (Anderson & Perez, 2021)

2.2.4 Business process re-engineering (BPR)

Business process re-engineering is the radical redesign of business processes to achieve dramatic improvements in critical aspects like quality, output, cost, service, and speed Business process reengineering (BPR) aims at cutting down enterprise costs and process redundancies on a very huge scale (Hussein et al., 2014)

2.2.5 Scientific Management

Scientific management is a management theory that analyzes work flows to improve ec onomic efficiency,

especially labor productivity (Knod & Schonberger, 2000) This management theory, developed by Frederick Winslow Taylor, was popular in the 1880s and 1890s in U.S manufacturing industries

2.3.1 Advantages and Disadvantages of Six Sigma

Advantages Disadvantages

• Focus completely on the customer

• Stand out among competitors within the industry

• Increase profits and reduce costs

• Create amazing bureaucracy and rigidity • Can be very expensive to implement • Focus on a strict and rigid process to follow • People are not trusting Six Sigma as a

methodology in itself anymore

Six Sigma Advantages

The first and most important advantage is that Six Sigma focus completely on the customer Within Six Sigma the defect ratio is 3.4 defects per one million products or service processes Six Sigma goes beyond the simple error and takes a close look at the entire process behind the product or service and not only the results and the complaints that customers have So we can say that the advantage is that Six Sigma is proactive and not reactive, and it looks at how improvements can be made even before faults are found either by customers or others parts of the process

Furthermore, for Small Businesses, the advantages of having a Six Sigma quality certification will make them stand out among competitors within the industry For customers of B2B businesses, it is important to know that there

is a standard for manufacturing their products and Six Sigma is one of those warranties for businesses It is even important to know that even though the business is small there is somebody that has been trained in Six Sigma and in the proactivity philosophy and the customer satisfaction approach

Other advantages are that Six Sigma can be implemented in many categories within a business and this will impact directly on profitability and reduction in costs; that the methodology focuses on improving every part of the process and not the final outcome and that for Six Sigma the prevention of defects is far more important than waiting for them to appear to fix them

Six Sigma Disadvantages

It is difficult to imagine that a methodology created to improve can actually bring problems to an organization The first drawback is that Six Sigma can create amazing bureaucracy and rigidity because the methodology covers all the process of the company and this, in turn, leads to delays and problems in creativity Furthermore, when Six Sigma is taken to the extreme problems can arise because companies tend to favor policies that follow the Six Sigma methodologies and forget about policies or approaches that can only apply to their company So, for example, a company can prefer to follow the Six Sigma methodology and apply a very expensive measure rather than trying a very inexpensive measure that evidently is needed in the business

For small businesses, one of the biggest disadvantages is that applying Six Sigma can be very expensive to implement The main cause of this cost is training Companies have to find certified Six Sigma institutes to get their training or do their training in-house without formal certification Either way, the cost for small business is too high and a lot of training is needed to really get the grasp of the system and to apply it to each and every process

Another disadvantage is that Six Sigma really focuses on a strict and rigid process to follow and that goes against the new trends that favor creativity and innovation because the innovative approach focuses on redundancy, unusual solutions, and deviations in production, and all these things clearly go against the Six Sigma principles Another disadvantage is that people are not trusting Six Sigma as a methodology in itself anymore They are saying that this methodology is just a continuation of the continued improvement techniques that were applied in Toyota and companies are shifting to other approaches or strategies that require outsourcing of projects that bring big problems with accountability With this in mind, it is clear that Six Sigma also requires many trained staff that needs to be motivated in time and well trained for long periods

2.3.2 Advantages and Disadvantages of Lean principles

• Streamlined design: In the design stage, the Lean focus will be to establish a product with no unnecessary steps or waste This results in a streamlined design that is easier to implement and bring to market

• Long roll out: Starting a Lean program can take a while as the initial process, value streams, and other necessities need to be reviewed and mapped out for the very first time However, once implemented, a Lean process typically runs faster than a non-Lean one

• Reduced costs: Reduced waste results in lower costs, as time and resources are efficiently allocated

• Increased efficiency: Employees follow the same process which is continually honed to ensure perfection This reduces wasted employee time and maximizes labor power

• Consistent quality: As the process of creation is standardized, there are no deviations that would result in poor quality products making it off the assembly line

• Limited flexibility: As it is process-focused, it may seem that Lean limits creativity However, the steps are designed to allow manufacturers to pivot with some frequency

• It’s ongoing: For those who need to check items off the to-do list, Lean manufacturing may not be ideal It’s an ongoing process that is never truly complete

2.3.3 Difference between Six Sigma and Lean Principles

In the above content, Lean and Six Sigma have pointed out the main advantages and limitations of the two methodologies in contemporary academic literature In summary, the complementary and contrasting aspects of the two methodologies need to be identified before the review can continue to study Lean and Six Sigma

Market situation Stable, high forecast accuracy No special requirement

Demand Preferably but not limited to high volume No special requirement

Organization Total commitment, long-term buyer/

supplier relationships

Specialist hierarchy, based, metric-performance-

project-driven

Human resources Intrinsic, shop-floor level project

initiation, bottom-up approach

Extrinsic, top-down selection of improvement initiatives

Focus Efficiency, flow, JIT, standardization, cost and waste reduction

Customer, stakeholder value, process variation, statistical

decision making

Limitations Expensive implementation,

questionable flexibility

Structured implementation, expensive projects Table 2 The differences in application of Six Sigma and Lean

Lean and Six Sigma can complement each other is various ways The type of product is important for the Lean production philosophy because the product needs to be standardized with a low product variety The flexibility of Lean is the most important reason for this, for Six Sigma, this is not necessarily a constraint A stable market situation is preferable for Lean while Six Sigma can be useful within any market The same applies for the demand where Lean prefers to deal with high volume situations, Six Sigma can deal with all possible demand situations Regarding the organizational design of a firm, both methodologies stress the commitment from management to the shop floor Six Sigma utilizes a structure of specialists which manage improvement projects, which lacks within the Lean methodology The responsibility of Six Sigma’s specialists is to provide guidance and structure to improvement initiatives, such a structured hierarchy can also be appropriate for Lean Both methodologies emphasize the importance of the customer within a process A different focus can be identified regarding Lean and Six Sigma, in which they can complement each other

Lean and Six Sigma have different approaches regarding the use of an organization’s human resources and the accompanying culture Within the Lean methodology, all employees are seen as process experts which are encouraged to be critical towards their own work This leads to improvement projects to be initiated in a bottom-up manner from the employees themselves (intrinsic) Six Sigma uses the specialist structure for completion of improvement initiatives which are selected on among others quality improvement, increase in shareholder value or efficiency improvement This is more of a top-down approach to utilize the organization’s human resources and can be seen as extrinsic because most employees (except for the specialists) are not directly involved in the decision to initiate an improvement project and the actual process improvement itself

Where Lean focuses mainly on the reduction of waste and increase of process flow and standardization, Six Sigma

has a firm focus on controlling process variation and statistical decision making Limitations for both methodologies come in the form of the actual implementation and the associated expenses

The literature study regarding both Lean and Six Sigma has revealed that both methodologies emphasize a structured approach to problem solving and process improvement Further, both methodologies will eventually lead to a standardized process but they reach this in a different matter Lean can be seen as a bottom-up approach (from the shop-floor), whereas Six Sigma is more of a top-down method

Modern operations management revolves around four theories: business process redesign (BPR), reconfigurable manufacturing systems, six sigma, and lean manufacturing BPR was formulated in 1993 and is a business

management strategy that focuses on analyzing and designing workflow and business processes within a company (Timothy, 2021)

The goal of BPR is to help companies dramatically restructure the organization by designing the business process from the ground up

Reconfigurable manufacturing systems are production systems designed to incorporate accelerated change in structure, hardware, and software components This allows systems to adjust rapidly to the capacity to which they can continue production and how efficiently they function in response to market or intrinsic system changes Six sigma is an approach that focuses on quality It was primarily developed from 1985 to 1987 at Motorola The word "six" references the control limits, which are placed at six standard deviations from the normal distribution mean Jack Welch of General Electric started an initiative to adopt the six sigma method in 1995, which brought the approach a great deal of popularity.3 Every six sigma project within a company has a defined step sequence and financial targets, such as increasing profits or reducing costs Tools used within the six sigma process include trending charts, potential defect calculations, and other ratios (McClay, 2021)

Lean manufacturing is a systematic method of eliminating waste within the manufacturing process The lean theory accounts for waste that is created through overburdening or uneven workloads This theory sees resource use for any reason other than value creation for customers as wasteful and seeks to eliminate wasteful resource expenditures as much as possible

3 Continuous improvement