BRIEFING PAPER - RESIT

Dear student,
You are working for a respected management consultancy organisation as an apprentice. As
part of your training you are given four operations management cases, two in each of sections
A and B.

You have time to do some preparation for the topics in Operations Management that these
briefs are covering.

Shortly, in an exam set up, you will be given instructions by your mentor to answer some
inquiries about two of these cases (one from section A and one from section B). You will be
expected to provide a short essay for each within a total time of 2 hours.

You are allowed to bring an A4 paper of notes with you to the exam session.

Section A

Business Case: The Handicrafts Company

A small company produces handicrafts and sells them to the shops. The company has recently
decided to change its image from a producer of goods only to a producer of goods and
services. The plan is to reduce the number of goods produced and to open up a new building
to run practical training courses on making handicrafts. Customers will pay annual fees to
attend a nine-month course. On successful completion of the course customers will receive a
certificate that qualifies them to be admitted to more advanced courses in a local art college.

The company has contacted you, as an Operations Management expert, for some advice. Your
client, Samir, who represents the company, has suggested that while they are very excited
about the change, they are not sure what they will be facing. They have concerns about how
to manage service quality and what major differences they will be facing as the result of
introducing a service product to their work. The plan is to carry out a brief market survey to
get some ideas about what the company’s potential customers would expect from a practical
training course, then to design the training course based on this feedback and the
requirements of the art college.

Samir says that the company is also using this opportunity to bring some improvements to the
manufacturing part of the company (where they keep producing handicrafts but with a lower
production rate). They have heard about TQM and BPR, as well as possible effect of improving
operations on the total cost of quality, but need some advice there. Samir is personally
interested in studying the performance objectives of the company. Besides reduction in the
rate of production, the process for making the handicrafts will remain the same, however it
is obvious that some improvements are needed. The quality of the handicrafts is not as good
as they used to be. Many years ago these handicrafts were considered as very valuable artistic
products. Customer survey indicates that this is no longer the case. Being a work of art, the
problem does not seem to be with following any standards: the individual nature of each
product is part of the attraction of the products. Staff who produce these handicrafts do not
seem to be as motivated as they should be and this seems to have a detrimental effect on
quality.

Business Case: The Question of Food!

You have been asked by your mentor to help the manager of ‘Farhad Restaurant’ with some
comparative studies. The manager of the Farhad Restaurant is interested to compare its
operations and operations strategy with another restaurant in the same area of the city:
‘Alison Restaurant’.

The manager of Farhad Restaurant wants to hear your views about how these two restaurants
are different in terms of their strategy. He would like to know what the effect of volume and
variety on the operations of the two restaurants might be. The manager of Farhad Restaurant
remembers his studies in Operations Management about the relationship between demand
and production (the so-called P:D ratio). He would like to know your views about how the P:D
ratio is affecting the operations in the two restaurants. He also believes that the weather
conditions sometimes influence the choice of customer between the two restaurants and
wonders if there are tools that he could use to study if this is a correct observation. He
remembers learning about Scatter Diagrams as well as Cause and Effect diagrams at
university.

Farhad Restaurant provides a variety of fast food type dishes (hamburgers, pizza, sandwiches).
The average price for a three-course meal in this restaurant is £12. The restaurant has both
takeaway and sitting in facilities, with long tables. Customers may end up sitting alongside
people who are not part of their own group can. Most of the food is already cooked and
prepared to be consumed by the customer.
Alison Restaurant specialises in Mediterranean dishes. The average price for a three-course
meal in this restaurant is £30. The internal decor is very elegant and each group of customers
has its own table. The main ingredients of every dish are cooked only when an order is in place
to assure freshness and, where needed, customisation.

Section B

Business Case: Hamid Ltd

Hamid Ltd specialises in selling commemorative goods at major events. Its most recent
contract was for clothing (caps, hoodies, t-shirts) and accessories (including water bottles,
wrist bands, key rings, and stress balls) for a two-day sporting event in Lisbon. Until two years
ago, Hamid’s approach to procuring the clothing had been to buy in clothing without logos,
sourcing them in a range of places, but principally Portugal, and have them
printed/embroidered in the UK with the logos/messages required to customise them to each
client event.
Two years ago a new production manager had persuaded the board of directors that they
could make significant cost savings by having all the clothing made and printed/embroidered
by in the Far East, saving money when compared to the sourcing printing and embroidery in
the UK. Since this move, while Hamid’s initial costs have been reduced, there have been some
problems that have nearly bankrupted the company, noticeably when a shipment was
delayed and arrived four days after the sports championship that the t-shirts were meant to
be on sale for. The client cited difficulties in embroidering the championship logo, which
required special threads. Hamid’s previous supplier of embroider had many years of working
with similar threads, but two other Far Eastern suppliers have also complained about the
thread. The championship, a long-term client of Hamid Ltd. had been very unhappy with this
and was threatening to sever a contract that still has four years to run. A second incident, just
last month, resulted in t-shirts for a tour by a successful hip-hop artist being scrapped because
the name of the group had been incorrectly spelled on all the clothing items, though it was
spelled correctly on all the order materials. Unfortunately the mistake was not spotted until
after the t-shirts were being unpacked in Hamid’s UK warehouse. The company had to
writeoff the consignment and rapidly source and pay for printing in the UK of hastily sourced
tshirts form Europe. Another consignment had been printed in inferior inks and the caps had
been scrapped before going on sale.

Ali Hamid, one of the company’s directors was unsurprisingly questioning the supply chain
design: “We always used UK suppliers until two years ago, when we took the decision to move
to the whole garment production to Far East suppliers to save money. Or, that was the theory.
In reality we are able to sell our products at a premium compared to standard t-shirts because
of people are willing to pay a premium for something branded with the event they are
attending, and our clients are always good about passing on a fair share of the premium. But
we do need the goods to be there and at the right quality! I am beginning to realise just how
good our UK printer was compared to the subcontractors in the Far East, and I know way too
much about embroidery threads. I think we need to think again about our supply chain
design”. 客⼾已與諮詢公司聯繫，尋求產品開發⽅⾯的幫助。這家位於愛丁堡的客⼾多年來⼀直為保險公司和銀⾏提供服
務，使他們能夠計算複雜的風險。 該公司通過將長期存在的產品銷售到新的國家⽽發展壯⼤，過去⼗年中唯⼀的變
化是為了反映不同國家的不同監管環境以及各個國家的法規變化。

Business Case: Product Development

A client has approached the consultancy asking for help with product development. The
Edinburgh-based client has, for many years, provided services to insurers and banks, allowing
them to calculate complex risks. The company has grown by selling long-established products
into new countries, with the only changes in the last ten years made to reflect different
regulatory environments in different countries and changes to regulations within individual
countries.

To date the company has not had to work hard to remain successful, but uncertainties about
access to the EU market has caused the client company’s board to investigate how they can
diversify the range of products they provide. Six months ago a team was put together from
existing staff and four new recruits with broad experience in the financial services sector to
identify potential new services that the company could offer to existing clients, particularly
those in the UK who are currently using services from companies based in the EU outwith the
UK.

The team has identified a wide range of potential new products, but it is clear that the client
has neither the resources nor the time to develop them all. An internal report to the board
has suggested a prioritisation of the potential new services, but the managing director
suspects that the projects have been ranked based on the seniority of the proposers, and their
power within the organization, rather than on the merits of the individual projects and their
fit with the existing business. In his words “When I look at the lists it seems to be the projects
heavily supported by senior managers that have made the cut, rather than those that are
genuinely good for the company. And for a company whose business is risk analysis, I haven’t
seen any mention whatsoever of risk in the report!”.