Project Management: Operations and Information Management

Introduction

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Operations management plays an essential role in the success of an organization (Slack, 2007), in
another hand, Chase RB, Jacobs FR and Aquilano NJ identified the operations management that
all the activities necessary to plan, develop and improve the business processes involved in the
manufacturing of a product or in the provision of a service (Chase RB, Jacobs FR, Aquilano NJ,
2008), hence, the both of the above identifications are argues that operations management
involves designing as well as controlling the production processes and business operations
redesigning in the services or goods production. and all the sources confirmed that the
importance of the operations management in every business, regardless to the size or type of this
business, where that the main goal of operations management is promoting efficiency in
productions.

In this report, we will discuss and analyze the operation and lean management concept that
adopting in the local restaurant (food company) in my country which called SAMAD Restaurant,
besides that, this report will focus on the food and beverage productions in this company. The
analysis will look at how inventories are managed in the production of food and beverages in the
restaurant from the first step (get the raw materials) to the last step (deliver the production to the
client). It will also look at the logical operational flow in the restaurant the production process
and significant points of failure in the production process and how the concept of lean
management can be used to address these failures.

Appraisal the inventories and/or assets within the production system

Inventory management is a complicated process, especially for the large organizations, but the
basics are the same regardless of the organization's size or type. Margaret Rouse described that
the inventory management, goods are delivered into the receiving area of a warehouse in the
form of raw materials or components and are put into stock areas , shelves or productions
(Rouse, 2011), hence, the inventories management is of the most significant assets associated

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with the entire operations of a restaurants, where enters in the production process from the first
step (collect the row material) to the final step (deliver the production to the client), according to
Patton et al., as part of an organization supply management element, inventory management
involves controlling as well as overseeing inventory storage, inventory ordering an amount of
product produced for sales purposes. (Patton, S, Clegg, B, Hsuan, J and Pilkington, A., 2011).

Moreover, inventory management is important to the organizations (regardless to the size of

business) to train its workers on the inventory management to ensure that operations delay will
not affect negatively on delivery to costumers.

The capacity of SAMAD restaurant in our case is considered is (moderate level business), this
level of the capacity is gave the restaurant the flexibility to adopt the best technique in manage its
inventories, operations and productions processes.

SAMAD restaurant has implemented a computerized inventory management system and trained
its employees on how to use it and reflect the benefits of usage in this system on the performance
of the restaurant. The computerized system helps the restaurant in keeping track of the
inventories, such as the raw materials at the store needed in productions that will be offer to the
costumers, besides the survey that usually conducting by the restaurant to check the demand of
costumers, this system helps the restaurant to reach to the accurate data of costumers’ demand
and assist the operations manager to using these data in guiding decisions concerning the
ordering and control of inventories needed in the production process, besides that, the restaurant is
using Just In Time (JIT) technique manage the inventory, which focusing on rapid throughput as well as
reducing inventory to provide improvements on operations. JIT provides “lean operations” that supply or
receive only the materials needed, only at the time they are needed (Heizer, J. & Render, B., 2009), this
technique assists the restaurant to eliminate the waste from product defects, waste from overproduction,
waste of time, transportation, thus, adopting of this technique by the restaurant is saving a lot of time,
efforts and money on the company, which assists them to focus on the quality of products to reach the
demand of the
customers. therefore, the restaurant became able to minimize cost and maximize profit, the JIT technique
aids in ensuring that the stock is efficiently managed to minimize losses associated with the expiry of
beverage and food products, it means that to reduce expiry of beverage stocks, the first beverage and food
to be produced by the restaurant is first sold to the customers, SAMAD restaurant through using (JIT)
technique in order to maximize usage of area by gathering the similar productions in one space and

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reduced the required distance for transportation of productions or raw materials, thus, this thing assists the
restaurant to save the money, time and efforts.

In addition to that, the JIT technique ensure the best quality of productions offered to the
customers by the restaurant. Goetsch & Davis indicated in their report which published in 2011,
the success of an organization is dependent on its ability to provide high-quality products to its
customers. (Goetsch, D. L., & Davis, S. B., 2014).

The restaurant, in this case, employs a JIT inventory management principle in ensuring that
customers always take high-quality beverages and foods.

The process ensures that customers do not come across expired productions, as what is produced
first is sold first, minimizes the chance of the quality of the productions being compromised
through expiry of the products offered by the restaurant, meanwhile, we cannot neglect some of
the risks of using this technique, as Williams indicated that, it became necessary to find suppliers
that are close by or can supply materials quickly with limited advance notice, when ordering
small quantities of materials, suppliers’ minimum order policies may pose a problem, (Williams).
Companies ordering smaller amounts of goods may encounter difficulty meeting minimum
orders, requiring a different contract or a way to break up a large order over time or among
several smaller manufacturers, but as Heizer & Render mentioned above the focus on good
relationships with the suppliers will assists us to mitigate this risk.

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Logical Operation Flow

As Prachi Juneja indicated in management study guide, the essential of company to do the
following steps in order to deliver value for customers in products and services (Juneja, 2019):

1- Identify the customer needs and convert that into a specific product or service (numbers
of products required for specific period of time)

2- Based on product requirement do back-ward working to identify raw material

requirements
3- Engage internal and external vendors to create supply chain for raw material and finished
goods between vendor → production facility → customers

Chart 1 The logical flow Inside the restaurant

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 Chart 2 The logical flow Outside the restaurant

After using the computerized system which helps the restaurant to get full data about the
costumers’ demand, the right decision in this stage is very important, in addition to identify the
costumers’ demand, the decision in this stage should be focused on another aspects of Operations
Management, the major decision areas in supply chain management are location, production,
distribution, and inventory, the location decision relates to the choice of locations for both
production and distribution facilities.

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The production and transportation costs and delivery are important for any business; hence, the
right selection of the location will assist us on focus on the costumers' demand and other details
like what their needs, how much is needed and when they need it.

In addition to that, we must keep in our mind that the transportation cost is often represent a
significant portion the total cost of production, furthermore, the right decision will assist us to
identify the required raw materials and cooperate with the best and close supplier in order to get
the materials on time, the purchase of the raw materials is an integral part of any business,
whether manufacturing organization or service organization, but after purchase and before
selling, there is an essential step that assist to put the organization on track, this step is keep the
purchased raw materials in the right place to be in safety and good care.

The storing of the materials is risky step, because the timeframe of storage can be short period or
longer depending upon nature and requirement of materials, hence, as mentioned above, any
damage or theft to the materials is going to increase cost to the organization, so, it becomes
important for organization to have a robust and effective warehouse as well as material’s
management.

As we mentioned above, the assign of the right place for the storage ''warehouse'' is very
important for the organization, according to Greasley, warehousing is an important aspect of an
organization supply chain management processes, as it ensures that a business is able to meet
customers demand at different times. (Greasley, 2013), hence, the first point that should be taken
into consideration, the distance of the warehouse from the manufacturing location to reduce the
cost of the transportation of the raw materials and keep them in safe and good conditions.
thereafter, we must focus in the main steps of the warehouse management ''as essential step in
the operation flow'' by:

1- Receive the purchase goods and entered upon the stock register.
2- Ability to access goods whenever needed.
3- Keep proper records through coding to keep goods.
4- Tracking the in and out materials.
4- Proper stocking of goods and in good conditions.

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In our case, SAMAD restaurant applies the above steps and reach the overall efficiency of the
production and organization. the effective warehouse management would lead to a smooth flow
of production, reducing to wastage and the spoilage, eliminate the possibility of theft and damage
and reducing the cost.

After ensuring the right location for the warehouse (storing and distribution points) we will
ensure the best quality for the productions, in addition to that, the quality assurance unit of the
restaurant is responsible for checking the beverages and food packed before they can be released
to the final customer.

The restaurant applies the principle of the JIT technique in managing the stock at the warehouse,
the first stock to arrive from the production point is the first one to come out when the demand
arises.

The restaurant makes use of two ways in distributing the productions to the final consumers, the
first way is selling the productions directly on its premises, the target customers are frequent
visitors of the restaurant, and this helps in meeting their needs based on their tastes and
preferences and the second way is using the distributors.

SAMAD restaurant adopting the approach that once the products are moved to the warehouse the
next key operations activity is distributing them to the distributors, the restaurant has contracted
exclusive distributors to distribute its productions in different markets.

The distributors are responsible for distributing the productions to the retailers who then sell the
products to the final consumers, the distributors collect feedback from customers and retailers
and then provide it to the restaurant to enhance the quality and features of its products to align
them with taste and preferences of the target customers.

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Possible points of failure

There are two major points of failure in the organization delivery system for its beverage and
food products. The first point of failure is in inventory management, especially the supply of the
ingredients required ''raw materials'' in the production of various products. The failure can arise
due to the perishing of the raw materials or products before using or distributing, although the
JIT technique that using in our case, but we cannot overlook the possibility of such risks.

One of the key performance measures of the restaurant is reducing production costs, and they can
only be reduced by minimizing wastages and the damage in the production process, however,
poor planning of inventory ordering process can lead to wastages, especially in the restaurant’s
cases, because the productions of the restaurant has excess ingredients required in the production
process on time.

The second point of failure can be associated with quality. The failure can occur at the point of
inspecting the quality of the beverages and food produced by the restaurant before they can be
released to the market. According to Goetsch & Davis, the quality inspections are critical in
ensuring that the products released in the market are safe and of the right quality (Goetsch, D. L.,
& Davis, S. B., 2014). If the inspection team uses the wrong samples, especially take small
samples, and then they might end up failing to notice some quality issues in some of the
beverages and food produced by the restaurant. The outcome of the failure would be the
restaurant failing to meet its goal of offering satisfactory and high-quality beverages to the target
customers. Also, this would result in the restaurant destroying its brand image as far as its
beverages are concerned. Although in our case SAMAD restaurant adopting the Total Quality
Management theory ''TQM'' which focusing on the customer satisfaction and zero defects, but
this failure occurs is still in place.

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Lean Management Approach

To maintain the efficiency of the business, we need to adopt the Lean Management Approach,
this approach will assist us in focus on the value of the productions and improve the productivity
through focusing the staff on the value, reduce the waste of time, efforts and resources and assist
us to optimal use of resources.

For the above reasons, the lean management has been applied in different organizations, such as
healthcare with the aim of helping them eliminate wastes of time, resources by looking at steps
associated with various processes and revising them for purposes of removing those activities or
steps that fail to create value to the organization (Souza, 2009).

In our case, apply of the concept of leans management to assist us in advocates for continuous
improvement of restaurant processes, where we can eliminate wastages associated with inventory
management and quality management issues, besides that, the five principles associated with
lean management can be useful in addressing the points of failure that the restaurant productions
operations face.

The first principle associated with lean management is the identification of value. According to
Plenert indicates that the identification of value in the lean management process revolves around
identifying the value that a company is trying to offer to its target customers (Plenert, 2010).

The value of the restaurant in our case, is offering high-quality products to the customers. Hence,
through lean management approach, it can focus on its beverage and food production processes
to eliminate possible loopholes that can lead to quality of its products is compromised.

The second principle is the value stream mapping, where all actions, as well as people involved
in the production of the final products offered to the consumers, are identified (Myerson, 2012),
through this principle we need to involve all actions and people in the process of produce and
delivering the end productions to the customer, in our case, the restaurant needed to identify all
the actions and people involved in the production of its beverages and food, applying of this
point will aim to identify what parts of the process bring no value, and in the end, we will get a
big picture that will enable us to detect the steps that don’t bring value and eliminate them.

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The third principle is associated with the creation of continuous workflow to ensure each of the
processes associated with the production of a product or service in an organization is smooth
(Teich, S. T., & Faddoul, F. F., 2013), applying of this principle will assist us to identify the
areas of weaknesses and coming up with measures that can eliminate these weaknesses to
enhance the smooth processing of the beverages that meet quality standards and eliminate
wastages in the various operations associated with its production.

The fourth principle is the creation of a push system. The main objective is the elimination of
wastages by ensuring that production process relies on the demand that is in existence, in our
case, the work is pulled only if there is a demand for it. Through following this principle and
applying the JIT technique we will be able to optimize resources’ capacity and deliver product
only if there is an actual need, for example, instead of ordering ingredients that are perishable in
large quantities, they can be ordered based on existing demand in the restaurant per day. The
move would ensure that wastages are not recorded in the production of beverages and food that
cannot be packaged, leading to huge losses on the part of the restaurant.

Furthermore, lean management is based on the principle of continuous improvement, the

principle advocates for the management of an organization to repeat all the other four steps
associated with lean management until all areas of weaknesses are eliminated, and maximum
benefits realized for the customers (Radnor, Z. J., Holweg, M., & Waring, J., 2012).

According to Johnston, Clark, G & Schulver (2012), an organization can continually improve the
value of its services by carrying a continuous assessment of the steps involved in the production
of the service and eliminating areas of weaknesses (Johnston, R, Clark, G & Schulver, M., 2012).
In this case, the restaurant should apply the same lean principle by continuously reviewing its
inventory ordering processes to determine areas of weaknesses that lead to wastages, and then
find ways of improving them in the future.

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The key Findings

One of the major findings is that lean management is concerned One of the major findings is that
lean management is concerned with reduction in inventories, cost of quality and lead-time by
90% with an increase in human resource productivity of 50% (Lathin, 2001).

The concept can be used by the restaurant in ensuring that it aligns its beverage and food
production process with its goal of enhancing the quality of products offered to its customers, the
restaurant is keen to deliver the best quality of its productions to the costumers.

Second, the discussion reveals that lean management technique involves the creation of a
workflow, where the key actions and processes associated with the production of a product are
identified (Slack, N; Brandon-Jones, A and Johnston, R., 2013).

The same principle can be used by the restaurant in helping it achieve its performance goal of
increasing operational efficiency. It can create a chart of all the activities and actions associated
with the production of beverages to aid identification of possible areas of weaknesses that can
adversely affect its ability to attain the goal of enhancing operational efficiency.

The last finding is that lean management is concerned with the continuous improvement of
organizational processes to enhance its ability to meet the offer of value its promises to its
clients. The restaurant should continually improve on its quality assurance processes to ensure
that it attains the goal of offering quality products to its customers, as part of its operational
management performance goal.

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Conclusion

Briefly, one of the main finding of this report is that SAMAD restaurant apply inventory
management principles, such as JIT & TQM to ensure that there are no wastages in the time,
efforts and cost, and besides that ensuring customers demand on time. However, there are two
points of weaknesses/failure in the beverage and food productions process. They include
wastages in inventory ordering stage and quality assurance weaknesses, leading to some of the
products released to the market failing to meet the quality standards needed. The restaurant can
successfully apply the lean management concept in addressing the point of failure and ensuring
that it meets its operations management performance goals.

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Table of References

Chase RB, Jacobs FR, Aquilano NJ. (2008). Management nella produzione e nei servizi. In J. F. Chase RB,
Management nella produzione e nei servizi. Milano: McGraw-Hill.

Goetsch, D. L., & Davis, S. B. (2014). Quality management for Organizational Excellence. New Jersey:
Pearson.

Greasley, A. (2013). Operations Management, 3rd Edition. Wiley.

Heizer, J. & Render, B. (2009). Operations Management. Ninth Edition. New Jersey: Prentice Hall.

Johnston, R, Clark, G & Schulver, M. (2012). Service Operations Management: Improving Service
Delivery. 4th Edition. London: Pearson.

Juneja, P. (2019, June 19). Management Study Guide. Retrieved from MSG:
https://www.managementstudyguide.com/production-andoperations- Lathin, D.
(2001). Lean Manufacturing. American Society for Quality Journal, 12.

Myerson, P. (2012). Lean supply chain and logistics management. New York: McGraw-Hill.

Patton, S, Clegg, B, Hsuan, J and Pilkington, A. (2011). Operations Management. Milano: McGraw Hill.

Plenert, G. (2010). Reinventing lean: introducing lean management into the supply chain. Amsterdam:
Elsevier.

Radnor, Z. J., Holweg, M., & Waring, J. (2012). ean in healthcare: the unfilled promise? Social science &
medicine, 74(3).

Rouse, M. (2011, June 17). Inventory Management. Retrieved from TECHTARGET NETWORK:
https://searcherp.techtarget.com/definition/inventory-management

Slack, e. a. (2007). Operations Management 5th edition. In e. a. Slack, Operations Management.

Slack, N; Brandon-Jones, A and Johnston, R. (2013). Operations Management, 7th Edition. London:
Pearson.

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Souza, L. B. (2009, June 12). Trends and approaches in lean healthcare. Bingley, UK: Emerald Group
Publishing Limited.

Teich, S. T., & Faddoul, F. F. (2013). Lean management—the journey from Toyota to healthcare.
Rambam Maimonides Medical Journal, 4(2).

Williams, J. T. (n.d.). Pros & Cons of the JIT Inventory System. Texas: Houston Chronicle.

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