Operations Management MGMT 208

Part A: Capacity and Resource Management

Steps to receive driver’s licenses

 Produce appropriate identification (A)

o Failure percentage – 10%

o Time taken – 5 minutes

o Number of staff - 4

 Pass written exam (B)

o Failure percentage – 15%

o Time taken – 3 minutes

o Number of staff - 2

 Pass the road exam (C)

o Failure Percentage – 40%

o Time taken – 20 minutes

o Number of staff – 5

(i) Flow Diagram

15% Failure 40% Failure

10% Percent
C D
A B
3 Minutes 20 Minutes
5 Minutes
Finish
4 People 2 People 5 People
 For the flow diagram, the processes are shown with the number of staff, time required

for the process and the failure rate.

(ii) Bottleneck for the process

Process A, people =4

Time taken for process A = 5 minutes

Cycle time for process A = 5/4 = 1.25 minutes/ person

Process B, people =2

Time taken for process B = 3 minutes

Cycle time for process B = 3/2 = 1.5 minutes/ person

Process C, people =5

Time taken for process C = 20 minutes

Cycle time for process C = 20/5 = 5 minutes/ person

Bottleneck in a process where the most cycle time occurs. Hence the bottleneck for the process is

the C where the road exam is happening.

(iii) Maximum capacity of the process is taken as the process capacity of the bottleneck.

This will be used to calcautes the maximum capacity and will provide the current

number of applicants that can be handled every day.

Total working hours each day = 8 hours

Cycle time of the process = Capacity of the bottleneck process

= 5 minutes

Total available time = 8 * 60 = 480 minutes

480
Maximum capacity = =96 Applicants
5
 (iv) As per the question, DMV has a target of 100 drivers per day. This will be done by

increasing the staff in the DMV. Calculations are shown below -

Target of the DMV = 100

To increase the capacity of the process, we need to decrease the cycle time of the

bottleneck process. The bottleneck process is C where the road tests are occurring.

Hence, we will increase the manpower at process C to reduce the cycle time.

20
New cycle time at C with 6 manpower = 3.33 minutes
6

480
Hence, new capacity = =144 applicants
3.33

To achieve 100 drivers per day, we need 4 manpower at process A, 2 manpower at

process B and 6 manpower at process C.

Part B: Scheduling and Sequencing

As the manager of the warehouse operation, each activity in the warehouse will be

standardized to obtain the maximum efficacy from the processes. There is slight difference

between warehouse operations and order fulfilment centers (Hompel & Schmidt, 2006). Main

aim in warehouse operations is to optimize the stock storage that is available while in case of

order fulfillment centers focus is to streamline process of ordering and shipping. This includes

optimizing receiving, storage, picking, packaging, and shipping. There is stock management,

packaging, tracking and delivery of orders involved in warehouse operations. In our case study

we have assumed that there are three types of orders that are received in the warehouse. First and

the foremost priority is the urgent orders which are dispatched same day. Next is the routine
orders in which normal packaging and dispatch times are required. Final orders are the slower

orders where customer can wait longer than usual. For the last two categories, orders are shipped

within the week of receiving. For the daily list of orders that I receive every day, the rule will be

that I will mark all the priority orders with red. I will divide my team in handlers which will

handle priority orders only and remaining will handle regular and routine orders. If there is any

mismatch among the orders, then flexibility of the material handlers will be used. Then the

material handlers will pick those orders and sent it to the shipping station.

There is another option where all the material handlers will first focus on the priority

orders and once the priority orders are finished, then we can deliver the remaining orders. This

will make sure we will achieve the priority of delivering on the same day. There can be

possibility that regular orders may be lagging behind. Then in that case, as the manager, I will

sequence the orders on the basis of them being received in the warehouse. The dispatch time for

all the remaining orders is one week as per the policy. So, we will deliver priority orders on the

same day. Even of some of the regular orders are pending, those will be carried forward the next

day. Same situation will go for further days as well. In these cases, priority will be given to the

old orders. Also, seasonal workforce can be used in case if the demand is very high in particular

season.

Some of the things to remember are priority is given on the type of order received. This is

based on the customer requirement. Once the order is picked, then the shipping criteria will be

first cum first shipped basis. Here the batch size is generally considered. It can be a small truck

or a delivery van depending on the number of orders to the particular location. The main goal of

the whole process is to deliver within the promise date of the customer. Based on the order

priority, all the orders should be delivered to the customers within the date promised (Chiang and
Lin, 2010). There is a possibility that the order from the customer is out of stock. In this

particular case, immediate action will be required to let the customer know about their order

status.

I would prefer that all the workforce is utilized finishing the priority orders. Once those

are taken care, for the rest of the day, we can focus on the regular routine orders. This will

optimize the number of operators required for the warehouse and increase the efficiency of the

workers as well. Also, as a long-term strategy for the warehouse, on a trial basis, we can adopt

both the rules and measure the efficiency in terms of delivery and cycle times. For both the

cases, data should be collected, and then appropriate decision can be taken.

References

 Hompel T. M., Schmidt T. (2006) Warehouse Management: Automation and Organization of

warehouse and order picking systems, Springer Publications

 Chiang M. D., Lin P. C. (Nov 2010) Adaptive approach for storage assignment by mining

data of warehouse management system for distribution centers, Enterprise Information

systems, Vol 5, Issue 2.