Case Scenario-The Sandwich Factory
Operations Management deals with the management of production operations. Production operations consist of those activities, which transform an input into an output. Inputs typically come from suppliers, while outputs generally go to customers.
If you looked at a factory, you would see input materials going into the factory via the receiving dock and output product being shipped from the factory to customers via the shipping dock. This yields theflow in the attachment.
If you peered inside a factory, you would see a myriad of activity. There are a multitude of steps involved in the total transformation process. Each step comprised of input, transformation and output.
Our business example produces Peanut Butter and Jelly Sandwiches. What comprises input material? It might be peanut butter, jelly and bread. However, we may possess superior skills at producing jelly from various types of fruits. We may possess superior skills at baking bread. We may be able to produce the best peanuts. From a strategic standpoint, we need to determine the vertical level at which we will operate our business.
Mission Statement:
To deliver economical, quality peanut-butter based products for our customers through leadership and innovation.
History:
Our founder was a vegetarian who had originally wanted to convince the world to base their diets on non-meat protein. She was convinced by management consultants to concentrate on one substitute. Since she craved peanut butter, she founded the company.
Regardless of who produces the raw materials, the path from raw material to final product is the supply chain, as viewed by the final customer. The final customer purchases a sandwich from us because he considers the value received. If he could produce the sandwich himself, for less cost or better quality or in a timelier manner, he might consider that option.
Engineering and marketing have developed the product and market tested it. Based on their results, Design Engineering has developed specifications for:
Thickness of the bread slice
Thickness of the bread crust
Creaminess of the peanut butter
Thickness of the peanut butter
Thickness of the jelly
Process Engineering has add the below two specifications:
Bread border around the peanut butter
Bread border around the jelly
Quality Engineering has added one final specification for periodic destructive testing:
Amount of pressure applied to sandwich that oozes either inside ingredient.
We produce our sandwiches, taking advantages of scale, in mass production. Our purchased material consists of peanut butter, jelly and full loaves of bread.
There are four distinct work centers, each within its separate department.
Bread Slicer
Jelly Spreader
Peanut Butter Spreader
Final Assembly
There are other activities taking place within our company.
Order Entry, which transforms customer orders into factory orders.
Accounts Payable, which transforms supplier invoices into payments.
Accounts Receivable, which converts shipping notices into customer invoices
Many, many more.
Our focus is on the production operations, generally known as operations. Your assignment is to develop the operational flow. This is a good precursor in understanding how a process works. (Basically, you'll have some type of flow chart and brief description, if it's even needed, nothing very elaborate.)