Level 5. Nov Senior Assessor s Report. Advanced Diploma Purchasing and Supply. Operations Management in the Supply Chain L5-12

Transcription

1 Advanced Diploma Purchasing and Supply Operations Management in the Supply Chain L5-12 Level 5 Senior Assessor s Report Nov 2008 L5-12/SA report/nov

2 INFORMATION FOR CANDIDATES The senior assessor s report is written in order to provide candidates with feedback relating to the examination. It is designed as a tool for candidates for both those who have sat the examination and those who wish to use it as part of their revision for future examinations. Candidates are advised to refer to the Examination Techniques Guide (see the following link as well as this senior assessor s report. The senior assessor s report aims to provide the following information: An indication of how to approach the examination question An indication of the points the answer should include and how marks are allocated An indication of candidate performance for the examination question APPENDIX A matrix for the examination is included as an appendix. It highlights the learning objectives of the unit content that each question is testing. The unit content guides are available to download at the following link: ADDITIONAL SOURCES OF INFORMATION The Supply Management magazine is a useful source of information and candidates are advised to include it in their reading during their study. Please see the following link to the Supply Management website L5-12/SA report/nov

3 SECTION A Question 1 (25 Marks) Assuming the role of the consultant explain the recommendations for Stage 1 to Pete highlighting the benefits for Decoart This question aimed to test candidates understanding of operations management in a small business environment. This is about being able to analyse a situation and suggest solutions based on operations management theory. This question asks candidates to analyse the case study and present some solutions. However, some of the analysis has already been carried out and so it is a case of justifying why these recommendations would be of use to Decoart. Based on the case study it has been recommended that Pete implements a manual or computer-based planning and control system and appoint a manager to assist with running the business. Answers should recognise that ideally Pete would implement some type of MRP (materials requirements planning) system but he could also implement a good quality manual system based on spreadsheets. Answers were expected to explain the recommendations for Stage 1 and highlight the benefits for DecoArt. Answers could include: having a manager who specialises in operations management would mean a more efficient well planned operation on a day to day basis and Pete could concentrate on his design work which is a critical part of the business; it is his core competence better management would mean faster throughput and therefore reduced lead times the recommendations would allow Pete to manage his stocks of materials and packaging the recommendations would allow Pete to identify what he should be purchasing based on his current stock figures the recommendations would assist Pete with planning and scheduling his machining and painting operations producing BOM would help with costings. Better answers demonstrated that they had analysed the scenario and identified specific issues such as the inability to deliver on time, and then relate this back to planning, scheduling, quality and purchasing. This question was compulsory. Most candidates discussed the benefits of having an MRP system in terms of planning and control but few actually explained comprehensively how an MRP system worked. Whilst this was not a specific requirement of the question it does represent an opportunity to demonstrate knowledge. In order to show the benefits L5-12/SA report/nov

4 there is a requirement to appreciate that a planning advantage is the need to develop an MPS schedule. There is also an advantage in knowing specifically what materials and components to buy; this would have helped with stock management Candidates could have suggested that Decoart may have found the implementation very difficult because of their inexperience and also the need for large amounts of accurate data. Generally far less was written about the benefits of recruiting the manufacturing manager compared to the computer-based system, and this contributed to an overall low average marks. The general answers to this question were average and whilst one or two candidates provided some good answers the quality of the justifications was overall quite poor. Question 2 (25 Marks) Explain the advantages and disadvantages of outsourcing all of Decoart s wooden product manufacturing to the Far East. This question required candidates to explain the advantages and disadvantages of outsourcing. The main points for discussion are as follows: Explanation of Advantages might include reduced costs reduced maintenance no need to source and manage wood and paint supplies no environmental responsibility for paint disposal reduced overheads (people) focus on core competencies Explanation of Disadvantages might include extended lead times need to forecast possible loss of jobs at Decoart of workers who could not be re-skilled risks with late delivery supplier management difficulties associated with culture differences communications problems associated withy time differences etc. Answers were expected to recognise that quality could be improved but this is not guaranteed and Decoart would need to manage this aspect. L5-12/SA report/nov

5 Better answers could discuss all of the above and might offer an opinion of this type of solution, for instance, is it appropriate? do the benefits outweigh the disadvantages? The average mark was 13.2/25 and overall the quality of the answers was quite poor. Nearly all candidates discussed some of the benefits of outsourcing and also some of the disadvantages but few put together a structured argument about the pros and cons. Very few mentioned the essential challenge that forecasting and lead times would be of paramount importance. Higher marks were achieved by candidates who provided a good definition of outsourcing and some also plotted the outsourcing strategy matrix. L5-12/SA report/nov

6 SECTION B Question 3 (25 Marks) With the aid of examples distinguish between the different types of process in operations management and their ability to deal with variety and volume. These processes are at the heart of manufacturing and there is a necessity to understand what type of approach is required based on the need to balance variety with volume. Different processes are required at different stages of the product life cycle. The definitions of these process types are taught along with graphs that plot variety versus volume. Typical answers were expected to distinguish between the five different process types using examples. Alternative answers may include greater depth of detail and relate to fewer process types; appropriate marks were achieved accordingly. Process types expected to be included are: project jobbing batch line continuous. The volume increases down the list but the variety decreases. Comment should also be made on the different layouts and locations plus investment and skills issues. Answers might use a graph to plot the variety/volume relationship. This is a fundamental aspect of operations management and candidates who study operations management were expected to have a basic understanding of these processes. It should be noted that examples are a requirement of the question and answers which fail to include examples will fail to gain high marks. There were some good answers which included not only plotting the manufacturing process types against volume but also the service process types on volume /variety graphs as well as providing a good description of each. Unfortunately the average marks were lowered by candidates not providing enough examples and bullet pointing comments. There were some excellent answers but overall the level of detail and understanding was disappointing. Question 4 (25 Marks) Explain how FIVE key performance objectives, such as those suggested by Slack, are relevant in relation to an operations environment of your own choice. L5-12/SA report/nov

7 This was an opportunity to gain marks for describing one of the most important aspects of operations management. The subject of Slack s performance objectives is a fundamental element for operations management and relates to the inputtransformation-output model. There is a balance to be found between these different objectives and this formed the basis of the question Initially answers were expected to identify FIVE key performance objectives; Slack s are: cost quality responsiveness flexibility dependability or reliability 5 marks could be achieved for an explanation of relevance to operations. Answers were expected to be applied to a specific operations management environment and answers which failed to include examples gained lower marks. Better answers explained and justified why, for example quality is key to operations i.e. if you are not producing consistent quality products then planning the rest of operations efficiently can become impossible; without good quality cost will rise. Alternative key performance objectives that are relevant in relation to an operations environment gained appropriate marks. Most responses listed the performance objectives but few related this directly to operations management. There were some excellent answers which included the relevant information from the study guide and the reference text. Some candidates appeared to be confused and in some cases made up their own objectives; this may have been due to misreading the question. Question 5 (a) Define the term capacity and explain the differences between long-term strategic and short-term operational capacity planning. (15 marks) (b) Suggest appropriate methods for managing and smoothing capacity (10 marks) The subject of capacity and capacity planning is an important subject in operations and supply chain management. Being able to define the term and understanding the content behind long and short term capacity planning is a prerequisite for anyone expecting to operate at a senior level. There is also a need to understand the methods around managing and smoothing capacity as this again would be a subject that may need to be discussed with another functions such as marketing. In part (a), answers are expected to provide a definition of capacity in terms of output per unit of time and explain the differences between long-term strategic and short-term tactical/operational capacity planning: L5-12/SA report/nov

8 strategic capacity planning is long-term and the need to plan for capacity in house by the investment in equipment and machinery. It is important that machinery purchased will provide capability for the long term and not just be based on current volumes and specifications. This is normally determined at Director level tactical capacity planning is short-term and can be implemented by subcontracting and extra shift working. It allows for the excess capacity needed to be flexed and means extra investment is not needed. This is usually managed at mid manager operating level. Up to 5 marks could be gained for a definition of the term capacity. Many candidates omitted the time element which is crucial. Up to 10 marks were achieved for the explanation of the differences between long-term strategic and short-term tactical/operational capacity planning. In part (b), answers are expected to suggest appropriate and realistic methods for managing and smoothing capacity: firstly there should be focus on minimising capacity loss through preventative maintenance and lean initiatives incentives for increased productivity eliminating bottlenecks chasing demand by the use of price reductions and promotions of specific goods where there may be excessive stock encouraging sales personnel to sell, so as to use unallocated capacity. Better answers will make the point that the effective management of the interface between the marketing and operations functions is crucial to ensure that operational capacity is effectively utilised. Better answers will include appropriate examples to support the suggestions. This was a reasonably popular question and candidates generally answered the first part much better than the second. Some responses included a description of capacity but very few applied it to a real life example or within a business context. In terms of part (b) the answers were rather poor with few students appearing to understand the need for smoothing and balancing capacity requirements. Almost all organisations seek to chase demand and adjust appropriately. There was no mention of capacity requirements for new products Question 6 (25 Marks) Describe the philosophy of just in time (JIT) manufacturing. Detail the benefits of implementing this type of approach and provide examples of potential areas of improvement. Just in Time is a philosophy which aims to focus on the elimination of waste from all production and business processes. It can be linked with lean manufacturing in terms of L5-12/SA report/nov

9 a mixture of JIT and TQM. It is a complex subject and candidates are expected to have a basic knowledge and understanding of this philosophy in a business context. Businesses generally want to improve and JIT is one of the most common approaches within manufacturing organisations. Answers are expected to describe the philosophy of just in time (JIT) and to detail the benefits of implementing this type of approach, providing relevant examples of potential improvement areas. JIT is a philosophy and not simply a case of delivering products exactly when they are needed. JIT is about the elimination of waste in all its forms and is equally applicable to supply chains as it is to manufacturing organisations. The main focus of JIT is on the elimination of the different types of waste: stock movement of materials non-added value activity such as reducing set up times unnecessary processing space reduction Answers should recognise that JIT can be used as a continuous improvement activity. As stock is reduced the buffer in the system is reduced and this highlights manufacturing problems; by solving these problems the system becomes more efficient. This was the most popular question; however few candidates demonstrated understanding of the rationale for such a question. Many only provided brief answers, which may have been due to lack of time. Some answers were also simple bullets for the benefits sections of their answer. There were some excellent responses which gave detailed definitions of JIT/Lean, the techniques, the benefits and the improvements. About half of the candidates failed to describe improvements therefore missing the opportunity to gain marks. General Comments Overall the pass rate was 62%. The subjects within this paper covered some of the higher profile subjects such as Slack, capacity, process types but in most cases although the basics were known, candidates did not have the depth of understanding necessary to apply these ideas and techniques to case studies and develop solutions. There is a good case for defining the day to day activities of operations management along the lines of the input-transformation-output model and using this as a means to study the rest of the course. By discussing these types of scenario, candidates would appreciate the context of tools and techniques and get a feel for the application of these to real life situations. The overall average mark was 52%. L5-12/SA report/nov

10 APPENDIX: Matrix indicating the learning objectives of the unit content that each question is testing Question No. Learning Objective SECTION A SECTION B X 3 The design of products and services X 4.2 X X X X X 5.8 X Approaching operations management The concept of operations The design and management of the operations network The planning and control of resources Philosophies and methods for making improvements in operations ma 6 L5-12/SA report/nov