Analytic Hierarchy Process in Operations Management

The project deals with the issue statement where the content is included about the target market, poor management, and lack of supervision by the managers and the supervisors, the focus is given on the profits of the company and the sales of the Custom Gear Inc. The problem the Custom Gear is experiencing is being stated in the project, which includes lack of the order size, lack of the future growth, inventory and the production management and many others. The actions that have been taken by Mr. Rhodes are narrated in the project. Inappropriate production process, inappropriate target market, poor management, poor control system, suppliers are not efficiently delivering raw materials and the profit earned by the Custom Gear is not adequate. Lack of the policy of the order size: Eastern gear has accepted a huge lot of the order size which is been seen in the exhibit 2 of the case study. It can be seen that in the order size 1 the total number of orders are taken are 80. In size 2, the number of orders is 53. In size 3 the number of orders are 69 and so on. On the other hand, President of the Eastern Gear has also taken decision to accept the huge orders from the customers. Lack of planning for growth: It appears that the company does not have any plan to expand their business in the future. This may be the reason and the company can face problems with respect to the cash flows, problems of capacity and other problems that are associated with the growth of the company. Inventory and production control: The expediting seems to be the rule rather than the exception. Twenty percent of the total orders have the rush tags on it. The processing time of the production has increased from two to four weeks, and there does not seem the production and inventory system are not in place. There are certain orders are being handled on the rush basis and that may be disruptive with the smooth flow of the production. Objectives that are followed in the operations: It is not clear that the operations should be focusing on the cost of the product, delivery and quality of the product and the flexibility. The focus should be laid down on the objectives of the operations. The order entry system is been flawed: The time is lost between the design that is desired by the customer is flawed because the order is taken by the James and therefore, is reviewed by the engineer. The problems that are faced by Mr. Rhodes are been divided into four parts: 1. Production process, 2. Target market, 3. Management, 4. Suppliers. In case these problems are resolved, the impact of these will be seen in the goodwill of the company. The sluggish production process of the Custom gear has caused problems related to the delays in the production, late deliveries and the poor quality of the product. The main problem of the production process of the custom gears is the standard job shop layout. Every workflow has the set of the processes. Depending on the operations, the materials flow from one work centre to another. The cycle below shows the path that the typical order will follow is: Taking into consideration the floor layout of the Custom gear, it can be taken into account that the work centre’s are not arranged into the correct order of the workflow. They can be said to be unstructured. To get rid of this problem the layout of the shop should be arranged in the following manner: The main target of the Custom Gear’s is the engineering research and the development laboratories or the manufacturers. These result in the number of the small number of the gears. Custom gear is losing the market share as it is targeting small manufacturers who order very small amount of the gears from the company. This results in the low sales and revenue for the company. In order to increase the sales as well as the profits of the Custom Gear should try and target the large companies that are in need of the more of the custom gears. Doing this Custom Gear does not have to find more of the customers because the profits gained from one company would be huge. The management issues that the Custom Gear is facing are the past due raw materials in the shop. The manager and the supervisor must take note of the inventory that is lying on the shop. The materials that have expired are mostly because of the errors that have been caused by the supervisor or the manager. In order to get rid of this problem the supervisor should take extra care while placing the orders with the suppliers and avoid wastage of the resources. The company has also recorded many lost orders. Therefore, in order to get rid of the problem the management should ensure that all the orders are properly documented this ensures that the files should not be missing and there exists no complaints from the customer’s side about the lost orders. The operation strategy is related to the product, process, method, quality, cost and scheduling. Moreover, like any other organization the Custom gear has the definite relation with the operations strategy: The design of the product should have a match between the operations management, finance department and the supply chain management and should look at the customers need. The methods take into account the process of transforming raw material into the finished products. The process considers the conversion of inputs into outputs. Therefore, these two process in closely linked to the process design. The process selection and the facility layout takes into account the implications of the supply chain management. A cost is the variable factor that affects the pricing and the profits of the organization. Organizations that have high degree of productivity in comparison with their competitors have a comparative cost advantage. Custom Gear must plan the schedule orders deliberately. The rush orders and the large orders should be made carefully. Operating resources are necessary for the personnel and material which is generally necessary to carry out the project. The examples of the operating resources are materials, machines, labor, tools, fixtures and many others. Custom Gear must complete the process of the operating resources. The above-mentioned analysis that is been done on the Custom Gear Inc. the lack of proper and efficient operational controls will bring adverse changes in the organization. The sluggish production process, selection of suppliers and objectives of the sales target, the poor layout of the job shop also slowed down the production process and created confusion. The Custom Gear should target the large-scale manufacturing companies where they can get huge orders and earn the maximum revenues out of it. The production process should be changed the quality of the products should be given maximum attention. The resources that are getting wasted should be given utmost importance by the supervisor and the managers. Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2012).  Marketing: an introduction. Pearson Prentice-Hall, London. Becker, J., Kugeler, M., & Rosemann, M. (Eds.). (2013).  Process management: a guide for the design of business processes. Springer Science & Business Media. Chang, J. F. (2016).  Business process management systems: strategy and implementation. CRC Press. Davenport, T. H. (2013).  Process innovation: reengineering work through information technology. Harvard Business Press. Ferrell, O. C., & Hartline, M. (2012).  Marketing strategy, text and cases. Nelson Education. Fitzsimmons, J., & Fitzsimmons, M. (2013).  Service management: Operations, strategy, information technology. McGraw-Hill Higher Education. Jeston, J., & Nelis, J. (2014).  Business process management. Routledge. Khanna, R. B. (2015).  Production and operations management. PHI Learning Pvt. Ltd.. Krajewski, L. J., Ritzman, L. P., & Malhotra, M. K. (2013).  Operations management: processes and supply chains. New York: Pearson. Subramanian, N., & Ramanathan, R. (2012). A review of applications of Analytic Hierarchy Process in operations management.  International Journal of Production Economics,  138(2), 215-241.

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