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Case 1: AAF Rotterdam

Case overview
The case is all about AAF Rotterdam,a theatrical services company based just outside Rotterdam
in the Netherlands. The company mainly has two businesses; one was hiring and selling stage
equipments that mainly consisted of lighting, sound and staging equipment to clients ranging
from local theatrical groups to large production and conference companies. The other business
was offering production services that included designing, constructing and installing entire sets
especially for conferences and theatrical shows. This business was growing quickly (with bigger
profit contribution) which was getting difficult to handle due to accompanying increase in costs.
So, one of the three directors of the company Marco Van Hopen is looking for ways to increase
flexibility and agility of the processes in the business so as to increase the companys ability to
work more without increasing the cost.
Questions
1) Do you think Marco Van Hopen understands the importance of operations to his
business?

Yes, I think Marco Van Hopen definitely understands the importance of operations to his
business. We know that operations management at strategic level is all about managing the
cost, increasing revenue, making effective investment and building capabilities further.
Further, processes in operations have to be managed differently according to the four Vs;
Volume, Variety, Variation and Visibility. Van Hopen seems to have a clear view of these
concepts. This can be said concluded form the following facts from the case:

The company has succeeded in differentiating itself by offering design, build and install
service that is flexible to incorporate last minute changes. (the concept of each processes
differently according to the need)

The key skill involves considering client requirements, working closely with them and
translating the ideas into workable set design.(the concept of visibility through the direct
involvement of clients.)

Retaining the hire and sell division even if it accounted for only about 20% of total
profit because it provided a steady source of revenue for the company (about 60% of
revenue).Further, the investment in the equipments amounted to over 1,00,000 euros and
which would be needed by the production services business for their operation. (the
concept of increasing revenue and making effective use of investments)

Looking for ways to get more from available resources and getting more organized so as
to control costs.(the concept of managing/reducing costs)

Realizing that the main problem is the unpredictable nature of their activities which most
probably results in increased costs.(understanding the relationship between increased
variation and increased costs.

Thus, we can say that Marco Van Hopen understands the importance of operations to his
business.

2) What contribution does he seem to expect from his operations?

The contributions that he seems to expect from his operations can be briefly listed as
follows:

Reduction in costs.

Increase in revenue and hence profitability as well.

Improved flexibility without raising the costs.

Increased and improved agility for moving people out from the workshop and
store area so that both the businesses can use the facilities for their respective
work without getting in each others way.

Reduction in excessive hours of work. (which has arisen as a side cost for being
flexible)

Increased predictability (i.e. reduced variation) to handle complex production


services contract.

3) Sketch out how you see the supply network for AAF Rotterdam and AAFs position
within it.

Technicians

The workshop
and storage

Set
Construction
workers

Hiring & Sales


division

Admin Office

Production services
division

Executive
office

Design Studio
AAF Rotterdam

Designers
Divisions within AAF Rotterdam

Operations within AAF Rotterdam

Fig: Supply network for AAF Rotterdam

4) What are the major processes within AAF and how do they relate to each other?

The major processes within AAF are as following:

Receiving orders from the hire and sales customers and providing the first point
of contact for production services clients.(performed by the administrative office)

Preparation of hire equipments and their delivery to clients (if required).

Checking equipments upon return and carrying out necessary repair and
maintenance work.

Using computer aided design equipment and simulations for set design.

Construction of sets for production services clients.

Planning of logistics required for efficient installation of sets.

All these processes relate to each other in the sense that each of the processes should be
successfully completed for the initiation of another process. For example, the
administrative office should receive and properly process the order from hire and sales
division before the preparation and delivery of the aid equipments. Similarly,
maintenance and repair work can be carried out only after the equipments are returned by
the clients. Likewise, planning of logistics can be initiated only after the construction of
sets (designed using computer aided design equipment and simulations).Thus , in this
way the processes relate to each other.

5) Evaluate Van Hopens idea of increasing the flexibility with which the different
parts of the company work with each other.
Basically, Van Hopens idea is to increase flexibility by getting things more organized by
making the best use of the resources they already have. This means that the production
services division could be the biggest customer of the hire and sales division because the
sets designed by production services for their clients could definitely need equipments
(such as sound and lighting) from the hire and sales division. Similarly, improving agility
for moving people out from the workshop and store area can enable both the businesses

to use the facilities for their respective work without getting in each others way.
Likewise, increased flexibility within the company will help overcome the inflexibility
regarding the things needed for production services to some extent. Thus, Van Hopens
idea of increasing flexibility seems to be appropriate.

Case 2: Dresding Wilson

Case overview
This case is all about Dresding Wilson, an innovation based provider of technical solutions to the
medical equipment and direct health care industries with three mutually supportive and
integrated division; the Manufacturing division, the Technology division and the Medial Services
Division. The case outlines the timeline events from its foundation in 9991 as a small
manufacturer and supplier of cardiovascular and heart function devices named Dresding
Medical up to its growth as Dresding Wilson today.

Questions
1) What are the significant strategic events in the history of the company from its
foundation to the present day?
The significant strategic events in the history of the company from its foundation to the
present day can be listed as follows:

Buying up of a Danish medical equipment company that produced neurological


simulators.

Splitting off of technology consulting advice activity to form a Technology


solutions division to develop new in-house products and to develop and license
technology solutions to other Original Equipment Manufacturers (OEMs).

Opening a new plant in Winchester,England to further embed quality procedures


in the companys manufacturing units.

Launching a brand building initiative called the Dresding Assurance that


emphasized the quality of the companys products in all major markets.

Upgradation of Singapore technical support office to become Singapore


development centre within the technical division.

Acquisition of Ryder Wilson,a US manufacturer of monitoring systems that also


had a clinical management activity.

2) What do you see as the operation strategies for each of the three divisions of the
company?
The operation strategies for each of the three divisions of the company can be seen as
follows:
Manufacturing division

Remaining highly vertically integrated so as to ensure control over quality.

Applying modular design principles and flexible manufacturing cells to control


the cost incurred due to producing variety of products.

Technology division

Integration of software development, diagnostic software, new on-patient modules


and wireless communications to develop the significant Insight monitoring
system.

Educating customers about the technical possibilities and choices that they face as
well as training the customers in-house technicians.

Medical Services Division

Providing a low cost service with the help of technology ( from the technology
division)

Carrying out the designing and installation of systems instead of outsourcing


them.

3) How has each divisions operation resource capability developed in relation to the
requirements of its market over time?
Each divisions operation resource capability has developed in relation to the
requirements of its market over time in the following way:
Manufacturing division

By establishing an absolutely impeccable set of standards to build a reputation


that could be used in the marketplace.

By adopting a more flexible manufacturing cell to produce the variety as


demanded by the market.

Technology division

Shifting of focus from being a product innovator to being a systems innovator so


as to fulfill the need of market demanding more customization and constant
reassurance over quality.

Medical Services Division

Integration of various service processes so as to provide a smooth and satisfactory


service experience as a whole.

4) What do you see as the strengths and weaknesses of the companys approach to
developing its operation strategy?
The strengths and weaknesses of the companys approach to developing its operation
strategy can be listed as follows:
Strengths

Innovativeness ( e.g. the development of Insight system)

Planned organization ( the decision to remain vertically integrated so as to ensure


control over quality)

Use of in-house technology to provide low cost service.

Cautious approach to marketing ( since the branding initiative Dresding


Assurance was launched only in 1999 while the company was founded in 1991)

Weaknesses

Too fast expansion and recruitment of new staffs.

Performing each process in-house instead of outsourcing even if it was increasing


the cost.(in manufacturing division)

Taking jobs such as arranging leasing agreements and providing agency staff and
training programs in which they had little or no experience at all.

5) What challenges does the move to becoming a service provider pose for the
company?
The challenges that the move to becoming a service provider pose for the company can
be as follows:

Increased involvement and contact with customers while educating them about
the technical possibilities and choices that they face as well as training their inhouse technicians.

Keeping activities in-house against the growing trend of outsourcing ( and hence
controlling costs)

Proper reorganization of the whole business in order to effectively handle the


service division.

Growing competition from other clinical services company.

The often need of integrating the various services processes so as to deliver the
services smoothly.