Assignment 2: Reflective Report on Case studies 500001: Value Chain Management - MBA

Assignment 2: Reflective report on Case studies Fitness plus Case and Parts Emporium Case

500001: Value Chain Management

Masters of Business Administration Sydney Graduate School of Management

University of western Sydney

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Assignment 2: Reflective Report on Case studies 500001: Value Chain Management - MBA

Reflective report on Case Study Case Study 1: Fitness Plus

Fitness Plus was at a significant juncture of its business growth process and the management is required to make sound business decision to make or break the organizations future prospects. The market share of the Fitness Plus is currently facing a considerable competition from the newly opened YMCA and Oasis clubs. The customers are complaining that during the peak hours their waiting time is longer than acceptable to access the service. To make the matters worse the opening of new corporate businesses in downtown had generated whole new opportunities that increased the pressure on the demand of the services. In the Fitness Plus case analysis, I learned how to use a quantitative approach to evaluate the adequacy of existing resources estimating whether the existing capacities are fully utilized and whether the existing equipment/ resources are adequate to facilitate satisfactory customer service. I applied the theory of capacity evaluation using the output capacity measuring method in order to find an appropriate solution to the problem. The Fitness Plus provided me a greater opportunity to apply the theories I learnt to a practical situation. I estimated the capacity, and then identify the gaps. I spent significant time brainstorming to develop my alternatives and subsequently evaluating the advantages and disadvantages of them. This case is an eye opener for me as I realized the extent of the risk any organization has to deal with, while making decisions based on assumptions. In this case, a sample of customers data was analysed to identify the demand on the equipments. I used the outcome of this sample, assuming that they represent accurate distribution of customer demand for the equipment in the facility. The risk of this sample being not representative of real demand is disregarded. All my subsequent decision processes have a greater dependency of selecting the sample size and sample points. I realized that how important it is to use a reasonably representative spectrum of the sample population to obtain fairly accurate perspectives of customers. When I allocated setting times for equipments, the scenario changed drastically. The inclusion of setting time indicated that Fitness Plus need different strategies to address the peak demand as the equipment availability significantly reduced. Then what would be the difference in availability and demand, when there are idling equipment due to malfunctions, maintenance delays, repairs, and corrective actions: which are inherent component in this business. I come across with various strategies that could be implemented to address the issues at Fitness Plus, without resorting to invest heavily, at this point in time. While analysing the Fitness Plus case, I understood the complexity and risks involved in decisions making especially the strategic decision making process. I became aware of the extent of assumptions involved in any decisions making process, and the need for organization to have a mechanism to minimize the estimated risk due to these assumptions. The most important aspect I learned in this case is that, the outcome of many business analyses depends on the assumptions managers make in arriving at those decisions. If the degrees of deviations of the assumptions from the reality are high, then the potential to reach a realistic decision is diminishing. When managers make decisions based on inaccurate decisions they bound to end up with inappropriate decisions and generate higher risks than realistically acceptable.

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Assignment 2: Reflective Report on Case studies 500001: Value Chain Management - MBA

This exercise gave me an excellent opportunity to understand the depth of the predicament, contemporary management faced with, when making strategic decisions. The highlight of the learning is the complexity of assumptions the todays businesses deal with, while evaluating their options. I always understood and dealt with the fact that almost all the business decisions are involved with certain level of assumptions. But the real impact of the extent and depths of those assumptions were rarely affected my realization as hard as in the case of Fitness Plus. I learnt that, if I had evaluated the problem in different perspective, I would be able to address the same issue in numerous ways. For example, the following decision mix would have given me better opportunity to address the apparent customer complaint issue which I initially suspected to be due to the insufficient capacity of equipment: Use of a well designed booking system, to allocate process time for customers, would reduce the f customer waiting time. Adopting a different process times, based on different pricing policy, Offering discounted rates for reduced process time for high demanding equipments Offering discounted rates for off-peak time slots, so that peak demand could be shifted to off-peak Employing dedicated customer service team to minimize the customer waiting time

When I consider where and how I could apply the lessons learnt from this case, I can easily identify many opportunities for the application in my routing work activities. I work in an organization, managing an energy distribution infrastructure, providing services expanding across NSW and ACT. Capacity planning and scheduling is a very important aspect in my daily routines. I spend considerable time identifying potential issues in the distribution network and then allocating resources to rectify them. The resource management (i.e. allocating human resources to rectify issue, fleet allocation and equipment allocation to address breakdowns and preventive maintenance, then balancing and prioritizing the resources allocation based on complexity of the issue, cost and the level of priorities) plays a vital role in preventive and/or on-going maintenance programme of this distribution network. When I reflect on the factors that could prevent me from applying what I have learned in my day-today activities, I am unable to find a reason. As I always used analytical approach to find solutions and make better decision, explicitly understand the impacts on day-to-day activities. But I have not realistically tested the underlining assumptions though there were few abandoned attempts. I think I will apply different set of assumptions and test the validity of them as an experiment in capacity planning and scheduling in sometime in the future. The time constraint possibly will be the only factor that would delay me applying and experimenting theories I learnt, during the working hours. I am confident that I would be able to find adequate time if I am determined to apply them. My view on the management and process of decisions making is further confirmed and strengthen after I engaged in this Fitness Plus case assessment. The lessons I learned in this case revalidated my experience in dealing with capacity constraint in daily scheduling activities. It further enhanced my understanding of complexity of decisions making process and effectiveness of making decisions based on accurate assumption. Now I can better identify the exact reasons behind the situation where I was also a part of making inaccurate assumption in resolving operational issues. I now know that my decisions are as good as the assumptions I make.
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Assignment 2: Reflective Report on Case studies 500001: Value Chain Management - MBA

Case Study 2: Parts Emporium

When I contemplate on various phases of my career, Inventory control is an aspect that I have a very limited exposure. My understanding of inventory management is non-existent, and my only experience is handling the domestic inventory levels in monthly and weekly basis. I have read about various techniques and tools applied in inventory management, I have never paid much attention to this area. Therefore, Parts Emporium case provided a great opportunity to study the fundamentals of the inventory controls. The dilemma Sue McCaskey faced at the Parts Emporia indicated the extent and enormity of resources and capital tied up with inventory management, which were allocated and underutilised and/or unutilised in some organization due to lack of proper analysis. In this case, the reasons behind the maintaining less stock level of exhaust gaskets and more of drive belt can be associated with lack of appropriate analysis in the existing inventory management process and inadequate evaluation of the current inventory planning process. Purchasing managers note to Sue provided a hint that the existing system is focused on complete physical count of inventory, which probably has a very limited focus on the cost-benefit analysis. This was evident from the statement of Purchasing Manager stating that organization not keeping compiled records of some aspects of the inventories and Sue having resorted to evaluate the two products as a pilot project to identify the extent of the issues. I learnt the challenges in managing inventory, the consequences due to lack of proper system to manage the inventory, and the enormity of the operational and financial impacts on business. My analysis and interpretation of the Parts Emporium case, directed me to identify the prevailing situation as follows: Lack of organizational inventory information, compiled and recorded in systematic manner Concentrating on evaluating the existing level of inventory (as per the note from the Purchasing Manager stating that they just completed a physical stock taking for the whole range of items) rather than ascertaining to focus on maintaining cost effectiveness of whole inventory management process Inadequate analysis to identify and rank SKUs according to the demand rate and dollar usage of the items No evidence of performing any systematic analysis to evaluate o The cost-effectiveness, o Economic order quantities for the SKUs o Safety stock, o Re-order points o Time between orders o Ordering costs and holding cost o Cycle inventory cost o Revenue lost due to insufficient inventory level The lack of all information of these parameters for SKU, left the organization in dark about the effectiveness of inventory management system. I learnt from the Parts Emporium case the inventory management have significant relationship to Value chain management of the organization. Parts Emporiums core processes and core competencies mainly evolved around the accurate inventory management.
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Assignment 2: Reflective Report on Case studies 500001: Value Chain Management - MBA

The value chain management process of ordering and purchasing, logistic management, Capital acquisition, budgeting, customer relationships and product delivery are key internal processes- all have a major link to the inventory levels of the SKUs. Most of the decisions related to these processes have a certain impact on how they manage the inventories. I experienced firsthand how the following organizational strategic decisions tend to have a significant correlation to the success of the inventory management1 while evaluating the parts Emporium Case. Capital acquisition Budgeting HR Recruitment, hiring, firing and training Information systems Functional management The in depth analysis of this case help me understand the integrated decisions making process and its vital inter-dependencies. For my perspective, the most important outcome of analysing the Parts Emporia case is that I have gained excellent understanding about the fundamentals of inventory management. I value the great opportunity given in this case to understand the application of the statistical techniques in assessing the EOQ, Safety stocks, re-order points, Time between Orders, Total inventory cycle costs, impacts of lost revenues due to improper inventory management etc..This case very effectively covered a whole range of aspects of inventory planning and management providing greater exposure to the subject matters. When I contemplate on my opportunities to apply what I learnt in this case, I see many areas in my work place. When I was involved in energy distribution network management allocating human resources, material & spare parts, heavy machinery equipments- I inadvertently use many of these aspects of inventory controls effectively manage my routine work. Now I think I may be able to look deeper into the inventory management system and identify why our maintenance programmes are sometimes delayed due to lack of critical items in the stores. I would like to evaluates the existing inventory management systems of my organization to identify the causes for non-availability of some critical items. I often was compelled to defend the situation of delays to urgent mainatance works due to lack of existing stock items or having incorrect items. I never deduced that causes may be due to the deficiencies in our inventory management system. I would like to conduct an investigation on sample items to identify the current situation in the warehouse. If I evaluate the factors which would prevent me applying the tools and techniques I leant I see many hindrances in my work life. The following factors are on top of the list: - Having no authority to obtain relevant information of the exiting inventory management process - Being in a work area which has no formal influence on the inventory management process other than being a customer at the tail end. I would think it would give me an opportunity to raise my issues and provide some influence on the process. - Highly segregated divisions involved in inventory management process and supporting functions (i.e. procurement, contract management, Purchasing, supplier relationships, and ware house) due to the size of the business.
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Assignment 2: Reflective Report on Case studies 500001: Value Chain Management - MBA

The insight into the inventory management process, better understanding of appropriate methodologies: that could be implemented in the organizational environment, further strengthen my overall ideas about the management and its responsibilities. This case provided me with opportunities to evaluate the importance of effectively managing the supply chain and supporting functions in order to minimize the losses due to the deficiencies in the different functional units and their implications on the overall business. It strengthen my view of the management as having greater understanding about the over all aspects of the business process.

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Assignment 2: Reflective Report on Case studies 500001: Value Chain Management - MBA

Bibliography
1. Krajewski, LJ, Ritzman, LP and Malhotra, MK, 2009, Operations Management: Processes and Value Chains, 9th Ed, Pearson Education, Upper Saddle River, NJ. pp 28-29

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