Operation Management

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CHAPTER 1

Operations management

Short case: Dealing with variety – two examples
The Bombay Tiffin Box Suppliers Association (TBSA) operates a service to transport home-cooked food from workers’ homes to office locations in downtown Bombay. Workers from residential districts must ride commuter trains some 30–40 km to work. Typically, they are conservative diners, and are also constrained by strong cultural taboos on food handling by caste, which discourage eating out. TBSA arranges for food to be picked up in the morning in a regulation tin ‘tiffin’ box, deposited at the office at lunch time, and returned to the home in the afternoon. TBSA takes advantage of public transport to carry the tins, usually using otherwise under-utilised capacity on commuter trains in the mid-morning and afternoon. Different colours and markings are used to indicate to the (sometimes illiterate) TBSA workers the process route for each tin. For as long as ships have navigated the seas, ports have had to handle an infinite variety of cargo with widely different contents, sizes and weights, and, whilst in transit or in storage, protect them from weather and pilferage. Then, the transportation industries, in conjunction with the International Standards Organization (ISO), developed a standard shipping container design. Almost overnight, the problems of security and weather protection were solved. Anyone wanting to ship goods in volume only had to seal them in a container and they could be signed over to the shipping company. Ports could standardise handling equipment and dispense with warehouses (containers could be stacked in the rain if required). Railways and trucking companies could develop trailers to accommodate the new containers. Such was the success of the new design that very soon specialist containers were developed which conformed to the ISO standard module sizes, for example, refrigerated containers that provide temperature-controlled environments for perishable goods.

Chapter 1: Short case study 1
Copyright © 2006 Pearson Education Limited

Slack: Operations Management, 5th edition

Questions 1. What are the common features of these two examples? 2. What other examples of standardisation in transport operations can you think of?

Chapter 1: Short case study 2
Copyright © 2006 Pearson Education Limited

Slack: Operations Management, 5th edition

Short case: Swatch revolutionises watch manufacture
In the early 1980s, the Swiss watch industry was nearly dead. Competition from cheap, but often high-quality, products from Far Eastern manufacturers, such as Seiko and Casio, had almost obliterated the traditional Swiss industry. Trying to protect their investments, the Swiss banks organised a merger of the two largest companies on the advice of Nicolas Hayek, now boss of Swatch’s parent company SMH, which was formed from the merger. Hayek saw the potential of a new plastic-cased watch which was already being developed inside one of the companies. One of its major advantages was that it could be made in high volume at very low cost. The quartz mechanism was built directly into the all-plastic case using very few components, less than half the number in most other watches. Fewer components also meant that the manufacture of the watch could be fully automated. This made Swatches cheap to produce, even in Switzerland, which has one of the highest labour costs in the world. The innovative design, some creative marketing, but above all else the operation’s success at producing the watch cheaper than anyone else brought the company significant rewards. In the early 1980s, the total market share for all Swiss watches was around 25 per cent; 10 years later it had more than doubled. The ability to offer a good watch at a low price had released the potential of the watch to become a fashion accessory. Swatch’s operations reaped the benefits of high volume, but had to cope with an everincreasing variety of product designs. Through...
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