Operations Management Comparing Servicing Industry and Manufacturing

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The main factor that differentiates products from services is tangibility. Although these industries have different operations, as we are moving towards a world that is more and more service based it is observed that operations management theories, approaches and other methodologies used in manufacturing can mostly be modelled to work in the service industry. In this essay we will be contrasting some principles of operations management between Ford Motor Company and McDonald's, two succesful multinational companies with prominent operations functions.

a)
When it comes to processes and activities, there are wide differences between a service-based organisation and a manufacturing environment. In the production line of a factory like Ford where we are mostly dealing with materials transformation, processes are as follows: 1. Components: each bit of item required to make a car is supplied by over 4000 suppliers and are transported to the relevant plant. 2. Chassis: sequentially, the frame which forms the base of the car, moves on a conveyor to equip the car with suspensions, gas tank, axle and shaft, gear and steering boxes, wheel drums, braking systems, engine, transmission, and radiator. 3. Body: on a separate assembly line to the chassis, the door pillars, roof and side panels are attached. Fully assembled doors, deck lids, hood panel, fenders, truck lid and bumper reinforcements are then installed. 4. Paint: skilled body repairmen repair any cosmetic damage on the shell after it has been thoroughly inspected. The car is then mechanically painted a number of times. 5. Interior Assembly: workers assemble all interior instrumentation and wiring systems, dash panels, interior lights, seats, doors and trim panels, head-liners, radios, speakers, all glass except wind shield, steering column and wheel, weather-strips, vinyl tops, brake and gas pedals, carpets and bumpers. The wind-shield is then robotically installed prior to the shell being given a water test to ensure watertightness.

6. Mate: the assembly conveyor and the body one finally meet. The car is then moved down the line to be fitted with battery and tyres; petrol and other liquids are distributed.

7. Finished product: the car is finally operable and is fully examined and audited at a checkpoint off the line and moved to a central repair area near the end of the line if required. Once the vehicle passes final audit, it is is given a price label and is driven to a staging lot where it will await shipment to its final destination.

Throughout, because of the nature of the heavy components, articulating robots perform all the lift and carry operations while assemblers bolt pieces into place. Theodore Levitt describes thoroughly in his article “Production-Line Approach to Service” (1972), how McDonald's utilises manufacturing techniques to its food preparation processes, namely standardisation and mass delivery. This is highly efficient and effective because these processes are isolated from the customer, away from the seating and the ordering area, enabling them to achieve the economics of production, concentrating on high volume and uniformity of the product with minimal to no customisation offering. For the purpose of our essay and to contrast with the very typical example of the manufacturer that is Ford Motor Company, we will concentrate on the delivery aspect of McDonald's products to its customers. The processes involved at this end are: 1. Identification of client: the cashier welcomes the next client on the line, or seeks a client waiting in the lobby area who is ready to place his order 2. Order placement: the cashier takes the order from the client and records it on the programmed-till 3. Gathering of items: an assistant cashier fecthes all ordered items and places them on the tray 4. Cashier completes transaction

5. Cashier inspects that ordered items are placed on tray accurately 6. Customer picks up his order from the counter
7. Customer is...
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