MODULE TITLE Operations Management
MODULE CODE BMG 855
The module will use coursework assessment in the form of one individual piece of Case Study work.
Recycling Centre Corporation
The case describes a commodity processing and trading company that is facing several challenges as it seeks to turn its losses into profit. Important themes are touched upon including capacity planning and control; inbound versus outbound customers; incentives and their effects; and operations strategy. The issues of conversional waste management versus environmental awareness and recycling are raised in the case study and should be considered with regard to decisions around a proposed operations strategy.
The assignment requires students to conduct a strategic operational analysis of RCC for the Board. The key tasks involve: (1) capacity analysis and break even calculations; (2) customer mapping; (3) the analysis of the operations part of the business; and (4) some consideration of strategic direction.
Calculate the capacity of the company’s major asset: the heavy-duty shredder plant. The information required to perform the calculations is detailed in the section entitled Recycling Centre Corp. on page 3 of the case study. You should try to calculate:
• The capacity of the heavy-duty spreader in tons per week*
• The annual revenue currently being generated from this machine assuming a selling price of $370/Ton
• The annual production costs of the heavy-duty spreader
• The annual profit or loss** from this asset
The following guidance is provided for the capacity and break even calculations to be performed:
* You are given the theoretical process capacity in tons per hour. To calculate the actual capacity achieved, you must take into account losses from availability, performance and quality.
• Availability takes into account any events that remove production time such as waiting time or breakdowns. Production hours – (waiting time and breakdowns) gives the net capacity.
• Performance takes into account anything that causes the machinery to run at less than the maximum possible speed when it is running. Net capacity – speed losses gives the effective capacity.
• Quality takes into account any output from the machine that is unusable such as waste or scrap. Effective capacity – waste gives the actual capacity
** If the annual costs are greater than the annual revenue, then divide the difference by the selling price/ton to identify how many additional tons of raw material are required per annum.
This information will be useful in conjunction with the qualitative information about the operations side of the business to enable you to make a fuller analysis of the organisational situation.
(2) Complete a customer mapping exercise for RCC: customers divide into inbound and outbound. Inbound include municipalities and large construction companies as well as small scrap traders and manufacturers. You can decide what these manufacturers might be but they are likely to be a combination of original equipment manufacturers (OEMs) e.g. automotive, tier 1 or tier 2 suppliers to the OEMs, metal processors, foundries, wire and cable manufacturer, utilities, telecoms companies etc. Outbound we are told are metal manufacturers.
Customer mapping involves mapping the type of customer with their requirements. We studied in class how requirements will be cost, quality, time, flexibility, dependability or a combination of them.
Try to identify or estimate what unique resources RCC might have to exploit the requirements.
(3) Conduct an operational analysis of the RCC operation. The analysis should touch on the following areas: the difficulty of capacity planning; the issue of quality management; plant maintenance; performance measures; logistics. All of these issues are touched upon or implied from the information provided. You can select which of these you wish to discuss in more detail as you see most appropriate.
(4) Assess and compare different possible options for the strategic direction that the company should take. It is suggested that you use the Ansoff matrix***. Clearly anything to do with metal recycling will be existing products; you may identify new products / services from the strategic projects suggested on page 8 of the case.
*** You could consider using the Ansoff Matrix to help structure your arguments in this regard:
(5) Finally you should argue for what you feel are the most appropriate managerial actions that the Board of RCC should take.
It is expected that the written report will not exceed 4,000 words.
All published information that has been used in the preparation of the written assignment report should be included as an appendix.
It is expected that you will use the Internet for the following:
• To visit web sites of similar organisations to Recycling Centre Corporation (the case is developed based on a real company but the name of the company is disguised) to better understand the industry and the market pressures.
• To visit other relevant sites regarding environmental strategies
• To obtain academic literature from electronic databases to provide support for your expressed views
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