SIMULATION REFLECTIVE REPORT
Questions for Simulation Reflective Report- Balancing Process Capacity
To improve productivity every business needs to implement a good strategy. Effective strategy formulation requires the managers to take into account characteristics which customer consider as minimum acceptable standards (Casadesus-Masanell & Ricart, 2010). It also requires taking into account core competence as well as conducting a good environmental scanning. The environmental scanning includes conducting the SWOT analysis of the business (Phadermrod, Crowder & Wills, 2019). As the manager of the simplified car wash, there is a mandate to appropriately allocate the budget across the vacuum, machine wash, and the hand-dry to maximize the profitability of the business.
Some of the hard questions to ask are what is the average time that is taken between completion of successive units?. What is the number of system in the system and what is the average time that a unit spends in the system?. However, there are two stages or challenges faced in the business. Due to the difference in the different stages, different strategies are applied to acquire results.
The first stage uses an organizational strategy of proper responsiveness. The car wash improves its responsiveness in dealing with incoming units as well as the available units in the system. The final strategy ensures there are no gaps between units in the system. By crossing the gaps and putting the measure to help leading unit to move faster within the system the business creates a shorter processing time. When a unit enters the system there is an on-time delivery of services thus reducing the time a unit spends in the system.
The car wash increases its capacity and balances it across the three stations at 37.5 cars/hr. In this stage the consumer’s arrival time and demand are constant and thus throughout time reduces from 30 minutes to 20 minutes. Throughout rate increase from 30 minutes to 40 minutes while the cycle is reduced from the initial 2 minutes. The number of cars washed increases leading to a rise in profits. The capacity utilization of the car wash is at 100%.
The second stage includes variable customer demand as well as the variable performance at the service stations. Thus, the capacity at the stations changes with changes in investments. The organizational strategy to be employed in the second stage is the differentiation of services. The most suitable operations strategy is offering superior customer services and creating conveniences when offering services. At different times the car wash translates customer’s wants and needs into certain service requirements. Minutes between arrivals varies in the second challenge unlike in the first challenge were minutes between arrivals is constant at 1.6 minutes.
There is a difference between the results of challenge one and those of challenge two. The changes in schedule or setups of the two challenges lead to the variability in results. The arrival of cars are also different were in the first challenge inputs are constant which is not the case in the second challenge. The operator’s skills and experiences are not constant in challenge two which is the case in challenge one. The variability thus leads to an increase in lead time, reduction in profits and an increase in cycle time compared to challenge one.
Capacity management establishes a match between the long-term demands of the business and the long-term production. Businesses undertake capacity planning due to changes in demand, environmental changes, and change in technology among other reasons. A difference between the current capacity and the desired capacity leads to an imbalance. The capacity utilization rate is the best determinant of whether there is a capacity deficit or excess capacity within a business. The goal of practicing operation capacity is to maximize production abilities without causing excess lead time. But every capacity planning should be done only if it is necessary and the only to a certain level. The managers also need to know exactly what should be included in the plan.
The two challenges discussed above have confirmed to my idea that variability is enemies of operation in business. The major variables are the demand variables and process variables. To have good capacity management demands that the manager should be able to understand, manage, control and eventually eliminate caused of variables.
References
Casadesus-Masanell, R., & Ricart, J. E. (2010). From strategy to business models and onto tactics. Long range planning.
Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis based SWOT analysis. International Journal of Information Management, 44, 194-203.