Operations Management Essay

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Assignment:

This report reviews and evaluates the operations management of carrying out programmed food hygiene / health and safety inspections of commercial premises within Cherwell District Council. The report also aims to:

1. Analyse the type of operations and operating processes in place for commercial premises inspection.

2. Identify and evaluate some of the major strengths and weaknesses of the Operations Functions.

3. Review the extent to which the Operation Functions supports the broader Business Strategy of the Department.

4. Make recommendations to address some of the shortfalls identified.

Student: Shamsul Islam

(Word count: 2,410)

Contents

1.0 Introduction

2.0 Corporate Strategy

3.0 Operations Managers Task

4.0 The Operations Process

5.0 Performance Objectives

6.0 Quality Management

7.0 The Cost of Quality

8.0 Resource Management and Planning

9.0 Conclusion

10.0 Recommendations

1.0 Introduction

Cherwell District Councils Environmental Services Department (ESD) delivers a wide range of diverse services ranging from offering advice to closing and prosecuting businesses for failing to comply with environmental health legislation.

There are around 3745 commercial premises within Cherwell District Council of which 1218 will require an inspection between 1st April 2003 and 31st March 2004, to check compliance against food / health and safety legislation. The environmental health staff have a statutory duty to make routine unannounced visits to these premises as required by the Food Standards Agency (FSA) and the Health and Safety Executive (HSE). The Department is required to demonstrate satisfactory achievement for inspections and report performance data to both internal and external auditors quarterly and annually.

This report primarily looks at the operations management surrounding commercial premises inspection programme. It analyses the inspection process, identifies and evaluates some of the strengths and weaknesses and assesses the extent to which the operations function supports the departments strategy on inspection of businesses. It also draws up some recommendations for future improvements.

Read more: Operation Management Challenges

2.0 Corporate Strategy

Thompson and Strickland (1992), cited in Hope and Muhlemann (1997), suggest that after establishing the organisations mission the next step is the development of a series of performance objectives which can be used to measure progress towards the mission. The acronym MOST suggested by Craig and Grant (1993), cited in Hope and Muhlemann (1997), is an ingenious way of capturing the strategic management process: mission (description, attitude and direction), objectives (the performance ambitions), strategy (resources deployment and competitive advantage) and tactics (the planned actions).

The Councils strategy somewhat follows this acronym. The mission is to be in the top quartile for inspecting businesses. The strategy is to provide enough resources to ensure all high risk premises are inspected within budget. And the tactic is to encourage creativity and innovation for continuous improvement to enable sustainable growth and increased productivity. Basically the aims and objectives of the ESD is to be able to inspect every business within Cherwell to ensure they understand and comply with relevant legislation (see figure 1).

The only criticism of the corporate strategy is that they are often drawn up without any consultation with either the field staff or the operations managers. As a result operations managers often have to complain about the unrealistic demands made of them and the problems that invariably arise.

* To protect the health and general well being of all residents of and visitors to the Cherwell District, by improving and safeguarding the quality of the environment in which they work and live.

* To discharge the Councils statutory responsibilities in respect of a range of services affecting consumer protection and environmental health including food safety, health and safety, pollution control and environmental protection.

* To ensure that all commercial premises are visited within the minimum frequency specified by central government guidance and to ensure that they comply with environmental health legislation including occupational health and safety, food hygiene and pollution control.

Figure 1. Cherwell District Councils Service Plan 2003/2004

3.0 Operations Managers Task

The operations function of the ESD is to provide the services that the department can deliver. It concerns the transformation process that involves taking inputs and converting them into outputs together with the various support functions closely associated with this basic task (figure 2).

Operations managers therefore need to keep control of the inputs and processes that together provide the services that ensures sustainable growth and improvement in service delivery. It is essential for those activities responsible for the provision of goods and services to be well managed as these tasks are critical for the ESD to remain competitive.

Hope & Muhlemann (1997) suggest that there are five areas of responsibility for the operations managers. These include product, process, programmes, plant and people. For the ESD it is a challenge to be able to manage the available facilities, to meet current requirements within the cost constraints laid down, and in the longer term, it involves the design or extension of facilities in so far as they affect the operating systems (see figure 3).

* Product. Product design and specification for the ESD include inspection procedures, prosecution procedures, inspection aid memoirs, post inspection report forms etc.

* Process. Inspections are carried out in batches both in time (monthly) and space (district areas) according to set inspection criteria.

* Programmes. Inspections are prioritised according to the risk businesses pose to the public/employees-categorised by a risk rating system laid down in statute.

* Plant. Equipment used during inspections include calibrated thermometers, torches, cameras and a database to record and categorise businesses according to their risk rating.

* People. Only qualified/competent staff are selected and recruited. Staff are also regularly appraised and offered refresher training. People are the most critical factor in the success of the department.

Figure 3. Five areas of responsibility for the operations manager (adapted from Hope & Muhlemann, 1997)

Operations managers therefore must not only be able to understand the tasks in hand, they must also be able to understand the whole, take it apart, fix the parts required and put it back together again if they are to manage the tasks efficiently an effectively.

4.0 The Operations Process

There are five classic types of operations processes project, jobbing, batch, mass and continuous. The operations of the ESD can be said to follow a batch process. The department provides a standard service, which is repeated without any significant changes. Businesses due for an inspection are printed of the computer system on a monthly basis and are inspected to a set format. Inspection protocols are written in accordance with government guidelines and dictate the exact manner in which businesses are inspected and assessed even down to the introduction by the officer and his statement of the reason for his visit (see figure 4).

To identify the strength/weaknesses for the current services provided by the ESD it would be beneficial to look at the overall strategies for the department relating to inspection procedures. Table 1 highlights some of these issues. Its evident the department is strong at offering services in other languages/formats through a disability awareness officer, translated materials are also available in different languages and there are officers in the council who can be called upon to assist with Bengali, Punjabi, French speaking businesses.

The section also has well documented procedures on inspecting premises, taking evidence and investigating accidents/complaints. The departments weaknesses include poor/diminishing budget, inadequate number of staff or staff not fully trained for the jobs they need to do and outdated equipment including a premises database that needs updating and a filing system that matches the database.

Table 1. The different strategies of the ESD (adapted from Hill,2000)

1. Corporate Objective

2. Marketing Strategy

3. Order-qualifiers & order-winners

Operations Strategy

4. Processes

5. Infrastructure

Sustain current level of inspections within budget.

Routine unannounced visits based on a risk based inspection programme.

Cost effective visits.

Visit by appointment where necessary.

Quality inspections.

Choice of various inspection methods.

Staff training

Salary

Admin support

IT support

Make continuous improvement through innovation and creativity

Standardised visits with fixed protocols.

Accompanied visits where prosecution is indicated

Follow annual service plan

Offer guidance to businesses.

Charter Mark Award

Investors in people award (IiP)

Manage capacity

Number of visits

Time/time taken

Location of office

Welfare facilities

Lease car

Performance related pay (PRP)

Work procedures

Flexi working

Follow agreed enforcement policy

Make use of interpreters

Org. structure

Understanding the market is crucial to the success of any business. One way of assessing the market is to look at order-qualifiers and order-winners (Hill, 2000). Qualifiers get the product/service into a market place and keep it there. They do not themselves win orders. Order-winners on the other hand will help gain advantage over similar services offered by competitors (e.g. outside private consultants). In short qualifiers match customer needs (as do competitors) and order-winners provide a service at a level better than any competitors. Table 2 details some of these factors for ESD.

Table 2. Order-qualifiers and order-winners for the ESD

Order-qualifiers

Order-winners

* Trained staff

* Good IT support

* Calibrated essential equipment

* Reasonable budget

* Trained staff (competence tested)

* Continuous performance development of staff

* Sustainable database (able to analyse/monitor work performance). Enforcement Policy/Procedures.

* Mobile technology (phones, hand held PC)

Note: Qualifiers are not less important than order winners they are different. Both are essential. Order-winners and qualifiers are time and market dependant.

Figure 5 below also summarises some of the factors associated with operations management for inspection of businesses. Some of the factors are also discussed in detail later in the report.

* Strategy. Inspect all businesses within the minimum frequency set by government guidelines.

* Output planning. Inspect high risk premises as priority within budget and available resources.

* Capacity planning. Spreading inspections over the 12 month period taking into account peoples holidays, seasonal trade, budget and internal/external audits.

* Transformation system design. Equipping staff with the knowledge/skills to carry out the inspections. Provide protocols, up to date information of the law and businesses.

* Inventory management. Deciding on the staffing level required, types and number of equipment required, type and level of outside expertise required and the level of support required from the FSA/HSE.

* Materials requirement planning. Deciding on the amount and time to order materials (CDC operates a just in time policy).

* Supply chain management. Organising activities from receiving the dates for inspecting businesses to carrying out the inspections for speed, efficiency and quality.

* Quality Management. Performance management through Performance Related Pay (PRP) appraisals, post inspection audits and accompanied visits.

Figure 5 Factors associated with operations management for inspection of businesses.

5.0 Performance Objectives

Figure 6 below assess the competitive advantage of the ESDs approach to inspecting businesses using Slacks 5 performance objectives (Slack et al. 2001).

On the whole the ESD is able to deliver a reasonable service within reasonable time scales. The nature of the work prevents visits by appointment and some time is wasted when businesses are found to be closed at times of visits or the owner is not available. Targets have dropped with increasing number of businesses coming into the area with no increase in budget or the staffing to inspect them. It is also difficult to balance a cost effective inspection programme with quality, dependability and flexibility with reducing resources. Figure 7 below demonstrates some of the problems encountered when trying to deliver a quality service with budget restrictions.

6.0 Quality Management

Quality is a difficult topic to monitor as it can be very subjective and rely on personal judgement.

However the ESD have set standards/specifications such as inspection protocols, post inspection forms/letters and data base entries that are used to measure quality. Understanding reasons for failure of systems also help maintain quality. Figure 8 details some of the reasons for failure that can arise in the inspection programme.

7.0 The Cost of Quality

The cost of quality include prevention costs, appraisal costs, internal failure costs and external failure costs (figure 9).

* Prevention costs. Cost of producing quality inspection procedures. Cost of IiP. Cost of Charter Mark Award. Cost of the premises database/filing system. Indemnity Insurance cost

* Appraisal costs. Monitoring costs. PRP appraisal costs. Cost of audits, surveys and accompanied visits.

* Internal failure costs. IT system crashes. Cost of poor filing/record keeping. Poor staff training/retention.

* External failure costs. Poor assessment of inspection results. Compensation claims against malpractice. Revisit costs. Cost of losing prosecution cases. Cost of withdrawal of Notices.

Figure 9. The cost of quality for inspection of businesses.

To safeguard against any losses the ESD has documented procedures for premises inspection, gathering evidence and instigating prosecutions. Officers are also indemnified against their actions if taken in good faith. This is also supported by Charter Mark and IiP and PRP appraisals.

The department also participates in the County wide Liaison meetings between the 5 district authorities to benchmark and carryout standardisation exercises. In addition to this the 5 authorities recently underwent an inter-authority audit to check on each others performance management. The FSA/HSE also randomly audit authorities to check inspections are carried out in accordance with codes of practices/guidelines.

8.0 Resource Management and Planning

Capacity management is an essential part of operations management. The objective is to match the level of capacity to the level of demand both in terms of quantity and capability. Planning and managing capacity requires balancing uncertainties, time-scale, looking at alternatives and executing the objectives. Capacity management ensures resources are of good quality and in the appropriate quantity at the right time and at a reasonable cost.

The ESDs resource management includes staffing (ensuring the right staff are recruited, trained and developed), equipment (the right tools for the job) and the budget (adequate resources). Planning is important both on the short term (annual service plans) and on the long term (3 yearly councils community plan). Accurate information is crucial which will affect forecasting demand. Figure 10 details the ESDs capacity planning.

Table 3. Capacity Planning for inspecting businesses

The Tasks of capacity planning

Work programme for 2003/2004

Forecast demand

Annual inspection programme indicates 988 businesses are due for inspection at an average of 82 per month. Staff absences are uncertain. Number of new businesses/businesses closing is uncertain.

Calculate capability of operations resources

Realistically an average of 80 inspections can be carried out by the section without having any impact on other work (complaint/accident investigations). There is no extra budget for slippage or increased inspections. Vacancies will also be frozen should staff leave. Training budget is limited as well as that for equipment. One staff starts maternity leave on 25 April 03 who shall not be replaced.

Allocate resources over time

Priorities shall be given to inspect the 502 high risk businesses by the 2 competent officers. The remaining officer shall manage the 486 low risk premises. Any prosecutions/statutory action shall also take priority and the inspection programme may therefore slip if no additional resources are made available.

Design capacity control mechanisms

Monthly inspection lists shall be checked for progress against high risk premises and identify any slippage. Additional resources shall be requested or alternatively inspection target shall be adjusted from inspecting 100% high risk to a more realistic figure.

9.0 Conclusion

Operations management is about managing the resources that directly affect CDCs service delivery. Resources consist of people, materials, technology and information to mention a few. These resources are put through a series of processes to deliver CDCs services. Operations management therefore manages inputs (resources) through a transformation process to deliver outputs (service delivery inspection of businesses).

Generally CDC is managing to inspect the high risk businesses within the councils area within reasonable time scales. However with diminishing resources (staff and budget) and increases in the number of new businesses it is becoming more and more difficult to keep up with the demand.

The process of operations management demonstrates that with diminishing resources there is a greater need to prioritise to ensure a quality service delivery. Staff will require refresher training in the new areas that they now will have to cover. Work procedures will have to be updated to include up to date legislation and information on the businesses to be inspected to save staff looking it up. The premises database will have to be monitored closely and updated to ensure the details held are accurate.

With cutbacks every year it is getting more and more harder to keep up with demand. Creativity and innovation will have to play a bigger role if continuous improvement is to be maintained under best value/compulsory performance assessment or additional means of resourcing will have to be sought or targets will have to be reduced.

10.0 Recommendations

Development Need

Action

How will this be measured?

Time scale

Resources required and other issues

Review and update work procedures to include legislative changes as well as changes to staff and contact personnel.

Re-print team handbook with amended procedures.

Report to Departmental Management Team (DMT).

Team handbook issued to all staff.

DMT will approve amendments.

By Sept. 03

Staff time to develop new policies. Will need to work with Admin support and IT personnel and liase with equal opportunity and disability officers.

Assess staff competency and provide training/refresher training as identified under food/health and safety legislation

Carry out individual personal development plans for all staff

Report to DMT.

Report accepted by DMT who will allocate resources accordingly.

12 months

Staff time.

Budget implications

Union and employee implications.

Assess stock of equipment such as light meters, legionella kit, thermometers etc. for damage and calibration.

Produce a report to replace damaged equipment and calibrate others.

Training for staff.

Report to DMT.

Report accepted by DMT who will allocate resources accordingly.

12 months

Cost associated with equipment and staff training.

Review premises database and hard filing system to ensure accurate record of premises within the district.

Set up links with other departments of the council to share premises details.

Make plans to check files with database.

Links set up with economic development to exchange information.

Person appointed to check files with database, check papers and yellow pages and amend premises records.

6 months

Staff time.

Cost associated with training and staff development.

 

Bibliography

1. Braun, E. (1998). Technology in Context. Technology Assessment for Managers. Routledge. London & New York.

2. Fox, M. J. (1995). Quality Assurance Management (2nd Ed.). Chapman & Hall.

3. Galloway et al. (2000). Operations Management in Context. Butterworth Heinmann.

4. Hill, T. (2000). Operations Management. A Strategic Context and Managerial Analysis. McMillan Business.

5. Hope, C & Muhlemann, A. (1997). Service Operations Management. Strategy, Design and Delivery. FT Prentice Hall.

6. Hutchins, D. (1999). Just in Time (2nd Ed.). Gower.

7. Meredith, J. R & Shafer, S. M. (2002). Operations Management for MBAs. John Wiley & Sons inc.

8. Slack et al. (2001). (3rd Ed.). Operations Management. FT Pitman.

9. Teare et al. (1994). Achieving Quality Performance. Lessons from british industry. Cassell.

10. Wheatley, M. (1992). Understanding Just in Time in a week. British Institute of Management. Headway. Hodder & Stoughton.

11. Cherwell District Council Service Plan 2003/2004. Cherwell District Council.

12. Framework Agreement on Local Authority Food Law Enforcement (2002). Food Standards Agency.

13. Health and Safety Executive Guidance to Local Authorities (2002). Health and Safety Executve.

Operations Management Shamsul Islam

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