Most Critical Process In The Vba Operation example essay topic

Operation process at VBA INTRODUCTION! SS The Design, setting up, operation, and continuous evaluation of internal and external systems that deliver a product or a service to the customer is called Operations Management. !" (Alan Carroll, 2003) According to Slack et al, All Operations processes takes in a set of input resources which are then used to transform something, or are transformed themselves, into outputs of goods and services which satisfy customer needs. This is described by transformation process model.

All operations manager are designers. Design in Operations management refers to the conceptual process by which customers needs are satisfied through the use of a product or system, which derives from the physical translation of the concept. (Slack et al, third edition) Good Design is very important for an organisation. A good functional design enhances profitability and can provide a competitive edge.

It starts with the customer and ends with a customer. A good design is feasible, acceptable and flexible. (Russell / Taylor, operations management, second edition) This report discusses the central issues to design activity in an unusual operation of a flower auction in Aalsmeer, Holland called, VBA. It is the largest flower auction operation in the world. It contains different aspects of the design activity in operations management. Answer to Question 1 There are basically 5 operations objectives that apply to all types of operation.

The design of VBA process is very complex. It is designed to handle around 19 million flowers and plant everyday. The operation objectives that are most important to build in to the design of VBA's processes are; SPEED- According to slack, ! SS Speed is concerned with how long customers have to wait to receive their products.

!" In the VBA operation speed is the most critical objective because flowers are extremely perishable. And it cannot afford inventories since the product declines to zero within 10 to 12 days of harvesting. Flowers reach the operation in the evening and overnight and subsequently distributed in to lots and refrigerated. Flowers reach the auctioning process following morning itself. The bidding process is done within few seconds through the clock system and then the flowers are packed and dispatched. The whole process is designed in such a way that flowers move through each stage of the process without any delay and does not stay at VBA for more then 18 hours.

QUALITY-! yen Quality means doing things right! |. Quality has been the primary objective in the designing of the VBA process. It is basically an error free process. In other words it's a! yen world class operation!

|. The operation is very complex and large but is held together by information processing technology. VBA follows Self-monitoring plan, which increases the reliability of the information regarding the quality of flowers. One of its principle is that supplier themselves are responsible for providing reliable information. VBA staff supports the suppliers through guidance and targeted inspection. Quality inspectors inspect on the basis of the reliability index of the suppliers.

This index is formed on the basis of past accuracy of the information provided by the suppliers. So it detects any error that can occur regarding the quality of flowers within the operation itself. DEPENDABILITY-! yen means doing things in time for customers to receive their goods when they were promised.! |For VBA operation dependability is very critical again because of the perishable nature of flowers. VBA staff ensures the quality and that leads to Dependability. VBA uses high level of computerization and automation of material that allows it to operate at high dependability levels.

VBA process ensures those flowers reach shops all around Europe on the same day and to other parts of the world on the next day. All these objectives are critical in the design of VBA process at present however in future the other operational objectives could be as crucial as these objectives like: Flexibility- means providing resources that can be changed quickly. Flexibility could be crucial for VBA in future because the volume of flowers that they handle everyday and the demand for it may vary in future. This would help VBA in maintaining Dependability in future because unexpected events would not disrupt its normal functioning. Cost- Low cost is a universally attractive objective.

VBA is already operating at low costs and it would lead to a competitive advantage for VBA if it could still reduce the costs further. Lower the cost of running this operation, the lower would be price to the customers. According to Slack et al, We can represent the relative importance of performance objectives in the design of VBA process through Polar Representation. This is called polar because the scales that represent the importance of performance objectives have the same origin. A line describes the relative importance of each objective. The closer the line is to the common origin, the less important is the performance objective to the operation.!

SS Process technologies are the machines, equipment and devices which help the operation transform materials and information and customers in order to add value and fulfil the operation's strategic objectives. !" (Slack et al, operations management, third edition, pp 227) VBA is a very large and complex operation and is held together by its information processing technology. Though VBA process is centred on information processing, but it processes a combination of Materials, Information and Customer. VBA cannot achieve any of its objectives without these process technologies because of its complexities. VBA process involves certain degree of integration of all three process technologies. Integration Technology Source; slack et al.

VBA operates at high degree of automation of Materials (flowers) flow and high level of technology (computerization). The advantage of high degree of automation and technology is that it leads to low costs and it helps VBA in achieving its critical objectives that is high speed, quality and dependability. The significant process technologies involved in the VBA operations are: Material processing technology- At VBA around 19 million cut flowers and plants are auctioned everyday. These flowers are handled in standard trolleys according to their quality and held in cool storage areas, which is done manually.

But during auctioning process the flower are conveyed automatically through the auction halls in these trolleys. There is a separate convey er automated belt for each clock. This technology helps VBA in Speeding up the operation. Information-processing technology- this is the most critical process in the VBA operation. Information-processing technologies include any device which collect, manipulate, store or distribute information. This complex operation is held together by its information processing technology.

VBA auction process is centrally computerized. When the flower trolleys are conveyed through the auction halls they are linked to the auction Clock and all the important information about the flowers is shown automatically on the electronic clock. The clock scaled 100 to 1 moves downwards during bidding and the first person to press his desk button becomes the buyer. All the information regarding the transaction is recorded by VBA computer and given to the buyer in printed vouchers. The processing of information takes only takes few seconds. VBA employs electronic consignment note (EAB) system in which suppliers automatically send information regarding the quality of the flowers to the auction in advance.

Buyers can see what is on offer even before the clock starts. It saves time and reduces errors. All these information-processing technologies help VBA in achieving Quality, Dependability, Speed as well as low costs. Customer processing technology- There are essentially two types of customer processing technologies, those that you interact with yourself and those that are operated by an intermediary. In VBA there is a direct interaction with the buyer at the auction. First of all buyer chooses the auction clock of his choice using the selection switch on his desk and then during the bidding process buyer has to press his desk button to stop the clock and buy the lot.

During that time the buyer takes control of the technology. This process helps VBA in achieving Dependability for its operation because buyer is aware of the quality and the appropriate price because he chooses it. So, the combination of all the process technologies centred on information process technology helps VBA in achieving its objectives. Although all operations are similar in that they all transform input resources into output, products and services, but the key characteristics of the operation which determines the nature of VBA's design is explained by the 4 V's model 4. VBA process is a high Volume, low Variety, low Visibility and low Variability operation. However it is the Volume-Variety matrix that affects the nature of VBA's design.

Low volume operations often have a high variety of products and services and high volume operations often have a low variety of products and services. So, we can position operations on high volume low variety or low volume high variety. VBA is a High-Volume / low-Variety operation. The key characteristics of this category of operations are:" h! yen High volume of customer transactions.! | VBA is designed to handle thousands of transactions per hour". h! yen Standard processes, with reliance on information systems.! | VBA process follows standard procedure and is held together by its information processing technology". h! yen Short customer transactions!

|. The whole bidding process in VBA takes only a few seconds". h! yen Clear service propositions, often replicated across many delivery units! |. The auction process in VBA takes place in 5 different halls but the procedure is same for all of them". h! yen key challenge is to increase flexibility without forfeiting productivity! |. The primary objective of VBA in future is to attain flexibility". h! yen tightly controlled design of service process is required to deliver it.

Large numbers of people are recruited to tight specifications to play their part in these processes, and are trained to high levels to carry out a specialised task in what is a small part of the total process.! | Around 1800 people work directly for VBA and are engaged in quality inspection, handling of the flowers and in charge of the bidding process in the auction hall. (Johnston & Clark, Service operations management, 2001, pp 12) The impact of High Volume- Low Variety position of VBA on different aspects of its Design activity is that it has lead to high standardization of service and the process is centrally located at Aalsmeer. The flow of flowers is Continuous. The process technology is dedicated towards achieving the operational objectives of VBA process. the implications of low variation and low visibility in VBA process Variation dimension refers to the demand pattern of a particular process. The variation in demand at VBA is very low because the demand for flowers is relatively consistent throughout the year.

It makes the process predictable. This stability in demand helps VBA to standardize service and it leads to low costs. Visibility refers to how much the operation is exposed to its customers. It is a difficult dimension to envisage VBA is the integration of material, information and customer processing technology. So it's a mixed high and low visibility operation. There is a customer interaction at the time of bidding at the auction hall but apart from that there is very little contact with the customer in the whole process.

This characteristic of the operation helps the VBA design in centralising its activities and high staff utilization. The flow chart of flowers in the VBA process clearly indicates that this design is based on the concept of continuous flow of material. The continuous flow of flowers is very crucial to the success of VBA operation mainly because they are dealing with very large quantity of flowers every day and flowers are extremely perishable in nature. The VBA design is based on very tightly controlled process and every part of the process is very important to its success. However there are certain points in the material flow, which are absolutely critical for the operation. When the flowers are brought in the operation then VBA staff does a quality inspection before sending it for storage.

This is very critical point because one of most important objective of the VBA operation is Dependability. The description that is given by the staff about the material is important because the buyer gets to know about the quality of flowers mainly through that description. Immediately after this the flower trolleys are send to cold storage areas. This point is critical as well because of the perishable nature of flowers and they need to be refrigerated in order to maintain the quality. This part of the process is called! yen REEFER! | operation. Another critical point in the flow is when the flowers are going through the auction hall during the bidding process.

Flowers are auctioned through electronic clock system and the flower trolleys are attached to separate clocks according to their category. The trolleys are guided through the halls by automated convey er belts so those buyers can have a very good view. VBA process is specially designed in the way that whole bidding process takes very less time so that flowers could be in shops the same day therefore this point is very critical. CONCLUSION & RECOMMENDATIONS In a way VBA is! yen world class! | operation because it is a LEAN and automated operation right now. It is LEAN because of several features like there is a continuous flow of materials so no waste of waiting and no unnecessary inventory waste as well. The product is standard and the quality is measured.

All activity is directed towards achieving the objective of the operation. The Automation of operation leads to quality. However it needs to be transformed in to an Agile operation if it has to become full world class operation. It should be more flexible regarding future unpredictability.

There should be a system to measure buyer satisfaction. A! yen Zero Defects! | system is where inspection is from point of origin. There are 100% audit checks. It is a system that detects mistakes itself. VBA should aim for that. One of the drawbacks at VBA is that there is no sale through Internet.

Buyer has to be present at the time of auction whereas some of the competitive auction processes in Spain and other African countries. Secondly there is huge service cost to the buyer for every transaction so buyers buy small lots instead of large. And a system should be made where buyers can compare the prices with the competitive auctions for fair-trading. In the end we can say that VBA process needs to be more flexible towards facing future challenges and it could become a zero defect operation if it implements various actions and should favour buyer as well..