Ops_Tm571_Week_2

Apply the Learning Curve Theory John Doe OPS/TM 571 May 23, 2011 Instructor Apply the Learning Curve Theory As within many companies, processes are setup, defined, and implemented to achieve a common organizational goal. With process comes an operational level of efficiency within any company that will benefit the organization. As companies continue to evolve, the need for process refinement is inevitable. The methodology and theories outlined will ensure that the level of refinement needed to enhance operational efficiency is met. At Mario’s Pizzeria, the operation has grown in clientele substantially and is in need of operational efficiency adjustments to accommodate this growth. In the past, the limited space, wait staff, and equipment have worked at an operational level of efficiency to meet client demands. With this growth, Mario is at a critical juncture with his customers. Their wait times have increased and seating options have impaired the ability to handle larger volumes of customers. By applying the learning curve techniques, Mario can be assured that his business will continue to grow and operate efficiently. Performance Data Points Mario’s simulation allowed practical application of operational variables that would help to simulate the current and future volume of customers as they interact with the pizzeria. Weeks five through six were the most critical as the focus shifted to the foundation of the business. Mario’s operational efficiency stems from the wait staff, tables, kitchen staff, manual ovens, and Plax ovens. By augmenting data found in the simulation, the best scenario would be demonstrated to Mario. The data contained in the simulation was substantive to help assist us with making a well informed decision toward improving operational efficiency. The following table outlines our deciding factors for increasing operational efficiency: The Alternative Process Defined Through Six Sigma Six Sigma refers to the philosophy and methods companies such as General Electric and Motorola use to eliminate defects in their products and processes (Chase, Jacobs, & Aquilano, 2006). Mario’s pizzeria can use Six Sigma carefully to plan and outline each step of their journey to eliminate or decrease the possibility for defects. Defects can occur at any step of Mario’s upgrade; however this methodology will help to retain focus on core areas within the company. By applying Six Sigma define, measure, analyze, improve, and control cycle (DMAIC), Mario can rest assured that his concepts are carefully analyzed. By defining the priorities, we have discovered that the project is driven by long wait times and inadequate seating as provided through customer feedback. Mario offers two types of seating arrangements, tables for two and four individuals. The bulk of the layout includes tables for four individuals. By augmenting the table layout, we could increase utilization. By having 10 four-person tables, utilization moves to 86.60%. By having eight two-person tables, utilization moves to 86.11%. By measuring key internal processes that influence critical-to-quality (CTQ) and measuring the defects currently generated, Mario can obtain a better grasp of how the current process performs; relative to the proposed solution. Serve times have continued to increase as there is longer wait times depending on queues and order volume. This is a defect in the process that needs to be corrected. Adding a Plax oven to the upgrade will dramatically decrease queues and order volume output. The Plax system has a higher output ratio than manual ovens. This critical-to-quality characteristic will help to decrease the upper control limits and increase efficiency. Analyzing Mario’s pizzeria can help identify the most likely causes of defects. Most of the defects stem from future growth and expansion issues never taken into consideration when the business began. The key variables that contribute to the defects are future growth and demand. Many smaller companies do not anticipate such dramatic future growth and therefore fail in this particular area. By Improving Mario’s operational efficiency, we are seeking to remove the causes of defects. The means for identifying and removing the cause of defects for Mario would include staff augmentation, new equipment purchases, new facility expansion, and the installation of the MenuPoint system. We can confirm the key variables and quantify their effects on the CTQ’s as they relate to the pizzeria. Sheer volume is the primary cause for this expansion, and the CTQ is high given that the customer satisfaction index is a key variable. Once Mario has implemented the propose changes, we want to ensure that he does not fall prone to future expected and unexpected changes. By implementing Control measures, Mario can devise a solution to monitor their new implementation and ensure that there are adequate tools in place to continually gauge the effectiveness of the new improvements. By establishing maximum acceptable ranges, Mario can set forth certain thresholds that will dictate whether or not the process needs to be revisited. Learning Curve Concepts Applicable to Mario’s Pizzeria A learning curve is a line displaying the relationship between unit production time and the cumulative number of units produced (Chase, Jacobs, & Aquilano, 2006). Mario can apply the learning curve theory to measure his product generated output against production time to determine his level of operational efficiency. With the new improvements implemented, Mario can establish general baselines and determine the typical sales volume generated on designated days. Leveraging a learning curve will ensure that those maximum limits are not pushed against his production run time. With the staff augmentation, new equipment, and new expanded facilities, Mario will have everything in place to satisfy his customer satisfaction index. To determine the learning curve metrics, Mario can observe that his output would increase compared to the previous setup. As the output increases, Mario can see a direct reduction in wait times for his customers. Time per unit shows the decrease in time required for each successive pizza to come out of the oven. This could work as one metric that can be continually monitored to determine output efficiency. TQM Approach for Pizzeria Improvement As quality has become a major concern over the years, it is imperative for any operation to understand what this means and apply it to their organization. Chase, Jacobs, and Aquilano, (2006) define total quality management as “managing the entire organization so that it excels on all dimensions of products and services that are important to the customer” (p. 320). Mario has a very commonly offered product which he brings to market. However, the ingredients create demand for this product. As the total quality management process outlines, his first operational goal would be to design a product which offers value to customers. Mario has achieved this and volume sales are evidence that this operation needs to expand. The second operational goal would be to ensure that Mario’s Pizzeria can consistently produce their product and ensure consistency. This organizational goal is achieved by implementing standards and controls that ensure his output is consistent. By increasing kitchen staff, Mario can rest assured that his product is consistent based on his recipe. Consistency is further enhanced by the new equipment to help deliver the product such as the Plax system. Recipe for Continued Growth Mario’s Pizzeria has earned a highly recognized name in the industry because they offer a product which is in demand and continues to generate new business every day. As with any business, expansion is sometimes inevitable and unforeseeable until circumstances present themselves that require attention. In Mario’s case, TCM and CTQ began to suffer and feedback received from customers confirmed this. Using the approach outlined, Mario has responded favorably to his customers and continues to offer a product of high quality that his customers can enjoy without little inconvenience. Mario’s TCM and CTQ will continue to increase, and he can enjoy the benefits from his efforts and solidify the company’s current and future growth in a positive manner. References Chase, R. B., Jacobs, F. R., & Aquilano, N. J. (2006). Operations management for competitive advantage (11th ed.). New York, NY: McGraw-Hill/Irwin. University of Phoenix. (2011). Pizza Store Layout Simulation. Retrieved March 21, 2011 from University of Phoenix, Week Two, OPS/TM571—Operations Management in Technology Web site.