MBA: Operations Management Assignment

Answer ALL questions that follow:

Due Date: 18 February 2014

Product Strategy provides competitive advantage at Regal Marine Thirty years after its founding by potato farmer, Paul Kuck, Regal Marine has become a powerful force on the waters of the world. The worlds third largest boat manufacturer (by global sales , Regal e!ports to "# countries, including Russia and $hina. %lmost one third of its sales are o&erseas. Product design is critical in the highly competiti&e pleasure boat business' ()e keep in touch with our customers and we respond to the marketplace, says Kuck. ( )e are introducing si! new models this year alone. * would say we are definitely on the aggressi&e end of the spectrum. )ith changing customer tastes, compounded by material changes and e&er impro&ing marine engineering, the design function is under constant pressure. %dded to these pressures is the constant issue of cost competiti&eness combined with the need to pro&ide &alue for customers. $onse+uently Regal Marine is s fre+uent user of computer,aided,design ($%- . .ew designs come to life &ia Regals three,dimensional $%- system, borrowed automoti&e technology. Regals na&al architects goal is to continue to reduce the time from concept to prototype to production. The sophisticated $%- system not only has reduced product de&elopment time but also has reduced problems with tooling and production resulting in a superior product. %ll of Regals products, $ommodore yachts, follow a similar production process. /ulls and decks are separately hand 0produced by spraying preformed moulds with three to fi&e layers of a fibreglass laminate. The hulls and decks garden and are remo&ed to become the lower and upper structure of the boat. %s they mo&e to the assembly line, they are 1oined and components added at each workstation. )ooden components, precut in,house by computer dri&en routers, are deli&ered on a 1ust,in,time basis for installation at one station. 2ngines, one of the few purchased components,are installed at another. Racks of electrical wiring harnesses, engineered and rigged in,house, are then installed. %n in,house upholstery department deli&ers customised seats, beds, dashboards or other cushioned components. 3inally, chrome fi!tures are put in place and the boat is sent to Regals test tank for water tight, gauge and system inspection. (Source: Hei er and Render! "#th $dition

%uestion &ne mar(s)

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$omputer,%ided -esign is one of the techni+ues used by Regal Marine in the manufacturing of boats. )ith the aid of e!amples, critically discuss 3*42 (5 techni+ues that are important to the design of Regal Marines product.

%uestion *wo mar(s)

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()e keep in touch with our customers and we respond to the marketplace, says Kuck. ( )e are introducing si! new models this year alone. * would say we are definitely on the aggressi&e end of the spectrum. )ith reference to the abo&e statement, critically e&aluate the 6uality 3unction -eployment strategy.

%uestion *hree mar(s)

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()ooden components, pre,cut in,house by computer dri&en routers, are deli&ered on a 1ust, in,time basis for installation at one station. Regal Marine has adopted the 7*T system in its production process. $ritically discuss the 7*T system with reference to Regal Marine.

%uestion +our mar(s)

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*n 7anuary 8#98, the :outh %frican ;o&ernment announced that it would be offering ta! incenti&es to organisations if they relocate to the $oega *ndustrial -e&elopment <one. Timbercraft, a manufacturer of wooden furniture (currently located in -urban , is considering this option. *n their present operations, the organisation uses a process focus strategy, but if they relocate then they would consider a product focus approach. $ompare both these strategies and ad&ise which one would be more suitable for their operation. %uestion +ive Read the case study -elow and answer all the questions that follow. The store recei&ed raw materials in the form of natural and synthetic rubber supplied by Malaysia. $hemicals, compounds and powder were sourced locally. The lead time for the rubber was four (= months and the rest of the stock items was two (8 weeks. *t is estimated that 3irehawk Tyres needed 85 ###kgs of rubber (both natural and synthetic per annum. %nnual carrying costs were R=### and order costs were R8>5#. 3irehawk works "#5 days per annum. (,# mar(s)

%lthough the operations manager was not +uite sure, he had a gut feel that the in&entory le&els seemed to be too high and the $hief :toreman argued that large safety stocks had to be carried 1ust in case the ship did not arri&e. The operations manager called for an in&entory listing and was gi&en the following report' Annual Stoc( Holding Report Stoc( num-er 79#5 :85" K=?@ <8"# P998 A@?5 B59" CD>5 Annual /olume (R0s) 985#### 85#### 9>5#885 9?>5 8>5@ "85### 9?@5### 985?D>

:oon after recei&ing this report, the operations manager immediately set up a meeting with his mentor to get his opinion. The mentor concurred with Eperations Manager that capital in&ested in in&entory seemed too e!cessi&e. En the other hand, the accountant had recently informed the senior managers that according to in&entory records, there was a loss of 1ust o&er R9,5 million. The EM knew that something radical had to be done to turn things around. *n desperation the EM installed closed circuit cameras throughout the warehouse to confirm if large scale theft was indeed taking place. 5.9 *dentify the in&entory problems and critically discuss the re+uirements for an effecti&e in&entory management for 3irehawk. (9# marks 5.8 $alculate the 2conomic Erder 6uantity (2E6 for rubber (both types , the number of orders per year and the length of the order cycle. (9# marks 5." Fsing the %nnual :tock /olding Report, construct an %C$ %nalysis. marks (9#

5.= 7M$ $orporation needs to e!pand its capacity and is considering three locations in ;auteng, :prings, Rosslyn and %eroton for a new plant. The company wishes to find the most economical location for an e!pected &olume of 8### units per year. The Eperations Manager conducts a locational break e&en analysis. To do so he determines that fi!ed costs per year at the sites are R"####, R>#### and R99# ### respecti&elyG and &ariable costs are R@5 per unit, R=5 per unit and R85 per unit respecti&ely. The e!pected selling price of each unit produced is R98#. $alculate the cost for each location. )hich location should be considered and whyH marks $12 &+ PAP$R Assignment +ormat (9#

)ord Aimit' Bour assignment (e!cluding inde!, co&er page and appendices must not e!ceed =###. Research must be undertaken to enhance the &alue of your response. Bour assignment should include a Table of $ontents page. Te!t' 3ont' %rial or Times .ew Roman (98 , :pacing' 9I line. %ll te!t must be 1ustified at each margin. Bour answers may include theories, charts, tables or e!hibits necessary to support your analysis and recommendations. References , %t least ? sources of reference (te!tbooks, 1ournals, press reports, internet, etc must be included in your bibliography. The /ar&ard system of referencing and bibliography must be used. %ssignments will be marked on research, application of theory and understanding of sub1ect matter.