Title | Great America/BMW Operations Management |
---|---|
Author | Ryan Pham |
Pages | 20 |
File Size | 418.5 KB |
File Type | |
Total Downloads | 179 |
Total Views | 999 |
1 Group Conference Paper An Operations Management Analysis of & Submitted by Group 3 Ryan Pham Imane Jahid Tyler Meditz Submitted to Prof. Graeme Warren OMIS 108 Operations Management Submitted on June 1, 2016 2 Table of Contents...
1
Group Conference Paper
An Operations Management Analysis of
&
Submitted by Group 3 Ryan Pham Imane Jahid Tyler Meditz
Submitted to Prof. Graeme Warren OMIS 108 Operations Management Submitted on June 1, 2016
2
Table of Contents I. II.
Introduction Quality Management
A. Great America
Managing Ride Quality with Supplier Standardizing Ride Maintenance and Procedures A Day in the Life of Ride Maintenance Manager Great America’s Quality Management Practices According to Stevenson
1. 2. 3. 4.
Importance of High Quality Suppliers The Supplier Selection Process and Supplier Relationships ThirdParty Quality Control Standardizing Quality via the Complete Product Audit
Lean Management A. Great America
1. 2. 3.
Inventory Waste Workload Leveling Continuous Improvement
1.
Employees as Assets
B. Lean Management at BMW C. Great America vs. BMW IV.
2. Lean Suppliers Forecasting/ SCM
V.
Conclusion
A. B. C. D.
1. 2. 3. 4.
B. Comparison to BMW
III.
Demand Forecasting: Great America Industry’s Best forecasting practices : The Disney example BMW: Supply Chain Management BMW’s Supply chain management Vs. Industry’s best practices
3
I. Introduction
In this operations management course we have learned concepts that companies utilize that make them successful. Many of the examples we have come across in our lessons deal with companies that sell a product, however, servicebased companies have not been given adequate attention. Our group decided that it’d be valuable to see how concepts like 1) Quality Management 2) JIT/Lean Management and 3) Forecasting/Supply Chain Management, concepts that are often associated with the manufacturing of a product, can be applied to a local servicebased company and then compare these practices to a successful, globallyrecognized, productbased giant. The servicebased company we decided to take a look at was California’s Great America amusement park here in Santa Clara. Great America is one of 12 amusement parks owned and operated by Cedar Fair Entertainment Company, the same company that owns the wellknown Knott’s Berry Farm in Buena Park, California. On a tour of the facility and in conversations with Clayton Lawrence, the Manager of Live Entertainment and Raul Rehnborg, the General Manager of Great America, we were able to see the behind the scenes operations of the amusement park and gain an understanding of the main components of the industry. Any amusement park is essentially made up of the same basic components: rides, food, shows, and games, and Great America is no different (Lawrence & Rehnborg, 2016) . In this paper we will be exploring these core foundations of the business and applying the aforementioned concepts to see how Great America stacks up against an automotive industry powerhouse, BMW. BMW boasts building “the ultimate driving machine”, which leans on both BMW’s mission of providing drivers with “premium products and premium services for individual mobility,” and their highly decorated racing history (Farfan, 2016) . BMW began producing vehicles in 1929 and has continued to be a leader in their industry to this day, a testament to their strong operations management practices and organization. Although on paper the differences between these companies should be stark in terms of types of practices and level of execution, BMW and Great America are surprisingly similar in many ways. After comparing and contrasting these two very different types of companies we found that both servicebased companies like Great America and productbased companies like BMW engage in Quality, JIT/Lean Operations, and Forecasting/Supply Chain Management practices. However, BMW seems to take these operations to the next level.
II. Quality Management
A. Great America
Although the Great America amusement park is event based, and draws its crowds with seasonal events such as Taste of New Orleans in the Fall, Winterfest during the holiday season, and the Halloween Haunt in October, the staple of the business is the rides. Great America has 58 rides available for the enjoyment of the patrons of the park, and Great America is liable for
4
the safety of these patrons while they are riding these rides. What this means is that in order for rides to be able to take passengers, they need to be checked daily, weekly, monthly, and annually through manual checks by park maintenance crews and electronically through ride metrics attached to the rides in order to ensure that patrons remain safe, have fun, and keep coming back for more. This is quality management, and it is important because not only does higher quality increase customer satisfaction through smoother operations (literally, through the quality of the ride and by decreasing attraction down time, which increases waiting times and decreases customer satisfaction) but because it also limits liability in the event that some ride does malfunction and someone gets hurt. Since these checks are done and logged frequently, Great America’s owner, Cedar Fair Entertainment Company, can use these documents in the case of a lawsuit and deflect any potential hefty settlement fees that come from the suit. Great America takes quality management seriously, and they do so in a very systematic way. 1. Managing Quality with the Ride Supplier When Great America first decides they want to get a new ride in the park, they begin the process by meeting with potential suppliers (mostly in Europe), looking at designs these ridebuilding companies have, giving input by factoring in the topography, the noise, the physics, the preexisting ideas they have for the space, etc. and then coming up with drawings, and computer simulations to see if the ride is feasible. Great America exemplifies Stevenson’s Quality Management practices, as we can see, by involving everyone in the supply chain, having collaborative relationships with suppliers, choosing quality suppliers, building quality into the service offerings, and ensuring quality meets expectations. This is all before the ride even begins to be manufactured! 2. Standardizing Ride Maintenance and Procedures Once the ride is given the “okay” to be built, the plans and parts are developed and built by the supplier to be shipped to San Jose, where the ride is put together by local contractors under the guidance of Great America Ride Operations. With each ride comes a training session for construction and maintenance personnel given by the supplier and a “huge ride manual” that covers all aspects of the ride, i.e. safe ride metrics (acceleration, speed, weight, etc. and acceptable deviation), which sections/parts of the ride should be inspected daily, weekly, monthly, and annually, which sections of the ride are potential areas where problems will arise, which parts on the ride need more attention than others, how to fix those parts of the rides, etc. (Lawrence & Rehnborg, 2016) . Through the collaboration with the supplier and supplier research, the supplement of training, and a ride manual, quality management is allowed to be standardized and consistent. Basing the safety of the ride on statistical figures such as accelerometer readings, or through pictures outlined in the manual of what a part of the ride should and should not look like, allows decisions to be based on facts rather than opinions, gets all employees on the same page, and limits daytoday variability to the service of the ride and the ride itself. 3. A Day in the Life of Ride Maintenance Manager Inspection is a huge part of the daily operations of Great America. Every morning at 4 AM, Stanley (the lead ride operations guy) and his crew walk through the park and do their daily inspections according to the each individual ride manual. The daily checks for each ride are
5
outlined on their own checklist sheet which is inside their own folder that Stanley carries for every mechanical attraction. He checks out each ride’s folder from the Ride Servicing Warehouse on a wall that his boss checks every morning when he gets in later. After Stanley and his crew perform inspections for the entire park, he signs off on the inspection sheet and places each ride folder back into it’s designated spot on the wall, with the signatures up and a pink slip attached to notify to his boss that the ride is checked and ready to go. When the boss comes in to check the wall of ride folders, he can easily see which rides can begin their testing for the morning and which rides are not in good shape/need attention. The rides that have been signed off on are required to do 50100 runthroughs, depending on the type of ride, before a passenger is even allowed to step foot on the ride. The rides that need further attention, are closed for a certain period of time that allows the ride itself to be repaired onsite, or in the case of a cart/train malfunction on the ride, the cart/train is removed from the ride and taken to the Ride Servicing Warehouse to be repaired. After the ride has been repaired at least 200 total runthroughs (daily requirement plus postrepair requirement) are required before a passenger is allowed to step foot on the ride. Inspection of each ride is done before the park opens, monitored by the operations team via ride metrics during the day, and inspected one more time after the park closes. The purpose of all this inspection is to nip any problems in the bud before they occur in order to avoid costs incurred by rides breaking down entirely, lost sales from unhappy patrons that leave, and dissatisfied patrons that are stuck in a waiting line because of a ride breakdown. 4. Great America’s Quality Management Practices According to Stevenson Great America goes to great lengths to ensure a quality service provided to their guests in the name of safety and in the name of profit. Their practices align with many of Stevenson’s concepts of Quality Management such as the use of control charts with upper and lower control limits, exemplified by their ride metric systems (accelerometers, speedometers, vibration meters, sound level meters, etc.). A few examples of how the park ie able to manage its ride metrics include: doing frequent inspections by the same group of employees, holding employees accountable for ride maintenance by placing checklist sheets in public areas in the department, and collaborating with quality suppliers from the beginning of the process. Great America has a lot to gain from providing a high quality experience as well as a lot to lose by failing to meet standards, and it’s this pressure that has pushed Great America to create these systems, programs, and standards at this toplevel.
B. Quality Management at BMW
1. Importance of High Quality Suppliers Although Great America is a servicebased company and BMW is productbased, accountable supplier relations is nonetheless an critical part of each company’s success. At BMW, more than 50% of all components in their vehicles are developed at a supplier’s facility, meaning that, one, BMW must go through an extensive process to choose the best supplier, two, ensure that the supplier can and will continue to provide a quality product, and three, make sure that the vehicles leaving each plant have pieced each of these suppliers’ parts together perfectly every single time.
6
To choose the best suppliers, BMW has implemented the Clover Leaf System. In this system, the Supplier Network Division, Development department, Parts Quality Management department, and Logistics department make up the team that oversees existing and potential supplier contracts. By using four departments in the process of choosing suppliers, the BMW team can assess their decisions from several different angles to ensure that each department gets what they need and expect. As outlined in the booklet BMW distributes to companies looking for supplier contracts, BMW is looking for “the best in the world in product quality”, and that suppliers have to prove that they can, “meet the demanding requirements of the BMW Group” (BMW Group, 2009). 2. The Supplier Selection Process and Supplier Relationships Potential suppliers are required to draw up quality plans for all trial and series parts to be delivered, define quality standards for the project, and fix times/procedures for quality inspections and quality assurance. These measures are then verified according to international standards ISO 9000, that are based on “strong customer focus, the motivation and implication of top management, process approach, leadership, and continual improvement,” as well as ISO/TS 16949 standards which are specific to the automotive industry. When drawings and applicable specifications are approved, the supplier must then organize an Initial Sample Inspection onsite at their facility, where a batch of products are produced and analyzed in order for a report to be submitted to BMW Group, where the Parts Quality Specialist at BMW will examine the results and determine whether or not the supplier will receive a contract. The Initial Sample Inspection Report is created in accordance to VDA Vol. 2 Submittal level 3, a standard format for a quality management report. It is important to note that most contracts at BMW are being offered to several suppliers at the same time, meaning that there is competition for the contracts. Competition allows BMW to get the best quality out of their potential suppliers, and because BMW also takes long term process capability into consideration when assessing each supplier and site, it ensures that this high quality is sustainable. When a supplier is chosen, the level of risk each supplier possesses determines the amount of supervision BMW will have over the supplier through the duration of the partnership. Frequent verifications by BMW with regard to, “quality systems being properly applied, implementing agreed upon measures, and whether these measures are successful,” are done to keep suppliers accountable for their products. Quality Management at BMW does not stop there, however. The BMW Plant Rosslyn in South Africa utilizes a neutral third party called The Central Laboratory to maintain quality standards for the vehicles it produces. 3. ThirdParty Quality Control The Central Laboratory in Plant Rosslyn acts as a link between BMW’s Quality Organization and the Global BMW Labortechnik Organization, and does so as a neutral division of the company, meaning that Central Laboratory does not rely on BMW’s financial success, eliminating any kind of pressure that may put on an inspection company to approve vehicles in the name of costcutting and profitraising. Central Laboratory is responsible for doing investigations, inspections, and tests on vehicles and parts which include: Qualification of conformance checks of incoming and process materials, controlling chemicals in the car production process that potentially affect the environment, develop suppliers and support inhouse manufacturing of adhesives, sealers, pretreatment chemicals and paint products,
7
problem solving of failed investigations and detailed forensic analysis, and the steering of plant performance (BMW Plant Rosslyn, n.d.) . Tests done at the lab are then compared against other plants in the BMW group to get an idea of the quality of the vehicles coming out of Rosslyn and ensuring that these vehicles are up to BMW’s standard. 4. Standardizing Quality via the Complete Product Audit On a carbycar basis, quality inspections are done throughout the build process through the use of technology and humans. Technology verifies the hard facts of everything measurable, and humans are that cherry on top that ensure the car looks, smells, and sounds good. BMW utilizes ultrasound machines, camera scans, optical tests, and laser based examinations to constantly assess their products, and works with their suppliers and universities to continuously improve their technology and methodology (BMW TV International, 2012) . By doing this, BMW can run their Complete Product Audit process knowing that their will be a very low defect rate. The Complete Product Audit process is designed to take place at specific points in the build process and the standards are set by BMW Headquarter at the Central Quality Department where they are constantly reviewed by top management and made standard to every plant in the BMW Group. This audit compares the quality of a unit to the customer's requirements, including technical specifications, fitment and function (BMW Plant Rosslyn, n.d.). With all these quality processes in place, it’s no wonder BMW is the creator of “the ultimate driving machine.”
C. Great America vs. BMW
1. Managing Suppliers Managing quality from the beginning with suppliers, as we have seen, is a critical part of each company’s quality management practices. Both Great America and BMW take pride in choosing the right supplier, remaining a part of the process till fruition, and maintaining a relationship with the supplier to ensure quality products are received time and time again. Because of BMW’s size and reputation, however, they need to take, and have the ability to take quality management of their suppliers to a higher level. Because supplying companies compete to have their product in BMW’s vehicles, BMW can formulate a very intensive screening process without dissuading companies from applying because supplying companies see the value in having their products tied to the prestige of the BMW name. With this competition, BMW gets the bestofthebest suppliers and will receive the most thorough applications that ultimately ensures positive partnerships and quality parts/products that can be sustained for the longterm. In contrast, Great America does not have the same reputation as BMW, nor does the number of available ride suppliers nowadays allow Great America to be very particular when it comes to proposing a new ride. How the process generally works now, according to Mr. Lawrence, is that there are trade shows for rollercoasters, rides, plush prizes, etc. that Great America representatives will attend (trade shows are mostly in Europe) to see what is available. When the representatives see something they like, they will begin a dialogue with the respective company and then engage in a deal until the culmination of the project. Although Great America will generally work with the same company on new projects, this isn’t always the case, and this lack of a longterm partnership can hinder hopes of achieving total quality management. James W. Dean and David E. Bowen in their article, Management
8
Theory and Total Quality: Improving Research and Practice through Theory Development , identifies Teamwork as the third principle of Total Quality, and is defined as a partnership between a supplier and customers (Dean & Bowen, 1994). Partnerships, according to Stevenson, are specifically longterm contracts that benefits both parties through the sharing of i...