Operations Management in Action: Kier Group Plc Analysis

Operations Management in Action Kier company Plc AnalysisOperations Management in ActionFor this assignment we shake off been asked to investigate the Industry bea, choose a logical argument within that sector, and then analyse and evaluate the handicraft we pass chosen from an operations manager point of view.First we must know what the Industry sector is. concord to oxford dictionary the word persistence means Economic activity concerned with the processing of raw materials and even off of goods (Oxford Dictionary. 2014).This means that the industry sector have seames within it that deal with the processing of raw materials and manufacture of goods. This is in any case called the secondary sector or manufacturing sector.In 2009 the UK manufacturing sector generated 140bn in revenue this is 11% of the UK total economy. This sector also employed 2.6 million people which equals out to be 8% of the UK workforce. The whole sector itself is spilt up into 14 different industr ies by the government which include textiles and chemicals (BIS. 2010).The business I have chosen is Kier company plc. The reason that Kier root plc fit within the Industry sector/secondary sector is because this is a expression firm that deals with crimping raw materials in a finished products i.e. turning bricks into buildings.Kier assembly plc offers their go to the common and private sectors, these services include civil engineering, mining, mechanical electrical design and installation and 3D clay sculpture (Kier Construction. 2014). An example of commonplace sector customer would be the northerlyampton Borough Council in creating their new 7 million North approach Bus Station (Northampton Chronicle Echo. 2014). An example of a private sector customer would be Network Rail Infrastructure Ltd, as Kier class plc did the Kings Cross Station crown refurbishment (Kier Group. 2013). Kier Group plcs clients ar often other business or large public bodies such as Council s due to their ability and proven track record with multi-million pound contracts that they be asked to do or win the contracts against other competitors such as Balfour Beatty PLC. Kier Group plc operate on a globose scale however some sorts within Kier Group plc work within the U.K.Any brass instrument can be shown as multiple of input/output diagrams in a hierarchy format. At the bottom of this hierarchy would be the customers aims beingness transformed into consumer satisfaction (Muhlemann, A. Oakland, J. Lockyer, K. 1993). As e very(prenominal) business is made with the customer in mind even if the businesses overall goal could be to maximise profits they still need the customer. However other input/output diagrams in the hierarchy differ from business to business. As a car mechanic shop wouldnt use the aforesaid(prenominal) ways to satisfy consumers as a bridal dress shop would.As Kier Group plc deals with social organisation it has a specialised inputs and outputs. Five inputs of Kier Group plc would be skilled crusade, high attri juste equipment, energy, building materials, and introductory cat designs. Three outputs of the company would be buildings, infrastructure, and recycled materials.Skilled labour is an input for Kier Group plc because to be commensurate operate as a building business they would need skilled labour. This is because the businesss that the business could be doing whitethorn have a high risk of doing lots of damage not just moneys terms but in personnel terms as well. This would also be beneficial to the business as it could lead to being more productive due to the skilled labour however it would be costly hiring someone thats highly skilled or even over skilled for the job rather than someone who could just around do the job. But in the companys overview they want to offer clients world-class solutions (Kier Group. 2014)which suggests that the highly skilled labour would be used.High grapheme equipment is would be a specific input for Kier Group plc due to the nature of the job that the business gets inquired about. These can be very complex jobs such as the Kings Cross Station roof refurbishment. Not only did they refurbish an iconic building roof, the station had to stay open with thousands of people walking underneath the building work. This shows the high quality equipment would be ask as an input.The reason that energy is undeniable as an input as the business would be development computers to design projects and also it would be needed to power equipment on site. It is a needed input in this business.Building materials ar a vital input to the business as they are needed to get to the final product. Without these, the business would not be suitable to run as a anatomical structure business. Kier Group plc need to start from a basic project design to be able to make what the customer want like the business to make. Thats is why basic project designs is a needed input for the bus iness. As Kier Group plc have architects that would design the final product from these basic project designs whether it would be a finish building or a new part for railways.A specific output for Kier Group plc would be buildings as this is the main product/good that the business produces. They way in which this would be produced from inputs would be via project process. Project production is a lawsuit of production that has low lot of products but high variety between distributively one. This means that each new project would be different from the last using different materials with different quantities. They also have to be made in a fix location which is one of the classifications of a project production. During the production of each building uses a mixed process technology it uses manual and mechanised. This means that during the production of each building on that point are parts which are done via hand with no machinery and in that location are parts where machinery is utilised but under the control of humans (Evens, J. 1993).Infrastructure in another output of Kier Group plc as it doesnt only make buildings it also builds roads, railway parts and much more which is a vital part in the UKs infrastructure. These would also be produced in a project production as each part of infrastructure they make would be different from another part.One other output the Kier Group plc produces are recycled materials. Kier Group plc has a recycling service which is used in many counties. Recycled materials go with many processes. It is made via continuous flow production as it has a high product volume, in that locations some although not much product variety. During the processes the recycled material goes though in that location are a high number of automated and specialised equipment that does a large amount of the work. There is also labour that take out any rubbish that cant be recycled or shouldnt be in that particular recycling line this doesnt require h igh skills. The reason that it is not a Mass production is that there isnt any variety between each product at the end (Evens, J. 1993).The conduct for the products and services the Kier Group plc produce usually depend on the economic evoke of the country but there are also other factors the affect the demand for the business. These factors include globalisation, demand for more sustainable construction, demographic changes and increasing importance for technology use in construction.The demand for the products and services that Kier Group plc produce usually depend on the economic state of the country but there are also other factors the affect the demand for the business. These factors include globalisation, demand for more sustainable construction, demographic changes and increasing importance for technology use in construction.The reason that the state of the economy affects the demand for Kier Group plcs products and services is because buildings and infrastructure is capit al which helps boost long term growth. These are the first things that are cut if the economy was to go into decline. When the recession hit in 2008 according to House of Commons there was a refund by 6.2% in gross value added for the construction industry, followed by a 7.9% fall in GVA, then an increase by 1.1% in 2011, and then followed by a 6.0% drop in GVA during the double dip recession (Rhodes, C. 2013). This data shows there is a correlation between the construction industry including Kier Group plc and the state of the economy.The demand for more sustainable construction also impacts the stability of the demand of Kier Group plcs products and services because if the business doesnt offer the right amount of sustainable construction or by offering green alternatives they may lose customers and clients. As new legislation is soon to be coming into action due to the UKs recent air pollution issues this would mean a practicable overhaul of more carbon producing processes. How ever to overcome this Kier Group plc currently generates 10% of its revenue by using recycled material, low energy alternatives and more sustainable materials (Fry, C. 2014)Every business needs demand to be able to sell its good and/or services however you need to be able to have enough contentedness to collide with this demand. Capacity planning is vital in operations strategies. Capacity is better(p) when it around 75-90% utilised. Having capacitance between these levels means that you should still be able to cope with new clients without having to turn larger clients down and also you wont be running with excess capacity. Excess capacity is a large cost on businesses and may lead to layoffs and department closures (Hill, T. 1991)There are 3 different strategies that a business can use to plan capacity to meet demand. These policies are matching Capacity with Demand, Excess Capacity, and Capacity Shortage polity. Matching capacity with demand means that the business tries to financial backing as close to demand as they possibly can. This policy means that it sometimes has excess capacity in which it has the ability to get more clients or customers. However it also means there is a shortage of capacity. During these times a business would have to subcontract out work to get a short term increased capacity or they would lose sales this could come from poor quality of work from being rushed to compete work.A Capacity Shortage Policy is when there is a gap between the demand and the capacity where demand is always high than capacity. As there is a high capacity utilisation this means there is a strong return on investment. This type of policy is usually best for goods or services that usually relate to status or are in fashion. This would mean that there is a high capacity utilisation which in turn leads to a strong return on investment. For example the iPhone 4 White. When it came out it was being sold quicker than it was being made.The way that Kier Gr oup plc plan their capacity is by a strategy called Excess Capacity Policy (Fry, Colin. 2014). This policy means that the business has a goal of maintaining enough capacity to be able to meet with demand or to reduce the chance of not meeting demand. Although this policy can lead to higher costs than the other two polices it is the best policy for this business. This is because the business does not know if they are button to win a bid for a client so there needs to be bare(a) capacity in case they do win the bid. As large construction businesses get invited to stupefy their bid on large projects so the business always need to be prepared for these invites.Kier Group plc could better utilise operations management to counter some of the challenges that it has in the ever changing food market place. It could utilise Lean Operations more this is because there is going to be more legislation regarding cut down thriftlessness and carbon footprint. Its better to be proactive to chan ges in legislation than to be oxidizable as it shows the business has a strong CSR which customers and clients look for.Lean Operations is minimising the amount of waste there is in order to operate quicker, produce higher quality work and also to operate at low costs. The reason that lean operation is suited for Kier Group plc is because in the lean approach there is a focus on producing only when there is a need to produce, this does mean there is a lower capacity utilisation however this fits in well with the Excess Capacity Policy has the business already is implementing.Some of the techniques that could be used in lean operations for the business could be JIT cede and Total Involvement. JIT preparation means just in time supply. This means that you wouldnt receive materials until you need those materials (Hill, T. 1987). This would be useful in the business because it means there wouldnt been material they dont need wasting space in a construction site. For example the would nt need a road tarmaer when the drainage is still 3 days away from being completed not only could it be wasting space it could be in the way of workers increasing the distance from the materials theyre using to the place where they need to use them. If 10 workers had to go an extra 20 seconds out of their way whilst this tarmacer was 3 days early and each worker had to do this trip 40 times a day that adds an extra 400 minutes on their travel overall on the 3 days the tarmacer was there. With JIT supply the tarmacer would arrive on the day it was needed saving the 400 minutes which could have been wasted.Total familiarity is when everyone within the business is aware of the lean approach of the business. If everyone is doing it, it would become second nature to abide by the 5Ss of lean operations. These are sort, straighten, shine, standardise and sustain (Muhlemann, A. Oakland, J. Lockyer, K. 1993)Sort means to eliminate what is not needed and to keep whatever is needed in the pro duction of goods. Straighten means to place tools and equipment is such a way that is it easily accessible as lots of time is spent looking for tools that have been misplaced. radiancy is to keep things clean and tidy. This could lead to less injuries due to slipping over dirt or waste packaging. Standardise means to keep to a certain level of cleanliness and sustain is to keep to this standardisation end-to-end each product life cycle.These methods of lean operations keep Kier Group plc near the top of the construction market as they would be less wasteful, operate with lower costs and also could lead to a better workforce from total involvement as everyone would feel they are impacting the businesses performance.References BIS. (2010). Manufacturing in the UK.An economic abbreviation of the sector. 1 (1), p11.Evens, James (1993).Applied Production and Operations Management. 4th ed. Eagan, Minnesota West Publishing Company. p126-127.Fry, Colin., 2014. Interview. 25 March. 1800Hi ll, Terry (1987).Small Business Production/Opertations management. Basingstoke, Hampshire Macmillan education ltd. 147-148.Hill, Terry (1991).Production/Operations Management. 2nd ed. Hemel Hempstead, Hertfordshire Prentice Hall Internation (UK) Ltd. p47-49.Kier Construction. (2014).GROUP STRUCTURE.Available http//www.kier.co.uk/about/group-structure.aspx. Last accessed 22/03/2014.Kier Group. (2013).KINGS CROSS STATION ROOF REFURBISHMENT.Available http//www.kier.co.uk/case-study/view-all/kings-cross-roof/case-study.aspx. Last accessed 24/03/2014.Kier Group. (2014).COMPANY OVERVIEW.Available http//www.kier.co.uk/about/company-overview.aspx. Last accessed 20/03/2014.Muhlemann, A. Oakland, J. Lockyer, K (1993).Production and Operations Management. 6th ed. London Pitman Publishing. p3-395.Northampton Chronicle Echo. (2014).Your questions answered about the new North Gate bus station.Available http//www.northamptonchron.co.uk/news/business/business-news/your-questions-answered-about-the -new-north-gate-bus-station-1-5888441. Last accessed 23/03/2014.Oxford Dictionary. (2014).industry.Available http//www.oxforddictionaries.com/definition/english/industry?q=Industry. Last accessed 25/03/2014.Rhodes, Chris. (2013). Construction Industry.Economic Policy and Statistics. 1 (1), p1-3.By Chris FryBUS2010-STD