Short Note on Location and Operations Management in Ethiopia and Beyond
Table of Contents
- Location Decision in Ethiopia
- Limitations
- Strengths
- Differences Between Service and Manufacturing Location Decisions
- Facility Layout
- Layout Types
- Service Layouts
- Line Balancing
- Quality Management and Control
- Meaning of Quality
- Determinants of Quality
- The Costs of Quality
- Quality Circles and Improvement Teams
- International Quality Documentation Standards
- Total Quality Management
- Quality Control and Improvement
- Aggregate Planning
- Definition and Decision Options
- Basic Strategies of Aggregate Planning
- Aggregate Planning Costs
- Scheduling Operations
- Introduction to Scheduling
- Introduction to Loading
- Introduction to Job Sequencing
- Priority Rules and Techniques
- Personnel Scheduling in Service
1. Location Decision in Ethiopia
Limitations:
- Infrastructure Challenges: Ethiopia faces issues related to inadequate transportation networks, unreliable energy supply, and limited internet access which can hinder operational efficiency.
- Geopolitical Issues: Political instability in certain regions can complicate logistics and deter investment.
- Regulatory Environment: Bureaucratic processes, inconsistent regulations, and government intervention can affect decision-making for businesses.
- Resource Availability: Limited access to skilled labor and raw materials can restrict operational capabilities in certain industries.
Strengths:
- Strategic Geography: Ethiopia's location offers access to the larger East African market, making it a strategic hub for trade.
- Government Initiatives: The government has shown a commitment to improving business investment through policies and incentives that promote growth.
- Growing Economy: With a rapidly expanding economy, there is increasing demand for both services and manufactured goods.
2. Differences Between Service and Manufacturing Location Decisions
- Nature of Service vs. Product: Service locations prioritize accessibility and customer convenience, while manufacturing requires proximity to suppliers and raw materials.
- Capacity and Flexibility: Manufacturing facilities are often fixed with a focus on long-term production capacity, whereas service locations require flexibility to adjust to fluctuating customer demands.
- Quality Control: Manufacturing locations must consider factors affecting production quality, such as machinery, while service location decisions focus on delivering consistent customer experiences.
- Human Capital: Service industries often require a higher proportion of skilled labor compared to manufacturing, which can be automated.
3. Facility Layout
Layout Types:
- Process Layout: Arranges resources based on similar functions, ideal for job shops.
- Product Layout: Organizes resources linearly based on the production process, best for mass production.
- Fixed-Position Layout: Used for large, complex projects where the product remains stationary.
Service Layouts:
- Retail Layout: Designed to facilitate customer movement and optimize sales.
- Office Layout: Focused on efficient workflow and interaction among employees.
- Warehouse Layout: Maximizes storage capacity and ensures efficient retrieval.
Line Balancing:
- Involves distributing tasks evenly across production lines to minimize idle time and maximize efficiency. Techniques include assigning workstations based on task times and the Takt time method.
4. Quality Management and Control
Meaning of Quality: Quality refers to the degree to which a set of inherent characteristics meets requirements, including customer satisfaction and compliance with standards.
Determinants of Quality:
- Design Quality: Influence of product features and specifications on performance.
- Conformance Quality: The degree to which the product meets or exceeds specific standards.
The Costs of Quality:
- Prevention Costs: Expenses incurred to prevent defects.
- Appraisal Costs: Costs of measuring and monitoring activities to ensure quality.
- Internal Failure Costs: Costs associated with defects found before product shipment.
- External Failure Costs: Costs associated with defects found after delivery to customers.
Quality Circles and Improvement Teams: These are groups of employees who meet regularly to discuss workplace improvement and problem-solving strategies, enhancing engagement and ownership of quality initiatives.
International Quality Documentation Standards: ISO 9001 is a prominent standard that outlines quality management principles aimed at ensuring consistent quality in products and services.
Total Quality Management (TQM): A management philosophy focused on embedding awareness of quality in all organizational processes, emphasizing customer satisfaction and continuous improvement.
Quality Control and Improvement: Quality control focuses on operational techniques and activities to fulfill quality requirements, while quality improvement involves ongoing efforts to enhance products, services, and processes.
5. Aggregate Planning
Definition and Decision Options: Aggregate planning determines resource allocation to meet expected demand. Options include level production, chase demand, and hybrid strategies.
Basic Strategies of Aggregate Planning:
- Level Strategy: Maintaining constant output despite fluctuations in demand.
- Chase Strategy: Adjusting capacity to match demand fluctuations.
- Hybrid Strategy: Combining both level and chase strategies to optimize resources.
Aggregate Planning Costs: Costs related to production, inventory holding, hiring and training labor, and overtime can influence decisions. The objective is to minimize these costs while meeting service levels.
6. Scheduling Operations
Introduction to Scheduling: Scheduling involves allocating resources and time to complete tasks efficiently, impacting productivity and ability to meet demand.
Introduction to Loading: Loading refers to assigning work to machines or employees in a production setting, balancing workloads to optimize utilization.
Introduction to Job Sequencing: Involves determining the order of tasks or jobs to enhance efficiency and minimize delays or idle time.
Priority Rules and Techniques: Techniques such as FIFO (First In, First Out), LIFO (Last In, First Out), and shortest processing time help prioritize jobs based on various criteria.
Personnel Scheduling in Service: In service-oriented environments, scheduling focuses on meeting customer demand while ensuring adequate staff levels, considering factors such as peak hours and employee availability.
This short note provides a concise overview of key concepts in location decision-making, facility layout design, quality management, aggregate planning, and operations scheduling, which are vital elements in optimizing business efficiency in both Ethiopia and the global market.