ABC Manufacturing Co

Operational Efficiencies & Effectiveness Analysis Report of the ABC Manufacturing Co., Ltd

Abbreviation:

Operations Management (OM)

Supply Chain Systems (SCM)

Quality, Cost, and Delivery (QCD)

Computer-Aided Design (CAD)

Computer-Aided Manufacturing (CAM)

Flexible Manufacturing System (FMS)

Computer Integrated Manufacturing (CIM)

Artificial Intelligence (AI)

Material Requirements Planning (MRP)

EXECUTIVE SUMMARY

This report mainly discusses how to improve the operational efficiencies and effectiveness of our plant in terms of operations management, which is based on our current operations database. There actually are too many suppliers to our plant and this is causing major problems in terms of delivery levels, quality of products and raw materials, production scheduling and customer satisfaction. As a result, our plant needs to sustain the current operational efficiencies and effectiveness and look at ways to improve operational efficiencies, effectiveness and productivity of our manufacturing plant within the next twelve months.

In order to optimise the production and operations, several management strategies need to be unitised, which include supply chain management, inventory management, production scheduling methods, quality management. This report will discuss these strategies and the related information that must be considered when conducting the relationship and operations process with suppliers, and finally handle the problems, such as delivery levels, quality of products and raw materials, production scheduling and customer satisfaction, due to so many suppliers currently to our plant. Also a identification of operations management development and trends has been discussed.

Finally, a number of discussions will be concluded, which include the solution about the operations management optimising the production and operations, and streamline the suppliers, improving the quality of procured products, production capacity and satisfying the customers. Also, recommendations will focus on two major aspects, which are supplier management and customer management.

1. INTRODUCTION

1.1 Background

Operations management (OM) is in regard to all operations within our plant. Related activities include delivery management, inventory control, quality control, OM evaluations, customer satisfaction and further development. A great deal of focus on efficiency and effectiveness of operations processes were previously discussed by Paul & David (2002). Therefore, the OM report includes substantial evaluations and analysis of operation processes due to too many suppliers for our plant currently. Ultimately, the nature of how OM is carried out to handle the dilemmas caused by increasing suppliers should be discussed for our OM evaluations.

Our OM actually should cover a diverse range of activities and calls upon the concepts of several aspects, such as selection of suppliers, delivery levels, quality of products, raw materials, production scheduling and customer satisfaction.

The following is a typical list of common operations that need to be investigated in the report:

* Selection of suppliers to create a proper OM that enhances productivity of production and material handling operations

* Delivery management operations that ensure optimal transport operations, minimizing costs while maximizing speed and safety of distribution

* Quality assurance procedures that maximizes the percentage of acceptable quality output and minimises rejections

* Production Scheduling systems that optimises the productivity of available equipment and manpower

* Customer satisfaction minimises customer complaint and increases the customer loyalty.

* Process strategy practices that results in quick retrieval of needed merchandise and speedy receiving and shipping operations

* Inventory management policies and practices that minimize inventory holdings and maximize availability of needed raw materials for production

Consequently, as an operations manager, I see an opportunity to develop current OM with the idea to select proper supplier. I present a critical analysis that seeks the best balance among our suppliers and us, and discuss in several management strategies to further develop our OM behavious.

1.2 Objectives

The purpose of this report is to sustain the current production and operational efficiencies and effectiveness and look at ways to improve the manufacturing operational efficiencies, effectiveness and productivity of the plant within the next twelve months.

1.3 Scope

The report evaluates our plant current OM behaviours, focusing on operational efficiencies & effectiveness. Although this report indicates that there are too many suppliers should our operations management face to. Still the delivery levels, quality of products, raw materials; production scheduling, customer satisfaction, supply chain management, inventory management and operations management developments and trends all come within its scope.

2. CRITICAL ANALYSIS

2.1 General solutions to the issues

With the growth of new products and suppliers, the supply chain systems (SCM), supporting both manufactured products and further operations management development suggested by Lambert & Cooper, 2000, have become intertwined directly or indirectly for our operations management trends. While e-business might be simplifying the communications between suppliers and us, many suppliers are still finding it challenging to provide timely deliveries of goods, because of geographical distance and resource limitations (Cristobal et al. 2005, pp. 289-301). Thus, strategic planning and scheduling of logistics operations are important in our supply chain systems.

The followings are five basic components of SCM which definitely should be discussed in the report and considered with cautions to handle the overall dilemma, which our plant faces to currently (Lambert & Cooper 2000, pp. 65-83).

Plan—this is the strategic portion of our SCM. Our plant needs a strategy for managing all the resources that go toward meeting customer satisfaction. Our current SCM planning is developing a set of metrics to monitor the supply chain so that it is efficient, costs less and delivers high quality and value to customers.

Source—our plant must choose proper suppliers to deliver the raw materials. Therefore, supply chain management must develop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring and improving the relationships. And then, supply chain management can put together processes for managing raw materials and inventory, including receiving and verifying shipments, transferring them to the manufacturing facilities and authorizing supplier payments.

Make—this is the manufacturing step. Supply chain managers schedule the activities necessary for production, testing, packaging and preparation for delivery. This is the most metric-intensive portion of the supply chain management, which is able to measure quality levels, production output and worker productivity.

Deliver—this is the part that our SCM referred to as logistics, where our operations management coordinate the receipt of orders from customers and satisfy the customers.

Return—this can be a problematic part of our SCM. Supply chain planners have to create a responsive and flexible network for receiving defective and excess products back from our customers and supporting customers who have satisfaction problems.

It is evident that I will have to call upon different tools and skills to manage such diverse activities. A manufacturing product can be thought of as having three dimensions: quality, cost, and delivery (QCD). Quality is the attribute desired by our plant that renders the product its primary value. Proper tolerances, specifications, features, and varieties are examples of quality indicators. Cost, the second dimension, refers to the cost of producing and delivering the product to the customer; it has an impact on another cost: the cost to our plant or the "price" we pay to suppliers. Cost affects the marketability of the product and the profitability of our plant. Delivery involves bringing the finished goods to satisfy the customer at the right time, at the right quantity or amount, at the right place, conclude by Lambert & Cooper (2000).

The bulk of our QCD task falls on the shoulders of the operations or production manager. The quality, cost, and delivery of the finished goods, or QCD output, is the outcome of the efforts of the production manager in managing the processes and inputs that go into the making of the output.

Delivery of finished goods to satisfy the customer is largely determined by the availability of inventories, the length of the manufacturing lead time, and the available capacity - all within the control of the production department. The production plans and production schedules essentially determine the delivery performance of our plant. Actually, a terribly wrong forecast from marketing and suppliers can wreck the best laid-out production plans and confound delivery schedules. The other factors, suggested by Krause et al. (2000), affecting our delivery which do not involve production are the extent, location, and efficiency of the distribution channels of our increased suppliers.

The QCD mission of production is not an easy task for our plant. The operations management is often subjected to tremendous pressure from inside and outside of our plant to correct and control just the runaway element. Unfortunately, we can not simple juggle the three and do some trade-offs, as they are mutually interdependent on each other. Some trade-offs or single factor adjustments are tolerable; many are dangerous and may worsen the problem by causing unexpected, undesirable changes in the other two factors The QCD approach makes it easier to evaluate production and product decisions. If we rush product delivery, this would probably have an adverse impact on product cost or product quality. This decision would also affect QCD process. The decision to upgrade product quality or reduce production cost can be treated similarly. A proposal to shift to a new raw material or new source and supplier can likewise be evaluated by checking its effect on output QCD, input QCD, and process QCD, which has been illustrated in following Figure 1.

The same strategies may be applied in the case of the installation of new equipment or new forms of processing, such as automation discussed by Wu & Choi (2005). All production decisions and solutions will have to end up in salvable output with acceptable QCD; otherwise, it was a bad decision not to be repeated. The QCD framework could serve as a convenient checklist for CEO of our plant to gauge the effectiveness of our OM policies and to interrogate the production manager and evaluate his/her decisions and performance. The QCD framework actually serves to illustrate the large extent of the OM responsibility and control over the final product. It shows that production or operations management is very critical, if not the most critical, aspect of running our plant business.

2.2 Delivery Management

Nevin (1995) suggested that suppliers should take responsibility for managing their stocks and deliveries. However, our plant is also absorbing a large part of the inventory and delivery costs. We therefore must plan delivery programs including delivery frequency to ensure that the inherent costs are minimised.

The unbearable pressure to rush the delivery of promised goods may tempt our operations management to hasten, shorten, if not omit, some critical operations or processes, resulting in serious quality problems at the end of manufactory line. Since the cost of the resulting scrap and defects is spread out over the good products, Tan & Wisner (2003) said manufacturing cost likewise increases. Similar consequences await our OM to solve delivery problems by shipping old, unreliable inventory or stock.

We should take a powerful supplier who has established quick-response relations with our plant for delivering. Otherwise the supplier has extracted cost concessions in such a way that our plant is fully responsible for delivery and shortage costs. Various surveys clearly show a shift in power toward the supplier leading to inventory cost transfers of this nature (Fisher 1997). The supplier has been instructed to ship a certain product in a timely fashion so as to raise inventory to a predetermined level M (moderate) each time. In other words, the supplier is allowed to stock at most M units, and deviations from M are forbidden. Let us say the product has a fairly stable consumer demand, but some "heavy" demand exists occasionally (Fisher 1997). In other words, we assume that the product inventory depletes at a constant rate under normal circumstances, but from time to time it jumps downward due to random demands. Here we consider a product for which one component of demand is relatively predictable, while the other is somewhat unpredictable. The unpredictable part is an attempt to account for situations of sudden high demand, which cause inventory to drop precipitously. In fact, one important observation derived from our plant database is that each component of demand has a surprisingly different effect on the optimal shipment policy.

With a focus on cost reduction, our plant is directing the suppliers to take responsibility for inventories and deliveries. This shift means that suppliers are shouldering a large part of the inventory and delivery costs, which has been conclude by Baumol & Vinod (1970). We therefore must plan delivery programs, such as delivery frequency, to ensure that the inherent costs are minimized. Here, we are specifically concerned with average response time and reliability of response time for possibly a proper delivery and optimise the customer satisfaction.

2.3 Quality of Products and Raw Materials Analysis

Quality in our manufacturing plant has a pragmatic interpretation as the non-inferiority or superiority of something. Consumers may focus on the specification quality of a product, or how it compares to competitors in the marketplace. Our plant might measure the conformance quality, or degree to which the product was produced correctly. There should be two common quality-related functions within our plant. One is quality assurance which is the prevention of defects, such as by the deployment of a quality management system. The other is quality control which is the detection of defects, most commonly associated with testing, which takes place within a quality management system, typically referred to as verification and validation.

The dimensions of quality referred to the attributes that quality achieves in OM are followings (Sridharan & Berry 1990, pp. 541-558):

* Quality supports Dependability

* Dependability supports Speed

* Speed supports Flexibility

* Flexibility supports Cost

Improved productivity of our plant is a source of greater revenues, employment opportunities and technological advances. However, this has not been the case historically in our plant. Most discussions of quality refer to a finished part, wherever it is in the process. The best way for us to consider about quality is in process control. Paul & David (2002) suggested that if the process is under control, inspection is not necessary. The following PDCA model in Figure 2 will illustrate how we are going to assess our quality management plan.

In the past, when we tried to improve quality, typically defined as producing fewer defective parts, we did so at the expense of increased cost, increased task time and longer cycle time. We could not get fewer defective parts and lower cost and shorter cycle times. However, when modern quality techniques are applied correctly to our plant, all aspects of quality, such as customer satisfaction, fewer defects/errors, shorter cycle time and total cost, must all be improved. Also, if one of these aspects does not improve, it must at least stay stable and not decline in our plant.

The most progressive view of quality, in our plant, is that it is defined entirely by the customer or end user and is based upon that person's evaluation of his or her entire customer experience. The customer experience is the aggregate of all the touch points that customers have with our plant products. For example, any time one buys a product or one forms an impression based on how it was sold, how it was delivered, how it performed and how well it was supported.

Quality is the result of the efficiency and discipline of the entire production system of our staff, manufactory machines and raw material provided by suppliers (Barbara et al. 1990, p. 260). That quality is a production responsibility which is illustrated by the fact that our plant is immediately blamed whenever there are customer complaints, product returns and recalls due to defects. Actually, we should equally responsible for the success and failure of meeting quality targets. There are only two quality problems that do not concern our production staff: i) When our marketing people causes the production staff to come up with a wrong product, or ii) Given the right product concept, but our production staff commits a design flaw. In both cases, the production department can come out with a high quality workmanship of the wrong products with the wrong design. In both cases, the customer will perceive a quality problem and not further patronise our plant.

Production has direct responsibility for operations managing, controlling, and reducing manufacturing cost, in our most business concerns. Though production decisions may not significantly affect the other principal costs like selling and administrative costs, they could have a large impact on financing costs of our plant. Buffa (1983) suggested that the production people may not have the final say in product pricing, but it should be suggested by our OM that manufacturing costs can influence some extent to which the marketing people can competitively and profitably price the product.

OM refers to the way our plant doing for core operations, involving in a broad sense:

* Obtaining raw materials and supplies that it needs,

* Converting raw materials into finished products and

* Distributing products to its customers

The more efficiently and effectively these are carried out, the lower will be the costs of production and better the quality of the products. Lower costs and better quality confer distinct competitive advantages for our plant business.

2.4 Production Scheduling Methods Analysis

Production scheduling is a well-established branch of our OM. We actually have produced a wealth of techniques that can be used to solve many practical problems, such as real-time problems in our operating systems, distributed systems and process control. Despite this success, alternative and complementary approaches to schedule synthesis based on reach ability analysis of timed automata, should indeed be proposed in our plant. The main motivation of this work is the observation that many scheduling problems can very naturally be modelled with timed automata.

Furthermore, the expressivity of timed automata renders the models robust against changes in parameter settings and small changes in the problem specification (Mark 2004, p. 30). This approach is necessary to be developed within the next twelve (12) months in our plant. Also, within next 12 months, the following Figure 3 provided a clear scheduling flow, which can be considered by us to further develop production scheduling.

The main strength of following approaches is that the expressiveness of timed automata allows, unlike many classical approaches, the effective and efficient of scheduling are very different kinds in our plant database. Furthermore, the approaches are robust against changes in our obtained parameter setting and against changes in the problem specification.

* Effective and efficient scheduling can be a competitive advantage

* Faster movement of goods through a facility means better use of assets and lower costs

* Additional capacity resulting from faster throughput improves customer service through faster delivery

* Good schedules result in more dependable deliveries

* Scheduling deals with the timing of operations

Supply chain planning enhances value chain collaboration and optimizes the entire supply planning process by matching the most-profitable options with the least-cost ways to satisfy requirements. Our plant has the following offerings in the area of advanced operations planning and scheduling:

* Maintenance and support (post-implementation services) for forecasting modules of various supply chain products.

* Technology services for inventory planning solutions

* Development of bolt-on applications for order management systems

* Development of plant planning solutions and support to the same.

We assume that the supplier may fail to meet regular shipping schedules and that there is uncertainty in shipment times caused by unforeseen delays. Thus, the time between deliveries is a stochastic variable. Furthermore, we assume that the succession of times, at which a proper delivery is made, constitutes a successful operation process. Behrmann et al. (2005) suggested that the use of an exponential random variable to model the cycle time for manufacturing plant may represent a reasonable approximation in the present situation, since the supplier's goal is to achieve short-cycle schedules in concert with actual demand. For an exponential random variable, the time between deliveries will usually be small; only occasionally will a long -interval elapse without a delivery arriving.

2.5 Customer satisfaction

The current Australia economy has entered a new and complex phase, as there are too many suppliers and high level competitions, eroding customer loyalty and satisfaction. Together, these forces have triggered a seismic shift in the balance of satisfaction between us and our customers (Iyer & Bergen 1997, p. 559). This is good news for our plant that sees the opportunity amid the change and aligns ourselves quickly and effectively around a new focal point: delivering a satisfied product around customer perspectives and intentions. In fact, that designing the right customer experience and delivering it the right way leads to better financial performance, stronger brand value and improved customer loyalty and satisfaction.

Make no mistake, however, achieving and sustaining customer centricity is a challenging proposition which grows more challenging every day. Across Australia, consumer expectations are rising quickly, and their perceptions are defined through an increasingly complex set of interactions (Iyer & Bergen 1997, p. 559). Moreover, new consumer populations are emerging with distinct needs and preferences of their own.

With so much changing, our plant are fortunate enough to maintain a deep understanding of what customers want and a clear view of what they really experience or the ability to keep experience aligned with their expectation. Our plant, for example, may claim success when we provide an expected product to customer on time at a competitive price.

To weather the economic and cultural transformations now underway and achieve high performance, our plant must refocus the entire experience provided around the desires and intentions of our target customers, from the first impressions created by our OM and sales to customer day-to-day experience, using a product from its initial purchase until it is upgraded or replaced. We must also achieve this level of customer-centricity with the speed, flexibility and certainty demanded by customer satisfaction. To make this change, we will need insight, leadership and commitment to excellence, a challenging task for us, to be sure, but one that must be made.

Experienced OM knows how to provide existing offerings satisfy existing clients. In addition, our OM performance tends to be managed using metrics based on the lowest costs of delivery and production. I believe that our plant can simultaneously reduce our cost of delivery and production and boost revenues by focusing on increasing product quality and OM intelligence.

We need to perform higher OM behaviours, and satisfying both new and existing customers. Further OM and customer satisfaction development will help our plant to take major strides toward new goals for our revenue and productivity. We should identify customer preferences at every stage of the relationship, and match our OM performance to customer satisfaction. We should also identify critical OM skills and develop stronger approaches to satisfy our customers.

Customers want to be recognized for who they are as soon as they contact you: their history, their preferences, their intentions. Our OM, therefore, should build a blueprint for handling customer interactions based on detailed knowledge of the customer. we will also execute this blueprint consistently regardless of how the customer contacts us, whether they call, come on line or on the web and walk into a branch office. This can be tough, for our OM and entire plant, however this information tends to be scattered throughout our entire plant or distributed between the customer, us and third parties.

As a result, we increase plant productivity and enhance other OM behavious to boost revenues, reduce the cost and satisfy our customers. We have to master the new customers and suppliers dynamics that compel them to focus on becoming customer-centric. We are still working to reduce costs but now we are doing it in the context of relationship development, protecting the customer relationships while streamlining and trimming operating expenses. I actually found that achieving widespread, consistent OM performance is the result of focusing on three key areas: knowing the customer, exceeding customer expectations and fulfilling promises to the customer with appropriate selection of suppliers.

2.6 Identify Operations Management Developments and Trends

Our plant must improve the products as well as productivity to retain our market share. The long-term success of our plant requires investments in cutting-edge technology because new technologies can improve efficiency and productivity. In this report, I am about to discuss how our plant can benefit from automation.

Our operations traditionally refer to the production of goods and services separately, although the distinction between these two main types of operations is increasingly difficult to make, as we tend to merge product and service offerings. More generally, our OM aims to increase the content of value-added activities in any given process. Fundamentally, these value-adding creative activities should be aligned with market opportunity for optimal OM performance. Specifically of interest is the implementation of our OM.

Some of the cutting-edge technological developments in the field of OM, which include computer-aided design (CAD), direct and indirect computer-aided manufacturing (CAM), flexible manufacturing system (FMS), and computer integrated manufacturing (CIM) were discussed in this section.

Computer Aided Design (CAD) is used for designing products and processes on a computer terminal (Buffa 1983, p. 24). Computer systems assist in the creation, modification, analysis and optimization of a design. In Computer Aided Manufacturing (CAM), computers are used either directly to control the processing equipment, or indirectly to support manufacturing operations.

Automated machines usually perform a variety of operations, depending on the instructions received from the computer with respect to the sequence and operational specifications of a process. FMS is a form of flexible automation in which several machine tools are linked to the materials-handling system (Jack 1998, p. 444).

Jack (1998) also concluded that a central computer controls all aspects of the system. CIM refers to a computer application that connects various computerized systems into a single multi-functional system.

Another development in the field of technology is artificial intelligence (AI). AI enables computers to exhibit some of the characteristics of human intelligence, like the capacity for learning, understanding language, reasoning and problem solving

In recent years, two approaches have had a major impact on inventory management: material requirements planning (MRP) and Just-In-Time (JIT). Their application is primarily within manufacturing but suppliers might find new requirements placed on them and sometimes buyers of manufactured items will experience a difference in delivery.

Therefore, apart from above OM development of our plant, we should also concern about the general OM trends through the following aspects, rather than just trends of automations:

* Global focus

* Material requirements planning

* Just-in-time performance

* Supply chain partnering

* Rapid product development

* Mass customization

* Recycled materials using

* Empowered employees

* Environmentally sensitive production

* Ethics

According to the general trends above, the following Table 1 illustrates the details of trends might occur for OM in our plant.

Table 1. The trends of operation management (Barry 2008)

Past

Causes

Future

Local or national focus

Reliable worldwide communication and transportation networks

Global focus, moving production offshore

Batch (large) shipments

Short product life cycles and cost of capital put pressure on reducing inventory

Just-in-time performance

Low-bid purchasing

Supply chain competition requires that suppliers be engaged in a focus on the end customer

Supply chain partners, collaboration, alliances, outsourcing

Lengthy product development

Shorter life cycles, Internet, rapid international communication, computer-aided design, and international collaboration

Rapid product development, alliances, collaborative designs

Standardized products

Affluence and worldwide markets; increasingly flexible production processes

Mass customization with added emphasis on quality

Job specialization

Changing socioculture milieu; increasingly a knowledge and information society

Empowered employees, teams, and lean production

Past

Causes

Future

Low-cost focus

Environmental issues, ISO 14000, increasing disposal costs

Environmentally sensitive production, green manufacturing, recycled materials, remanufacturing

Ethics not at forefront

Businesses operate more openly; public and global review of ethics; opposition to child labour, bribery, pollution

High ethical standards and social responsibility expected

Also, the trends of effective inventory management might enable our plant to meet or exceed customers' expectations of product availability while maximising net profits or minimising costs.

Successful inventory management involves balancing the costs of inventory with the benefits of inventory. The trends of inventory management also concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns and defective goods and demand forecasting. This fine line between keeping too much inventory and not enough is not the our OM only concern, which has been defined by Iyer & Bergen (1997).

3 CONCLUSION

In conclusion, I feel OM of our plant needs to be further developed via several management strategies, such as supply chain management, delivery management, quality management, OM process and etc, to handle the problems like, delivery levels; quality of products, raw materials, production scheduling and customer satisfaction, due to too many suppliers. In details, I analysed each problem component of above causing by huge amount suppliers. The bulk of our QCD task falls on the shoulders of the operations or production manager. We therefore should take a powerful supplier who has established quick-response relations with our plant for delivering. In fact, there should be two common quality-related functions within our plant. One is quality assurance which is the prevention of defects, such as by the deployment of a quality management system. The other is quality control which is the detection of defects, most commonly associated with testing, which takes place within a quality management system, typically referred to as verification and validation. Then I discussed that production scheduling is a well-established branch of our OM. We actually have produced a wealth of techniques that can be used to solve many practical problems, such as real-time problems in our operating systems, distributed systems and process control. With aspect of customer satisfaction, our plant are fortunate enough to maintain a deep understanding of what customers want and a clear view of what they really experience or the ability to keep experience aligned with their expectation. Our plant, for example, may claim success when we provide an expected product to customer on time at a competitive price.

This report also reveals several emerging trends in the OM of our plant, summarized as follows: 1) as increasing of cutting-edge technologies, our OM should utilise more automation. 2) as business operations function is extending across functional and organizational boundaries; supply chain management has become a mainstream aspect for OM process. 3) since suppliers increased a lot, the OM process focus is moving away from the traditional production/manufacturing management to the environmentally sensitive production. 4) Due to effective inventory management, OM department might enable our plant to meet or exceed customers' expectations of product availability while maximising net profits or minimising costs. The local or national focus becomes global focus and the other trends also have been discussed related in Table 1.

Finally, the Appendix 1 illustrated the details of our OM implementation plan, such as who does what and when. Also, Appendix 2 would give the general idea of value positioning and competitive advantage strategies for our OM implementation plan.

4. RECOMMENDATIONS

The decisions made by operations managers should be consistent with a corporate strategy shared by managers in all functional areas of our plant:

* Operations function is much broader than activities occur in a factory.

* Products must be developed,

* Materials must be purchased,

* Facilities must be maintained,

* Products must be distributed, and so on.

According to current situation of our OM process, although a variety of fields of OM should be recommended to be improved, I should still stress two major recommendations, which are mainly focus on suppliers management and customer management.

i). For suppliers management: I have looked at one aspect of supply-chain optimisation, which involves up-to-date information on inventory levels in hand. Comparing with suppliers taking direct responsibility for replenishing stocks, our OM can forwardly determine the best balance among inventory investment, the required frequency of delivery, and the expected losses from shortages and force suppliers to do it. If suppliers do so, we can achieve better OM performance and successfully handle the problems caused by whether too many suppliers to our plant or not.

ii). For customer management: In the increasingly complex environment, such as too many suppliers to our plant, one of sustainable sources for further customer satisfaction is the ability to deliver a consistently satisfying products to customer. To deliver this kind of consistently satisfying products to customer, we should develop a new database or system to make sure the ability to offer, our OM department or even entire plant, the highly relevant customer experiences, intentions and interests. We therefore can design the optimised OM process and manufacture the expected and qualified products to our existing and potential customers, no matter how many suppliers we have.

5. REFERNCES

1) Barbara, BF, Sadao, S, Roger, GS, Kimberly, AB & E. James, F 1990, ‘Empirical research methods in operations management', Journal of Operations Management, Winston-Salem, vol. 9, no. 2, pp. 250-284.

2) Barry, R 2008, Operations Management, 9th edn, Pearson Prentice Hall, Upper Saddle River.

3) Baumol, WJ & Vinod, HD 1970, ‘An Inventory Theoretic Model of Freight Transport Demand', Management Science, vol. 16, no. 7, pp. 413-421.

4) Behrmann, G, Brinksma, E, Hendriks, M & Mader, A 2005, ‘Production Scheduling by Reachability Analysis - A Case Study', Parallel and Distributed Processing Symposium, vol. 04, no. 08, pp.140.

5) Buffa, E S 1983, Modern Production/Operations Management, 7th edn, JOHN WILEY & SONS, INC., New York.

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9) Jack, M 1998, ‘Building operations management theory through case and field research', Journal of Operations Management, Winston-Salem, vol. 16, no. 4, pp. 441-454.

10) Lambert, DM & Cooper, MC 2000, ‘Issues in Supply Chain Management', Industrial Marketing Management, vol. 29, pp. 65-83.

11) Krause, DR, Scannell, TV & Calantone, RJ 2000, ‘A structural analysis of the effectiveness of buying firms' strategies to improve supplier performance', Decision Sciences, vol. 31, no. 1, pp. 33-55.

12) Mark, B 2004, ‘Understanding the meaning of collaboration in the supply chain', Supply Chain management: An International Journal, vol. 9, no. 1, pp. 30-42.

13) Nevin, J 1995, ‘Relationship marketing and distribution channels: exploring fundamental Issues', Journal of the Academy of Marketing Science, vol. 23, pp. 327-334.

14) Paul, C & David, C 2002, ‘Action research for operations management', International Journal of Operations & Production Management, New York, vol. 22, no. 2, pp.220-240.

15) Sridharan, V & Berry, WL 1990, ‘Master production scheduling make-to-stock products: a framework for analysis', International Journal of Production Research, vol. 28, no. 3, pp. 541-558.

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17) Wu, Z & Choi, TY 2005, ‘Supplier-Supplier Relationships in the Buyer-Supplier Triad: Building Theories from Eight Case Studies', Journal of Operations Management, vol. 24, no. 1, p. 27.

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