Cellfonie – Shaping the future of Smartphone

Executive Summary

For the successful implementation of a lean management system, an organization needs to have clearly defined operations performance objectives. The lean management system works to smoothen and hasten the road to achievement of the objectives by removal of waste, reducing expenses that are otherwise unnecessary, and increasing response time. This report presents an analysis of the operations management issues which affect Cellfonie Company and suggest how lean management approach can be used to solve them. This will be done using sections exclusively set for discussing operations performance objectives, the operations management issues affecting Cellfonie, and the application of lean management principles.

Introduction

There are many products and services in the world which are facing problems that commonly relate to low quality, low reliability, late delivery of orders, long lead times, and wastage, among many others. The advancement of business and social practices, together with technology have changed the way of looking at things, through the introduction of the lean management concept. Lean management is an ideology of handling operations that was first developed in the Toyota Production System (TPS) that was created by Taiichi Ohno, who was the head of the manufacturing plant at Toyota. Lean management is focused on the improvement of quality and speed of products and services by reducing processes that result in wastage (Melovic, et al., 2016). It is representative of a school of thought where sets of principles which are adopted ensure process efficiency and effectiveness in production (or services) and their supply by eliminating every activity which do not increase value or create losses, along with striving to instil continuous improvement (Melovic, et al., 2016).

This case study report seeks to analyse the operations management issues that are raised “Cellfonie – Shaping the future of Smartphones” by considering the application of lean management approach and critically assessing the issues presented in the case. This will be done through a discussion of the following themes; operations performance objectives, operations management issues affecting Cellfonie, and the application of lean management principle.

Operations Performance Objectives

By 2008, the economic crisis that was taking place worldwide had grown stronger and many different organizations in different industries began looking for opportunities to enhance the situation of the economy. These efforts resulted in the adoption of contemporary operations management (OM) activities. To be specific, there was a need to monitor performance so as to judge their effectiveness and efficiency (Dekier, 2012). Operations performance considers the aspect of effectiveness and efficiency rates of the processes involved in making of the final product. According to Greasley (2008), there are five fundamental objectives for operations performance. These objectives include; dependability, speed, quality, cost, and flexibility. The Objectives underpin the strategies of operation management (Greasley, 2008). Also, they add customer value and enhance the competitiveness of the firm particularly by the final achievement of satisfying customer requirements.

To fulfil the objective of dependability, Cellfonie ought to ensure timely delivery of individual components and shorten its lead time for order deliveries from suppliers (Pozo, et al., 2018). To achieve quality, Cellfonie ought to have a quality inspection department which will ensure that the parts delivered match the specifications given in the orders. To achieve speed, Cellfonie needs a supply and logistics network that is fast that will reduce the overall time from smartphone production to customer delivery. To achieve flexibility, Cellfonie will need to adopt changes in key departments, such as the transport and production departments to avoid the defect caused by damage from the processes involved. To achieve the cost objective, which specifically involves savings on production expenses, the organization will have to ensure it sufficiently fulfils other objectives.

Operations Management Issues Affecting Cellfonie

Apart from attaining the goal of customer satisfaction, Cellfonie company aims at providing solutions to future healthcare needs. However, there are several operations management issues which affect the organization’s ability to achieve its aims and operational objectives. These issues relate to planning and control, warehouse layout, supplier relations, and wastage among others. These operations management issues are discussed as follows.

Planning and Control Issues

This aspect of operations management involves the use of systems, decisions and processes which unite the aspects of supply and demand in the market. Cellfonie needs to consider planning and control issues as they will offer a reconciliation between market requirements and inventory available (Bennet, 2006). For example, Cellfonie has misaligned goals with its suppliers. One of Cellfonie’s operations performance goals ought to be quality assurance in its design and products. Although, this performance goal is not being achieved because it receives cracked screens from its supplier in London.

Warehouse Layout Issues

A good warehouse layout requires an appropriate design which focuses on reducing expenses. The optimal warehouse layout should take into consideration the need to reduce travel distances between assembly parts held in Cellfonie company’s storage. Eventually, a proper layout results in storage area efficiency. In the general business environment, warehouse design is the structural approach to illustrate how decisions are made in the tactical, strategic and operational levels (Dukic & Tihomir, 2014). The issue in Cellfonie company that relates to warehouse layout is the distance between the work center and the location of inventory. In-between these two crucial functions that are directly related to each other, are the sales offices which is indirectly related to output. The distance between the work centers and inventory results in increases distance of movement which increases time for processing jobs, and that is why the large automated machines are sitting idle.

Supplier Relations Issues

Supplier relations refer to the way Cellfonie identifies, negotiates and engages with its suppliers. Many organizations target to streamline every procedure and channels of communication with suppliers to ensure that their interactions are flawless and effective (Iacob, 2012). Cellfonie, however, has issues in its relationship with suppliers. First, Cellfonie is engaged in an exclusive agreement with Lightronics to deliver components of its patented light technology. Lightronics delays its supplies to Cellfonie due to illness. The London-based supplier of Cellfonie’s smartphone screen sends cracked screens which result in time wastage due to the need to return the screens for replacements.

ERP System Issues

Enterprise Resource Planning systems consist business intelligence software which coherently integrates the management of business practices electronically through frequent control of billing and logistics activities in an organization (Parry & Graves, 2008). As businesses continue to grow and evolve, ERP system play a key catalytic role in the progress as it allows ease of adopting new customers and suppliers. Cellfonie has challenges with its ERP business process management software such that it contains inaccurate information. The management staff, who have high loads of work, are the only ones who can access the ERP system; thus, they are less concerned about updating the system. The system’s inaccuracy causes the production staff to lose trust in the system and its inability to prioritise orders causes the deployment of department supervisors to determine the order for processing jobs.

Application of Lean Management Principles

As a tid-bit, lean management is a process that results in reduction of wastage by eradicating processes and techniques which do not add any necessary value to the product and consumer. It also involves activities that uphold continuous improvement in the production system (Melovic, et al., 2016). There are five key lean management principles to achieve the goals of lean management in Cellfonie. These principles include value, product value stream, flow, pulling demand and striving for excellence (Dekier, 2012). These principles can be used to address the operational problems of Cellfonie as follows.

Value

This requires that Cellfonie makes an accurate determination of the value of its products from the perspective of the customer (Dekier, 2012). Cellfonie needs to focus on meeting the demands for its customers in a manner that is timely and appropriate. For instance, the customer perceives value in possession and using of Cellfonie’s elegantly designed smartphone. Another form of customer value is retrieved from the novel applications and novel patented fun light technology. Therefore, with the lean management principle of value, Cellfonie needs to avoid delaying in its delivery of orders to customers and ensuring that the ZebraX all smartphones arrive while working. This will minimize the likelihood of reducing customer value Cellfonie’s smartphone.

Product Value Stream

This second principle requires that Cellfonie engages in the careful identification of the processes which its smartphones undergo from the most initial stage of production to the final step of delivering them to the customers (Dekier, 2012). A value stream map would be essential in this process as Cellfonie would use it to identify and account for every form of value added to the product at different stages. Therefore, to fulfil this principle, Cellfonie needs to analyse the series of work and information beginning from Lightronics’ supplier to the end-users of the smartphone. By looking into Lightronics’ s suppliers, Cellfonie will be better placed to find the true reason behind the delays in the supply of its patented light technology.

Flow

To fulfil this principle, Cellfonie needs to have an oversight on the flow of work and material through every process. The flow needs to be synchronized and uninterrupted, running from the unfinished parts through every value-adding activity all the way to the end user (Melovic, et al., 2016). Cellfonie’s management staff need to delegate some of their tasks, among many other actions they could take, in order to reduce the workload they receive, which eventually hinders them from updating the ERP business process management system. The ERP will contribute to an orderly and uninterrupted flow of material and work hence there will not be a need for department supervisors. This, in the long-run, eliminates wastage and reduce lead time for customer deliveries.

Pulling demand

To fulfil the principle of pulling demand, Cellfonie needs to start production activities according to demand from customers. By putting this principle into practice, Cellfonie is bound to benefit from increased space in the warehouse because less than 50% of floor space will contain held inventory. One way that Cellfonie can ensure good practice in inventory management is by deploying the Just-in-time system – a lean thinking system which enhances company survival by reducing overstocking and understocking (Domingo, 2018). The Just-in-Time system will require major changes in the warehouse layout of the company to suit the first-in-first-out or last-in-first out strategies of flow of material, thus ensuring that Cellfonie meets its promise of delivering orders within three working days.

Striving for Excellence

To fulfil the principle of striving for excellence, Cellfonie needs to instil perfection in its processes. This involves the progressive effort of eliminating all activities that have a net loss effect. Cellfonie needs to advocate for continuous improvement of its value stream being creative and seeking to excel in every activity. For example, the company can avoid seek perfection by acquiring more staff with diverse skills relating to microchip technology to reduce the likelihood of smartphones being delivered while not working. This will not only boost the firm’s excellence, but also rebuild its reputation in the smartphone manufacture industry.

Conclusion and Recommendations

To conclude, for Cellfonie to shape the future of the smartphone industry, as acclaimed by the company slogan, it needs to consider upholding operations management and performance. The way which Cellfonie can use to proceed with this future goal is by implementing lean management principles in its processes. Cellfonie has made significant achievement in enhancing the aesthetical appeal of its smartphone to customers, hence, it needs to appeal to customer value through elimination of processes that result in wastage and operational losses. For example, resolving issues related to planning and control will reconcile the firm’s market demands and inventory level. Also, adopting the proper warehouse layout will increase efficiency by reducing the distance between work centre and inventory. Lean management principles, adopted from the TPS, will steer Cellfonie ahead of its competition in the smartphone industry. Cellfonie needs to make changes to its physical and ideological structure to root out any kind of processes that decrease customer-perceived value and production value, as well as minimize wastage as a way to correct problems concerning delivery of defective smartphones to end-users.

References

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• Greasley, A., 2008. Chapter 2.3: Operations Performance Objectives. In: Operations Management. London: SAGE Publications Ltd, pp. 18-22.
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