Operations Management in Daimond Manufacturing Essay Example for Free

Operations Management in Daimond Manufacturing Es placeDefinition Operation Management is the exertion of managing the visions which conjure and deliver genuines and work (Slack et al, 2010). These activities commences from the very initial take stage of in coordinateation gathering right up to the final stage of run offr consumption of the wargon. each fundamental law does operation solicitude even if they do non notice it. All organizations produce wide-cuts and/or proceedss and to create goods and/or services, the organization mustinessiness perform a number of operations which must be effectively and efficiently managed. 1. 2 Role of Operations ManagementOperations Management is of rosiness importance in each(prenominal) sectors, cells, functions, units and groups within the organization. An organization is a corpse and according to the business dictionary, (http//www. businessdictionary. com/definition/ arranging. html) a system is An organized, purpose ful structure that consists of co-ordinated and interdep cobblers lastent elements (comp angiotensin-converting enzyments, entities, factors, members, take ups etc. ). These elements continually influence sensation an opposite (directly or indirectly) to maintain their activity and the existence of the system, in order to chance upon the aim of the system. Read to a greater extent http//www. usinessdictionary. com/definition/system. htmlixzz2QSyXAP1f . All employees ar part of this system and pass water a common inte anticipate in qualification the studyr to receive goods and/or services in the best way thinkable. So I leave behind say every manager in every part of the organization is to roughwhatwhat extent an operational manager. According to pack (2011), the role of operations management is to manage the transformation of an organizations inputs into finish goods and services employ off pay offes. Processes argon actually present in all atomic number 18as of t he organization from Human Re solution to Finance to Marketing to procurement etc. 1. The Input version Output process Resources sewer buoy both be transforming resources or alter resources. After the transformation process is complete, transforming resources transcend rise to transformed resources. According to James (2011), on that point be 2 main types of transforming resources * Facility which comprises of land, building, externaliset and equipment. * Staff which comprises of everyone involved in the operation process. There be 3 main types of transformed resources * Material. Transformation goat be physical (manufacturing), by location (transportation), by storage (warehousing), or by ownership (retail). Information. Transformation can be by property (accountants information), by possession ( commercialize research), by storage (libraries) or by location (telecommunication). * Customer. Transformation can either be physical (plastic surgery), by storage (hotel acc ommodation), by location (airline transport), by physiological state (hospital), or by psychological state (entertainment). Input Output Input that forget be transformed * Material * Information * Customer Input that allow transform * People * Facility * Goods * Services Transformation Input OutputInput that go forth be transformed * Material * Information * Customer Input that depart transform * People * Facility * Goods * Services Transformation bod 1 The Input-Transformation-Output process 2 Operations Strategy 2. 1 Definition Strategy is defined by Johnson et al, (2008) as the direction and scope of an organization everyplace the long terminus ideally, which matches its resources to its changing environment and in particular its markets, clients or clients so as to meet stakeholder expectations. 3. 2 Levels of Strategy Strategy can be viewed from 3 levels which areThe Corporate level This level looks at the long term position of the comp whatever. It answers questions lik e where will the organization be in 10 years? Or are we going to launch a stark naked product in a tonic market? The Business level This level looks at the market and is concerned with the goods and services which the organization has to offer. It answers questions like how do we vie? The Functional level This level deals with the functional aspect of the organization like finance, marketing, human resource etc. It answers questions like how do we manage our financial resources. . 3 Operations Strategy Operations strategy is the total pattern of decisions which shape the long-term capabilities of every operation and their contri exception to overall strategy, through the reconciliation of market requirements with operations resources (Slack and Lewis, 2011). A 5 step structure has been designed by Hill (2005) so as to design and under remain firm a good operation strategy. The steps are as follows 1. Define Corporate Objectives Here, long term objectives are set-up so as to di scombobulate the keep company balance and a good direction.At this stage, Sparkle does environmental scanning and the company also looks at its karyon competences, core processes and its global objectives. procedure Indicators (KPIs) are also established here so as monitor the accomplishment of these objectives. Top management routines a number of models which includes PESTEL, hit the books and Porters 5 forces. See appendix A. 2. Set Marketing Strategies Here Sparkle identifies the market it wants to compete in and then it looks on how to compete in these markets. Ansoffs matrix is employmentd. New Product Existing Product NewMarket Diversification Market emergenceExisting Market Product Development Market Penetration/ Market Growth Figure 5 Ansoff Matrix. Source Kaplan Financial Ltd, 2008. Sparkle uses the market penetration/market growth pathway for now. With era, they will start manufacturing knocked out(p) of the UK thus implementing the market development strategy. I t is yet not get it onn if they are thinking of one daytime starting up the production of a new product. 3. How do we gain private-enterprise(a) return? At this stage of Hills structure, the organization is to find ways to hold its product win another(prenominal) products in the market.For this to happen, the organization must have a base to make its disputation and this base is unremarkably one or to a greater extent(prenominal) of the following performance objectives speed, reference, woo, dependability and flexibility. See chapter 3. Sparkle uses the above performance objectives to gain warring advantage plainly it must be noted that, competitive advantage must * Be real * Add value (to the consumer) and * Be difficult to imitate. 4. Choose a delivery system Here, the organization has to choose an remove delivery system so as to meet up with speed and maybe dependability. In Sparkle, some orders are icked up by the customer but if not, Sparkle uses their vans which have a high level of security for close distances or they patch the jewellery for faraway distances. 5. Choose your Infrastructure The company at this phase has to choose all necessary infrastructures that it has to obtain so as to gain an edge over its competitors in the market. Different organizations in different industries will need different types of infrastructures. But in the ball field conciliate industry, the infrastructures are al nearly the same and can hardly give competitive advantage. 3 Performance ObjectivesIn the present congested and very competitive business environment, companies must do something extra so as to stand out of the crowd. For them to do this, they must react to what customers value and these scratch into the following category. They are called performance objectives. 1. Cost 2. Quality 3. Dependability 4. dependableness 5. Speed Sparkle is aware of the tight competition in the diamond market and it takes its performance objectives very badly s o as to gain competitive advantage. Before achieving the above performance objectives, they must achieve the 4 Cs ( mark off appendix B). * Cost.The principle of cost is doing things cheaply. Sparkle changes its processes, its materials and its suppliers every now and then so as to operate on a turn shore cost scale. They bargain for rough diamonds directly from the companies who buy them from the mine and sometimes the make orders directly from the mine so as to reduce cost because the more(prenominal) intermediaries there are, the higher the final price. They sometimes buy more rough diamonds than what the actually need so as to gain discount for bulk buying. They alter most of their processes to reduce the number of hours worked by human beings thus reducing total wages. Quality. This involves producing durable high standard error-free goods that consumers perceived to the good. In the fashion business, quality is king because consumers are becoming more conscious of what t hey wear. One can say that everything in the diamond industry is of good quality so in this kind of high standard industry, quality is not the issue but superb quality. Sparkle buys the best of the rough stones which are hand-picked one after the other so that their final product will be of the best quality and they will have very little waste during production. * Dependability.This is doing everything on time so as to keep commitments and promises made to customers. Sparkle has a track record and reputation of never keeping its customers waiting. Customers diamonds are continuously richly processed in the offset the pick-up date. Customers love coming to this organization because they chouse they can rely on them when it comes to delivery. There was a scandal in March 2008 in Real rhombuss where a couple ar prototype for their wedding rings costing thousands of pounds to be manufactured but the company was unable to meet up with the due date so the couple had to use different rings for the wedding. Flexibility. This is being able to change what you produce or how you produce it. Sparkle is very flexible in regards to their products because they produce apparently anything requested by the customer. We pride ourselves on being different, you wont find our jewelry effective anywhere, we appreciate that you want something special to you (Source sparlediamonds. com/ slightly). They manufacture dressing rings, marriage rings, engagement rings, necklaces, earrings, bracelets, bangles and designers jewelry out of diamond.Over the years, they have come up with different diamond designs thought by others as unsurmountable and have now gained a name as being the company that uses diamond to manufacture anything and everything. On the other hand, their production process is flexible in any case but not very flexible. They change little bits of their production process all the time to fill out down cost and to increase the quality of the diamonds but this chang e is never a bragging(a) change (process gain). Figure 5 Different items made out of diamond. Source * Speed.This can be described as how responsive an organization is to the customers pick outs and complain. It is a measure of the time in the midst of a customers order or complain to the time when that customers order or complain is sorted out fully. Sparkle is very fast in dealing with complains. Any customer who comes to the company with a thrill is not allowed to leave when the matter concerned has not been resolved. Complains made online take a maximum of 2 working days to be dealt with and those by post takes a little more time. Figure 5 Different colors of diamond. Source 4 Product initiation . 1 Definition Product/service design is the process of defining the specification of products and/or services in order for them to fulfill a specific market need (Slack et al, 2009). According to Russell and Taylor (2009), new product designs can provide a competitive edge by brin ging new ideas to the market quickly, doing a better job of satisfying customers needs, or being easier to manufacture, use and repair. Product design is of great importance in any organization because consumers are becoming more and more conscious of the products they consume and their contents.Almost everydead body in the organization is involved in product design because bringing in a new product design is not just about the market requirement but it is also about anticipating future demand and this needs imagination and creativity. In coming out with a good product design, market requirements, technical issues, cost, quality, investment information and the target market must be considered and dealt with appropriately. Diamond design step by step assorted steps are followed when coming out with a good diamond design. 1. Generating Ideas Ideas to bring up a new diamond designs can come from anywhere and comes from everywhere.Some organizations look only within the organization a nd come up with a diamond design but this approach is very dangerous because it can easily back fire leading to a poor design. Ideas in Sparkle usually come from * The customers who will use the product. Most at times, the customer comes to the organization with a design in mind. The design team in the organization then sits with the customer and adds ideas to perfect the customers request. * The employees who serve the customers. These groups of persons know exactly what customers wants because they are the people who take customers specifications, demands and complaints.They play an important role in the creation of a new design. * Competitors and any new technology. Sparkle sometimes looks at the designs of its competitors like Avi Paz and tries to modify it so as to create something better than theirs. * Research and Development (R antiophthalmic factorD) Department. One of their major roles in the organization is to look for new feasible designs which will entice customers. I t is at this stage that the diamond color, size, weight, cut grade, clarity grade, carat weight, laser inscription and shape is decided. Figure 4 calculating machine simulated diamond designing in progress.Source www. sparklediamonds. com 2. Product Screening According to Slack et al (2009), not all concepts and ideas generated will be up to(p) of being developed into products and/or services. Each idea generated is taken and examined to see whether or not they are acceptable, feasible and vulnerable. Fig 5 illustrates. Figure 5 Some typical evaluation questions for marketing, operations and finance. Evaluation Criteria Marketing Operations Finance Feasibility Is the market likely to be big enough? Do we have capabilities to produce it? Do we have access to sufficient finance to develop and launch it? Acceptability How much market share could it gain? How much will we have to reorganize our activities to produce it? How much financial return will there be on our investment? Vulnerability What is the risk of it impuissance in the market place? What is the risk of us being able to produce it acceptable? How much money could we lose if things do not go as planned? Fig 5 Slack et al (2009) Some typical evaluation questions for marketing, operations and finance e-book p. 89 3. Preliminary target At this stage, the design is reviewed by the cutters and polishers to see if the can really produce the diamond and any unnecessary complexity in the diamonds design is eliminated because such complexities can build cost. For example there are some unnecessary and unnoticed cuts in a diamonds design but these cuts could irrupt the whole diamond if not done carefully. Because customers will not even notice the additional cuts and even if they do, they will not be willing to requital an addition for it so the cuts are eliminated.Figure 4 Different diamond designs (drawing). Source Figure 4 Different diamond designs. Source 4. Final Design After all the above has been done, a prototype is then created out of glass and tested to see if it meets market requirements, technical requirements and the financial limit. Tangible prototypes are created and virtual ( estimator simulations) model too to properly assess the diamond out front production goes any further. Sometimes, customers are called in to see the prototype and give their feedback from which some adjustments may be made on the products design.An after acceptance, diamond cutting commences. Figure 5 Prototype diamond made out of fine glass. Source 5 Process Design 5. 1 Definition Process design is Sequence of interdependent and linked procedures which, at every stage, consume one or more resources (employee time, energy, machines, money) to convert inputs (data, material, parts, etc. ) into outputs. These outputs then serve as inputs for the next stage until a known goal or end result is reached (www. businessdictionary. com). Read more http//www. businessdictionary. com/definition /process. tmlixzz2QTQAtoBi When deciding a product design, it is advisable to simultaneously come up with a matching process design. This will entail the flow of the process and Barnes (2008) said that the design of processes is different in all organizations and these designs will be based on the volume and variety of the demand for the product in the market. He further categorized the processes under project, jobbing, batch, line and continuous. Types of Processes There are different production processes namely project, jobbing, batch, line and continuous. See cecal appendage C.Sparkle is in a business of very expensive products which are very dainty in size so they do jobbing. Customers usually give orders which are produced by the company (make to order). They usually hold little or no fully-processed inventory. The Production Process Diamond ore is sorted by density using X-rays. Before that technology became available, grease belts were used to separate diamonds from the rest of the ore, due to the diamonds greater tendency than other minerals to stick to grease. Rough diamonds are then set to be cut as gemstones in the cutting laboratory.A diamond has different cuts and different professional specialize on different cuts. This is the most scare task of diamond production because a bad cut will cost the company a fortune. Figure 5 Diamond plan forward cutting. Source Cutting produces the facets associated with a diamond. The angles of the facets maximize uncontaminating, giving the diamond its greatest possible luster (dispersion of white light). The cutting process can take as much as 50% of a rough diamonds weight. Figure 5 Illustration of diamond facets. Source A number of factors come into play when deciding how a diamond should be cut.X-rays are employed to analyze the stones crystallographic structure, its hardness and ability to cleave. The diamonds flaws are considered, and the cutter decides which to remove and which can remain. Either a po wer hammer or a diamond saw can be used to split the diamond the hammer is quicker, but the saw is surer. Figure 5 Diamond cutting. Source A number of institutes in the diamond industry offer courses for diamond cutters, but the bulk and most crucial part of the training for this light-handed trade take place during the cutters apprenticeship.A diamond may get its final cut from numerous skilled hands the diamond marker or designer the diamond sawyer the diamond cutter or brute the cross-worker and the brillianteer. After the initial cutting, diamonds undergo the polishing stages, usually performed by a technician as the process is a standard one. Polished diamonds are reexamined for flaws, which can be addressed through enhancement techniques or disguised when set in jewelry. Figure 5 Diamond beautify. SourceFinally, the polished diamonds are sold to individuals, retailers, wholesalers and jewelry shops. Figure 5 Diamond quality check. Source 6 Planning, Control amp variation In any good type of project or manufacture to be successful, it must be planned at the very beginning and at the end, it has to be controlled to make sure that the planned processes and cost is not very different from the actual. Businesses must also continuously innovate so as to move line to line with the changing tastes of consumers and to beat numerous designs from competitors. 6. 1 PlanningEur says this about planning It lists the phases and encapsulates all the main parameters, standards and requirements of the project in term of time, cost and quality/performance by setting out the Why, What, When, Who, Where, and How, of the project. Planning therefore looks at the entire process, product and project but in an imaginary form which has not yet happened but it is wished that it should happen that way. 6. 1. 1 Advantages of Planning 1. It gives direction of what has to be done and how it has to be done. 2. It assigns responsibilities on every person thus answering Who does wh at? 3. A good plan will see line of works a project, product or process will encounter before the problem strikes. 4. A plan helps us to manage cost, quality and design side by side with the profit we will want to make on the product. 5. Plans are used to assess how well a product, process, project or person has done. 6. 1. 2 Disadvantages of Planning 1. It is usually made up by top management and given to the employees down the management ladder who just follow it. 2. Plans are usually followed to the latter. Even when some changes have to done, it is not because a plan is being followed. 3.Plans are usually just estimates and it has no use in turbulent economic environments as the plan and the actual are usually very different. 6. 2 Control Control involves measuring the actual results against the plan and then taking action to adjust actual performance so that it moves in line with the plan. So in other words, control is only possible when we have a plan. Control has a feedback phase and this involves adjusting the actual to move in line with the plan or reporting differences between actual and budget so that there may be no such discrepancies in the future. 6. 3 InnovationInnovation is defined by the oxford dictionary as changing something established by introducing new methods, ideas or products. Just like there is no control where there is no plan, there is no innovation where there is no control. They all rely on one another. After control has been done, feedback is sent back and remediatement or innovation is made. But in the complex business environment operating now, innovation just not just come from within the company but from outside the company like from competitors and especially from the consumers due to the rapid change in customers taste, design and fashion.In the diamond manufacture industry, there are many different innovative ways manufacturing diamonds and Sparkle has had the following innovations 1. The Supercut design Sparkle has int roduced the innovative supercut design into the industry a patented ideal emerald cut, with more than twice the facets of a traditional Emerald providing unparalleled brilliance and fire. The culmination of three years of research, the supercut gives extraordinary brilliance and reflection and this innovation gives Sparkle competitive advantage in terms of having good designs with extraordinary glittering. 2. Precision cuttingSince 2010, Sparkle has brought in a technology of cutting the diamonds using computer software and this cut is so exact that less than 0. 000002% waste is created from diamond cutting. Waste use to be about 0. 5% during diamond cutting and this innovation has caused drastic cost saving making Sparkle to be more competitive in terms of cost. 3. Sparkle offers a wide range of jewelry manufacturing processes, including design, modeling, prototyping, grooving, setting, finishing and meticulous quality control all featuring our own fine diamonds, and designed for clients to sell under their private labels. . 4 The Planning Control Innovation Cycle. From the above notes, it can be seen that planning, control and innovation work together. Sparkles cycle looks like this. Plan Procurement of unrefined stones. Process the stones into fine diamond. Sell and make a reasonable gain. Actual Procurement of unrefined stones. Process the stones into fine diamond. Sell and make a reasonable gain. Control Looks at the difference between what was planned and what actually happened. extraneous Information Customer specific design New tastes and fashion Design from competitorsMarket Research (RampD) Feedback and Innovation Plan Procurement of unrefined stones. Process the stones into fine diamond. Sell and make a reasonable gain. Actual Procurement of unrefined stones. Process the stones into fine diamond. Sell and make a reasonable gain. Control Looks at the difference between what was planned and what actually happened. External Information Customer spe cific design New tastes and fashion Design from competitors Market Research (RampD) Feedback and Innovation Figure 7. The planning-control-innovation cycle. 6. Changes happening in the diamond industry. * Researchers are on the verge of bringing in new materials which reflect light better than diamond and these materials are stronger and more durable than diamond. But, they will be far cheaper than diamonds and this is going to be a big problem to diamond manufacturers as the demand for diamond will surely drop. An example is synthetic stones. * In response to growing concern over illicit trade in betrothal or blood diamonds, the United Nations General Assembly established the Kimberley Process Certification Scheme in 2003.This scheme is going to make sure of the source of every single diamond so as to ensure that they are from a genuine source. This happening will increase the price of diamond because more than 55% of diamonds are from Africa and the mines there are operated by ve ry cheap labor and sometimes by slaves, women and children. The UN will come in and stop this utilisation thus increasing the cost of labor, working conditions and ultimately the price for diamonds. 7 Quality Management Quality is one of the performance objectives and it is taken very seriously by all organizations because if achieved, may give them competitive advantage.Some organizations rely on quality more than others and the fashion and health industry takes quality as primary considering the fact that people want to look good and in good health. Quality is a matter of perception so what can be called quality for A might not necessarily be called quality for B. According to Garvin (1984), the attributes in quality for a product are * Performance * Features * Reliability * Conformance * Durability * Serviceability * Aesthetics * Other perceptions Parasuraman et al. (1985), on the other hand listed 5 attributes in defining what is quality of a service? nd they are * Reliability Are we always going to get on time delivery? * Responsiveness Are the always going to respond quickly to our demands and complaints? * Assurance Are we assured of their competence? * Empathy Does the organization feel and understand customers needs and concerns? * Tangibles Is the physical surrounding conducive? 7. 1 Quality in the presidency But in relation to Sparkle, the best definition of quality is that as per Slack et al. (2009) quality is consistent conformance to customers expectation and I will say and even surpassing those expectations.Sparkle uses total quality management as their quality management technique. They look for means and ways to maintain and continuously improve quality at each stage of the production process. All employees meet once a month to discuss on how to improve the organizations present performance. Books by Deming, Crosby, Juran, Hill and other total quality management gurus are in the companys library and research department for employees to evince and be motivated to contribute into the organizations performance. All employees are made to know that quality and customers requirements being met comes before any other thing.The organization has a suggestion box where employees can write any inspiring idea that comes in mind and this box is emptied every day and read by the research staff and it is summarized and sent to the manager examine. 7. 2 The Cost of Quality Quality has a cost which is like a ambiguous sword meaning that good quality will have a cost and bad quality will also have a cost. 7. 2. 1 The Cost of Good Quality This is also known as the cost of quality self-confidence. Sparkle has a lot of this cost because they are continuously always trying to get better in quality all over the organization so as to better serve customers needs.The cost of quality assurance is further divided into prevention cost and appraisal cost. * Prevention cost is the cost of trying to make everything right on first attempt and some of this cost are * Sparkle does not give a command for precious stones and wait for the stones to come. They go to the suppliers premises and pick the stones one after the other and not in groups to ensure the best stones are taken. The supplier charges more for this. * The cost of designing the jewelry in a computer automated system and running several checks with other very expensive bespoke software before the design is confirmed. Sparkle trains its employees every 6 months and buys books to modify them on new technologies and to keep their skills up and awake. * All employees are taught a wide variety of skills so that if a certain employee is not available to do a specific thing, there will always be another to do it. * Appraisal cost is concerned with controlling quality and this is achieved by scrutiny the process before the product is manufactured and testing the product before it gets to the customer. Some of these costs are * The cost incurred in testing all equipm ent, machines and ensuring staffs are fit and able before any diamond is processed. The cost of checking the diamond after manufacture by employees and with the use of a computer help individualize software which is very expensive to make sure that the diamonds are flawless. * The time spent in testing the diamonds ensuring the pass all the set of test before and after manufacture. 7. 2. 2 The Cost of Bad Quality All organizations including Sparkle wants to evade this cost because it is very dangerous and it can even bring down the entire organization in a blink of an eye. The cost of bad quality is divied into internal misery cost and external failure cost. Internal failure cost is cost incurred before the product reaches the customer. Some of this cost are * The cost of tear apart. Diamonds are very expensive so any little scrap of badly shaped diamond is worth a whole lot. So Sparkle makes sure the best quality diamond is procured and diamond cutting should be not less than p erfect. * The cost of reshaping ill-shaped diamonds and gluing broken once. * The resources lost in repairing diamonds. Labor, machine time, and electricity are used which should have if the diamonds were made right the first time. External failure cost arises after the product has been received by the customer and some of this cost include * The cost listening to customer complaints and responding to them. * The cost of replenishment a defective diamond which a customer has rejected. This can cause the organization a fortune. * The customer might have to take the company to courtyard and the organization will pay a huge sum if the lost the lawsuit. Some compensation may run to millions of pounds and could bring the organization to its end. * One of the most dangerous costs is that which we dont see.An example is the lost sale and contribution. When a customer is dissatisfied, he will most at times not want to come back and he will discourage a potential customer who will discoura ge another customer to come to us. facial expression all this, quality should be treated like an egg in the midst of rocks. 8 fork out Chain Management 8. 1 Definition Supply Chain is the management of the interconnection of organizations that relate to each other through upstream and downstream linkages between the processes that produce value to the ultimate consumer in the form of products and services (Slack et al. 2010). A supply range of a function is a holistic network starting from the sourcing of material, through its transportation to the organizations premises, to manufacturing, to storage and warehousing and at long last to consumers. So it is a whole system and it works as one therefore is one part of the chain is broken, the whole system will fall apart and consumers will not be satisfied. 8. 2 Sparkles Supple Chain Stage 1 Sparkles supply chain starts from the diamond mines in Africa which produce more than 50% of total diamonds to mines in India, Russia, Canada a nd Australia.The mines usually dug very deep but the deepest diamond mine runs for about 160km passing through sand, rocks, and gravel to be blasted drilled, crushed and processed. It should be noted that only 20% of diamonds from mines can be polised and used for jewelry the rest is used for industrial use. The stones picked here are very rough still with no beauty (see compute 10). Stage 2 Companies and independent buyers go to these mines and buy the rough stones from the mine owners and take them to their premises for processing.These stones are then processed to make them a little bit more presentable so that diamond manufacturers can then buy them and further process them into diamonds. Diamonds at this stage looks like that in figure 11. Figure 8 Trapping stones to look for diamonds in an African mine. Source Figure 9 A typical unprocessed diamond. Source Figure 10 Unprocessed diamonds directly from the mine. Source Figure 11 Diamonds which have been slightly processed. Sour ce Stage 3 Sparkle buys the diamonds in fig. 11 and examines them with the use of a computer aided personalized software.After a series of checks, rejected diamonds will be sent back to the suppliers and the good ones will be cut into different shapes so as to give the greatest value. After cutting, the diamond goes through computer aided software to confirm its perfection and after this, it is polished and cleaned. Sparkle will also buy what the diamonds are going to be fitted on because people will scarcely buy a chunk of diamond. Diamonds are usually fitted on rings, pens, earrings, belts and many more (see figure 14). These things are usually bought from top manufacturers with good design and quality and they are usually very expensive.Figure12 Diamond cutting in Sparkle. Source Figure 13 Diamond polishing in Sparkle Source Stage 4 After polishing and the diamond have an unblemished shine, shape and color, it is then taken by the customers. Some of the customers ordered just a f ew and sometimes even just one special diamond while other big customers like jewelry shops order bigger quantities at ones. It is either Sparkle delivers the diamond to the place agreed by the customer or the customer comes to the organizations site on an agreed date and after a phone call to pick up the diamond. The supply chain ends after the diamond has reached the customer.Figure 14 Finished diamond ready for the customer. Source Figure 15 Diamonds bought by jewelry shops. Source The Mine The Cutting Company Polishing Customers Jewelry Shops Manufacturing The Mine The Cutting Company Polishing Customers Jewelry Shops Manufacturing The supply chain of Sparkle is a good and effective. Its success can sometimes be attributed to the information technology they use. They use the Enterprise Resource Planning (ERP) system which brings in data from all sources and this is used to know when suppliers have diamonds and the variouse categories, to know when jewelry shops are running short of iamonds, and many more (all discussed in chapter 9). Figure 16 Sparkles Supply Chain 9 Information Systems As seen in chapter 1, Operation Management is the activity of managing the resources which produce and deliver goods and services (Slack et al, 2010). For these activities to be properly managed, it needs the help of automated process and computer aided techniques. Information systems are found throughout an organization and if used well reduce costs and can be a source of gaining competitive advantage. 9. 1 Computer Aided Techniques Sparkle uses information systems in many ways in its business.Listed below are some specialized computer aided programs used. 1. They use Computer Aided Process Planning (CAPP) which gives an optimum layout of the cutting steps and their sequence (this is different for different diamonds). There are many diamond cutting machines and they all have different cutting styles and they are operated by specialist in the different cutting sectors. So t he CAPP examines a diamond and gives different possible steps on which machine to use first and which not to use so as to minimize waste and give the diamond the best possible cuts so as reflect light in an optimal way. 2.They use Computer Aided Designs ( hotdog) to design the shape of diamonds on a computer and finished diamonds can actually be seen even before processing starts. If an error is made in the design, it can be corrected but this could have been impractical without CAD. 3. The also use Computer Aided Engineering (CAE) which takes the drawings and designs from the CAD and test them for perfection. Different test are administered and the flawlessness of a diamond can be confirmed even before manufacture. 4. Automated Material Handling (AMH) system is also used. Diamonds are very expensive and so care must be taken at each step.The AMH system improves efficiency in diamond movement, storage and retrieval. 5. The Laser Security System (LSS) is used where diamonds are kept be it rough stones, semi-processed diamonds and fully processed diamonds. Invisible laser rays crisscross the diamonds and it needs a war cry to be deactivated. Only top managers have the password and the password of each of them is different making it easy to know who accessed the diamond safe. If someone tries to pass through the laser rays, it can kill or paralyse them and the security alarm is automatically triggered and an automated call goes to the nearest police station. . Security Camera Systems (SCS) make use of Closed-Circuit Television (CCTV) at all times to monitor the whole building especially where inventory is held. 7. The Inventory Control System (ICS) gives detail information about each diamond rough, semi-processed or fully processed held in inventory at any point in time. Management must no go into the safe to see what they have in stock because the ICS does it all. This system is also used online to make customers see the diamonds, its specification and all oth er relevant information. Figure 16 The CAD system used to design a blue diamond.Source Figure 17 The virtual version of the diamond in fig 16. Source 9. 2 Pros and Cons of Information Technology (IT) IT is a very necessary tool in any organization be it a big or a small one. IT has advantages and disadvantages. They are listed in Appendix D including Why IT cannot replace Human Beings. 9. 3 Information Systems Information system can be defined as a set of interrelated components that collect, process, store and distribute information to support decision making and control in an organization (Laundon amp Laundon, 2006). Most organizations use some form of computer-based technology to accumulate, organize and distribute information (Ted, 2011) and Sparkle is not an exception. They use a set of interrelated information systems. 9. 3. 1 dealings Processing System (TPS) This system is used to account for day by day transactions of Sparkle. It records all sales, purchases, expenses, inco me, tax, bills paid, equipment bought and all other transactions performed by organization. This system is also used to account for employees attendance, absences, pay, overtime, bonuses, remuneration, and all other things concerning the employees. . 3. 2 Supply Chain System (SCS) This system deals with customers and suppliers. It monitors the stock in the jewelry shops so as to know when to give the shops an offer. It monitors the stocks which are demanded more and those demanded less so as to know when to produce. It tracks frequent and valuable customers and grades them into groups so as know how to give discounts. This system also monitors the stock in the cutting companies. It looks at the new stocks and compares price side by side quality so as to know which supplier to order rough diamonds from. 9. 3. 3 Knowledge Management System (KMS)In Sparkle, all manufacturing processes are recorded and stored in the KMS. Any ideas gotten either by inspiration, customers requirement, em ployees suggestions or business intelligence are stored in the KMS for future use. Sparkle is said to be very innovative and has this edge over its rivals because of its mastery of the KMS. When a new employees is recruited, he has 2 weeks probation where he is taught how to operate in the organization and how processes function. Before the implementation and use of the KMS, probation was 3 months so this system has greatly reduces l sack uping time. 9. 3. Management Information System (MIS) This system takes all the information from the above systems and summarizes them into financial statements and reports. It is used by management to make decisions on how to run and control the business. 9. 3. 5 Decision Support System (DSS) This system looks like an advance of the MIS. It takes data from all sources (internal and external) and summarizes them for top management to make decisions on the long term plans of the organization. Information from this system appears as statements, repor ts, charts, graphs, ratios, statistics and trend analysis. . 3. 6 Enterprise Resource Planning (ERP) This can be called the overall system. It takes information from all sources of the organization and brings them together in one large database. From there, compulsory information is taken out and implemented or used to make decisions in Sparkle. It should be noted that all other systems deposit their information in ERP. Figure 18 Example of ERP. Source LSBF MBA Intake 14, SOM Lecture 3, Session 9, Slide 34. 9. 6 Intranet and Extranet Sparkle uses intranets to deal with its employees and management.Staffs all have a particular passcode which the use and your code depends on your position within the company. Some passcodes can access some areas which other codes cant. They also use extranets to communicate and share information with customers, suppliers, some competitors and the government. This system is more secured and less vulnerable to attacks as compared to the internet. 10 ai r Design It is said that the blood stream of any organization is money and I will say the skeleton holding an organization and making it stand up straight is its workforce.An organization manages resources so as to be able to deliver acceptable goods and services to its customers and one of these resources is its workforce. An organizations workforce is its most valuable and the most complicated of all its resources because unlike other resources, humans have a mind of their own. To be able to deal with human beings, you must know what they like and this is different for different people but these needs though different are similar. In providing this, it motivates the employees and when motivated, they produce better output lastly yielding higher profits, quality and flexibility. 0. 1 Motivation Motivation is the urge to take action to achieve something or to avoid something (BPP, 2010). Motivation can either be intrinsic (wanting to satisfy an internal urge like being happy to be a ble to help others) or extrinsic (reliant on tactual rewards like money, fame and power). Continues in Appendix E. 10. 2 Empowerment This is the act of delegating work to employees making them feel more superior because of the added responsibility and new accountability. This is good motivation for many employees. origin design is about how people bestow out their tasks within a process.It defines the way they go about their working lives. It positions the expectations of what is required of them, and it influences their perceptions of how they contribute to the organization. It also defines their activities in relation to their work colleagues and it channels the flows of communication between different parts of the operation. But, of most importance, it helps to develop the culture of the organization its divided up values, beliefs and assumptions (Slack, 2009). In designing any job, the following have to be put into consideration. * Safety. mulls should be design in a way tha t it will bring no harm to the employee be it physical, psychological, mental or emotional harm. Workers in the mines especially those in Africa are exposed to a lot of risk and still earn less than the minimum wage. The mine owners wanting to make more profits cut down on cost by reducing expenditure on employees safety. The employees of Sparkle all have safety equipment like hats and new ideas are being implemented to make the process safer. The organization has also fully see to it its entire staff. * Legal and Ethical Issues.Jobs should be design in such a manner that those doing the job will not go against the law or their code of ethics. * Own time. Job design should create time for the employees to catch up on something other than work. For example visiting new places, being with their families or performing other social activities. Employees working in the mines have little of this, but Sparkles employees all have right to a paid holiday and taking permission to be out of w ork if the need arises. * Employees Ability. An employees ability to do the job or a range of task should be considered before designing the job.For example only heavy built men carry cargo from the trucks into the warehouse because of their physical ability to carry heavy weight unlike their colleagues. * Wage and Benefits In designing any job, the wage and benefits to be paid for the job should be considered if not the employee can be over-paid or under-paid for the job. 10. 3 Division of Labor Unlike traditional production approaches that stipulated that one person should know everything in the company so that he can serve any function, Henry Ford came in with the idea that one man should only know one thing and should be an expert in that thing.He suggested that with specializing in a particular function, the whole organization will be specialized and will give the best quality goods and services. So jobs should be broken down into smaller portions and given to different individ uals who will specialize and bring forth quality cost-effective products. 10. 3. 1 Advantages of Division of Labor (Slack, 2009) * It is easier to learn. dead and simple tasks are easier to learn compared with long and complex tasks. This will be very advantageous when training new recruits because training will take a shorter time and it will be better mastered. Automating. Short and simple task are easily automated as compared to long and complex task. * Time. More time is spent on one long task compare to time if that task was broken down. This extra time is as a result of weft different tools up and putting them down, looking for equipment, thinking of what to do next etc. 10. 3. 2 Disadvantages of Division of Labor (Slack, 2009) * Monotony. The same small task will be repeated every hour, week, month and year. This will make the job boring and less fulfilling thus resulting to listlesseeism, staff turnover and errors. Over-reliance. If one employee is absent, no other will b e able to perform his duty and this may bring the whole production process to a halt. * No flexibility. Employees let to do one particular thing over the years turn to lose the skill of being able to learn another thing. So if the production process was to change, many employees will not be able to cope with learning how to perform a new task. * Physical Injury. The repetitive use of one part of your body lets say arm or wrist will in the long run cause pain to that part. This is known as insistent Strain Injury (RSI).Sparkle teaches their employees a wide range of task during their probation but the employees are assigned to do just one thing when they fully start work. Teaching them a wide range of task is to expose them to the processes of the whole organization so that they can contribute ideas in the development of a department or process which does not involve them. Another reason for giving employees holistic training is to make an employee being able to do an absent employe es work. This tactic was also implemented because the organization did not want an employee to feel indispensable. 0. 4 Job Design Approaches In coming out with a good job designing, the following approaches should be implemented- 1. Job Simplification The organization tries to the range of task and their complexities. Polishing diamond use to be a very complex task at Sparkle but with the introduction of DiamondShines TM a specialized software where diamond polishing is programmed with exact details. 2. Job Rotation This is periodically interchanging employees performing different task to do the task of the other.Sparkle does a lot of job rotation and this makes the employees job more exciting. Job rotation is successful in this organization because they train their employees to perform a number of task but if division of labor was strictly implemented, this approach could have been impossible because employee A will not have a clue of employees Bs task. 3. Job Enlargement This inv olves integrating same level tasks to the ones already performed by the employees to make the job more exciting. This is not practiced in Sparkle. 4.Job Enrichment This involves integrating different level tasks to the ones performed by the employees. The new tasks are usually higher level tasks giving employees more responsibility and decision making power. Sparkle once a week picks an employee randomly and gives him the power of a supervisory manager so as to see the changes and innovations he is going to bring to the organization. Sparkle also makes employees work in small teams and the organization creates a competitive strain amongst the teams. The competition amongst the teams brings a lot of hard work, efficiency and effectiveness.