Vice President of Operations

Vice President of Operations

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Vice President of Operations

Question 1

One weakness in the company’s product life cycle is the steadily increasing cost of operations. Miami-Dade Transit (MDT) uses three main systems of transportation rail (metrorail), bus (metrobus) and the metromover. The company fuels the metrorail and metromover with electricity. A range of different fossil fuels powers the buses including normal diesel, advanced technology diesel and compressed natural gas. Each of the fuel sources is susceptible to inflation. Additionally, the cost of diesel and natural gas could go up depending on the situation in the international market. It is inevitable that the company will soon start to incur higher fuel costs, and this will force it to transfer these costs to the customers. This could result in a reduction in the number of people using services provided by MDT.

Another weakness of Miami-Dade Transit’s product life cycle is that the expansion of Miami city and the surrounding environs could wear the services down. As the city continues to grow, the number of suburbs and estates in its outskirts are likely to increase. This will mean that the services of the transport company could soon become inadequate. The company will be forced to carry out an expansion of its network, a process that will be very expensive. The federal government could provide the company with funds for this process, but it is possible that some of these costs will fall on MDT.

A new product that would benefit MDT is a bus network that uses electric buses instead of MDT’s diesel engine ones. This product would help the firm cut down on its operational costs drastically be eliminating the reliance on fossil fuel for energy. Additionally, using the electric buses would reduce MDT’s carbon footprint. The new buses would be divided into first and economy class buses to provide product selection, where the customers can choose to pay more for a better ride or pay less but for average services.

One new strategy that MDT could use is to focus on delivering quality and not quantity. The firm could reduce the number of vehicles it operates at a time and instead focus on making sure that the few vehicles running run on time. Providing quality would endear MDT to its clients and perhaps enable the firm to raise its prices justifiably. Another strategy that MDT can use is to add vehicles that go for capacity over comfort within its fleet. These vehicles would be very helpful when there are many customers, as they would help the company ferry more people and make more money. Lastly, MDT can provide entertainment in some vehicles to attract customers. The firm could set up Wi-Fi hotspots and LCD screens inside some vehicles that operate outside rush hour to draw in clients who would be willing to pay more for the services.

Question 2

Supply chain management refers to the entire process of delivering a service or a product, starting from the moment when the company creates the goods and ending when it has delivered the product to the end consumer (Shah, 2009). For Miami-Dade Transit, the supply chain entails the provision of transport services to Miami-Dade County. This process involves three key components the networks, the vehicles and the people involved in the transportation system. Vehicles are a crucial important aspect of the transport industry. Miami-Dade Transit cannot manufacture any of the buses or rail cars that it uses to ferry people around the county. The company purchases these vehicles from the manufacturers in a very important stage of its supply chain. In this step, MDT has to strike a balance between cost and quality so that they remain within their budget and still procure vehicles that will help deliver acceptable services to the people of Miami-Dade.

Since MDT deals with the provision of transport services, human labor is an important component of the company’s processes. The company needs to hire people for a wide range of tasks. Some employees maintain the vehicles and rail cars that the company uses. Another process for which the company hires people is the operation of the vehicles. Each of the company’s vehicles needs to have at least one person running it. These workers need professional training and have some amount of professional experience pertaining to the vehicles. Other professionals involved in the operation of the vehicles help by giving the drivers support, operating communication switchboards and monitoring the rail networks. The work done by MDT’s employees is a vital part of the services that the firm provides.

Budget constraints are one of the issues that could affect MDT’s supply chain. MDT is a public transit authority meaning that its operations are oriented towards the provision of reliable services and not profits or revenue. The company carries out many of its projects with help from the federal government. This means that the company has limitations on the number and type of vehicles that it can purchase. Any time that the company feels that it needs to procure new equipment, it may have to go through a lengthy process of securing funds and this is likely to hamper the supply chain.

The customer base that MDT deals with also affects the company’s supply chain. MDT services Miami-Dade County and has to deal with more than 300,000 customers daily. This number fluctuates depending on the day and season. Many people use MDT’s services on weekdays during rush hour and on public holidays. This large number of customers means that planning is a logistical nightmare for the company. It is very difficult for the company to estimate how many new buses or rail cars they need to buy and the number of vehicles that need to be active at any given time. This complicates the company’s procurement process and makes it harder for MDT to deliver its services.

Another issue that could affect MDT’s supply chain is the fluctuation of international markets. The company’s vehicles still use various fuels that are vulnerable to changes in the international market. Anytime the international price change, MDT has to bear the added costs. In the event that the change in price lasts for a long time, the firm may have to transfer costs to the clients, a course of action that could reduce the organization’s customer base.

There are a number of solutions to MDT’s supply chain problems. To deal with the issue of budgeting, MDT could find a way to make more money. This could be achieved by providing executive services, for which customers pay more, or by cutting down on current operational costs. As a way of handling the customer base, the firm needs to carry out active research into the patterns of travel that are used. This could help the firm know about any increases or decreases in the customer base in advance. Lastly, the company could use alternative means of fuel in its buses. Switching to battery run buses would make the company less susceptible to unstable fuel prices.

Question 3

            The purpose of total quality management (TQM) is to guarantee customer satisfaction. This means that the firm has to do whatever it can, to ensure that the customer’s requirements are met (Kreitner, 2009). The best TQM for Miami-Dade Transit to use is Deming’s plan-do-check-act (PDCA). Deming’s quality management tool is good for observing a system and rectifying any problems found (Kreitner, 2009). In this cycle, the first step is to plan. This accounts for any changes that may need to be carried out and determines whether a test run is necessary. In the next step, do, a small run is conducted to try out the changes. After this, the company checks to see the effect of the changes. In the last step, act, action is taken by working on what the implementers learned (Kreitner, 2009). The PDCA technique would work well with MDT because the company deals with aspects that change often. This means that the TQM tool they use needs to actually try out the variables and produce results that the firm can analyze and study.

Question 4

According to Lai and Cheng (2009), just-in-time philosophy (JIT) is about presenting the raw materials at the very moment when they are needed and manufacturing products at the exact time when there is demand for them. The main idea is to reduce the amount of waste in the manufacturing process. This works by reducing the raw materials used, minimizing the work done in manufacturing and eliminating any flaws in the process (Lai & Cheng, 2009). Within the context of MDT, the just-in-time philosophy relates to making sure that the company does not waste money in the process of ferrying customers to their location. For the firm, JIT would be about making fewer unnecessary stops, using the minimum number of vehicles needed to ferry clients and eliminating any delays that the system experiences.

JIT could help the transit company reduce its operational costs. By operating only the minimum number of vehicles needed, the firm could reduce its fuel costs and wage bill. The organization can then redirect this money into other areas such as the expansion of the network or the acquisition of new vehicles.

MDT can also use the just-in-time philosophy to make sure that customers receive quality services. Most customers using the transit service are in a rush to make it to work on time. Any delays that the vehicles experience increase the likelihood of the customer being dissatisfied. Implementing JIT by reducing delays would mean that the firm builds its reputation within its customer base. This could attract new clients and make the ones already using MDT services become loyal.

Lastly, applying JIT by avoiding unnecessary stops would help MDT focus on the customer base that provides them with the most revenue. It would work to the firm’s advantage if its vehicles did not stop in locations where they picked up very few fares. This would give the buses and trains more time to handle the customers who bring in a lot of income and it would enable them to arrive at their destinations on time and please their loyal customers.

JIT could affect the transit company’s quality assurance by enabling the company to satisfy its loyal customer base. Making the buses and trains run on time will improve the organization’s reputation because customers will find the services to be much more reliable this could make some of them loyal to MDT, as they would start to use its services more often. JIT could also affect MDT’s quality assurance by disenfranchising some customers. For the trains and buses to run on time, the firm would need to avoid stops with fewer fares. This would mean that the customers using those stops would no longer be able to use MDT’s services. This is likely to make them lose their loyalty for MDT. If MDT applied the philosophy, it might consider reducing the number of buses it operates at a time. This could lower the quality of services because customers would be crowded in a few buses and rail cars.

Question 5

            Qualitative forecasting methods use expert opinions to come up with predictions while quantitative techniques use data that a group has collected in the past to try to establish future patterns and trends (Montgomery, Jennings & Kulahci, 2011). When used to together, the two techniques offer a holistic approach in forecasting markets and future trends. The Delphi method can be a good qualitative method for use by MDT. In this method, an expert panel makes a prediction based on a questionnaire provided. Each panel member makes this prediction in private. After this, the data moderators analyze the data and return it to the experts who study it as a group and deliberate on it. The process is repeated until the experts come to a consensus or to different opinions that they justify satisfactorily (Montgomery, Jennings & Kulahci, 2011). In the quantitative method, MDT would simply need to study previous data that they collected on customers and revenue to determine possibilities for the future.

The advantage of using the qualitative method is that it provides an insight into the future that numbers and statistics cannot give. The experts involved are usually familiar with the field and their input is normally very valuable. One weakness of this technique is that sometimes the experts can be wrong and this can make their predictions become very costly. This means that the company needs to be careful in the way that it handles the information or predictions given by the experts.

One strength of the quantitative method is that it uses numbers and statistics, which makes it quite reliable. When analyzed correctly, the numbers can provide accurate information detailing how many customers that the company should expect in future and the revenue that the firm will collect. However, one weakness of this method is that there are limitations to the kind of forecasting that can be done with numbers. For instance, a company cannot use statistics to tell the strength of its competitors in the market.

References

Kreitner, R. (2009). Management. Boston: Houghton Mifflin Co.

Lai, K., & Cheng, T. C. E. (2009). Just-in-time logistics. Farnham, England: Gower.

Montgomery, D. C., Jennings, C. L., & Kulahci, M. (2011). Introduction to Time Series Analysis and Forecasting. Hoboken: John Wiley & Sons.

Shah, J. (2009). Supply chain management: Text and cases. Upper Saddle River, N.J: Pearson Education.