Research Korner: Planning Operations Essays

Structural Transformation through e-Business: Federal Express (FedEx) Corporation Case Study

EXECUTIVE SUMMARY The corporate culture of FedEx was based on superior customer service and displayed an attitude of "doing whatever it takes to serve customers" from the top to the bottom. The expansion of the Internet, therefore, was something FedEx could use to enhance its customer base and create a competitive service advantage. "It allowed FedEx to not only let its customers pull real time information and data into their internal systems, but also to become more involved in the internal processes of its customers." which involves the contributing factor in transforming FedEx into an e-business. Although there was no planned strategy to build an e-business, the decisions that the company made to align the organization structure with systems and processes has carved out a model for building a successful business for the 21st century", which lends support to transportation logistics efficiency as well as selling and supply chain logistics solutions management.  FedEx is famous for and known for its absolute dependability and its attention to detail. FedEx accomplishes this by not being a mass of bodies moving in one direction but rather by being the several parts that compose it and working together. FedEx's guaranteed on-time service and complete satisfaction is unconditional. The image the company has so meticulously cultivated helps maintain and extend its market share. FedEx Logistics provides customized, integrated logistics and warehousing solutions worldwide. FedEx Logistics is the parent company of FedEx Logistics and Caribbean Transportation in February 2000 to provide customs brokerage and trade facilitation solutions. FedEx Corporate Services formed in January 2000 to bring together the sales, customer services, public relations and IT resources. "On January 19, 2000, FedEx announced a new branding strategy that involved changing the company's name to "FedEx Corporation", and extending the "FedEx" brand to four of its five subsidiary companies. Providing customers with an integrated set of business solutions was the pivotal reason for the renaming of the company as FedEx Corporation. Customers wanted to deal with one company to meet their transportation and logistics needs. The announcement created to pool together the marketing, sales, customer services, information technology and electronic commerce resources of the group and provide range of business solutions.  Technological development has always been a major way for FedEx to add value since it can cut costs along with creating new ways of finding competitive advantages. Lastly, FedEx's improving and changing of the organizational structure over the last few years has added value. By developing different subsidiaries all operating under the FedEx brand name has organized the company along with improving the communication inside the company from one division to another.    INTRODUCTION   The ability to keep up with e-businesses will depend on how well a company can keep up with new emerging technologies. FedEx has transformed into an e-business by improving several of its core competencies. On January 19, 2000, FedEx announced a new branding strategy that resulted in the change of the company's name to "FedEx Corporation" and extended this FedEx name to four of its five subsidiary companies. FedEx's strategy was to take advantage of its brand image, the name that customers have counted on for reliable service and cutting edge technology. The transformation created an integrated set of business solutions. Customers will only need to deal with one company for all its supply chain, logistics, and delivery needs. This provided a single point of access to customer service, billing, sales and automation systems. Each company under the FedEx umbrella operates independently but competes collectively. The new organization is geared to help businesses of all sizes in achieving their goals. DISCUSSIONS   FedEx's business and quality management culture FedEx's vision and goal is "satisfying worldwide demand for fast, time-definite, reliable distribution" (Cisco Systems, 1999). This vision inherently requires that the company operate under a customer focused approach. This is what FedEx has been doing since its founding - the company has emphasized putting customers first in their vision to become a part of the global market. FedEx couriers have one less thing to keep track of these days - their vehicle keys. The company's couriers use an automatic keyless entry and ignition system that has RFID transponders. The system is being tested in 200 FedEx delivery vehicles. FedEx is constantly looking at ways to streamline their delivery processes. The company's couriers drive millions of miles daily in the U.S. alone and each time a courier makes a delivery, he must spend time searching for keys to unlock multiple doors to their vehicle. If a courier misplaces his keys, he must wait for someone from a FedEx station to bring out a spare and the vehicle must be re-keyed at a cost of more than $200 per incident. FedEx delivery personnel are freed from the hassles of juggling their keys while carrying armloads of packages and are more productive along their routes. If a wristband is misplaced, its code can be purged from the system and a new code can be reprogrammed in a matter of seconds.  FedEx vehicle is programmed using a master transponder, and can accept up to ten unique transponders. A single transponder can also be programmed to operate multiple trucks. In an effort to improve its global distribution system and, as a result enhance customer service in its shops around the world, as there entered into a path-breaking strategic alliance with Federal Express Business Logistics Services. Under the terms of a loosely structured partnership, Federal Express takes over the warehouse and distribution activities, the alliance is path breaking due to its informal structure based on trust and mutual benefit than on rules and measures. FedEx Express founder Frederick Smith have the initial conceptualization of FedEx Express as an air cargo firm that specialized in overnight package delivery on a door-to-door basis using its own planes. The goal was to deliver equipment and documents shipped from any location in the United States to any other location within the United States the next day. The logistics was merely the handling, warehousing and transportation of goods. By combining the functions of materials management and physical distribution, logistics took on a new and broader meaning. FedEx capitalized on this transition and aimed at managing all aspects of logistics. FedEx Express invested heavily in IT systems and with the launch of the internet in 1994, the potential for further integration of systems to provide services throughout its customers' supply chains became enormous. FedEx has now built a powerful technical architecture that had the potential to pioneer the Internet commerce. Mission FedEx Corporation will produce superior financial returns for its shareowners by providing high value-added logistics, transportation and related information services through focused operating companies. Customer requirements will be met in the highest quality manner appropriate to each market segment served. FedEx Corporation will strive to develop mutually rewarding relationships with its employees, partners and suppliers. Safety will be the first consideration in all operations. Corporate activities will be conducted to the highest ethical and professional standards. Problems: FedEx's strategy was to capitalize on the growth of e-business and aimed at integrating its physical transportation with its virtual information infrastructures to create a large matrix of systems that meets the needs of businesses ranging from transportation services to complete supply chain management solutions. FedEx has taken a customer focused approach and all systems are centered on the customer. The process of building the systems and technology infrastructure was the first step in the transformation. Next, was the integration of business processes into these systems?  This was not an easy task and required expertise in logistics and supply chain management. FedEx was following the technology age taking place in our country at this time and piggy backed on the growing e-business market. The final step is for FedEx to transform its business and make people aware of the innovations and advancement. Political: FedEx conducts its business internationally and therefore is required to follow international laws, rules and regulations. FedEx will not carry shipments, which are in violation of any U.S. export laws. As with all shipping companies, they will not assume liability for any loss or expense, including, but not limited to, fines and penalties, due to failure to comply with export laws or regulations relating to the export, import or movement goods at central hub locations, FedEx employees work jointly with U.S. Custom’s officials to prevent contraband and restricted items from entering and leaving the U.S. FedEx has initiated strict shipping guidelines and know your customer rules, in conjunction with law enforcement, to deter and prevent the movement of dangerous and deadly agents into the U.S. They screen packages for illegal currency and monetary instrument shipments in violation of the Bank Secrecy Act reporting requirements.  Economic: FedEx Corporation has grown from a package mover to the leading transportation provider in the world. It was the first to establish critical factors to transform a conventional business into an e-business. FedEx developed a global network which offers services beyond transportation, including full service management tools and support. FedEx led the way in the deregulation of the transportation industry, which resulted in economic competition and a decrease of transportation costs from 7.4 % of GDP in 1980 to 6% of GDP in 1999. It employed 166,000 full-time and part-time workers in the United States in 2000, with a payroll and benefits of $7.2 billion. The direct and indirect employment impact of FedEx operations is over 550,000 jobs, or around 1 in every 270 jobs in the United States. The company's revenues exceeded $18 billion in fiscal year 2000 while the combined direct and indirect output produced by FedEx activities totaled approximately $53 billion. The number of export packages transported by FedEx has been growing steadily over 15 percent. FedEx has tripled its market share over the last seven years. The value of these exports has also increased 300 percent, an annual average of over 22% while during the same period U.S. exports only increased 50%, a 7% annual increase. The evolution and success of FedEx has had a multiplier effect on the U.S. economy. It continues to make technological and operational advances that are impacting on global markets as well.  Socio-cultural: FedEx has demonstrated that it cares very much about the global community. It uses its resources to help thousands of organizations throughout the world. Their aircraft and vehicles deliver tons of aid to disaster sites. Employees volunteer countless hours to make their communities better places to live, play, and work. FedEx gives financial support to help ensure children's safety and improve education. FedEx is committed to all their employees and the communities in which they live. They show this by offering financial support and volunteer support for charities that promote educational, artistic and cultural, civic and humanitarian well being. Technological: The FedEx Corporation has made enormous strides in technology and is setting the industry standard for efficiency and customer service. FedEx has sought technological advances in response to customer needs, and has excelled in anticipating and projecting demands of an environment that would depend and thrive on information. The technology FedEx has developed enables customers and support personnel to have wireless access to essential information system's networks anytime and anywhere. FedEx was the first to integrate wireless technology more than two decades ago, and continues to develop and lead the industry in developing innovative wireless solutions.   FedEx has long been in the forefront in recognizing the potential of the Internet to provide fast, easy and convenient service options for its customers. In 1994, the FedEx Web site was launched with a bold package tracking application that was no doubt one of the first true corporate Web services. FedEx became the first transportation company with a web site offering a feature that allowed customers to generate their own unique bar-coded shipping labels and contact couriers to pick up shipments. The web site today handles over 1.1 million package-tracking requests daily. More than 2.5 million customers connect with the company electronically everyday, and electronic transactions account for two-thirds of the five million shipments FedEx delivers daily. The web site is acclaimed in the business community for its speed, ease of use and customer-focused features. Global: The international market place is by far the company's most prominent growth opportunity. The FedEx global story began with the growth of FedEx Express, which today covers more than 210 countries with quick, reliable express transportation. FedEx has been a leader in the global economy, offering customers more choices and more places. The family of companies representing FedEx operates hubs all over the world, giving customers limitless opportunities to expand their customer base.  FedEx Trade Networks provides global e customs clearance in the U.S. and Canada, offers freight forwarding services that connect the U.S. and Canada with Asia, Europe, Latin America and other major international regions. FedEx Supply Chain Services leverages the global transportation and information networks of the FedEx companies and their affiliates to provide international supply chain management solutions to customers in North America, South America, Europe, and Asia. Competitive Environment The competitive environment is made up of the life cycle stage, competitors, key success factors, and Porters 5 forces. FedEx is still in the growth stage of the life cycle. There are few competitors in the postal service and delivery industry. Top Competitor: UPS The United Parcel Service was founded in 1907 within the United States. Today UPS is a $30 billion company that focuses on enabling commerce around the planet. UPS is one of the most recognized and admired brands in the world on top of express carrier and package delivery. UPS is a leading provider of specialized transportation, logistics, capital, and e-commerce services. UPS is involved in more than 200 countries worldwide.   UPS Internet Shipping is your fastest and most convenient shipping solution on the Web. Access the industry's widest array of shipping options right from your computer. UPS Internet Shipping provides many key benefits including: Ø      Store up to 300 addresses in Address Book Ø      Access shipment details and tracking data for up to 90 days Ø      Customize preferences for fast, easy shipping Ø      Shipping software not required - nothing to install Strategic Analysis: Most carrier firms emphasize the same strategic dimensions and use similar strategies and that once common strategy that is the carrier business is the high investment in research and development in order to develop better technologies. In the business, firms with the best technology tend to have a higher market share and this can be seen as a competitive advantage.  Key Success Factors: The key success factors for FedEx business is technology. This is what makes a company run and ultimately makes the money for the company. Another key success factor is marketing. People need to be familiar with the carrier's names and services so they have trust in the quality of the service provided. The more a parcel carrier is globalization; the better success it will have when it comes to international deliveries. International deliveries are costly and there are only a few carriers that can provide total global delivery services and this could be a competitive advantage. Customer service is very important, carriers need to keep the customers satisfied with the service so they continue to come back and use the service. Value Chain Analysis & Identification of Core Competence Primary activities: Ø      Inbound logistics- handling and storing of products to be shipped. Ø      Operations- shipping products, logistics, value chain analysis, financial analysis, handling orders, checking orders. Ø      Outbound logistics- delivery of the products, receiving payment. Ø      Marketing and Sales- develop a positive image of the company making people feel comfortable and satisfied with the product. Ø      Service- Concentrates on customer satisfaction, doing anything that satisfies the customers. Support Activities: Ø      Procurement- purchasing, trucks, planes, gas and other assets Ø      Technology development- investments in systems innovation, research and development and information technology Ø      HR management- hiring, training, developing and compensating employees from truck drivers to top-level management Ø      Firm infrastructure- General management, planning, accounting, legal support, government regulations, required to support the value chain Global distribution involves managing not only the movement of goods, but also the flow of information and finance that moves with the goods. A FedEx supply chain solution is a streamlined organization and that one core competency leads to another it is a continuous flow. SWOT Analysis Strengths: Ø      Market Leader Ø      Number one in the International Air Express Industry Ø      They had a head start in the business Ø      Can clear customs faster allowing shipments to avoid delays Weakness Ø      Major competitors and its operations Ø      Growth demand Opportunities Ø      Expand into more countries Ø      Buy more planes and trucks to deliver more packages faster Ø      Start delivering more heavy weight cargo Ø      Improve ground delivery Ø      Upgrading distribution and logistic services  Threats Ø      Competitors that offer better prices, faster travel time Ø      Customers stop buying products Ø      Gas Prices can rise that will have an impact on the prices   Five Forces Model: Threat of New Entrants: The threat of new entrants is low in the parcel industry. It is low because it is very expensive to get involved in the industry. Starts up costs are high. It is expensive to have the services that are equal to that of FedEx and the other competitors. Bargaining Power of Suppliers: The bargaining power of suppliers is high. It is high because when looking at the items that the parcel industry use such as, planes, computers, and vehicles. If FedEx is not on good relations with these people, the costs can increase drastically. Bargaining Power of Buyers: The buyers have a very strong bargaining power. They have the ability to switch their user to one of the other members of the industry at any time. It is the job of FedEx to make sure that the customer is always happy. It comes as no extra cost to the buyer to switch their parcel delivery company. The only lose that is really suffered comes at the expense of the company for losing a client. Product Substitutes: It is very easy to substitute a delivery service. There are not many out there but the ones that are well established in the eyes of the customer and the industry. It would not be a complex task to switch one company for another. Since this is the case, FedEx has to maintain good customer relations with their clients. Intensity of Rivalry: The parcel industry is an intense industry. There are five main players in the industry competing for market share. The features that they are competing on are the speed of delivery, the efficiency of the delivery, and prices. If you can create a successful mix of the three of those factors, you will hold the greatest market share. FedEx has become a major technology user. The use of IT to its business enabled FedEx to surpass the rest of the industry and acknowledge Fred Smith as "the visionary who forced his and other companies to think outside the proverbial one." He rationed that the company "should acquire its own transportation fleet while competitors were buying space on commercial airlines and sub-contracting their shipments to third parties, reliable on its overnight delivery commitments, "an image that has become fundamental to FedEx's overall success." The introduction of new technology allowed FedEx to install more than 100,000 sets of PC's with its software allowing customers to be linked and logged into their ordering and tracking system. The emergence of PC's loaded with FedEx software transformed the customer base into an electronic network. "Information enables corporate customers to tighten their order-to-delivery cycle, exercise just-in-time (JIT) inventory management and synchronize production levels to market demand." FedEx's quality of service became synonymous with the quality of the information provided to its workforce.  FedEx has enhanced information management in terms of being able to identify the critical factors involved with success of an e-business. It has successfully transformed from a conventional business into an advanced e-business in its network economy. FedEx has succeeded in several areas including: visionary leadership in the application of new technologies, defining the information infrastructure, integrating internal processes, and aligning the organizational structure for maximum benefits. FedEx's key strategy was customer service and for its customers to adapt into its new information technology. FedEx harnessed its new technologies and extended the electronic business to all of its customers. FedEx has developed this technology and made it possible for its customers to connect with them in any way the customer chooses. The restructuring of FedEx addressed many processes but in particular the integration of logistics as well as supply chain management proved to be most successful. The enabled FedEx to cut inventory levels, reduce costs as well as shortening order-cycle time. This is a key for FedEx to improve the quality of service they provided to their customers. FedEx has laid out a vast matrix of transportation and information networks that will provide them with a huge competitive advantage for some time. To function as e-business Company will need to become increasingly customer/solutions focused. All processes must be integrated to ensure a unified customer centered front that provides services throughout the value chain, logistics, and parcel carrier business. FedEx's new restructuring will serve their customers and apply new technologies constantly to improve their response time and the value of the information they provide. FedEx will continue to build, innovate, and exploit technologies from the successful base they have created and will be on top of the industry for a long time to come. FedEx can be classed as an innovator in its field, being the first company to introduce many of the technologies and processes that are used in the courier business today. Innovation can be seen as a context-specific process of invention, diffusion, adoption and implementation (Galliers & Swan, 1999).  FedEx management understands the strategic importance of innovation and has forged links to create the FedEx Technology Institute. .FedEx has also shown a strong trend for technological innovation. This means that the company is not always reactive to competition; rather they often force the competition to follow their lead. This gives FedEx a competitive edge, and also continues to ensure that the "FedEx" brand-name is well respected. RECOMMENDATIONS   FedEx Corp. shall have as its basic function the obligation to bind the Nation together through business correspondence of the people. It shall provide prompt, reliable and efficient services to patrons in all areas and shall render good services to the community. FedEx can be a continued success in terms of: Keeping costs down to compete against competitors such as UPS, DHL and TNT. This includes using the latest technology to increase the speed of transactions. Focusing on customers is always important, as keeping the customers happy will allow for brand loyalty in not switching to other competitors. FedEx has to understand what it is going to take to be competitive, to meet the needs of the marketplace and then to try and exceed those and set tough targets. They should listen to their customers very well and try to diversify in an area where competitors are close in operations. Technology is important because it allows the companies to compete and be better than one another. It helps attract customers and helps to create the revenue for the companies. FedEx competes in this area by having at racking system and is available online for customers. Marketing also plays an impotent role in the industry. Marketing need to portray the company as one they can trust. Plus the customers need to be aware of the company name and the services they provide. To help build the brand name, FedEx offers an on time guarantee.    APPENDICES Business Challenge FedEx, the world's largest express package delivery and Freight Company, transports more than 5.3 million items to 215 countries each working day. FedEx maintains a fleet of more than 638 aircraft and 70,000 vehicles with schedules maintained and updated 24 hours a day, 7 days a week in an integrated global network. The company's continued growth and the logistics surrounding millions of packages per day, meant constant adjustments to operations and coordination among many operating groups. The existing legacy systems were adequate for individual business unit objectives, but could not coordinate the many functions of the Global Operations Center, the nerve center of the FedEx transportation system. FedEx needed a system that would efficiently provide contingency plans in the event of a problem. Any break in the flow of packages creates a backlog throughout the system. The company had to accomplish the system changeover while accessing the exist-ing IMS system as well as a relational database. To keep development and maintenance costs down, FedEx wanted a solution that enabled their project staff of mostly IMS system veterans to quickly and efficiently transfer application knowledge into the new system as well as incorporate new features.  Solution FedEx chose DataXtend CE for C++ to help create an infrastructure for the Service Recovery Application (SRA) and integrate the IMS system into the multi-tier component based application. The SRA provides recovery options and contingency plans when pack-ages are at risk of being delayed. As events continuously stream in, each group that could be affected and each potential option is reevaluated. FedEx was able to implement near instantaneous response times using the DataXtend CE for C++ object caching features. With the object cache, data that would normally be retrieved from IMS or an RDBMS is already available in memory saving the system seconds for each data access operation.   Benefits The new object component framework, built with DataXtend CE for C++ as a foundation, enables previously unattempted projects to be built. FedEx is no longer limited when considering possible projects because DataXtend CE enables capabilities that were not available in IMS. Establishing functional relationships between aircraft, maintenance and ground stations was practically impossible before, but DataXtend CE makes these cross-functional relationships possible. Furthermore, because DataXtend CE development tools integrate seamlessly with Rational Rose modeling tools, FedEx's system developers transitioned smoothly to an object-based environment. DataXtend CE's code generation capabilities significantly sped up development time. SRA performance demands and response expectations were achieved using the DataXtend CE technology server. Without the caching and pre-calculations done by the DataXtend CE server, the time required to compute a list of recovery options would have been prohibitive, making the application unusable.  REFERENCES Aichlmayr, M. (2000). Logistics Conquers a Brave New World. Transportation & Distribution, (Cleveland) 41 (8), p. 29. Aichlmayr, M. (2001). Boosting Business with Air Cargo. Transportation & Distribution, (Cleveland), 42(3), pp. 53-58. Atkinson, W. (2001). How e-Logistics Changes Shipper-Carrier Relationships. Logistics Management and Distribution Report Gooley, T. (2001). Ocean: Struggling to Keep Up. Logistics Management and Distribution Report, 40(7), pp. 75-77. McGovern, J. Michael. (1998). Auto ID Helps the Supply Chain. Transportation & Distribution, (Cleveland) 39(8), pp. 91-94. FedEx Corporation 2000 Annual Report Denton, "keeping Employees: The Federal Express Approach." FedEx's Commitment to Training," Managing Training and Development, September 2000 Businessweek online: January 31, 2000 Issue FedEx: Going Nowhere Fast in Cyberspace TechWeb: FedEx Woos E-tailers with Cheaper Service www.fedex.com Insights and Solutions: Endowment for the Business of Government Strategic management Cases, case 15, pages 205-219 Joachim, D., "FedEx Delivers on CEO's IT Vision", Internetweek, http://www.infoxpress.com/reviewtracker/reprints "Building an e-business at FedEx Corporation." Wetherbe, James C. The World on Time: The Eleven Principles that made FedEx an Overnight Sensation. Santa Monica: Knowledge Exchange, 1996.  Basch, Michael. Customer Culture: How FedEx and Other Great Companies Put the Customer First Every Day. Financial Times: 2002. William F. Conley, Ali F. Farhoomand, Pauline S.P.Ng (2000), "Building an e-Business at FedEx Corporation", [Online:] Wendy L. Currie & Bob Galliers (1999), "Rethinking Management Information Systems", Oxford UniversityPress, Oxford; Pg 376 FedEx Corporation (2002) [Online:], http://www.fedex.com Technology Overview: http://www.fedex.com/us/about/overview/technology.html FedEx Family: http://www.fedex.com/us/about/overview/fedexfamily.html Mission Statement: http://www.fedex.com/us/about/corporation/mission.html Corporation Facts: http://www.fedex.com/us/about/corporation/facts.html International Chamber of Commerce (UK) Business to Business Directory (2002), "FedEx Corporation"

Structural Transformation through e-Business: Federal Express (FedEx) Corporation Case Study

EXECUTIVE SUMMARY The corporate culture of FedEx was based on superior customer service and displayed an attitude of "doing whateve...

Network Maintenance Plan

Network Maintenance Plan                 Network planning and Design aims at ensuring that the network or service meets the needs of the users and operators by encompassing topological design, network synthesis and network realization. Involve in the process of network planning and design is the creation of a Network Maintenance Plan. This very important process will ensure good performance and reliable network operation and service. Investing in network maintenance improves the performance and longevity of the network. A well-maintained network performs better, lasts longer and costs less than networks that are not maintained regularly.   Processes:             The company’s maintenance plan will include Network modification of servers and workstations, download of virus and spyware updates, reviewing and addressing system performance and make small adjustment on the system to ensure optimal performance. It will also include fixing some minor problems on particular part of the network. The network maintenance plan will be carried out by an experienced engineer to keep the smooth operation of the network and to keep it trouble free. The Network Maintenance Plan is intended at eliminating slow networks that often lead to poor performance or network breakdowns. The Network Maintenance Process involves checking switches, checking hubs, checking routers, checking print servers, checking printers, checking firewall rules, checking firewall logs, checking UPS’s and more. It will also update the firewall operating system.   Procedures: 1. Network Overview involves checking the maintenance status of the network. It will also allow the maintenance team to define new maintenance needs and to check performed maintenance actions. 2. Recording of the maintenance and service tasks performed in the network. Searching of upcoming maintenance needs and performed maintenance actions. 3. Routine technical maintenance of telecommunication equipments to ensure network security. 4. To ensure the integrity of security controls, the equipments must be regularly checked. 5. Periodical checking of power and grounding to ensure keep them within specifications. 6. Adequate power backup maintenance. 7. Creation of error-reporting logs of equipment failures that will focus on the cause of error. 8. Putting institutional identification on each item and recording of the maintenance that was done on a specific item.          Expected Outcomes:             The Network Maintenance Plan is expected to increase the company’s profitability and improve the network by: <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Network Downtime Reduction</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Network Performance Improvement</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Longevity of network equipments.</li>

Network Maintenance Plan

Network Maintenance Plan Network planning and Design aims at ensuring that the network or service meets the needs of th...

Tourist Destination: Planning and Development

Contributions of destination of development models to destination planning             Tourism is one of the recreational practices an individual undertakes. People who exercise tourism are called tourists. According to  (2005) due to the fact that tourism is now one of the most popular recreational activity of people all over the world, in the year 2004 around 763 million tourists arrive in various parts of the world. Tourism plays a vital and crucial role in the economy of any country because the income and profit that is being obtained by the utilisation of products and services of the tourists will generate taxes which can be levied to the government. In addition, tourism provides employment and aids in the development of the economy of the nation. According to  (2000) tourism is not just a recreational and decorative activity but instead tourism correlates centrally to the modernity in numerous dimensions such as politics, moral, economical and technological.             This paper examines the various models of development destination. Models such as the Tourist Area Life Cycle, Resort Development Spectrum, and Touristisation model will be discussed. In addition the strengths and weaknesses of the three models will also be discussed in this paper. In the Tourist Area Life Cycle (TALC) Model the stages will be examined. The TALC model will be illustrated using the Danxia Mountain in People’s Republic of China wherein the development stages are highlighted. The measures that the tourism authority has taken up in the product re-organisation, transformation, rejuvenation, and specialisation of the Danxia Mountain in People’s Republic of China will also be discussed. Finally, a conclusion will be made at the end of this paper.             Hong Kong is one of the most popular destinations in the world and the tourism industry is one of the most important aspects in the economy of Hong Kong.  According to the  (2007) the industry held another record last 2006 in which more than 25 million tourists arrived in Hong Kong. In order to maintain the number of tourist arrivals in Hong Kong, the tourism department plans, develops, and audits the possible competitive destination. Tourism planning, according to  (1985) is the procedure which is concerned with expecting and regulating the transformation in the system in order to enhance the methodical development benefits from the society, economy, and the environment. In planning, especially, in the industry such as tourism the stakeholder plays an important role. A stakeholder is an individual or group of individuals that is changed negatively by the causes and the consequences of the issues and decisions (1992).              According to (2002) there are two approaches in tourism destination planning and these are project planning approach and organic planning approach. In project planning approach the steps include determining the sponsorship of the projects, and also the leaders behind it. The tourism authority must set goals that must be attained within the timeframe. Examine systematically the strengths and weaknesses of the planned project. Determine the purpose of the project and identify the best strategy to utilise. Designate the priorities and responsibilities of the individuals involved in the project. Excite the people involved and guide the development of the plan, and then monitor the development and review the feedback Organic planning process on the other hand includes the following steps the determination of the problem and opportunities within the planned project, establishment of goals that must be attainable, analysis of the area of the project, as well as, the entire location of the project, detailed studies on the project and are, planning the concepts of the business, as well as, the options involved, development of the guidelines, creating detailed designs of the project, implementation of the designs and the project, and management and evaluation of the project.             In developing the destinations in any country a destination development model is important. There are three types of destination development models and these are the Tourist Area Life Cycle, the Resort Development Model, and the Touristization Model. Resort Development Spectrum- according to  (2000) it is a destination development model wherein the tourist destination is usually a commercial area wherein the products and the services are produced and sold to the tourists. These commercial facilities entice the existing and new markets in which it develops new products and facilities.             In addition, according to Predeaux the capacity of a tourist destination to expand will be determined by the infrastructure of the area if the infrastructure is poor then most probably there would be fewer financiers that will invest in the area, transport is another aspect in expansion, if the area is not accessible to transportation, inviting investors to expand will be hard, ecological constraints such as storms and earthquakes could also hamper the expansion of the tourist destination, the physical constraints such as the political stability in the area, and the attractiveness of the resources, if the destination could be an attractive destination especially for investors, then there is a probability that they would invest in order to expand the area.             Resort Development Spectrum has its own share of strengths and weaknesses. According to  (2003) the advantage of the resort development spectrum model is that it is multidimensional and based on an understanding of the demand-side response to the market that operates in resorts and integrates the elements of Fordist and post- Fordist interpretation of the production and demand. Moreover, the model can be a possible candidate for planning tool in predicting the patterns of resort development in the future. However, there are disadvantages of the model, according  (2004) the disadvantages of disadvantages and limitations of the model are over-commercialization and a poor image most resorts or tourist destinations are overly commercialised and tends to be over-crowded which can lead to a negative perception of the place by the existing and possible tourists, another is the deterioration of the physical environment due to mass tourism. It includes the loss of the natural habitats of the plants and animals and increase in air, water, and noise pollution and even damage to the historic places, and then the lack of investment because of over-dependence of the package holiday which is characterised by high volume and low yield.   Touristisation Model- according to  (1983) this destination development model focuses on developing the rural area for tourism. Young enumerated the stages in the touristisation model and these are: <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Early traditional</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Late traditional</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Initial tourism in which the rural areas are explored to determine potential tourist destinations.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Early tourism in this stage the government as well as the government and private sectors are involved in planning and developing the destination.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Expanding tourism in this stage the plans are created and put into action.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Consolidation stage in which all of the development projects and ideas are united.</li> </ul> Touristization model juts like other destination development models have strengths and weaknesses. One of the strength of the model is that it helps the people, particularly of low-income status living in a possible tourist destination to gain extra income. Areas that are good locations for tourist destination can be developed in order to attract possible tourists in the area. However, the model has its share of disadvantages; according to  (2003) utilisation of touristisation model will slowly lose the identity of the place, in traditional societies the quick leap from the traditional way of earning to a faster one through tourism seemed to be immoral and almost indecent. In addition, the changes that occur in traditional villages would relate directly to the differences in the aesthetic, ethical and economic values between those proposing the tourism development and the people that want to retain their traditional way of living. In addition, the economic advantages relies upon the people living in the area whether they will accept the drastic changes in their way of living, culture and even personal identities. Tourist Area Life Cycle- according to (1980) this destination development model is utilised for the evolution of a destination. In addition, Butler (2006) TALC model has proven to be an important aspect in articulating the evolution of the area for tourism, at the same time, verifying the imitation of the predictable pattern of the stages of the lifecycle such as introduction, expansion, consolidation, and contraction which is related to all types of organisation may it be biological, genetic, cognitive, cultural ecological, or economic.             From the three destination development model, the most preferred especially by developed nations is the Tourist Area Life Cycle, due to the fact that the model goes with the flow in the changes and preferences of the customers. Tourism is also a business, and businesses constantly evolved in order to keep up with the trends and the competition with others. Although Tourism Area Life Cycle is often favoured by a number of sectors in the society particularly the tourism government authorities, there are still disadvantages of the said model. According to  TALC Model has its strengths, and one of those is it is useful in interpreting and explaining the past and can be utilised as one of the prime attractions in the tourist destinations. In addition, in the context of fully-developed destinations the TALC model could be utilised in a strategic manner to instigate action to prevent the decline. Moreover, strength of the model according to  (2006) is that it is a useful tool for understanding the development patterns of mass tourism destinations.  The disadvantages of the model were discussed by some critics of the model and one of those is Agarwal (1994) he discussed that the model should have alternative and additional stages after the stagnation stage of the original model. In addition, according to Baum the original TALC Model does not acknowledge the probability of having further stages which could take place as associated alternatives to either decline or rejuvenation. Another limitation of the model, according to Morais et al is that the TALC Model is not applicable model of tourism particularly in the developing world wherein the appropriate model is the ethnic tourism.             The stages in the Tourist Area Life Cycle, according to Prideaux are the following: <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Exploration- an area usually not yet developed is explored in order to determine if it has the potential of being a tourist destination. The task force hired by the tourism authority and the consultants are the individuals involved in the exploration of new places. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Involvement- once the place is explored and has been considered as a possible tourist destination, the relevant individuals and group of individuals are going to discuss about the development plans in the area, concerns such as in the environment will be tackled.  </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Development- once the key organisations and individuals have finished discussing and have come in to terms then the development of the project will begin. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Consolidation- the elements that are important in developing a new tourist destination are merged in order to perform a related function. Example while the area is being developed, the government as well as the owners of the businesses in the area will promote the destination to attract more consumers.  </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Stagnation- it is the period when the tourist destination has little or nor growth at all. Stagnation usually happens if a problem occurred such as damaged of property due to calamities like earthquakes and storms, or even outbreak of a disease such as SARS. The income generated from the tourist destination declines during this particular stage. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Decline to Rejuvenation- if the tourism authority, as well as, the owners are keen in gaining more profit they would look for ways to restore the vitality and vibrancy of the tourist destination. An example is during the SARS outbreak in Hong Kong wherein the tourism industry was greatly affected and a number of tourists have withdrawn their visits, however after that stagnation Hong Kong was able to recuperate from the financial losses and once again became one of the premier destinations in Asia.  </li> </ul> According to  () tourism area life cycle model is simple, plausible, and obtains interesting outcomes, it is the first analytical framework that incorporates the features of demand and supply of the customers. The Application of Tourist Life Cycle Model in Danxia Mountain             According to Danxia Mountain is one of the most famous geological parks in the People’s Republic of China and it is located in the northern part of the Guangdong Province. The area is approximately 180 square kilometres. The usual features of the mountain are its red hills and stones. Exploration- the place has not been explored by the tourism authority for numerous years. The tourism authority was able to examine the area and determine possible tourist attractions which are the temples in Guangdong that were built 1200 years ago.  Involvement- upon determining that the area could be a possible tourist attraction the group of individuals that were involved created plans to develop the area. The development of a new attraction was discussed and around 3.5 square kilometres of Danxia Mountain was opened for tourists. Development- even though it is not a major attraction, a number of people have visits Danxia Mountain already, however the development of the mountain began in 1970s; this is he development stage of the Mountain. Consolidation- Danxia Mountain was successful in attracting tourists, and it became an important pilgrimage destination for the Buddhists, at the same time, the area became popular for its scenic view of the sunrise, as well as, the sights that the mountain beholds. Stagnation- however the tourist arrivals in Danxia Mountain have declined due to mismanagement and a tougher competition from other resorts in China, as well as, in Asia. The number of tourists became stagnant until the tourists that visits the place declined. The tourism authority still made efforts to promote the destination, but still it was not enough to lure the visitors. Decline to Rejuvenation- the tourist influx in Danxi Mountain has immensely decreased despite of the efforts made by various sectors in the industry. In order to revive the splendour of the Danxia Mountain Prof.  was invited to work in reviving the mountain. The main reason for the decline of tourist arrivals was the poor management of the area, and in order to solve that problem the image of Danxia Mountain will be enhanced and the resort will open new attractions. After careful deliberation on the situation, the team of Prof. Bao selected YangYuan Stone as the main feature of the resort, aside from the new attractions it offered. And in the year 1995 the Danxia Mountain received tourists again and the outcome has been positive because the arrivals have been increasing since it opened again.               In addition, according to Butler the first application of the Tourist Life Cycle Model in China was in Danxia Mountain in 1993, wherein Professor Jigang Bao found out that the mountain was in its Stagnation Stage and the best way to attract new tourists is to develop new tourist attractions, and after deliberating the factors associated with developing new attractions the Yangyuan Stone Scenic Spot was selected as the new attraction afterwards it was developed. Danxia Mountain was quickly rejuvenated after selecting and adding new tourist spots in the area.             The successful utilisation of the Tourist Area Life Cycle model in the planning and developing of Danxia Mountain exhibited that the appropriate analysis of the area could determine the proper ways in rejuvenating and reviving the tourist destination. Conclusion             Tourism is one of the pillars in the economy of Hong Kong and it is an important source of income for the nation. Hong Kong has already faced a number of challenges in their tourism industry; it has experienced ups and downs due to a number of reasons. But despite of those, Hong Kong remained one of the premier tourist destinations not just in the Asia Pacific Region but in the whole world as well. In order to keep and even increase the amount of tourist arrivals in the nation, the tourism authority of Hong Kong must utilised various forms of destination development, they can use any of the three models to promote and maintain the tourist destinations. In order to ensure that the developments of new destinations, as well as the existing destinations are tourist and investor friendly, the tourism authority should monitor the new developments in the area. Aside from monitoring the developments in the tourist destinations, the authorities, as well as, the people involved such as the investors and the public should identify the measures that would improve the situation, and alleviate the problems even if it is small. Through this, the authorities could be able to prevent the catastrophes from emerging. TALC model is the first tourism framework developed and aside from the fact that it is a model for destination development it could also be utilised in monitoring the evolution of the area, TALC could be able to determine whether the area is already stagnant and authorities will be able to prevent the decline of the area. TALC is also an appropriate tool for longer tourism plans because the stages are created for a longer span of time. The authorities could already visualise future problems and they could create risk measures to counter those probable problems.

Tourist Destination: Planning and Development

Contributions of destination of development models to destination planning Tourism is one of the recreational practices an...

Planning and Operations Management

Planning and Operations Management   Introduction             "Management" characterizes the process of leading and directing all or part of an organization, often a business one, through the deployment and manipulation of resources (human, financial, material, intellectual or intangible). One can also think of management functionally: as the action in measuring a quantity on a regular basis and adjusting an initial plan and the actions taken to reach one's intended goal. This applies even in situations where planning does not take place. Situational management may precede and subsume purposive management. Apparently, this paper will discuss the related factors in operations planning particularly to a Retail Store Manager of a Travel Agency with 3 departments i.e. (Foreign Exchange, Flights and Travel) which are highly related to management.               Some writers trace the development of management thought back to Sumerian traders and ancient Egyptian pyramid builders, but modern management as a discipline began as an off-shoot of economics in the 19th century. Classical economists like Adam Smith and John Stuart Mill provided a theoretical background to resource allocation, production, and pricing issues. About the same time, innovators like Eli Whitney, James Watt and Matthew Boulton developed technical production elements such as standardization, quality control procedures, cost accounting, interchangeability of parts, and work planning. By the middle of the 19th century people like Robert Owen, H. Poor, and M Laughlin introduced the human element with theories of worker training, motivation, organizational structure and span of control.             By the late 19th century marginal economists like Alfred Marshall and Leon Walras introduced a new layer of complexity to the theoretical underpinnings of management. The first tertiary-level course in management was offered in 1881 by J. Wharton. By 1900 we find managers trying to place their theories on a thoroughly scientific basis. Examples include H. Towne's Science of management, Frederick Winslow Taylor's Scientific management, Frank Bunker Gilbreth's Science of motion study, and Henry L. Gantt's charts. J. Duncan wrote the first college management text book in 1911.             The first comprehensive theories of management appeared around 1920. People like H. Fayol and A. Church described the various branches of management and their inter-relationships. In the 1920s and 1930s people like O. Tead, W. Scott and J. Mooney applied the principles of psychology to management. Also in the early 20th century people like Elton Mayo, M. Follett, C. Barnard, Max Weber, Rensis Likert and C Argyris applied the principles of sociology to management.             H. Dodge, R. Fisher, and T. Fry introduced statistical techniques into management. In the 1940s, Patrick Blackett combined these statistical theories with microeconomic theory and spawned the science of operations research was born. Operations research, sometimes known as "management science", has attempted to make a science of some aspects of management. Importance of Operational Planning             A major theme of the literature in strategic management and operations strategy is that consensus on the general strategic direction of the firm and on manufacturing task emphasis must exist between business-level strategic planners and functional-level manufacturing managers for effective business unit performance to occur. It is the responsibility of the manufacturing manager to develop a manufacturing strategy that supports the overall business-unit strategy (Schroeder et al., 1986). Operations scholars have warned that a manufacturing business unit will have a decreased competitive advantage within its industry if it fails to develop a coordinated and supportive operations strategy (Buffa, 1984; Hayes and Wheelwright, 1984; Hill, 1985).             A good deal of research has examined the notion of consensus as it relates to the management process (Bourgeois, 1980; Dess, 1987; Schweiger and Sandberg, 1988; Wooldridge and Floyd, 1989; West and Schwenk, 1996; Homburg et al., 1999). As pointed out by Floyd and Wooldridge (1992), senior managers often complain that middle- and operating-level managers fail to take the correct actions to implement strategy. These implementation problems are deemed to be the result of middle-level and operating managers' lack of understanding of and/or commitment to the chosen strategy. Guth and MacMillan (1986) found that middle-level managers will not only redirect a strategy and delay its implementation, but will also sabotage the strategy if they feel their self-interest is being compromised.             Other research has examined the relationship of consensus to performance. Wooldridge and Floyd (1990) found that the involvement of middle-level managers in the formation of business-level strategy was associated with improved organizational performance. St. John et al., (1991) examined the relationships among various coordinating mechanisms, the degree of consensus between marketing and manufacturing groups, and marketplace performance reputation. They found firms using planning techniques experienced higher levels of interdepartmental consensus and this was related strongly to marketplace performance reputation.             The notion that manufacturing managers should develop a manufacturing strategy that supports the business-level strategy is consistent with the strategic management paradigm. A specific business-level strategy is formulated for the strategic business unit (SBU) in order to create a competitive advantage, and manufacturing managers are expected to translate this strategy into appropriate manufacturing performance goals, processes, and systems.             An issue of concern during this process is the extent to which consensus is developed between managers at the SBU level and managers at the manufacturing level with respect to the overall competitive strategy chosen for the business unit. The manufacturing manager's understanding of, and agreement with, business-level strategic choices will form the basis for subsequent manufacturing strategy development and execution. A unifying strategy is required (Schonberger, 1986) and a vision must be developed so manufacturing managers can clearly understand the requirements for implementation (Chase and Aquilano, 1989). It has been suggested that often this shared understanding does not occur. For example, Hambrick (1981) found evidence of rapid hierarchical decline in strategic awareness by second-level executives. Schroeder, et al. (1986) sampled manufacturing firms and found that only one-third of the firms had formulated a clear and well-developed manufacturing strategy (i.e., one consistent with the firm's business strategy). Swamidass (1986) found evidence of a general mismatch in strategic emphasis between CEO's and manufacturing managers concerning the appropriate role and performance objectives of the manufacturing function.             Hayes and Wheelwright (1984) strongly recommend a high level of involvement by manufacturing managers in the strategic planning process of business units for the attainment of superior competitive performance. Swamidass and Newell (1987) report finding evidence of a direct positive relationship between the level of involvement of manufacturing managers in the strategic planning process and firm performance. Dess (1987) examined the relationship between the degree of consensus within top management teams on business objectives and competitive methods and firm financial performance. His findings indicate general top managerial consensus on either competitive objectives or competitive methods to be positively related to firm financial performance. This finding is consistent with Bourgeois (1980), who found consensus on competitive methods to be related to firm financial performance. A review of other studies related to consensus can be found in Homburg et al. (1999).   Situation of Operational Planning of the Three Departments (Foreign Exchange, Flights and Travel)   Increasing Congestion Generates Significant Costs:             Increasing traffic congestion in the region is significantly impacting the travel time for automobile traffic, the movement of goods and the reliability of transit. This in turn increases costs for users, businesses and transit.             Between 1985 and 1994, the average travel time for the same distance to work or post secondary education increased by 36%, or 5.5 minutes.  Unfortunately, the rate of vehicle ownership is increasing at a rate of over 3% per year, double the estimated population growth rate. As well, during the same period average bus speeds have decreased by 2-3% due to increased traffic congestion, and a portion of the improvements in service hours has been consumed by increased schedule time to meet traffic delays. A recent study estimates the annual cost of congestion to the trucking industry for the movement of goods at 0 million.             The total Department funding for road capital improvements and rehabilitation and maintenance expenditures will significantly increase over the Three Year Plan. Yet, numerous examples from other jurisdictions have shown that road expansion alone is unable to provide a long-term solution to the problem of traffic congestion. The Department will develop a focused strategy to address delays affecting goods movement, transit reliability and a range of options to provide realistic alternatives to the private automobile as part of the Three Year Plan. A longer range strategy will be developed in 2004 as part of Departments Strategic Transportation Plan.   Dispersed Employment Leads to Increased Auto Dependency:             During the 1990’s suburban office and business parks attracted 7 million square feet of office development and their share of the total office space in the Region grew from 20% to 30%. During the same period the regional town centers only attracted 937,000 square feet of new office space and their share of the total dropped from 11% to 10%.             The growth of employment in the suburbs has made these areas very dependent upon road improvements for goods and people movement.   Increasing Walking and Cycling Mode Shares:             Between 1994 and 1999 the percentage of people traveling by foot and bicycle in the region grew by over 28%. A higher percentage of daily trips are now made by a combination of foot (12.3%) and bicycle modes (1.7%) than are made using transit (10.3%). In 1999, 40% of all trips were less than five kilometers, within a reasonable travel distance by bicycle. Further investments to improve municipal bike networks and to increase the accessibility of the transit system have the potential to increase the proportion of trips made by bicycle.   Revenue Maximization:             The agency wishes to maintain its financial stability and therefore will continue to focus on raising revenue by the following actions: • Identifying and implementing opportunities to increase commercial revenue generated from advertising and other opportunities by approximately .0 million annually in order to offset existing operating costs or required capital expenditures; • Completing a Transit Fare Review in 2002/3 and a possible change in the fare structure by mid-July, 2003 that will ultimately generate up to million in additional annual revenue; and   • Undertaking the specific recommendations in the independent Transit Fare Audit which reviewed TransLink’s current fare audit procedures and fare evasion rate.   Customer and Market Focused Plans and Service Design: Planning efforts will be more focused on markets including: • Planning and funding strategic investments in new roadways and bridge structures which are focused at key corridors for the improvement of goods movement and where there are strong and growing travel markets such as suburb-to-suburb; • Introduction of a broader range of transit services from rapid transit to Community Shuttles to meet the diverse market needs of the region; • Completion of a new Strategic Plan for Custom Transit services in 2002/03 to respond to changing demographics and increasing demand for access to health care services; • Identifying and promoting with other partners means to improve cross-border mobility and security across the country’s border; and • Introduction of a new Customer Service Committee in 2002 that will provide a forum for transit customers to air concerns around transit plans and service delivery.   Partnerships Projects             The Agency will continue to work with other levels of government and agencies in the development of major infrastructure projects. These include:   • Continued planning, environmental and other work required to identify the preferred options prior to tendering the River Crossing project, in addition to necessary communications and consultation with directly affected businesses, communities and residents; • Negotiations with the Provincial Government to clarify the status, funding and possible private-public sector partnership arrangements for proposed rapid transit extensions to rapid transit project; • Multi-year procurement of a new electric trolley bus fleet to begin to replace in late 2004 the existing vehicles, which are now 19-20 years old; and     Product-Process Linkage             A fundamental tenant of operations strategy is that manufacturing's choice of production process interacts with marketing's product goals, and this interaction affects the business unit's competitiveness within its industry. Hayes and Wheelwright (1979a,b) first proposed linking product and production process life cycles. Their theory states that the production process should evolve through a series of configurations related to changes in the product's life cycle.             The basis of the product-process alignment literature is that there exists a trade-off, or balance, between attainable levels of automation and flexibility. In the introductory and growth stages, for example, product variety is typically high, requiring flexibility in the manufacturing process. This flexibility, however, is achieved at the expense of higher unit manufacturing costs, as fully automated production processes cannot be employed. As products move through their life cycle, variety and flexibility lose importance, and the firm is able to attain lower operating costs through increased automation.             The product-process matrix described by Hayes and Wheelwright links product life cycle stages with theoretically correct general types of production processes (Hayes and Wheelwright 1979a,b, 1984; Wheelwright, 1984a,b). A firm's product can be characterized as occupying a particular region on the product-process matrix depending on the product's life cycle stage and choice of production process by manufacturing managers. Diagonal positioning on the matrix has been recommended (Hayes and Wheelwright, 1979a,b, 1984; Schmenner, 1985; Fine and Hax, 1985). For example, during the introductory stage of the life cycle, a job shop manufacturing process would be used; during the growth stage, a batch process; during maturity, an assembly line; and during continuance, a continuous process. In response to changes in competitive choices, manufacturing strategies may, by necessity, need to be changed as well in order to sustain the linkage between product characteristics and manufacturing processes (Voss, 1986). This positioning and repositioning of the production system in response to changes in the firm's business-level strategy is the primary responsibility of manufacturing managers (Buffa, 1984).   Advanced Systems and New Technologies             A number of advanced systems and new technologies have been developed to improve manufacturing performance and competitive effectiveness. Computer-based and manual systems offer the promise of changing the ways business units compete and of helping business units to be more competitive in world markets (Voss, 1986). The potential benefits of advanced systems and other new technologies have received attention in the recent strategy and manufacturing literature. Sanchez (1995) proposes that two sets of related innovations, one technological and one managerial, are jointly creating and escalating the process of change that is diffusing and transforming competition. Kotha (1995) suggests that mass production and mass customization might be pursued simultaneously. Bettis and Hitt (1995) believe that in an era of rapid technological change and corresponding forecasting difficulties, sustainable advantages are likely to come from internal organizational competencies. Static models that dictate either/or choices have come into question. For example, Sanchez (1995) points out that firms trying to compete by adhering to traditional strategies of low cost, differentiation, or focus, may find themselves challenged by firms with superior flexibilities in terms of quicker response times, more new products, broader product lines, and rapid product upgrades.             As suggested by Jelinek and Goldhar (1984), Wharton (1987), and Meredith (1987), the use of new manufacturing technologies and advanced systems might enable manufacturing firms to operate outside of the product-process matrix prescriptions and still attain superior performance. New technologies and processes could distort the traditional trade-off between process flexibility and lower unit cost by providing additional operational benefits, such as increased flexibility, improved product quality, and lower unit costs. Operational Planning vs. Strategic Planning             In order to plan better, we must first understand that there are two main types of planning: operational and strategic. Operational planning covers the minute details of directing an organization every day. Most companies engage in operational planning in order to manage their financial performance. In many small and medium-sized organizations, strategic planning, which is the more important of the two, is lacking or non-existent. However, using both in the proper combination can radically improve the success of any organization.             One way to better understand the difference between strategic and operational planning, and the important role of each, is to consider the analogy of an artist painting a landscape. The creative planning process the artist performs is very similar to strategic planning. Before ever touching a brush to canvas the artist plans the sequence of the painting steps needed to complete it. He envisions the shape, the colors used and the mood that he is trying to create. In his mind, he is attempting to visualize the end product. It is a planning and preparation process that will guide him once he begins painting. This analogy is a very accurate description of what happens when business leaders engage in the strategic planning process. They see the future of the business and create an overall action plan to make the future vision a reality.             On the other hand operational planning relates more to managing the logistical and procedural actions that are performed within the parameters of the strategic plan. In this same analogy, the artist would be functioning within an operational role when he actually started painting the landscape. In this operational capacity, the artist insures he has purchased the right canvas and paint supplies and prepares the proper lighting. As he begins adding colors and texture to the canvas he attempts to "flesh out" the vision he created before. During the painting process he is constantly measuring it against his image of the completed painting. This feedback process compels him to make corrections in color, scale and brushstrokes to make it match his mental picture. Only when the two are the same is he truly satisfied. In this analogy and in a business situation, all the operational efforts are measured against the vision and ongoing adjustments are made to insure the vision becomes reality.             In order to build a case for the importance of using strategic planning, let us consider the same artist not being allowed to be creative. By blocking all inspiration he could only mechanically apply the colors and brushstrokes. In the end, he may end up with a smattering of colors but nothing that he would view as art. It is hard to imagine an artist being satisfied with any work unless it was inspired through some creative process. Unfortunately, many businesses operate in this mode all the time. They suffer from a lack of coherent vision for their organizations and react to whatever situation is placed in front of them. The resulting business direction is shaped by these situations rather than by a conscious planning process and, as can be expected, the businesses often fail to live up to performance expectations.             In summary, strategic planning concentrates on "doing the right thing" or "what business the organization is involved in." It focuses on the effectiveness of the organization. It answers the question, "Are we in the right game?" On the other hand operational planning deals with "doing things right" or "how the organization is performing its tasks". It focuses on the efficiency of the processes. It answers the question, "Are we playing the game right?" They are both very important to the success of an organization but one should not be done without the other. Because the idea of strategic planning may be a new concept to some we will spend the balance of the article giving an overview of how this planning process works. Operation Planning             Operation Planning within operation management is the process to quantify the amount of time and budget an operation will cost. The purpose of operation planning is creating an operation plan that a operation manager can use to track the progress of his team/department. From the discussion of the above literatures, it is recommended to address the following plans and procedures in operation management. How to Plan an Operation <li class="MsoNormal" style="text-align: justify; line-height: 200%; margin-right: 4.0pt"> 	Determine the exact conditions 	for the operation to be completed or to be terminated. Before it is 	absolutely clear what the objectives of the operation are, it makes little 	sense to start estimating how long it will take and how much it will cost. 	Unfortunately, many operation managers fail to take this first, crucial 	step. Each operation should have a clear connection to one or more real of 	organization's business issues.</li> 	<li class="MsoNormal" style="text-align: justify; line-height: 200%; margin-right: 4.0pt"> 	Make an inventory of all the work 	that needs to be done with an estimate of the time it will take to complete 	by a single team member/staff. This can be done in a planning session with 	all the team members/staffs. Tasks that will take over three weeks to 	complete need to be broken down further to get good granularity. To avoid 	getting swamped with details, the tasks at the lowest level should take 	approximately 1 week. The result is a work breakdown structure. Make sure 	that having the operation's deliverables injected into the organization or 	its environment will actually cause the expected benefits (operation 	objectives) to materialize. </li> 	<li class="MsoNormal" style="text-align: justify; line-height: 200%; margin-right: 4.0pt"> 	Identify the resources needed to 	complete each terminal element of the work breakdown structure (WBS). At 	this point you can usually estimate the cost to deliver each terminal 	element and, consequently, the operation (bottom-up approach). Sometimes a 	top-down approach to estimating costs is also possible by means of using 	coefficients (e.g. it costs between $X and $Y to build a square meter of a 	house of such-and-such a standard). </li> 	<li class="MsoNormal" style="text-align: justify; line-height: 200%; margin-right: 4.0pt"> 	Make a decision whether this 	initial plan makes sense, i.e. whether the costs justify the benefits. 	Modify the objectives and the supporting work as necessary. </li> 	<li class="MsoNormal" style="text-align: justify; line-height: 200%; margin-right: 4.0pt"> 	Define dependencies among tasks. 	Some tasks need to be completed before other tasks can begin. By putting 	tasks into their relative completion order, a operation manager constructs a 	operation network. </li> 	<li class="MsoNormal" style="text-align: justify; line-height: 200%; margin-right: 4.0pt"> 	Calculate the minimum time the 	operation will take: it is the longest path through the operation network 	from the start of the operation until its end. This path is called the 	critical path (or critical chain, if resource dependencies are taken into 	account). Other tasks can be done in parallel to the critical path but any 	delay in the tasks on the critical path will automatically result in a delay 	in the overall deadline of the operation. </li> 	<li class="MsoNormal" style="text-align: justify; line-height: 200%; margin-right: 4.0pt"> 	Create an operation schedule 	(e.g. in the form of a Gantt chart). </li> 	<li class="MsoNormal" style="text-align: justify; line-height: 200%; margin-right: 4.0pt"> 	Plan for risk management and 	modify the operation plan accordingly. </li> 	<li class="MsoNormal" style="text-align: justify; line-height: 200%; margin-right: 4.0pt"> 	Commit the organization to 	starting the operation implementation. </li>             Operation planning is not something that is done only once at the beginning of the operation. It should be an ongoing task of the operation manager to keep an eye on the progress of his team and update the operation plan accordingly. Operation management software can be helpful if used properly. There are several operation management standards that describe in detail how to plan and manage an operation. Reference: Asher, H. B. 1983. Causal Modeling. Newbury Park, CA: Sage Publications.   Bettis, R. A. and M. A. Hitt. 1995. "The New Competitive Landscape." Strategic     Management Journal 16 (S1): Summer Special Issue, 7-19.   Bourgeois, L. J., III. 1980. "Performance and Consensus." Strategic Management            Journal 1(3): 227-248.   Buffa, E. 1984. Meeting the Competitive Challenge--Manufacturing Strategy for U.S.        Companies. Homewood, IL: Irwin.   Chase, R. B. and N. N. Aquilano. 1989. Production and Operations Management.            Homewood, IL: Irwin.   Dess, G. G. 1987. "Consensus on Strategy Formulation and Organizational         Performance: Competitors in a Fragmented Industry." Strategic Management        Journal 8(3): 259-277.   _____ and P. S. Davis. 1984. 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Planning and Operations Management

Planning and Operations Management Introduction " Management " characterizes the process of leading and d...