Question 1: Multiple Criteria in the Location Decision-Making Process and the Challenges
In operations management, the multiple criteria decision-making (MCDM) process refers to a decision-making technique combining alternative performance across several controverting qualitative or sometimes quantitative criteria, resulting in a solution that requires a consensus. Conflicting criteria are characteristic in assessing options. Price or cost is one of the primary criteria, and other measures, including quality, are another criterion that conflicts with the cost (Artana, 2009). As for the Summit Maritime Case, location decision-making several variables played, including labor productivity, proximity to market, suppliers, and market competitors. Because of the growth of the business, increasing rental expenses, and considerable quality time lost due to traffic in the town, Joseph needed to relocate his facility (Ivey Business School Foundation 2018).
According to the case study, the business had two production facilities (Facility A and B) and a consulting office. Facility A was located in Vyttila in the downtown region and the city’s transport hub and National Highway #66 (NH66), which connects Kochi to other major cities. Kochi is where the consulting office was located. Facility B, located in Willingdon Island, manufactured premium-segment boats. Several criteria had to be considered in Joseph’s decision to relocate. Joseph knew that Facility B required more attention and dedication because of the premium nature of the products manufactured. He spends most of his time in facility B and often fails to catch up with important meetings at the consulting office and facility A. The phenomenon is likely to undermine the company’s decision and impact future performance. Furthermore, the owner of facility B also increased the rent to double the initial figure, which means that the overhead costs were now too high and could reduce the profits. Another critical variable in location decision-making was the time lost. Traveling across the cost led to substantial time loss as the production facilities were far from downtown (Ivey Business School Foundation 2018). These events prolonged the time of every single business at the company, hence the need to consider relocation.
Question 2: New Facility
Service Factory Meaning
The term service factory is grounded on the philosophy that a factory can be a point of customer service besides being a place where products are manufactured. It encourages interaction in the manufacturing process to make the business more customer-centric. Service factoryredefines a business’s traditional concept where manufacturing was mainly confined to production workers. That has changed and manufacturing today comprises the management of interfaces alongside other organizational functions such as marketing, design, and after-sale services, including interactions with suppliers, customers, and other organizations.
Features of New Facility Joseph Have In Mind
Joseph wants the new facility to operate as a professional service business, customizing the offering to the preference of the market niche. The facility Joseph has in mind should help the company deliver such an offering most cost-effectively. Joseph requires a layout that promotes cost-effective manufacturing by combining the same processes, components, and parts to minimize the movement of materials and people. He also needs designing practices that can manage flexibility and maximum levels of quality control, expedite customer service in the boats’ design and production, and offer upscale ambiance to the business customers. The service factory design Joseph inspired to develop is centered on showcasing the business boards, technology and artisanship involved, process and systems, and the business responsiveness to customer needs, hence strengthening the customer’s view of product quality. Therefore, the new facility will be located close to the downtown expanse and cluster along the National Highway 66 to allow the business to get maximum exposure to the public to win over more clients from the competitors (Ivey Business School Foundation 2018). The area will also reduce time costs due to traffic.
Organizational Challenges Joseph Face in Designing the New Facility
Joseph’s primary challenge in designing the new facility was capturing customers’ perception of the product view. The production facilities could not offer a presentable picture of the market niche as the inventory was all over the facility. Hence, the proprietor considered having an outlet alongside the National Highway 66, where several high-class showrooms were clustered. Joseph also required a special regulatory clearance to work as both production facility and service outlet, which proved challenging as it needed other approval by the pollution control board. Joseph also faced the dilemma of selecting the best location from the five potential sites the agent identified and designing a layout that accommodates the business’s growth and restrictions (Ivey Business School Foundation 2018). It was time Joseph restructure the business and streamline the operations to match the change.
Focused Factory or an All-Under-One-Roof
The new business facility will be an all-under-one-roof model. The model will improve the company’s visibility while saving on travel time. Loss of time was Joseph’s primary worry leading to the idea of restricting the business, and having everything arranged together under one roof will effectively solve the concern.
Question 3: Layout for the New Facility, And the Characteristics
The new facility layout is a process layout characterized by high flexibility compared to product layout, and change operations or their orders can be done minus disturbing the existing layout. Besides, new functions can also be added. The layout increase visibility of the entire business process.
Ivey Business School Foundation (2018). Summit Maritime: Facility Location and Layout Design.
Artana, K. B. (2009, January). Multiple Criteria Decision Making (MCDM) Process in Selecting Location for Floating Storage and Regasification Unit (FSRU): A Case Study of Bali Island Project. In International Conference on Offshore Mechanics and Arctic Engineering (Vol. 43420, pp. 393-400).