Improving operational competitiveness at Albatross Anchor

Operations Management. Please PDF instructions essay.

Operations Management

Albatross Anchor's competitiveness

The competitiveness of Albatross Anchor can be assessed from a wide array of angles, including the following most relevant ones:

a) Cost

The cost is similar to that implemented by other anchor manufacturers, as this is imperative to maintain sales. Yet, the real costs encountered by Albatross Anchor are higher than those of its competitors and this is the result of operational inefficiencies.

b) Speed of manufacturing process

The manufacturing process is delayed by the lack of adequate technologies, spaces and facilities, but also by the fact that the company has to continually switch its production lines in order to manufacture both the bell anchor as well as the hook anchor.

c) Flexibility in filling orders

Due to several inefficiencies, the company is only able to manufacture and deliver small product quantities. In case the orders suffer modifications, the company is unable to effectively address them as it is highly inflexible.

f) Service to customers

Finally, at the level of services to customers, the restricted capabilities and resources also reduce the firm's ability to deliver services to customers, such as on site support, repairs and maintenance.

Question Two: Breakeven analysis

The introduction of a new model of manufacturing is pegged to the analysis of the breakeven points of each individual method. In this case, process A, characterized by a sales price per unit of $35.00, total fixed costs of $500,000 and variable costs per unit of $25, would break even at 50,000 units. On the other hand, process B, characterized by the same retail price, but a variable unit cost of $23.00 and total fixed costs of $750,000, would break even at 62,500 units.

This situation indicates that process A is more desirable as it will be the one to generate the quickest return on investment. In other words, it is the one which requires the lowest level of investments and it is as such the one which will more quickly and more efficiently generate profits for Albatross Anchor.

Question Three: Recommendations for the short- and long-term

Within the short-term, the recommendations are for Albatross Anchor to:

Set the basis of strategic partnerships in order to gather know how as well as develop opportunities for expansion, renewal and development. These strategic partnerships would help the company increase its access to resources and become better able to attain goals it initially perceived as unattainable (Van Leeuwen, 2004).

Reallocate the financial resources. This specifically suggests that the company's managerial team becomes more straightforward in allocating more funds to developments, rather than production.

In the long-term, the strategic recommendations to integrating change in operational processes refer to the following:

The development of the facilities in which the company produces and stores the anchors. Loans could be contracted in this sense and the current facilities could be enlarged, or they could be sold, and larger facilities could be rented / purchased.

The integration of newer technologies. Technological advent -- however costly -- is the single source to sustained business success, as well as operational efficiency (Rafinejad, 2007).

References:

Rafinejad, D., 2007, Innovation, product development and commercialization: case studies and key practices for market leadership, J. Ross Publishing

Van Leeuwen, J., 2004, Reaching the hard to reach: innovative housing for homeless youth through strategic partnerships, Child Welfare, Vol. 83, No. 5