MBA 5503 Production Operations Final Exam The final exam exercise is a case-based analysis relating to the in-class review of Almarai Dairy operation. If you would like to review the video presentation at any time, the YouTube website can be found at: Part 1: http://www.youtube.com/watch?v=52jP_Sd1zJE Part 2: http://www.youtube.com/watch?v=QAZ4uwYX1-s Based on this knowledge of dairy processing operations, you are now appointed to the role of GM – Operations at Al Ain Dairy. Al Ain Dairy Al Ain Farms For Livestock Production was formed in 1981 under the directive of the late great Sheikh Zayed Bin Sultan Al Nayhan. The company was charged with the responsibility to deliver fresh dairy products for the first time in the country at a time when the only choice on the supermarkets shelves was powdered and canned milk. The establishing of the first dairy farm in the UAE with just 200 cows heralded the beginning of a greater initiative for the region to become self-sufficient in food production and the first initiative tackling food security in the region. Al Ain Dairy quickly established itself as other suppliers began to enter the market and helped change the food manufacturing landscape of the country. Today, the dairy has three farms with over 1000 milking cows and 230 camels supplying raw milk product to provide the nation with a wide range of locally produced safe, hygienic and high quality dairy products. Throughout the last three decades, Al Ain Dairy has remained at the forefront of a growing dairy industry, leading the way in market trends and innovation and becoming the nation’s favorite dairy brand. Today Al Ain Dairy is poised for exponential growth as it embarks on ambitious expansion that will propel the company to wider markets and greater opportunities. To achieve this exponential growth, Al Ain Dairy has acquired Almarai Dairy to create the region’s largest single dairy company. In order to develop the most effective and efficient operations strategy, you’re brief is to review and recommend the best integrated operations strategy and structure across the combined business. The merger was mutually approved with one important condition: processing of some description will continue to operate at both sites – Al Ain and Riyadh. The CEO has a number of specific questions related to the integration opportunity. Your task is to address each of the following questions using sound operations management thinking. Each question should be addressed with clear explanation of the logic and reason/s for recommendation. You do not need to quote relevant theory, but your rationale should reflect sound operations knowledge. Please address each question directly, compiled into a report format addressed to the CEO. Your recommendations should be presented in professional format, clearly explaining the key points of information necessary to address each question. Long narrative essay answers should be avoided. A professional report writing style is recommended for clarity. Please prepare a report and save in DOC or PDF file format. Submissions are due by or before Sunday morning, 6th April via email attachment to [email protected] As CEO, I look forward to your recommendations. 1. Fresh milk and UHT long-life milk represent 80% of the dairy plant operations combined. The CEO would like to understand a simple description of the operations from start-to-finish … i.e. from dairy cow to finished product inventory supply chain. Please summarize the complete production process converting raw milk to finished product. Most importantly, identify the key operating issues and strategic considerations as you see them. What are the most important aspects the CEO should be aware of? As a suggestion, a graphic illustration of the process illustrating key stages may be very helpful. 2. After the merger, production will continue at both dairy plant sites. However, a decision about which products to process at either or both dairy plants needs to be made. The CEO is deciding which products should be rationalized for processing/production at only one dairy plant and which products should continue production at both plant sites. The list of current product ranges currently processed at both sites is: Short Shelf-life Extended Shelf-life Long Shelf-life (Shelf-stable) i.e. < 15 days i.e. up-to 45 days i.e. up to 9 months and warm ▪ Fresh Milk ▪ Yoghurts & Cultured ▪ UHT Long-life Milk ▪ Fresh Juices ▪ Deserts ▪ Long-life Juices ▪ Soft Cheeses ▪ Bottled Water Recommend which products that should be rationalized to one site and the products that should continue processing at both sites. Please be sure to explain: Which location the single-site products should be processed and why, and Why the products recommended for processing at both sites should continue at both. In other words, why is it more efficient for processing these products at both sites as compared to consolidating everything at one mega-site processing plant? Your recommendations should provide the CEO with a clear product range processing recommendation at each plant site. 3. Efficient operations management takes advantage of ‘JIT’ production scheduling: just-in-time scheduling of component parts and packaging. In the bottling of fresh milk (HDPE and PET), JIT processing is integrated into the filling of milk bottles. How is JIT strategy built into the operations process? What efficiency does this create for the company? 4. Marketing wants to introduce a new UHT long-life plastic bottle design with a pop-top device built in. The dairy plant currently does not have a bottling machine that can fill these types of plastic long-life bottles. What are the main issues for production/processing? What will the main impact be on operations? Please describe your concerns in a ‘response to marketing’ outlining the key issues and considerations you have. 5. Quality control is a significant issue to protect the integrity of products and reputation of the business. Please outline a quality control process you would recommend for the fresh milk range of products so that the process can be consistent across both sites. What are the key issues you would focus on and how would you control for them? Can the merged company centralize any aspects of quality control or will it need to be managed at each site? Why?