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GROUP ASSIGNMENT (GROUP 2)

TITLE: DIAN PANG (M) SDN. BHD


SEMESTER 1/ SESSION 2013/2014
COURSE CODE

BPB 31103

COURSE NAME

PRODUCTION & OPERATIONS


MANAGEMENT

FACULTY

TECHNOLOGY MANAGEMENT &


BUSINESS

STUDENTS NAME

1. SIN YUN YI

(AP120415)

2. WUNG PEY WEN

(AP120408)

3. TAN YEE FAN

(AP120220)

4. LOW CHUI LING

(AP120186)

SECTION

1&2

LECTURERS NAME

DR. NG KIM SOON

SUMMITTED DATE

16 DECEMBER 2013

Acknowledgement
We have taken efforts in this project. However, it would not have been possible without
the kind support and help of many individuals and organizations. We would like to extend our
sincere thanks to all of them.
We are highly indebted to Dian Pang (M) Sdn. Bhd. for their guidance and constant
supervision as well as for providing necessary information regarding the project & also for their
support in completing the project. In addition, we would like to express our special gratitude and
thanks to industry persons for giving us such attention and time.
Lastly, we also take this opportunity to express our profound gratitude and deep regards
to our guide (Dr. Ng Kim Soon) for his exemplary guidance, monitoring and constant
encouragement throughout the course of this thesis. The blessing, help and guidance given by
him time to time shall carry us long way in the journey of life on which we are about to embark.
We are grateful for their cooperation during the period of our assignment.

CONTENTS
TITLE
1.0

Introduction

PAGE NO.
1-3

1.1 Operations Management


1.2 The Importance of Operations Management
1.3 The Reasons of Study Operations Management
2.0

Objective of Factory Visit

3.0

Learning Outcomes

4.0

Background of Company

5.0

Organizational Structure of Operations Management

6.0

Operations Management Practices and Performance

6-9

6.1 Operations Management Decision Areas


6.2 Operations Strategy
6.3 Manufacturing Performance
7.0

Discussion

8.0

Recommendation

9.0

Conclusion

12

10.0 References

13

11.0 Appendices

14-24

12.0 Reflection about the Learning from Operations

25-28

Management Course

10
11-12

1.0

Introduction
1.1

Operations Management

Production is the creation of goods and services. Operations management is the set of
activities that creates value in the form of goods and services by transforming inputs into outputs.
Activities creating good and services take place in all organizations. In manufacturing firms, the
production activities that create goods are usually quite obvious. Operations management is also
an area of management concerned with overseeing, designing, and controlling the process of
production and redesigning business operations in the production of goods or services. It
involves the responsibility of ensuring that business operations are efficient in terms of using as
few resources as needed, and effective in terms of meeting customer requirements.
All types of organization must do operations management because all organizations
produce some mixture of products and services. Remember though that in many organizations
the term operations management will not be used. In many smaller organizations operations
management may be done by people who perform many other types of task such as marketing
and accounting.
1.2

The Importance of Operations Management

To be able produce professional managers capable of fulfilling strategic roles within


business and government enterprises the need for the practice of operations management cannot
be forgone. Operations management is very important in business operations since it forms the
heart of the organization by controlling the system of operation. Operations management deals
with the design, operation, and improvement of the systems that create and deliver a firms
primary products and services. Like marketing and finance, operations management is a
functional field of business with clear management responsibilities.
In operations management, the student will find tools and information to become the best
manager possible. Many of the management tools learned in operations management may be
applied to personal life and other disciplines. Students will be more successful in life as well as
work with these tools. Operations Management course will introduce us to basic business ideas
and their implementations.

Operations management is important. The decisions it makes have a major impact on


both the cost of producing products or services and how well the products and services are
produced and delivered which has a major impact on the revenue coming into the organization.
So, operations management has an important impact on both revenue and cost and therefore
profits. This also applies to not-for-profit organizations. In a local government service, for
example, good operations management can produce services which satisfy the community and
are produced efficiently. So the community is getting value for money from their local services.
An effective operation can give five types of advantage to the business. First, it can
reduce the costs of products and services by being efficient. Second, operations management can
increase revenue through increased customer satisfaction in producing quality goods and services.
Third, it can also reduce the amount of investment (capital employed) necessary to produce the
goods and service by being effective and innovative in the use of resources. Fourth, operations
management provides the basic for innovation by building a solid base of operations and
knowledge. Lastly, it can improve productivity, which improves an organizations financial
health.
1.3

The Reasons of Study Operations Management

There are four reasons that we study Operations Management. Operations Management is
one of the three major functions of any organization, and it is generally related to all the other
business functions. All organizations market (sell), finance (account), and produce (operate), and
it is important to know how the Operations Management activity functions. Thus, we study how
people organize themselves for productive enterprise.
Next, we study Operations Management because we want to know how goods and
services are produced. The production function is the segment of our society that creates the
products we use. In addition, we study Operations Management is also to understand what
operations managers do. By understanding what these managers do, we can develop the skills
necessary to become such a manager. This will help us explore the numerous and lucrative career
opportunities in Operations Management.
Lastly, we study Operations Management because it is such a costly part of an
organization. A large percentage of the revenue of most firms is spent in the Operations

Management function. Indeed Operations Management provides a major opportunity for an


organization to improve its profitability and enhance its service to society.

2.0

Objectives of Factory Visit


The objective of the factory visit is to help students gain first hand information regarding

functioning of the industry which presents the students with opportunities to plan, organize and
engage in active learning experiences both inside and outside the classroom. The specific
objectives for the students are to understand the process, become aware of the role of different
people in an organization and career opportunities, and focus students on specific aspects of their
studies.
Factory visit is a part of an operations management course, during which students visit
factory and get insight regarding the internal working environment of a factory and how a
factory functions, as well as useful information related to the practical aspects of the educational
course which cannot be visualized in lectures. The factory visit is considered one of the most
tactical methods of teaching. It provides students with an opportunity to learn practically through
interaction, working methods and employment practices. Moreover, it gives exposure from
an academic point of view.

3.0

Learning Outcomes

Upon the completion of the Production & Operation Managements program and factory visit, the
group members should be able to:

Understand of production and operations concepts.

Understand the system approach to operations: production and operations management as


a part of the organization and operations as a series of related subsystems.

Understand the roles of production and operations management among various business
functions and their roles in the organizations strategic planning and gaining competitive
advantage.

Understand production and operations management techniques.

4.0

Background of Company
Dian Pang (M) Sdn. Bhd. was founded in 2006 and located in Parit Raja, Batu Pahat. The

company has gradually become a regional leader in the cooking oil industry. The success of Dian
Pang (M) Sdn. Bhd. may be attributed to the remarkable synergy that has developed over the
years between its core businesses.
Dian Pang (M) Sdn. Bhd. was set up by local entrepreneurs who had a unique vision.
This was to produce a high-quality cooking oil to satisfy the fast-growing demand for this staple
in Johor.
Dian Pang (M) Sdn. Bhd. processes, supplies and distributes cooking oil praying oil and
sundry goods to the Johor and Melaka. In 2006, the company celebrated its first commercial
production run in Batu Pahat. The companys initial strategy was to concentrate its marketing
effort on the cooking oil market in Batu Pahat. Once it had consolidated its position within Batu
Pahat, the company then expanded their market to the Johor state. Dian Pang began to actively
supplies and distributes its products and continues to increase its market share in the Johor and
Melaka regions.

5.0

Organizational Structure of Operations Management

Organizational Structure of Operations


Management
Managing Director (CEO)
TAN AH BAH

Executive Director
TAN HAN CHONG

Assistant Manager
CHUA SIOK KHENG

Production Staffs

Lorry Driver

Director
TAN KEN LEANG

Office Assistant
Nurul Aini Bte Mohd Safari

Assistant Lorry Driver

6.0

Operations Management Practices and Performance


6.1

Operations Management Decision Areas

OPERATION MANAGEMENT DECISION AREAS


CAPACITY
SUPPLY NETWORK
PROCESS TECHNOLOGY
DEVELOPMENT AND ORGANISATION
Table 1

SCORE
3.4
3.5
3
2.6

OPERATION MANAGEMENT DECISION


AREAS
4
3.5
3
2.5
2
1.5
1
0.5
0

SCORE

CAPACITY

SUPPLY
NETWORK

PROCESS
TECHNOLOGY

DEVELOPMENT
AND
ORGANISATION

Figure 1

Based on the questionnaire, the manager has given her opinion in each of the question by
scoring point of 5 to 1, the degree of emphasis of the following operation management decision
areas in their company, where 5 represent very high score, 4 represent high score 3 represent
average score, 2 represent low score and 1 represent very low score.

The graph above shows the operation management decision areas is included capacity,
supply network, process technology, development and organization. Majority of the operation
management decision areas scored Average (scoring point of 3) and High (scoring point of 4)
which are capacity, supply network, process technology, development and organization. Besides,
process technology and organization have Low score.

Capacity is the ability of the factory to receive or contain, the Average score (scoring
point of 3.4) is providing resources to support quality, using quality as performance criterion,
sacrifice high utilization for fast and dependable throughput. High score is balance capacity
across end-to-end processes and coordinate capacity planning.

Supply network is a patterns of processes used in a facility and over distribution


connections, adding value to customers by improve delivery and manufacturing of products. The
High score (scoring point 3.5) in supply network area is purchase using quality criterion,
integrated supply network coordination to ensure synchronous flow, link with and coordinate
with suppliers' and customers' planning systems. Besides, internally, customers become their
own supplier rather than depending on another function. For the High score is continuous quality
emphasis with suppliers, work on functional barriers, work on functional barriers, supplier
development to ensure quality and delivery conformance.

Next, process technology of the factory scored Average (scoring point 3.0). There is
high score as built-in quality in process, statistical process control and emphasis on process
control. Enhance quality capability, quality as a performance criterion, emphasis on equipment
reliability and reduce process variability in Average degree of emphasis. Following is the Low
degree of emphasis which is small flexible technology; information technology is an enabler of
cost reduction and very substantial investment in IT capability.

Last, development and organization of the factory scored Average (scoring point 2.6).
Operation supervision is high degree of important. The degree of emphasis in Average as
following long-term plans, quality culture, continuous improvement, quality performance
measurement and control, communication, appropriate organizational structure, locate decision
making at the lowest practical level, rethink business processes in a cross-functional manner,
dramatic cost reduction can come from the elimination of unnecessary process steps,
improvement through a structured decision-making cycle and provide very substantial emphasis
on process knowledge. There are training and education emphasis, continuous improvement
through waste elimination, smooth synchronized flow exposes waste, people motivation and
involvement through reduced buffering, ensuring high degree of fit between the ERP's structure

and the operation's processes, providing very substantial training and familiarization, ensuring
very high degree of data integrity, strong evidence-based methodology and provide very
substantial training scored Low.

6.2

Operations Strategy

OPERATIONS STRATEGY
QUALITY STRATEGY
FLEXIBILITY STRATEGY
DELIVERY STRATEGY
COST STRATEGY
Table 2

SCORE
3
2.75
3
3

OPERATIONS STRATEGY
3.05
3
2.95
2.9
2.85
2.8

SCORE

2.75
2.7
2.65
2.6
QUALITY
STRATEGY

FLEXIBILITY
STRATEGY

DELIVERY
STRATEGY

COST STRATEGY

Figure 2

Based on the questionnaire, the manager is given her opinion in each of the question by
scoring point of 5 to 1, the degree of important of the following operation strategy in their
company, where 5 represent very highly score, 4 represent highly score 3 represent average score,
2 represent lowly score and 1 represent very lowly score. There are 4 types of operation strategy
which are quality strategy, flexibility strategy, delivery strategy and cost strategy.

This particular graph analyses the respondent (manager) answers regarding their
factory in general, all type of strategy using by this factory is Average degree of importance.

According to the graph estimates largest of times selected in degree of importance on the
operation strategy in factory Average (scoring point of 3). First, the degree of important on the
Quality strategy is Average (scoring point of 3.0) . There are detail of quality strategy, reduce
defective rate, improve vendor and supplier's quality, implement quality control program,
obtained international and local quality certification.

Next, Flexibility strategy is one of the important strategies to control the duration time
in operation factory. Reduce time to manufacture; procurement lead time and set up (changeover)
time is Average scoring point of 2.75. Reduce time to develop new product is Low. Third,
Delivery strategy Average (scoring point of 3.0) on degree of important, there are increasing
delivery capacity and delivery speed addition improving pre-sale services and technical support,
technical assistance of service to customer and after sales service. Last, Cost strategy of the
factory is to minimize the expenditures or costs in each of the operation process, manager's
opinion the degree of important on cost strategy is Average (scoring point of 3.0). There are
reducing unit cost, material cost and inventory cost for every operation process.

6.3

Manufacturing Performance

MANUFACTURING PERFORMANCE SCORE


FINANCIAL PERFORMANCE
2.8
MANUFACTURING PERFORMANCE
3
Table 3

MANUFACTURING PERFORMANCE
3.05
3
2.95
2.9
2.85

SCORE

2.8
2.75
2.7
FINANCIAL PERFORMANCE

Figure 3

MANUFACTURING
PERFORMANCE

This is a graph that quickly illustrates what the performance of the factory on financial
and manufacturing in this few years. The score of financial performance is most on Average
(scoring point 2.8). Manufacturing performance scored Average (scoring point of 3) in all. This
graph also shows that manufacturing performance higher than financial performance.

Particularly, this graph shows that the Dian Pang Factory needs to focus on "financial
performance" and "manufacturing performance" as they are important to their organization and
their satisfaction is quite low. In financial performance is included: Return on investment, Return
on asset, Return on sales, Growth in sales, Profit and Product cost per unit. Majority of the
financial items scored Average excepted Return on asset scored Low (scoring point 2). In
manufacturing performance scored Average which is overall productivity, process quality,
product quality, volume flexibility, product flexibility and on time delivery.

7.0

Discussion
In Dian Pang (M) Sdn. Bhd., there are five process of packaging the cooking oil. The

main production is 5kgs of cooking oil.


The first step of packaging is labelling. The worker has to take empty bottle of 5kgs from
the bag. Then, they will put the bottle on the machine; it will follow the belt and go through a
balancing & stability machine. The label that has pre-setting will auto label on the bottle itself.
Last, the worker pick up the bottle with its label and ready to start on next process.
Next is the palm oil filling process. Each palm oil filling requires of 8 bottles of 5kgs.
Once the labelled 8 bottles are ready, the worker will place them on the moving belt. The bottles
are going through the filling machine. The machine is automatically filling up palm oil into the
bottles. The gate door will open up once the filling process is completed. Upon the gate door is
open, the moving belt is starts at the same time. The bottles will moves out and next worker is
assigned to put the bottle cap onto each of the bottle. The moving belt will send the bottles to
next process.
Third process is bottle cap tighten process. The bottles will be tightening up when go
through the machine. The fourth process is the packing process. The moving belt will send the

bottles to packing area. Then, the workers will pack and seal 4 bottles into a box. Once boxes are
pack full on a pallet, it will load to a store place. The loading and delivery process is the last
process. Once the goods are ready, worker will load the goods into lorries and distribute
according to the order placed.
Dian Pang (M) Sdn. Bhd. had a complete and effective production process. The whole
process from extracting cooking oil to packaging cooking oil, it only takes less than 1 day to
finish. Dian Pang can process and packaging cooking oil about 3 ton per day. The operation hour
of the factory is 8 hours per day.

8.0

Recommendations
It is recommended that Dian Pang (M) Sdn. Bhd should advertise their service and

information about the industry through online advertising. The industry may make use of internet
to market and promote services to their customers. Online advertising that the industry can do
includes email marketing, social media marketing, mobile marketing and an array of display
marketing such as banner ads, pop-ups, and so on.
In online advertising, the industry is able to convey more details about the advertisement
to the customers and that too at relatively low cost. Moreover, any form of advertising helps in
improving the branding and online advertising stands a notch high in improving the branding of
an industry, service or product.
Nowadays, advertising on the Internet is almost a necessity for modern businesses.
Customers use the Internet for more than simply entertainment or information, as they do with
radio, television, magazines and newspapers. They use the Internet to assist them in nearly every
aspect of life, creating countless opportunities to place relevant, targeted ad messages. Therefore,
it is better if the industry use online advertising because it may helps the industry to easily reach
the targeted customers, which leads to their campaigns success.
Dian Pang (M) Sdn. Bhd. should minimize the use of human resource in packaging and
filling the cooking oil. In 2012, Dian Pang (M) Sdn. Bhd. had been transformed the traditional
packaging method to automated method. Since 2006, the company had been applied the

traditional method to filling all the cooking oil into bottle or plastic which was by filling the
cooking oil manually. However, due to increasing demand of cooking oil and rapid change of
technology, Dian Pang (M) Sdn. Bhd. decided to implement the automatic filling and packaging
machine. The machine has two main functions which are filling the cooking oil and packaging.
These two functions can be completed simultaneously. The machine had reduced the time of
filling and packaging of cooking oil. Moreover, the machine is more accurate and reliable.
However, Dian Pang (M) Sdn. Bhd. is still employed the same amount of workers to
finish the filling and packaging of cooking oil. The need of staff had reduced due to the
implementation of new machine. Hence, the company should reduce the amount of staff in order
to avoid redundancy in the operation process and increase the operation performance.
Besides that, Dian Pang (M) Sdn. Bhd. should implement the performance evaluation
method of operation system. In Dian Pang (M) Sdn. Bhd. there is no proper method to evaluate
the performance of the operation system. The company should implement a method to
objectively analyze and evaluate the factors that can reflect the whole circumstance of the system
by gathering all kinds of data in manufacturing system. This method mainly studies on
manufacturing system, makes mapping between business indexes and manufacturing process
indexes, builds evaluation model based on operation management, which has the advantages of
convenience, promptness and exactness. In the end, this method demonstrates the effectiveness
of the model through example analysis. By implementing the proper and formal method to
evaluate the operation system, Dian Pang can improve their efficiency and effectiveness.

9.0

Conclusion
In a very simple way to express the operation management, by doing it right will provide

the ability to meet the essential needs of the company, the customers, and the suppliers in order
to increase the profitability of the company. However, the process of manage operation and
production is complicated. It involves many method, thesis and analysis to make sure all the
process can be function efficiency and effectively. Furthermore, the operation management not
only relevant in production and operation, it also engaged on accounting, human resource and
marketing.
Dian Pang (M) Sdn. Bhd. is a typical small and medium enterprise that may not have a
complete and complex operation management. However, the company is able to maintain their
competitive advantages by improving gradually on their system over the years. The company
also shows the evolution of their operation process from traditional method into advance
automatically method.

10.0

References

1. Jay Heizer & Barry Render (2013). Operations Management: Sustainability and Supply
Chain Management, 11th Edition, published by Pearson Education, Inc., 2014.
2. http://en.wikipedia.org/wiki/Operations_management
3. http://www.slideshare.net/sthemiso/chapter-8-slides-operations-management
4. http://wps.pearsoned.co.uk/ema_uk_he_slack_opsman_4/17/4471/1144821.cw/
5. http://www.scribd.com/doc/11521407/Importance-of-Operations-Management
6. http://www.businessdictionary.com/definition/supply-network.html#ixzz2nVhQ6I85

11.0

Appendices

Group Photo:
1. WUNG PEY WEN
2. SIN YUN YI
3. TAN YEE FAN
4. LOW CHUI LING

Photo 1

Photo 3

Photo 2

Photo 4

Photo 5

Photo 7

Photo 6

Photo 8

Photo 9

Photo 10

Photo 11

12.0

Reflection about the Learning from Operations Management Course

NAME

: TAN YEE FAN

MATRIC NO.: AP120220


SECTION

:1

I and my group members had visit to industry, which is Dian Pang (M) Sdn. Bhd at Parit
Raja, Johor on 15th November 2013. This visit was a part of coursework for Production and
Operations Management course. The objective to visit industry is to expose students to working
environment in the field of production and operations management. It is also a new approach in
learning process which is student can relate the theory in lecture.
I have learnt other skills from visiting the industry, such as conducting an interview.
From the mock interview sessions, I have learnt what to expect from a real-life job interview, so
that I can be more prepared in the future. This course has been very enriching and enjoyable.
Throughout the course, it has tremendously contributed to my growth as a student. Every activity
and assignment in this course was a unique learning opportunity. Many of the management tools
learned in operations management may be applied to personal life and other disciplines. This
course aims to give understanding of the role of operations management in production and
service organization. And, I believe the course succeeded in achieving this goal.
In short, I would like to thank the Dian Pang (M) Sdn. Bhd. manager for providing us
with the practical information and share their knowledge for us. The visit was a great success
proving to be highly educational. This experience such as these is invaluable for enhancing my
understanding of the production and operations management course. Furthermore, I would like to
say thank you to my lecturer, Dr. Ng Kim Soon for his patient to teaching me for 14 weeks. I am
also very thankful for this experience and I look forward to using what I have learned in this
class within my career in future.

NAME

: LOW CHUI LING

MATRIC NO.: AP120186


SECTION

:1

A visit to factory, which is DIAN PANG (M) SDN. BHD at Parit Raja, Johor was held
on 15th November 2013. This visit is a part of coursework for Production and Operations
Management course. This visit is supervised by Dr. Ng Kim Soon The objective are to expose
students to working environment in the field of production and operations management and
career as a manager of factory. It is also a new approach in learning process which is student can
relate the theory in lecture and real world in production and operation factory.

Through this visit, we could feel the atmosphere of DIAN PANG, which is the spirits
of decreasing human errors and creating high-quality products. Then we could learn how
workers act in fact by joining the factory-tour and we could learn how to realize the results by
watching the exhibitions. On the other hand, we could know the actions that are the
consideration for the pollution of the environment on production site and products. It was the
most important experience for us in order to think of it. We would like to use the knowledge
gained in this event for our operation and production managements researches. At last, this event
was very effective for increase understanding on our course.

Overall the general impression I got from this course was a confirmation of what I
have learned on every chapters of production and operations management. Operations
Management deals with the design and management of products, processes, services and supply
chains. It considers the acquisition, development, and utilization of resources that firms need to
deliver the goods and services their clients want. Beside that, we also have to learn the tactical
issues include plant layout and structure, project management methods, and equipment selection
and replacement. Operational issues include production scheduling and control, inventory
management, quality control and inspection, traffic and materials handling, and equipment
maintenance policies. Therefore, I believe that we might be an opportunity to apply what we
have learned in future.

NAME

: WUNG PEY WEN

MATRIC NO.: AP120408


SECTION

:2

First, I would like to give my greatest gratitude to my beloved lecturer, Dr.Ng Kim Soon.
He had been delivered the courses effectively and patiently answered all the questions that
students asked so that we can understand the class completely. Dr. Ng is a very concern and
caring lecturer. He is willing to discuss and make adjustment when the students are facing
problems in their assignments. He always advices the students to do more exercise and shares his
experience in the production and operation management to his students in order for the students
to understand better all the method and theories that teach in class.
Next, from the classes of production and operation management, I learn about the
knowledge of production and operation process, theories, methodology and analysis. I also
realize that production and operation management is very important in the part of technology
management. It requires a lot of basic knowledge from accounting, human resources to
marketing.
Last but not least, I also learn a lot of knowledge from the factory visit. After the visit, I
am able to apply the concepts of the production and operation management to the real life
situation.

NAME

: SIN YUN YI

MATRIC NO.: AP120415


SECTION

:2

First of all, I had learnt a lot of useful knowledge from the classes of production and
operation management. I had learnt the fundamental concept of production and operation
management and able to apply the knowledge in an integrated manner. Through the classes with
Dr.Ng Kim Soon, I also gained a lot of knowledge from the experience he shared when he was in
the industry of operation and production. Through the experience he share and the real examples
he gave during the classes, I was able to understand more about the production and operation
management.
Although we had been facing a lot of difficulties during our assignment, our group is still
able to complete the assignment. The difficulties that we had been faced made me realized that
everything does not come easy. When interviewed with the manager of Dian Pang (M) Sdn. Bhd.,
I gained a lot of useful information and knowledge about the production management.