Obviously, it is vital for the organization to look at these productive factors to ensure a smooth distribution of the resources and wealth of the organization for the achievement of its profitability goals or objectives. In this paper, I will be reviewing network planning, operational planning, communication pathways, and organizing and managing activities and responses that are initiated by Ace Airways and Al Zhara Hospital.
Ace Airway has its headquarters in the Anchorage International Airport (ACE Air Cargo, 2012). The portfolio of the Airways is made up of cargo flights, passenger, and small package services and logistics. Currently, Ace Airways is planning to extend its operations to Cicely, Alaska to Rome, Wisconsin, and Settle, Washington. These new opportunities would provide the organization better profit generation. The initial evaluation says that the Cicely Airport would generate $2500 profit per flight from Cicely to Rome; while the flight to Seattle would open $2000 per flight.
Al Zhara Medical Center is focused in providing health services to both local and foreign population in UAE. The hospital caters full health care services including diagnostic, surgical and medical, as well family and dentistry practices. Al Zhara Hospital in Dubai can easily access as it is near business hubs such as the Dubai International Financial Center, the Burj Khalifa, and the Dubai World Trade Center.
Task 1.
Linear programing works on the relationships between the productive factors to transform the homogenous goods and services as inputs into other homogenous services and goods as outputs (Dorfman, 1951). With the aid of the linear programming, it is easier for the economist to see the best combination of factors that will yield to best and maximized profit. Primarily, the goal of linear programming is to create a mathematical model that will determine the maximum profit and lowest cost scenario.
Illustration 1: Maximized Profit for Ace Airways
*Y-Axis = Flights to Rome/ X-Axis – Flights to Seattle
The linear programming above shows the best possible combinations that can be used by Ace Airways to gain more profit for the company based on the following constraints:
- Only nine flights can be made from Cicely, Alaska to Rome, Wisconsin.
- Ace Airways only has one gate which operates 12 hours a day; and each flight has one hour gate time, which means that the gate can only handle 12 flights a day.
- Only 150 hours are available for pilot labor.
Using these constraints, the graph above shows how Ace Airways can taken advantage of the $2500 profit for the flight to Rome and $2000 flight to Seattle.
Mainly, Ace Airways can have sole flights to Seattle, and drop Rome flight, to earn $24000, or take the other way around to earn $22500, but these are not the best options for the company. And it is necessary for the company to combine these two flight routes to take advantage of the best maximization of its resources – at the top of it is the constraint of its single gate in Cicely Airport. In fact, it could have been that Ace Airways flight 15 flights to Seattle to earn $30000 and still be in parallel with the 150 hours pilot labor, but that would be in direct problem with the allowable number of flights of the gate.
Yet, in the graph we see the best combination that will give Ace Airways a maximized profit is in (6, 6). This means that Ace Airways must fly 6 flights to Rome and 6 flights to Seattle. The combination would not be in contrast to the 12 allowed flights of the gate; this would use the resource to the fullest. In the same manner, 6 flights to Rome, Wisconsin would only need 90 hours of pilot labor, and the 6 flights to Seattle, Washington would need 60 hours of pilot hours; the combination would really use the 150 hours of pilot labor. This combination would provide Ace Airways a total of $27000 [$15000 for Rome route and $12 for Seattle route.]
But still, if Ace Airways would want to give breaks to its pilots, it can use the (5, 7) combination. This would allow 5 hours of pilot labor allowance, but it will yield to $26500 [only $500 difference from the best option or combination provided by the linear programming graph above].
Task 2
Critical path method (CPM) or critical path analysis provides a diagram or model for the prediction of the duration or length of the project (Schwalbe, 2010). Critical Path Analysis or Network Analysis is a tool used to create plans on activities that will make the operation shorter and better. This is a technique used in project management to ensure that the project does not overrun its schedule. This tool looks at the possible ways, approaches, and series of activities that should be taken by the organization to determine the shortest possible time to complete the project. By putting series of activities into test of duration, the project is completed at shortest time to avoid overspending.
Mainly, the first part of the CPM is to develop the network of activities that are included in the accomplishment of the project. The project manager must keep all details of the project listed in the network of diagram, especially alternative routes of activities that can be done to replace certain activities that may lengthen the project completion. Second, each activity should be provided their own time-frame or duration. After which, the project manager takes the tasks or activities into a series to see what must be done first and so on.
Mainly, the first part of the CPM is to develop the network of activities that are included in the accomplishment of the project. The project manager must keep all details of the project listed in the network of diagram, especially alternative routes of activities that can be done to replace certain activities that may lengthen the project completion. Second, each activity should be provided their own time-frame or duration. After which, the project manager takes the tasks or activities into a series to see what must be done first and so on.
Yet, it must be noted that CPM only provide an overview of the time dimension of the project, it is not a complete list of all critical activities that should be done. This is the reason why it is necessary for the project manager to take corrective actions when activities already slip their schedules. By doing contingencies and correction actions, the project will be placed back to its original path and avoid schedule overrun, which is the eventual reason of cost bursting.
Illustration 2: Critical Path Analysis
The critical path diagram above shows the activities or procedures that should be taken by Al Zhara Hospital in relocating the medical center to Al Warsan suburb. The relocation plan is targeted to better serve and meet the demands of students of Dubai International Academic City. The plan includes construction of a new facility for the hospital and to make the hospital operation within the shortest possible time. It should be understood that the critical path diagram shows only the connection of the processes and steps. It can be that activities be done at the same time, provided that no necessary activity or predecessor is required to complete the task.
While the project team looks for administrative and medical staff (with the aid of Al Zhara Hospital's HR department), it can also work on the selection of the site with the aid of an engineering firm that the hospital can ink a deal with. There is no conflict in doing these tasks at the same time because they need separate individuals to complete and they don't overlap with each other. This will allow Al Zhara Hospital to complete the relocation project faster. However, the next processes and activities of the organization are dependent on some predecessors, as such these activities must be done only when the requites are complete.
For instance, it would be impossible for the HR department to train staff and support or the personnels without the recruitment process as provided in the Interview Applicants for Position task. The critical path diagram shows the activities that should be completed first by the project team before they can proceed to the next tasks. Near the end of the relocation project, we can see that a task is dependent on two or three predecessors. This means that if these predecessors are not that done properly, it would be impossible for the other tasks to be completed or accomplished successfully. Take notice of the equipment installation task. The equipment installation would be impossible if the purchasing of equipment is not done properly. In the same manner, the installation of equipment is also impossible if the hospital is not yet constructed.
In essence, Al Zhara Hospital relocation project maintains a critical path. The determining factor to the longest and shortest path to take is the hospital construction. If these tasks are done according to plan or to the number of weeks they are projected to be completed, delays or slack of time can be avoided. However, if these tasks are not taken as they are scheduled, it would be difficult to fulfill the deadline. Take notice of this: if the construction of the hospital is delayed due to weather conditions and delays in construction materials, the entire schedule is affected. As noted above, installation of equipment is impossible when the facility is not complete.
In essence, the critical path provides the relocation project to accomplished in just 70 weeks. All other activities that need time in the relocation project can be done while some other tasks are being completed. By going after the focus on the construction details, the organization is assured that they can reach the perfect and shortest time possible without delays. This also ensures that the company will not be spending more than the expected or estimated cost.
Lastly, as noted above, the CPM is a comprehensive guide on the completion of the project. However, it is necessary for the project team to be flexible and to keep the CPM updated when new things arise. Otherwise, the CPM may be completed or followed, but other tasks are left behind or not included in the priority tasks that should be done.
Task 3
In Al Zhara Hospital case, the CPA provides an operational process that should be followed. However, there are constraints that may hinder the accomplishment of the process. As such, when the process or the schedule is not followed, losses are incurred. According to Wallace (2006), an operational plan deals with the strategies of the organization on how they will be implemented and how issues are resolved to avoid escalation of the damage or impact. It is necessary for the operational plan to look for the results of the strategic plan for the future.
At the top of the operational plan's importance is its control and management. Operational plan executes the strategic plan of the company. Al Zhara seeks to relocate the medical center and the schedule is already laid. Without the operational plan, it would be impossible to see the entire process being implemented and achieved. As such, it is necessary for the organization to look for possible ways on how to implement the schedule to avoid slack time. With the aid of operational planning, all tasks of the organization's project are evaluated to seek their strengths and weaknesses to ensure that risks are avoided or resolved before they become threat to the accomplishment of the strategic plan or the schedule.
The objectives of operational planning and control is to ensure that cost of the project is kept at bay. The goal of linear programming is to look for the best possible way to maximize the project of the organization by reducing the cost of the operation. In Al Zhara Hospital, the cost of the relocation is already estimated and operational planning ensures that the cost remains reasonable to the estimate or allocated resources of the organization. However, even if operational planning seeks to develop a method to reduce the cost of the operation, quality results must be assured. The company cannot just purchase or choose equipment that have low quality. It is still the goal of the organization to look for possible equipment, raw materials for construction, the best people for the job and the best facility, while keeping cost reasonable.
Another important factor to the operational plan is the speed of the project completion. A single day delay may cost thousands of finances. Speed is an essence in the implementation of the project because it helps to ensure that the project becomes available for revenue generation right on time. If the project is not complete or does not meet the schedule time, the organization may suffer losses in the meeting the return of investments. However, with the help of speed in implementation of tasks, the organization is assured to get the ROI right on time without delay to avoid high and inflating interest (especially for loans).
With the CPA diagram above, a schedule is made on how to complete the project. With the aid of the schedule, the project is on its track. However, as I have already mentioned, a CPA schedule is not always on the standard, rather it is a flexible schedule that meets the changing demands of the productive factors. When things change, it is necessary for the organization to find ways on how to meet these changes. It is necessary for Al Zhara to look for ways on how to maintain strength and keep the schedule while inserting any necessary task or any concern and issue that should be resolved.
The goal of Al Zhara Hospital relocation to Al Warsan suburb is to meet demands of staffs and students of Dubai International Academic City. To meet this, Al Zhara needs to act quick and to implement the strategic plan faster. The ultimate goal of this is to keep Al Zhara a dependable healthcare service provider in the area. This means if delays happen, in contrast to the promise of Al Zhara to academic institutions of the Academic City, it will cause the organization's reputation.
Specifically, the operational outcomes of Al Zhara Hospital relocation include the financial value of the plan (Pateman, 2008). It is necessary to transfer the demand of the operational plan to the financial outcome. In fact, we can consider this as the most important aspect of operational planning. It is necessary for the organization to gain from what it has invested on.
Task 4
Perhaps, the most important productive factor and operational planning goal that should be given utmost attention is quality. In the triangle of priority, quality must maintain the topmost corner. Otherwise, everything is compromised. For Al Zhara, a low-quality equipment may not produce the best and may cost lives – and eventually damage the reputation of the medical center. In essence, the goal of quality is to keep the name of the organization in perfect shape. This is part of the long-term investment of the company. Although, building and protecting the reputation may not have direct financial gains that should be invested on, the same also provides the life of the company in the future.
Quality Circles
Quality Circles of Kaizen [Continuous Improvement] is a technique and approach in strategic change and operational management that works on the value of introducing incremental changes and development in the organization or business, rather than implementing changes in a single blow (Tutor2U). This technique ensures that efficiency and quality are both achieved. The good thing about small changes is that it allows the organization better opportunity to change the impact of the change when things are not working well. This ensures that when risks and threats are found by the operational manager, these risks and threats can be easily resolved.
In the same manner, Quality Circles is more focused on what employees can help to secure the operations of the organization. Instead of the executives monopolizing the implementation of the changes, employees have the opportunity to join the organization's operation. This is anchored on the reality that employees are the one who are exposed to the day to day operations of the organization, which give them the view on what's happening to the organization. Employees should know what are the ways and approaches on how they can improve the quality of their performance.
As with the Al Zhara Hospital, it should be noted that the implementation of the schedule is seen closely by employees. For instance, the engineer of the hospital construction sees the operation of the organization better than those who are in the office. For Al Zhara Hospital relocation to be accomplished smoothly, it is important for them engineer or any field in-charge to have the authority to implement these incremental changes that will affect the completion of the project. Because the person in-charge knows the ins and outs of the organization's operation's it would easier for him or her to implement changes that would ensure high quality results or outcomes.
Variance Analysis
As noted above, it is necessary for the organization's operational plan to consider the financial outcome of the project or strategic plan. Variance analysis is a technique used to evaluate and measure the different between the planned actions and the actual situation (Accounting Tools, 2013). This technique of measuring the quality of the project is more concerned with the financial standing of the organization. Nonetheless, this analysis is focused on small sections than the whole. In the accounting perspective, this analysis is concerned with the financial flow of the organization in a small period, rather than on the entire business cycle. By analyzing the small sections or financial periods, it is easier for the organization to see the weakness of their operation and the strength of the results.
With regards to Al Zhara Hospital relocation, we need to acknowledge that the entire project involves money. In fact, it is necessary to implement the schedule of the CPA to see the best way to maximize results and minimize cost. In variance analysis, the task as scheduled (see diagram) is analyzed and measured according to their financial value. Each section of the project operation involves money, and it is necessary to measure the financial quality of each task. For instance, in the recruitment of employees, it is necessary to note the financial value that the organization gets out of the task. There should always be a price tag attached to the action of the organization. This is the reality of business. By keeping the financial quality of each task, Al Zhara will be assured that the project will yield financial success or outcome in the future.
By evaluating and comparing the cost of the plan and the actual one, it is easy for the operational manager to review the action. For instance, if the construction of the project's cost goes beyond the planned or allocated cost, it is easy for the operational manager to see that there is something wrong with the construction, which results to the overspending problem. With the aid of variance analysis, operational manager sees problems like this and resolves them.
Six Sigma
The goal of six sigma is to keep the project of quality or even near perfection. This technique follows set of methodology that eliminates defects and problems. Instead of just relying on observations, the measurement is more data-driven and is anchored on a clear criteria and requirement, which is drawn from series of mathematical and statistical procedures. In essence, the real of six sigma is to analyze the output per action to see defects and problems (iSixSigma). Just like in Quality Circles, wherein small changes are adopted, in six sigma outcomes of small changes or actions are analyzed and measured to see how they are working for the best of the entire project. Through this, the evaluation of the entire project is more realistic and assurance of quality is achieved.
With regards to Al Zhara Hospital, it is important to note that the six sigma can be applied on every single task being accomplished. For instance, before installation of equipment is made, six sigma must be applied on the construction of the hospital. Simply, the hospital must be evaluated and measured if the facility meets the quality standard. This ensures that if any defect is found on the hospital, it will be resolved first before equipment will be transferred and installed. Rather than going on with the installation and the eventual full operation of the hospital, six sigma ensures that the facility is of high quality to avoid accidents and other untoward situations brought about by the impact of defects in structural construction.
In the implementation of the strategic plan of the organization, it is always important to consider the entire operation of the business. You cannot just expect the strategic plan to work out and achieve its goals and objectives without proper analysis of risk factors. In the same manner, in operational planning, control is always associated with evaluation. Through evaluation, mistakes are corrected at their first onset. This is the value of operational planning. Rather than waiting for the damage to grow and become a big hole to the system, it is necessary to confront and resolve it before further damage. If the operational plan can contain risks and threats at small levels, the entire operation of the organization would be in good hands.
