OPERATION MANAGEMENT

PGBM03

GOKHAN SAGLAM

STUDENT ID: 129074768

Table of Contents

1 INTRODUCTION.........................................................................................1

2 FOUR V`s OF OPERATION.......................................................................1

2.1 VOLUME....................................................................................................................1

2.2 VARIETY...................................................................................................................1

2.3 VARIATION IN DEMAND......................................................................................1

2.4 VISIBILITY................................................................................................................2

3 THE SERVICE PACKAGE........................................................................2

4 Operation Function`s Five Performance Objectives.................................3

4.1 QUALITY...................................................................................................................3

4.2 SPEED.........................................................................................................................3

4.3 DEPENDEBILITY.....................................................................................................3

4.4 FLEXIBILITY............................................................................................................3

4.5 COST...........................................................................................................................3

5 OPERATION STRATEGY.........................................................................3

6 PROCESS DESIGN......................................................................................4

6.1 PROCESS TYPE........................................................................................................4

6.2 LAYOUT TYPES.......................................................................................................4

7 PRODUCT AND SERVICE DESIGN........................................................4

8 PLANNING AND CONTOL.......................................................................6

9 INVENTORY AND MATERIAL MANAGEMENT................................6

10 SUPPLY CHAIN MANAGEMENT........................................................6

11 Quality Assurance & Quality System......................................................8

12 Project Management..................................................................................8

13 RECOMMENDATIONS...........................................................................8

14 CONCLUSION..........................................................................................8

15 Bibliography...............................................................................................9

1 INTRODUCTION

Vodafone made first mobile call of UK on 1 January 1985. Today the company has more than 403 million customer around the world and become a valued brand name. In addition, it is operated in 30 country and has partner with more than 50 network. Vodafone invest innovation and creative ideas always and the pioneer of mobile telecommunication in its history.

In Four v`s of Operation, the process will be identified by regarding product and/or service`s attributes based on operations` of the company. Service package analysis will define the tangible and intangible items within the company which are used in its operations. The company`s performance objectives will be analysed and determined based on five key point. Process and layout types of the company will be critically analysed based on volume and variety proportion. The stages of the product and service design will be identified and critically analysed. Planning and control for service will be critically analysed based on the current and new operations of the company. Inventory control and stock information and methods will be determined. The work method of the company by deciding new supplier and control methods for current supplier will be discussed. Methods and programs of the company to be able to have quality service and products will be identified. The future projects of the company will be discussed. Finally, based on the findings some recommendations will be commented.

2 FOUR V`s OF OPERATION

2.1 VOLUME

Vodafone customers used 850 billion minutes. Also, it is equal to 208 minutes per month per customer. Moreover, they used 161 petabytes of data which means 1,400 three minute video every second in 2011.It means that Vodafone present to its customer high repeatability. Each section of the company have individual work and work are systemized depends on the subject. There is always information flow which is repeatable and systemized also it gives low unit cost depends on circulation. According to this consideration it is clear that volume of organisation is high.

2.2 VARIETY

Prepaid customers constitute 79% of total customers according to Vodafone annual report 2011.It shows that there is no flexibility in majority of usage because the lines are limited by credit therefore they can buy other services if they have credit, moreover it is easy to achieve credit in internet, phone or casual environment, so top up systemization is well defined. They have more than 370 million customers in the world and they are routine customers who are in connection all the time. Prices of all services are standardized and these can not be changed without informing to the customer, in addition these all provide low unit cost for the customers. It is clear that variety which considered by points, is low.

2.3 VARIATION IN DEMAND

There were 370 million Vodafone customers in 2011 and it rose to 404 million in 2012 around the world, therefore to afford this demand Vodafone increased base station number from 224,000 in 2011 to 238,000 in 2012 in the world(Vodafone Group Plc:2011,2012). According to annual report of Vodafone in 2012 that there will be approximately 1.5 billion new mobile phone users, in

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addition majority of them will use smartphones. It means that particularly data usage will increase based on smartphones specification. Also they plan to increase 3G footprint capacity in Europe which is 82% capable of maximum data speed of 14.4Mbps to 100% of capacity in 2015(Vodafone Group Plc:2011,2012). Post-paid lines and contracts offer different kind of opportunity to the customers even they exceed the limit they can continue to use their line by charging, it means that there is flexibility. From wide viewpoint all these things afford demand. In addition Vodafone plan to put 1000 small cells in UK to expand network area and effectiveness as well as 200 of them will be in the tube in 2013(Fitchard,2012). Vodafone call centre work 24/7 for listening complaints or desires of customers, also they communicate with them and get feedback directly from customers and evaluate the information to correct mistakes and develop system through demand of customers. High unit cost is necessary to provide all these service and product. These considerations show that variation in demand is high.

2.4 VISIBILITY

Vodafone service to their customer in short time to afford their desires in less time as possible as. Employees by activity, which has 49% of whole activity, refer to customer care and administration (Vodafone Group Plc: 2011). This percentage clearly shows that satisfaction governed by customer perception and feedback. Vodafone develop and upgrade its customer services which service to them presence as well as online (Vodafone Group Plc: 2011). Call centres of Vodafone service 24/7 to its customers and these conversations are being recording by company to keep service quality standardized and to check employees contact skills and solutions for customer problems because they should solve their problem in less time to satisfy customers. In addition customer could ask to call centre what they like also it shows that high received variety exist. All these refer to high unit cost.

3 THE SERVICE PACKAGE

Vodafone has 14000 retailers in the world. Moreover, customers get products and help from there, if they want help one-to-one. These retailers perform direct marketing about Vodafone or have franchise to sell Vodafone products. However Vodafone serve its customer more online, through call centre and by mobile phones than through retailer. Also, the relationship between company and customers involves customer to solve their problems because for listening and solving the issue customers are needed. Vodafone devised net promoter score (NPS) to understand customer satisfaction and what extend they recommend it to others (Vodafone Group Plc: 2011). It pointed out that customer satisfaction could be understood by feedback because of intangible products which of quality can not be checked or controlled physically. `An information systems provider may produce software ‘products’, but primarily it is providing a service to its customers, with

facilitating products` (Slack, Chambers & Johnston.2010, p.13). It is understood that the products

of Vodafone based on more intangible than tangible.

Telecommunication companies change the location of information(Slack, Chambers & Johnston.2010, p.13). Also, vodafone use servers, base stations, towers and offices as a input to transform these inputs to outputs that are needed to serve to its customer such as communication and data facilities.

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4 Operation Function`s Five Performance Objectives

4.1 QUALITY

Vodafone aim to provide best data service in terms of coverage, speed and capability as well as voice and SMS. Vodafone services through retailers, call centre and online to its customers to solve their problems at the time to satisfy them. In addition, customer delight index is being determined by using NPS (net promoter score) to recognise satisfaction of customer to kept quality.

4.2 SPEED

Speed is the elapsed time between requesting and receiving service or products. (Slack, Chambers & Johnston.2010, p.42).To connect internet and to call another phones last a few seconds. Furthermore, service of call centre of Vodafone for customers very fast.

4.3 DEPENDEBILITY

If company would do thing on time and support to delivery of goods and service in minimum time

to the customer, it could give dependability advantage to the company (Slack, Chambers &

Johnston.2010, p.40). Vodafone service to customers through call centre directly when they needed and solve their problems or support them data or extra packages.

4.4 FLEXIBILITY

Flexibility means being ready for any change within the operation and it consist of

service/product, mix, and volume and delivery flexibility (Slack, Chambers & Johnston.2010,

p.46). Packages could be changed or new specification to the line could be added by call centre. Vodafone has many kind of mobile tariff plans to customer which involve different amount of data, text and minutes based on price. Vodafone provide unlimited service. In addition, the company offer flexible working to employees and prevent presenteeism.

4.5 COST

Vodafone spends money for software and hardware materials, employees and innovation. Also, the company advance flexible working to reduce expenses based on increased expenses.

5 OPERATION STRATEGY

Vodafone has competitive advantage based on technology and service and it can be understood from having the biggest brand value and brand rating respectively, $30,044 million and AAA+ according to brandirectory.com (2012). In addition products win order based on their technical performance and service. Vodafone strategy about mobile data service being the best data provider in the market in terms of far-reachable coverage, a very reliable connection, fast speed and satisfied capacity. Also, to achieve the best data provider that the company invests £6 billion every year for data service and it has largest base station capacity around the world which is 238,000 (Vodafone Group Plc: 2012, p: 22). Vodafone invest to emerging market such as India and Africa where there is big market potential. The other strategy of the company is to focus on all enterprise segments from micro-business to multinational business which are looking for more productive communicating ways created new growth opportunities for the company (Vodafone Group Plc: 2012, p: 28). Vodafone is implementing and improving its mobile commerce service, machine to

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machine and operator billing to enhance the customer experience (Vodafone Group Plc: 2012, p: 30). `Elimination of legacy IT and optimisation of investments, Single IT stacks, progressively, Common operations processes, Unclogging the organisation, Cost efficiency` are the operation strategy of Vodafone for 2015 according to Vodafone.com (2012).

6 PROCESS DESIGN

6.1 PROCESS TYPE

Mass services is being used by Vodafone. Also, volume of customer is very high and variety is low. It means that there is many customer transaction through limited contact time and little customization. For that reason, there is well applied division of labour for staff and they follow set procedures.

6.2 LAYOUT TYPES

Layout is the physical expression of process types but layout`s range is limited than process and

related. In addition, one layout types could indicate more than one process (Slack, Chambers &

Johnston.2010, p. 180). Mass services involve product and cell layout. Vodafone has product layout because transformed resources always flow to devices by fallowing certain sequences that informations called transformed resources. Moreover, call centres service to customer continuosly. Each base station distribute signals certain area also this areas called cells. Furthermore, each cell has certain capacity for servicing to devices. Likewisely, the company use cell layout.

7 PRODUCT AND SERVICE DESIGN

The stages of design consist of concept generation, screening, preliminary design, evaluation and

improvement, prototyping and final design (Slack, Chambers & Johnston.2010, p. 117). Concept

generation begin with the information which are brough out by needs of customer and, suggestions of staff and customers, actions of competitors and market serveys. Vodafone`s m2m (machine to machine) service is occured based on needs of people and to advance their experience. In concept screening project is evaluated by Design criteria and it depends on Feasibility, Acceptability, Vulnerability. Feasibility exemine that does the company have enogh skills, capacity and financial funds for it. In M2M it is clear that vodafone could afford all these steps based on its technologiacal capacity because they use for m2m technology same technological substructure and sim cards. The system achieve its goals and inform the certain machines to do necessary action also acceptability criteria is accoplished. System is always under control by servers to prevent possible erors. It indicates that vulnerability of the system is considered. The preliminary design of the sim card which are the main thing to transform information to other machine are produced based on endurance and erase/write cycle of its memory cells. In addition, data retention varies with `Ambient operating temperature (the higher the temperature, the shorter the life of the SIM), The used terminal (electrical and heat characteristics), The application running on the terminal (number of restarts and re-roam actions), The set-up of the network (requests to re-authenticate), User interaction (removing and replacing the SIM)` according to Vodafone developer website(2012). Vodafone has been using track record in M2M since 20 years and all experts focus on developing of extensive range of M2M service. In our time Vodafone embedded this system in many industry such Automotive, Consumer Electronics, Consumer Goods, Energy & Utilities, Financial services, Health, Manufacturing, Public services, Security, Transport & Logistics.

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`Delivering Next-Generation Managed Services via an Agile Business Model` showed as below:

(Roy et al,2010)

Vodafone’s Operational Blueprint for Service Fulfillment is below:

(Roy et al,2010)

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8 PLANNING AND CONTOL

Planning and controlling concern about analysing the market requirements and able to supply required resources of operation. In addition, planning and controlling is about to make supply

ready for satisfying customers demand as much as possible (Slack, Chambers & Johnston.2010, p.

270). Planning focus on future plans based on expectation of customer and requirements of market. However, to supply the operations can fail due to machine or technical resources fail or staff does not able to solve customers problems. Also, control cope unexpected problems by

monitoring them during operation (Slack, Chambers & Johnston.2010, p. 270). Vodafone services

based on telecommunication network and call centre services. The company embedded recovery and endurance requirements into the network. Moreover, system is monitored frequently by experts to respond to the failure directly with equipment which are always being waited in tracks to avoid negative customers experience (Vodafone Group Plc: 2012, p: 51). Tariff plans are most effective point to determine capacity in terms of network capacity and materials for them because all plans has certain capacity in terms of data, text and voice. In other words, this plan based on dependent demand due to tariff contract. In addition, for prepaid lines the capacity could assume based on last year`s data percentage which describe independent demand due to uncertainty. Decreased demand for voice and text cause to reduce costs of them. Data usage traffic is %67 of total traffic. Also, it means cost more money and to keep technology costs stable Vodafone choose to use cost saving methods such sharing radio sites and using RAN units which involve 2G,3G and 4G together (Vodafone Group Plc: 2012, p: 24). Vodafone is advancing `single view` service system that it allow the customers` contact centre call or video chat at the same time for in store staff.

9 INVENTORY AND MATERIAL MANAGEMENT

Inventory describe the stored material resources which are used and/or will be used by company. Vodafone is a company which based on more service than products. It means that company is always under control by control system. For example, if base station or other technical material fail, then the equipment stocked trucks send required material to necessary place. In addition, this trucks has always certain amount of material and in wide range of variety. Retailers where products of Vodafone are sold, the managers control the inventory and inform company through its inventory program to supply products.

10 SUPPLY CHAIN MANAGEMENT

Vodafone engross and communicate with its Supply chain by using its supplier management 2.0 program. Also, this program help to build reliable relationship, value, increase innovation and improve efficiency(Supplier management,2013). Vodafone evaluate its candidate suppliers under five consideration that the company determine the supplier throgh supplier qualification method. Then, supplier segmentation is applied that it help to diffirentiate to engage method with supplier. Next step involve supplier performance evaluation that the step consist of some evaluation methods based on nine core performance pillars and by utilising Net Promoter Score to recognise suppliers performance. After that, supplier optimization is the process to identfy and deliver improvement, set priorities due to clear expectation for long term and short term. The last step is supplier audit that the step is about to identify risk level of supplier through vodafone`s general high risk assesment and if necessary follow up them.

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(Vodafone,2013)

The name of Vodafone supply chain community is oneSCM. It involve to procure products and services for all steps of organization`s operations, such as equipment for its networks, corporate services and IT infrastructure. OneCSM team consists of three areas which are Vodafone Procurement Company, Operations teams and Enablers team. Vodafone Procurement Company is responsible globally for all strategic areas which relevant to suppliers. Operation teams accountable for local markets which involve customer management and trading saving in those market. Enablers team concern about supply chain`s operational effectiveness around the world.

Huawei, SIAE, IBM, Cellebrite, Hewlett Packard, EMC, Terradata, Ericsson, Kathrein-Werke are the some suppliers of the Vodafone and they awarded.

(Vodafone, 2013)

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11 Quality Assurance & Quality System

Quality is one of the effect for operation of company. Moreover, high quality product and service bring out advantage to compete in market, decrease costs and negative reviews. Also, it provide

satisfied customer which require for valued brand name for company (Slack, Chambers &

Johnston.2010, p. 495). To able to provide good service Vodafone is intervene running processes by analysing the process across its network and IT system (prnewswire, 2013). During the processes all data are being collected to analyse and inform IT staff for successful result. In addition, any deviation from expected process sequence could be led by IT staff to achieve desired result. Also, this process called `fingerprint` which are processed by company 1000 per second and to afford this high volume successfully company use six HP blade servers. "Vodafone's approach to end-to-end Customer Experience Management using TIBCO CEP software is both innovative and visionary," said Ricardo Gomez-Ulmke, vice president, Global Communications Practice, TIBCO Software Inc(2013). In addition, he state that `Vodafone is now able to identify and monitor individual events, transactions and key performance indicators in real time and detail to more effectively capitalize on opportunities as they arise`.

12 Project Management

Project management is about to manage a project from start point to end of it, by using defined sources and pursuing goals during permanent monitoring and analysing to identify deviation or

failure (Slack, Chambers & Johnston.2010, p. 459). Vodafone`s projects are made based on

expectation and demand of customer which could be possible by pursuing innovation and to invest for it. Also, by the time the company can challenge with competitors and expand its market. Long term evolution technology (LTE or 4G) is the new technology for fast and reliable data connection. Vodafone has launched this technology to able to be in market and satisfy the customer expectation and project planned by executives and engineers. Correspondingly, the company improved its base station and increased radio sites performance %12.

13 RECOMMENDATIONS

I would like to recommend to Vodafone that M2M service could be adopted to the casual life goods by dealing other technological companies Vodafone can offer its database to inform those companies. Also, if the product broken or get out of service, m2m identify the problem and make a bill for correction than the company could call or sent email own of products to inform and able to service 7/24 and if they want service they can provide it. Correspondingly, the technological company could reduce costs of call service employee, improve customer experience and satisfy customer.

14 CONCLUSION

As a result, Vodafone critically analysed, observed and interpreted by regarding the result and information which are obtained from the analysis of four v`s of operation ( volume, variety, variation in demand, visibility), the service package, Operation Function`s Five Performance Objectives( quality, speed, dependability, flexibility, cost), operation strategy, process design in terms of process and layout types, product and service design, planning and control, inventory and

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material management, supply chain management, quality assurance & quality system, project management

15 Bibliography

Annual report 2011. 2013. . [ONLINE] Available at:http://www.vodafone.com/content/dam/vodafone/investors/annual_reports/annual_report_accounts_2011.pdf. [Accessed 21 April 2013].

Best Global Brands | Brand Profiles & Valuations of the World’s Top Brands. 2013. Best Global Brands | Brand Profiles & Valuations of the World’s Top Brands . [ONLINE] Available at:http://brandirectory.com/league_tables/table/top-500-telecom-brands-2012#. [Accessed 22 April 2013].

Fitchard,K. (2012). Vodafone will start shrinking its cells in 2013 — Tech News and Analysis . [ONLINE] Available at: http://gigaom.com/2012/11/13/vodafone-will-start-shrinking-its-cells-in-2013/. [Accessed 21 April 2013].

Global M2M Service Factsheet, 2012 . [ONLINE] Available at:http://developer.vodafone.com/uploads/public/2012/10/25/simendurancedataretentionbrochure.pdf. [Accessed 23 April 2013].

Roy Page et all.2010. Next generation managed services. [ONLINE] Available at:http://www.cisco.com/web/about/ac79/docs/pov/Vodafone.pdf. [Accessed 26 April 2013].

Supplier management - Vodafone . 2013. Supplier management - Vodafone . [ONLINE] Available at:http://www.vodafone.com/content/index/about/about_us/suppliers/supplier_management.html. [Accessed 24 April 2013].

Vodafone Boosts Quality of Customer Service With TIBCO Complex Event Processing Software. Vodafone Boosts Quality of Customer Service With TIBCO Complex Event Processing Software.2013. . [ONLINE] Available at: http://www.prnewswire.com/news-releases/vodafone-boosts-quality-of-customer-service-with-tibco-complex-event-processing-software-56570347.html. [Accessed 26 April 2013].

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