Operations Management- Graduat Student looking for input
I put a thread under "Business Management." However, I thought it may be appropriate for this sections as well.
I am writing a research paper for my operations management class in graduate school and am gathering information on how operations relate to the lawn and landscaping industry.
I was interested to see if any of you would be willing to share information about your business or the lawn care industry as a whole. I have experience in the lawn care industry, and owned a business (yes, it was legal) for almost 5 years before I decided to focus on academics and on a masters degree; so I am familiar with this industry to an extent.
For my research I am primarily focusing on lawn maintenance companies which typically offer services year round such as mowing, mulching, pruning, fertilizing, leaf removal, etc. I am not neccesarily looking for large landscaping projects where projects are “less consistent” (due to varying expectations, costs, varying project specifications, specialized labor, subcontractors, etc)
This research paper is for academic purposes only and will not be publically published. I am mainly looking for general information about your business to tie into how the industry as a whole uses operations to gain a competitive edge and maintain controls in different areas of services.
I have made some notes on information I am gathering and would really like any input any of you all may find helpful.
The four categories I am focusing on are:
If anyone has ideas, inputs, or experience on any of these following topics, your input would be great.
Quality: do you all have any “tools” to manage quality
• Prevention cost- preventing service defects before they happen
o An example: having back up equipment to prevent a “snag” in the service operation
• Internal failure costs- any time an employee discrovers an issue with quality before the job is complete and are present at the service job site (essentially, before a customer finds it).
o What are some costs associate with this?
• Ex.) increase labor cost bc employees have to redo work, schedule alterations because of time spend on fixing issues
• External failure costs- when a customer discovers a service defect
o Costs associate with “going back” and fixing something
• Ex.) costs (fuel, schedule alterations, route inefficiencies) associated with an external failure cost
• Total Quality Management (TQM)
o Customer Satisfaction- how do you ensure satisfaction from a customer
o Employee Involvement- how do you make sure “employees are on board”
o Continuous improvement in performance- any tricks/tools you may use to promote continuous improvement in services
• Continuous improvement can range from continuously improving route distances, quality of service improvements, any efficiencies (ex. customers on pay by credit card for lawn mowing and is charged right before service → cuts down on accounts receivable collection costs) inventory management improvements, etc.
Cost of Capital: returns on your capital you have
• How much you must spend to make X amount of money
o Inventory cost- any holding costs associated with stock piling mulch?
o Storage/handling costs- any general costs associated with this, any potential recommendations to eliminate any inefficiencies
Inventory anticipation: how to know what to have on hand? And how much?
• Any specific re-order points
• Looking mainly for mulch inventory, fertiziler etc,
o Note* However, a lawn mower could be part of “inventory” required to mow a lawn → Example→ if the mower has an expected life of 1,000 hours before it becomes to expensive to repair than buy a new on → this could be a reorder point
• Reorder mower at $1,000
• Demand patterns: I am assuming mostly seasonal
o Different demand patters you may experience:
• Ex.) demand for services sold is forecasted to be 10,000 in January each year.
Or Demand for services will be foreceasted in a different measurement. Could be sales, sq. feet mowed, gallons of gas used, number of employee hours demanded in a certain season
Break Even Analysis: any examples of this
• The amount of return you must get off an invenstement in capital to break even
o An example: “for my business I typically don’t break even on a mower until the mower reaches X amount of hours
• Because I average X amount of profit margin after all indirect/direct, fixed or variable costs
I know this is a lot of information, and some of it may be pretty general. I would really like input from anyone, and if there are any additional ideas or comments, please feel free to share.
Thank you all, and input is greatly appreciated.