Analyse the potential operations management problems that may result from accepting the
Chinese department store’s order. (10 marks)
One potential problem that may result from accepting the Chinese department store's order is that Burkinshaw may see a drop in the quality of their products. This is because the Chinese factories have a 10% defective rate whereas the UK factories only have a 5% defective rate. This could be a problem for Burkinshaw in particular because the order for the Chinese department store is for 'exclusive, high quality, traditional' products. This in turn means that if the products are defective and not up to standard then they could damage the relationship with the Chinese department store.
Another potential problem that may result from accepting the Chinese department store's order is that the research and development centre for the product line is based in the UK. This means that there problems could arise if there is a break down in communication between China and the UK, for example wrong orders could be received in China which would be particularly problematic with the average delivery time from factory being 21 days, 11 more than the UK factories. Therefore this means that these problems could be much more costly than if they happened from the UK factories. (8/10)
Andrew Mitchell believed that the best solution to resolving the dispute over the introduction of new technology was to close the UK factories and move production to a purpose built factory in China. Do you agree with this view? Justify your decision. (18 mark)
One argument to suggest that Andrew was right in his decision was that before his plans were put into place Burkinshaws efficiency was beginning to decline. This means that the productivity of their workforce has been declining in comparison with their competitors. This has also contributed to Burkinshaw's falling sales as the market has become more competitive and because of Burkinshaw's poor efficiency...