QUESTION $3(20$ Marks$)$

Examine the scenario provided below and answer the following questions.

Croesus Manufacturing Limited $($CML$),$ based in Cape Town, specialises in the development and

production of AI$-$driven commercial drones. The company$$s strategic goals include the following:

$$ Enhance Reliability and Performance: Improve the reliability and performance of AI$-$driven drones

to meet or exceed industry standards.

$$ Streamline Production Processes: Reduce costs and boost productivity through optimized

production processes.

$$ Strengthen Supply Chain Resilience: Develop a more robust supply chain to minimize disruptions

and ensure timely availability of components.

$$ Optimise Inventory Management: Lower holding costs and improve production continuity by

optimizing inventory levels.

$$ Expand Market Reach: Increase market presence and drive revenue growth through targeted

expansion strategies.

Recently, CML has encountered intensified competition due to an influx of low$-$cost imports from China

and other regions, leading to a significant decline in sales. In response to these challenges, the

operations manager at CML commissioned a comprehensive review of the critical and strategic decision

areas of the company's operations management.

To conduct this assessment, CML engaged Mr$.$ Kirk van Houten, a seasoned operations management

consultant. Mr$.$ van Houten delivered the following executive summary highlighting key findings and

problematic areas, providing invaluable directions to enhance operational efficiency and strengthen

CML$$s competitive position.

Executive Summary

This report presents a thorough evaluation of Croesus Manufacturing Limited $($CML$),$ focusing on the

company's operational performance and potential areas for improvement.

CML$,$ a leader in the development of AI$-$driven drones, has successfully integrated advanced technology

into its product line. The company$$s commitment to innovation and design excellence is evident, but

continued evolution is essential to maintain market leadership.

The production system is well$-$structured to meet current demand, with sufficient capacity to

accommodate future changes. Regular evaluation of production processes is advised to ensure

sustained efficiency and adaptability.

CML$$s Cape Town location offers significant logistical advantages and access to key markets, supporting

operational efficiency and market presence. The facility layout enhances production by optimizing

workflow and minimizing disruptions.

Maintenance practices at CML are robust, effectively minimizing equipment downtime and ensuring

reliable performance. Adherence to maintenance schedules has proven effective in maintaining

operational continuity.

However, recent feedback has raised concerns about the reliability of the drones' functionality, suggesting

potential shortcomings in the quality assurance processes. These issues could impact product

effectiveness and customer satisfaction. In addition, several internal challenges have been identified.

Discrepancies between workforce skills and production requirements may lead to inefficiencies. Supply

chain disruptions have affected the timely availability of essential components, causing fluctuations in

operational costs. Inventory management issues are impacting both storage costs and production

continuity. Furthermore, scheduling practices have resulted in delays in meeting production and delivery

targets, affecting resource utilization.

Conclusion

This evaluation identifies both strengths and areas requiring improvement within CML$$s operations.

Addressing these challenges will enhance operational efficiency, improve production reliability, and

strengthen the company's market position.

The scenario above was synthesised by the examiner.

REQUIRED:

$3\mathrm{.}1.$Based on your knowledge of the ten critical and strategic decision areas in operations management,

critically discuss the key challenges identified in the consultant$$s report regarding CML$\text{'}$s operations.

Provide an in$-$depth analysis of how these challenges affect CML$$s operational performance and strategic

objectives.

$(10$ Marks$)$

$3\mathrm{.}2.$Offer actionable recommendations to address the primary challenges identified in CML$\text{'}$s operations

management, as highlighted in the consultant$$s report. Your recommendations should aim to enhance

operational efficiency, resolve identified issues, and support the company's strategic goals.

$(10$ Marks$)$

QUESTION