UOS MBA Student ID:SEGIS-J-001570

MODULE PGBM03
Operations Management
BY Susan Ong
20th Jan 2015

Word count: 2800 words

Assignment Title:

Looking at your company at organizational level, or department level critically assess

the operational methods and strategies adopted to provide the product(s) in a way
that give(s) maximum satisfaction to the customers or clients.

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EXECUTIVE SUMMARY
The scope of this report is critically analyse and assess the operational methods and strategies
adopted by First Solar in order to gain winning order in the industries and achieving the
Corporate strategies goal by adapting the Hills model and its explained the important of internal
supportive and internal relationship within department and its operational process to analysis the
current operation need and gaps and was evaluated basing on the customer expectation and
satisfaction level. The evaluation are basing on little measurement and using few tools basing
in order to achieve the customer satisfaction level.
The best recommendation for improvement plan was implemented and continuous monitoring to
sustain the customer satisfaction level are also essential that can be incorporate into the current
operation need and further have a position in the market.

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Table of Content
page
Executive Summary

1.

Introduction of First Solar

2.

Corporate Vision

3.

Department Inter relationship

3-4

4.

Customer (Internal Customer)

4.1 Internal Customer expectation

Performance Objective

6-7

5.1

5.

Performance Measure

6.

Operation Management

8-9

7.

Systems Operation and process

10-11

8.

Operation GAPS

12

8.1

Performance Matrix Cost, Quality & Dependability

12

8.2

Electricity Cost

13

8.3

Quality
13

8.4

Dependability

13

9.

Conclusion

14

10.

Recommendation

14

10.1
10.2

14

Cost
Quality

11.
12.

15
10.3 Dependability
Redesign a new CDA systems process
Implementation

13.

Order Winning

19

14.

References

20

15.

List of Table & Lift of Figures

21

15
16
17-18

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INTRODUCTION OF FIRST SOLAR

First Solar is a world leading company in photovoltaic (PV) solar energy provider. The
company energy solution is able to reduce the fuel price fluctuation, and at the same time
to delivery an LCOE which is cost competitive. With the technologies advancement of the
company by integrating the technologies its comprehensive services and expertise in the
system, the company able to integrate the entire solar value chain and able to offered
bankable PV energy solution with reliable and affordable solar electricity to the user.

Figure 1: First Solar Technologies & Capabilities

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CORPORATE VISION OF FIRST SOLAR

Figure 2: First Solar Corporate Objective

In order to be competitive and win the market share and position of the company in the
market. First Solar created the company vision as figure 2 Corporate Objective strategies. Its
1st goal of Organization objectives is solar panel cost reduction of cost per watt and follow by
implementation of conservation program and support towards carbon admission program for
all system equipment which is in the Operations strategy.

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3.

DEPARTMENT INTER RELATIONSHIP

Figure 3: Department inter relationship

There are seven supporting function in the organization, and all the department is co-operating
and supporting each others job functions. Each of the supporting department plays an
important role in transformation process.
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a. Manufacturing Engineering
The demand and needs analysis Is important for manufacturing engineering in order to
plan and sizing the production line in order to satisfy the needs and demand which
necessary supported by Facilities department. Any changes in the activities need to be
communicated within the facilities department and manufacturing engineering if there
is a reduction of the product demand or vice versa for control management and
effectiveness of the capacity planning (Reid & Sanders 2002) (Figure 3).
b. Information technology
System and information in database is important in manufacturing environment. The
connection of the system with internal customer and external customer is crucial in
determine the productivity and cost efficiency.
c. Purchasing
Raw material is the main component in the production. Purchasing play an important role
not only in the cost controlling, but also ensure the material is according to the
specification and quality demand by the company.
d. Human resources
When production in running, manpower or workforce is crucial in making sure the
production line run according to the standard. Workforce on time, and competency
workforce become main challenge for HR function. HR needs to ensure the workforce in
the production line not only on time, but is capable and competence to perform the job.
e. Finance & Accounting
Finance & Accounting is to control and manage the expenses, and make sure all the
expenses is accrued accordingly.
f. Security
Security is one of the crucial item in the facilities, we needs to ensure all the vendor who
are working with us is comply with the company standard.
g. Marketing
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Play an important role in communicates the company product to the market in the right
time. At the same time, getting feedback in the product needs in the marketing, so that we
can produce as per customer request. Example. 87W and 97W.
h. EH&S
We are producing product which required high clean and dry environment. We have to
ensure the community environment is well taken care off.
4.

INTERNAL CUSTOMER

Figure 4: Positioning Facilities Department Operation Function

In First Solar, the Operation management of the production involves two major functional
team which is Manufacturing Engineering and Facilities Department.

Manufacturing

engineering in charge the production line, and Facilities department are managing and
maintaining the facilities equipment support to meets the needs of the organization core
operation which is the Solar panel manufactured by the manufacturing engineering and
facilities department is the crucial as operational function is managing facilities systems
supporting to Manufacturing engineering as Internal customer in supporting to sustain the
operation of the manufacturing production line process towards core business products
(Chotipanich S 2007) (Figure 4).
4.1

Internal Customer Expectation

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Facilities Department work hand on hand with Manufacturing Engineering department.

The company is not afforded to have any unplanned interruption. Both department
works closely to support the daily operations in meeting customer needs. Close
communication and interaction for both company is important in achieving operations
excellence and company strategy. (Nigel F 1995). Below Table 1 are the Manufacturing
Engineering expectations for order winning and satisfaction level.

5.

PERFORMANCE OBJECTIVE
Table 2: Competitive factors imply to performance objectives

Cost, quality and flexibility are the order winning factor to the business in order to be
competitive in the market. First Solar required to have cost competitive improvement as
lowest cost per watt to the solar panel produce by them. Further the quality of solar panel
specifications of requirement need to match with at least 87w and 12% efficiency with the
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production capacity size enable to meets the changing volume of products demand flexibly
(table 2).
The performance indicator for facilities department is basing on the internal customers
expectation and together also basing on the Organisation goals. Table 3 demonstrate the
facilities department performance metrics is set in order to qualify to achieve the internal
customer satisfaction.

5.1 Performance Measurement

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Figure 5: Facilities department actual performance vs customer expectation

Overall facilities department performance rating is 3.2 versus customer satisfaction level
as in 3.8, maximum rating is at 5. The facilities department has not met the customer
expectation basing on the performance metrics on criteria Cost, Quality and dependability
(figure 5). Therefore, the facilities department need to have a plan to be executed in order
to improve the performance.
6.

OPERATION MANAGEMENT

Thin film solar panel needs to be produce under the clean compressed dry air (CDA) supply.
Facilities department play an important role in making sure the facilities environment and
power supply do not get interrupted during the process. Preventive maintenance is needed to
be pre planned to all facility equipment and systems. Therefore, cooperation of the Facilities
department and Manufacturing engineering are crucial in implementing and manage resources
conversation program, efficiency in electricity and water consumption or total capacity of the
equipment efficiency in achieve strategic goal. Cost efficiency in thin-film solar panel, will be
determined by all minor factors accumulation. As per the company direction to Eco-green and
cost efficiency, facilities department play a major supporting role in manufacturing process.
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First Solar having 24 hours production plant, with total 4 shifts per day, each operation shift is
led by shift supervisor, and assisted by team leader. They will be the in charge person in
providing system support, and to make sure the manufacturing is in process as per the
standard. Apart from there, they are the person to assign to conduct checking and
troubleshooting to the equipment and system. Supervisor and team leader required to record
all details into the daily working time shift record and submit to the mechanical or electrical
engineer to follow up and for record purposes. Facilities Manager plays an important role to
certify all facilities systems and equipment performance are in good condition. All the
operation equipment and system are monitored by Facilities Management Control systems
(FMCS). FMCS are providing a real time monitoring enable minimise the down time. The
system will allow company to analyst the system optimum efficiency and at the same time
evaluate for continues improvement process, not only in term of process but also the
equipments capability. Ultimately, company can gain competitive advantage and cost
efficiency. According to Hayes and Wheelwrights model, increase in strategic impact will
helps in increase operations capabilities. Improving the operations contribution, will bring a
significant impact in operations. First Solar is in the stage 3, where they are able to gain and
link company direction internally, and clearly this is the best practise among the industry.
(Figure 6) (Hayes R H and Wheelwright S C 1979).

Figure 6: Hayes and wheelwright Four stage model

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Example, the solar module cost per watt reduce from USD1.59 in year 2008 to USD 0.70 in
year 2013 has indicated the alignment of the company goal and direction is internalised and
getting support from the internal department, facilities department will be the champion on
this success.
7.

CDA SYSTEM OPERATION AND PROCESSES

Manufacturing engineering production process, one of the major facilities systems is the
Compressed Dry Air (CDA) System industrial-energy used of 12%. It is also well-known as
the most expensive utilities in the industry.
CDA system is in support to produce signal movement for robotic sorting pack, robotic
stacker, conveyer operating, spray & drying process, air valves & in a straight line for cooling
ventilating purposes. Therefore, the feature of CDA in terms of dryness and dew point is
important with point of use of 7 bars and at ~40oC dew point.

Figure 7: CDA systems process

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There are five units (5) of compressor compressed air distribute the air to the air receiver
tanks. The receiver tank task is to store the compressed air to standby during peak demand and
the compressed air has about temperature of 43 OC transfer through the pre-cooler and its
converted the compressed air temperature to 32 OC. then the cooled compressed air is to be
pre-filtered. The dyers runs automatically to absorb the water vapour from the compressed air
-67 OC dew point and oil vapour or others hydrocarbon will be remove after filtered Finally a
quality of compressed air of 7 bars will delivered to production line (Figure 5).

Figure 8: Process type for CDA System

CDA system is automated system continuously operated to supply compressed dry air
continuously to production (Reid & Sanders 2002). This processes are running in continuous
without break as its operates 24 hours x 7 days (Figure 8) (Hill T 2002)

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Figure 9: Process Matrix

CDA system process matrix is shown at figure 9. CDA system need to produce a high
volume of 10.660 Nm3/hr being measured using the process matrix (Hayes R.H and
Wheelwright S.C 1979).
8. OPERATIONAL GAPS
8.1

Performance Matrix Quality, Cost & Dependability

Figure 10: Importance Performance Matrix

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The improvement plans is necessary to deliver quality as it will directly impact the
production process and corporate strategy in reducing cost per watt for solar panel.
Figure 10, Measure the importance of dependability and quality towards customer
satisfaction.
8.2

Electricity Cost

Facilities department need to maintain a low facilities operation cost and yet to implement
conservation program. The CDA system electricity consumption cost per year is about
USD4 million which is below the internal customer satisfaction level. Therefore, the
facilities department must have a plan to minimize the wastage of energy usage, however
the measurement of the electricity consumption was not established appropriately yet.

8.3

Quality

Access conducted and there was minor leakage in the CDA system was found which
caused an impact on the system efficiency. The monitoring of the filter at the air intake of
the compressor was weak and not consistent. This will interrupt the production and
causing the production loss in quality, with this pressure fluctuation will affected the
robotic system fail to operate to hold the panel glass and causing the glass fall and breaks
with the pressure fluctuation will affected the key quality.

Figure 11 demonstrated CDA

systems pressure fluctuation at 6.6 bars and min ad 8,5 base on max, whereas the
requirement for production required minimum of 7 bars. Therefore, fresh air intake
filtered monitoring must be consistent to avoid wastage.

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Figure 11: Pressure fluctuation monitor (Min 6.6 bars : Max 8.5 bars)
8.4

Dependability

At current moment there are 5 units compressors operating to produce CDA to

production line. Table 4, shown that there is always 1 unit of compressor trip which
cause the production process slow down and replacement of new blow down valve is
just a temporary solution. An assessment of reducing compressor pressure setting Bars
needed to increase and eliminate the redundancy will be the permanent solution in
order to improve the dependability rating.
Table 4: Record of Compressor efficiency

9.

CONCLUSION

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In conclusion, after critically assessing the gap for delivery of quality, cost and dependability,
improvement plan are needed to be recommended and continuation monitoring is also needed
in order for facilities department to achieve their customer satisfaction and expectation level.
In additional,

Internal supportive are equality important order to achieve the Corporate

strategies.
10.

RECOMENDATION
10.

Cost
Figure

12: Six-Sigma
Six sigma (figure 12) was adapted for the whole CDA system by facilities department
in order to achieve order winning through implementing the conservation program
(Antony J & Coronado R B 2002)
Six-Sigma output is leading in developing few cost reduction strategies with the
estimated cost saving about USD26 K per year. The implementation is the inlet of the
air temperature will re diverting the fresh air intake ducting at rooftop at 35 OC to
corridor 28 OC. replacement of the traditional condensate drain with leak-loss free
automatic drain, old motor and nozzles with efficient productivity motor and nozzles
and dew-point for dryer reduction improved by 20 OC which is from -67 OC to -47 OC.
10.2

Quality
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Recommendation to install at CDA distribution pipeline with a leak test detection on

leakage need to be implemented, the equipment able to detect air lost which enable to
increase the deficiency of compressor to avoid pressure fluctuation. At fresh air intake
filters a differential gauge needed to be install to monitor the filters condition. With the
filter monitoring its reduced the electricity consumption by 5% as it also help to reduce
the load of motor.
With the above implementation, total cost saving estimated is about USD60K per year.
10.3

Dependability

The required bar for the production tools in the production line only required CDA
supply pressure is at maximum 7 bars, however currently the CDA supply pressure
bars is at 8.3 max which is unacceptable as this is causing huge energy wastage which
is not needed. Therefore, the pressure setting are needed to be implement in order
reduce from 8.3 bars to 7.3 bars and this is follow-on shutting down 1 units of 250 kilo
watt compressor as standby. With this action its contributed USD220K per year
energy saving cost.

10.4

Redesign a new CDA system process

After implemented the above delivery of quality, cost and dependability improvement
plans. The new CDA systems required only 4 units of compressor in order to operate
by producing the compressed air in production line with around 7.0 to 7.3 bars with the
one shut down compressor as a standby units as backup. (Figure. 13)

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Figure 13: New CDA system process flow

11.

IMPREMENTATION

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Figure 14: Project management model

Facilities deployed project management model (figure 14) to maximize internal customer
satisfaction level in 5 stages.
Stage 1
The improvement plan proposal required to be approved by Facilities manager, after approval,
Manufacturing engineering, vendors and facilities department required to have close
communication to ensure all resources are sufficient. In order to be successful, this process
needs to make sure the support towards Internal environment the improvement project.
Stage 2
Project definition are focusing on the objective to win internal customer satisfaction level.
The strategies are critically assessed the operation of the CDA system enable implement the
best technique which support by delivery of quality, cost and dependability.
Stage 3
Project scheduling of the activities describe in table 5 & 6 are important to monitor the
progress and ensure it execute accordance to the schedule timeline to support the investment
cost will have return on the cost saving.

Table 5: Project Schedule

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Table 6: Project planning activities and costing

Stage 4
This improvement plans process required Technical implementation and confirm before
proceeding to the next stage.
Stage 5
Project control are essential to monitor the project progress are within the schedule and
monitor the quality status of the project. Interposition is needed if there is any deviation and
immediate corrective action plans need to be implemented.
12.

ORDER WINNING
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Figure 15: Facilities department performance vs customer satisfaction

After implemented all the improvement plan, the facilities department performance reached
4.5 versus customer expectation rate of 3.8 against maximum of 5. With all the above
improvement plans it has improved cost, quality and dependability that satisfied customer
expectation towards order winning (figure 15)
The all the above implementation it is also align with First Solar goals & objective by
reducing the CO2 emission,

were the estimated saving cost for power consumption of

2,630,000 kilo watt per hour per which equivalent of translated over 1,615 metrics tons of
carbon dioxide per year. (Sinha P and Jenkins L 2012)

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13.

REFERENCES

Dr. Jiju Antony & Coronado R.B. (2002). Design for six sigma.

First Solar is the global leader in photovoltaic (PV) solar energy, n.d. Available from :
http://www.firstsolar.com/en/about-us. [29 December 2014]

Hayes, R. H. and S. C. Wheelwright. (1979). Link manufacturing process and product life
cycles. Harvard Business Review (January-February): 133-140
Hill Terry. (2005) Operation Management, 2nd Ed. Basingstoke:Palgrave Macmillan

Nigel F. Piercy (1995). Journal of Marketing Practice: Applied Marketing Science. Customer
Satisfaction and the internal market. [Onlne] Emerald Database Vol. 1 Iss 1 pp. 22-44.
Available from : http://www.emeralinsight.com [13 December 2014]

Parikhit Sinha and Laura Jenkins (2012). Estimating Carbon Displacement by Solar
Deployment. Technical report.
Reid & Sanders (2002) Operations Management. 3rd edition. United Stated of America: George
Hoffman.

Reid & Sanders (2002) Operations Management. 4th edition. United Stated of America: George
Hoffman.
Sarich Chotipanich (2007). Positioning and repositioning FM. Emerald Article. 26 (9/10), pp.
374-388.

Slack, N., Chambers, S. & Johnston, R. (2010) Operation Management. 6th edition. Harlow,
Pearson Education Limited.
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Table 1 :
Table 2 :
Table 3 :
Table 4:
Table 5:
Table 6:

List of Table
Internal Customer expectation
Competitive factors imply to performance objectives
Facilities Department KPI
Record of Compressor efficiency
Project Schedule
Project planning activities and costing
List of figures

Figure 1: First Solar Technologies & Capabilities

Figure 2: First Solar Corporate Objective
Figure 3: Department inter relationship
Figure 4: Positioning Facilities Department Operation Function
Figure 5: Facilities department actual performance vs customer expectation
Figure 6: Hayes and wheelwright Four stage model
Figure 7: CDA systems process
Figure 8: Process type for CDA System
Figure 9: Process Matrix
Figure 10: Importance Performance Matrix
Figure 11: Pressure fluctuation monitor (Min 6.6 bars : Max 8.5 bars)
Figure 12: Six-Sigma
Figure 13: New CDA system process flow
Figure 14: Project management model
Figure 15: Facilities department performance vs customer satisfaction

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