Analysis Of First Group Bus Company Business Essay
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In this report, I had conducted a research into First Group Plc that offer bus services around town in United Kingdom and North America.
The first part will be five performance objective such as speed, dependability, cost, flexibility and quality that perceived by the manager, employee and customer through interview. In additional, among of the five performance objective, the most important one for a company who provide bus services and how to improve it will be discuss in this report too.
The second part is calculating the Design Capacity, Effective Capacity and Actual output of the organization. Besides that, I will calculate the main bottlenecks that affect the organization by considering the capacity constraints.
The third part, I will observe a single operation of the company and gather data. I will calculate the capability index by the data gathered by me. Other than that, I will state the potential cause of variation and suggestion to reduce the variation.
I will include my company profile in my report to give a better idea on what First Group Bus company.
First Group Plc is one of the largest company who offer bus services around town in United Kingdom and North America. The company has more than 8500 buses and carries 3 million passengers a day in more than 40 major towns around United Kingdom (First Group, 2010).
First Group is an international company and run the operation in large scale. Its annual revenue is over 6 billion pounds and has 130,000 staff (First Group, 2010).
The mission statement of the company is We are the leader in safe, reliable, innovative and sustainable transport services (First Group, 2010).
5 performances objectives.
According to Slack et al (2007, P 39), five performance objectives is meant by a more tightly defined set of objectives that relates specially to its basic task as a tool to make decision in order to satisfy customer need. The 5 performance objective can be explain at the table below.
Doing things fast
Doing things right
Doing things cheaply
Doing things differently
Doing things on time
The above definition is from the book of 'operation Management'. (Slack et al, 2007)
The above polar diagram shows that the 5 performance is perceived by two different people from their point of view. The driver of the company, Mr. Paulosborne and the customer is Miss Yap Chui Yein who is the student of UWE.
From the above polar diagram, we realize that most of the performances are similar between the customer and driver.
The dependability of the bus is quite high as most of the bus is arrive on time. Besides that, the flexibility of bus services is medium as the buses had a fixed route and change the route easily. But, they do change according to customer's suggestion to improve their services. (Mr.Paulosborne, 2010).
Mr. Paulosborne( 2010) perceive that cost are reasonable but customer perceive cost a little bit higher as the cost of operation of the bus is higher compare to other industry.
The quality of buses of first group is very good. It is well design and comfortable according to the view of the driver and customer.
The speed of bus is quite high as there are lot of quality driver. Besides that, the bus services are very frequents, so you will take catch a bus very soon to reach your destination. (Ms. Yap, 2010)
Perceived User Value (PUV)
Perceived user value will give us a clearer image for us as compare to 5 performance.
From the chart above, we able to observe that there are some performance objective is split into two, for example, cost is split into operation and bus fare. From the PUV, it able to give us a better and clearer understand on the performance objectives.
From the PUV above, the bus fare is almost same from the driver and customer's point of view. On the other hand customer perceives that operation cost would be higher as First Group plc is a large company. But according to Mr. Paulosborne (2010), the operation cost is low as First Group plc is operating in a large scale.
Besides that, the quality of service and bus is quite high as the bus's condition is always clean and comfortable. Besides that, most of the drivers are friendly and helpful.]
On the other hand, the speed of solving problem and speed of the bus is quite fast. Drivers are able to solve the problem quickly because there is communication between them and the main operator. Besides that, The speed of bus is quite fast and the bus service is very frequent so customer able to get to their destination quickly.
Out of the performances, the cost and dependability is very important for a consumer. Although the price is reasonable, but consumer will always looking for a better service in cheaper price. (Miss Yap, 2010). From Mr. Paulosborne (2010), Cost will be more important in the future as customer would like to enjoy a cheaper fare and there will be more competitors to enter the market. But we must keep an eye on our dependability because customer won't pay for a service that are not dependable although is cheap.
( 100% of buses arrive on time)
(10% of buses does not arrive on time)
(90% of buses arrive on time)
(5% of buses does not arrive on time)
(85% of buses arrive on time)
The above data is provided by Miss Georgina (2010)
According to Slack et. al ( 2007, p329), design capacity is a theoretical capability of an operation which cannot always be achieved in practice and is often greater than effective capacity.
First group plc had design their bus's time table according to the demand of customer and number of employee that are working on that day. First Group plc had divided a week into 3 categories which are weekday, Saturday, and Sunday. Due to higher demand of customer and more employees that are working on weekday, the bus services are more frequent compare to the Saturday and Sunday.
On the other hand, there will be less frequent of bus service on the night time due to less demand and number of worker that are working at night time.
Effective capacity is the useful capacity of the process or operation after changeover has been accounted. (slack et al, 2010, p329). Effective capacity is equal to design capacity minus planned loss. ( Pearson Education, 2006)
There are some planned losses that will reduce the design capacity. According to driver, Mr.Paulosborne (2010), traffic condition is one of the largest problem that affected the bus is not able to reach on time according to the timetable which set in each bus stop.
Besides that, time spend on service the customer can be one of the planned loss. For example, if there are many passenger abroad the bus, buy ticket, and ask question from the passenger, it will affect the time of the bus abroad, thus will result the late arrival of the bus to the next stop.
Due to the planned losses, only 90% of the busses are able to reach the destination on time according to the time- table. (Ms. Georgina, 2010)
Actual output is effective capacity minus avoidable loss. (Pearson Education, 2006)
There are some avoidable losses that will reduce the effective capacity. Bus breakdown is an avoidable loss. Bus breakdown can lead to serious problem such as bus can't provide service according to plan and might lead to customer dissatisfaction.
Besides that, system breakdown can be a serious problem that will affect the bus's record and daily routine. System breakdown will lead to most of the bus delay as it not able to do the arrangement.
Quality of bus driver will also affect the quality of bus services to its customer and low quality bus driver will lead to dissatisfaction of the customer and punctuality of the bus. Absenteeism is also a problem that caused by quality of employee.
There are 5% reduction for avoidable loss which result 85% of the bus is able to reach the destination on time. (Mrs. Georgina)
Capacity constraints/ bottlenecks
Capacity constraint is meant by operate at below of their maximum processing capacity. (Slack et al, 2007,p322). The capacity constraint in First Group plc is punctuality of the bus according to the timetable which set by the management.
There are a few bottlenecks that affect the punctuality of bus. One of the main bottlenecks is traffic condition. Traffic condition is very hard to predict as it is different on anywhere and anytime. This can be solve or reduce by better arrangement according to survey and request for bus lane for more place to avoid jam.
Quality of driver is also a bottleneck of the operation. Quality of bus driver will influence the punctuality of the bus. Drivers are the one who drive the bus and provide service to customer. Low quality driver will not able to meet the expectation of the time set by the management. In order to solve this problem, management need to set a strict rule on drivers and on hiring drivers as well.
Bus breakdown is also a serious problem which will affect the punctuality and daily routine of the bus. In order to solve this, first group need to perform check up on the bus before the bus is depart from the site and using a better spare part on the bus will reduce the chances of the bus break down.
Besides that, the demand of customer is vary as different time and different place. In order to meet the demand of the customer, survey, continuous improvement and changes should be make in order to meet the customer demand and satisfaction.
In this report, I was required to measure the capability index of the single operation of the company. According to Lee Ing Tong et al (2008, p 209-220), capability index is highly effective and measure how a process is perform whether it is reliable or not.
Different result of capability index indicates different meaning to the operation. If the capability index is greater than 1, it is taken to indicate the process is capable. On the other hand, if the capability index is less than 1, it is taken to indicate the process is not capable. ( Slack et al, 2007,P 555).
The operation that I had chosen is the arrival time of the number 70 buses on Lockleaze bus stop that heading to Frenchay campus according to the time table. In order to get the data, I will observe and collect the data that I require from the First group website which shows the exact arrival time of the bus on lockleaze bus stop.
The reason I chose this operation is because punctuality play an important role in the company as it indicate the reliability and the commitment from the company to its customer.
According to Miss Georgina (2010) who working in the human resources department, the tolerance level of the arrival of the bus is 5 minute late and 1 minute early.
Key: Cp= the capability index
USL= Upper specification limit
LSL= Lowe Specification limit
α= Standard deviation.
(Extract from engineering statistics handbook, 2003)
The data is extract on 23rd and 24th of November from 9am till 2pm. Assume that the tolerance level is plus 5 minutes and minus 1 minute.
Due to the capability index is 0.2915, thus it is less than 1. We can conclude that this operation is not capable.
Reasons and initiatives to reduce variation
There are several reasons that cause the above operation is not capable. Traffic condition is one of the main reasons to result the variation of arrival time. Traffic condition is very hard to predict, although there are bus lane in several place but it's doesn't much on the punctuality.(Mr.Paulosborne ,2010) In order to reduce the variation, First Group need to consider the traffic condition is a main factor that will affect the capability index of the operation. Besides that, survey and proper planning should be done in order to overcome this problem.
Besides that, employee plays a very important role in determine the capability of the operation. Bus services are provided by the drivers. Low quality of driver will not able to meet the expectation of the company and unable to arrive on time. By setting up a strict rule on the drivers is able to reduce the variation of the operation. Besides that, management should set a strict rule on hiring new driver so they can meet the expectation of the company.
Speed of boarding process of customer into bus is also one of the factors that cause variation of the operation. In order to speed up the speed of boarding process, First group had increase and decrease the fare where the fare will rounded up to the nearest 10p. (First Group.com, 2010)
In conclusion, the report shows that the 5 performance objective of First Group Plc is perceived by a driver and a customer through interview. Out of the 5 performance, they perceived that cost and dependability will become more important in the future in order to stay competitive.
Besides that, there are some factors that affect the actual output such as planned loss and avoidable loss. The actual output of First Group is 85%. There are some ways to improve the actual output by solving the bottleneck of the company.
The single operation I had chosen is calculate the arrival time of the No. 70 bus 's capability index. From the result I get, I realise that operation is not capable. There are some factors such as traffic condition, quality of driver and speed on boarding will cause the variation. Besides that, some suggestion is being suggested in order to reduce the variation, thus improve the capability index.
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