19010025

Operations Management Tools

Assignment 1.pdf

Ali Beauty Hair Saloon

Ali Beauty Hair Saloon is located in Chung Pind adjacent to Alfalah Town, Lahore. Hubb-e-Ali is
the sole proprietor of the hair salon. With the current monthly profit of the business around PKR
16,000 it is barely enough for Hubb-e-Ali to make ends meet.

The Way Forward

1) Market Identification and Service Differentiation

The market for low end salons is saturated. Many competitors serve the same locality. For
Hubb-e-Ali it is prudent to identify which segment of the market is underserved; students living
in hostels at LUMS. These students must frequently venture out of the university to find a
barber. It would be convenient if a barber showed up at their hostel’s doorstep. Hubb-e-Ali
should set up a ‘on-call shop’ in a hostel room or likewise place, where students can show up
for their haircuts. Marketing would be done through word-of-mouth. Hubb-e-Ali would just
have to message one student that he would be arriving in university at a certain day and time,
and this would be spread throughout the hostel.
2) Purchasing cycle of supplies
Currently, supplies such as gels, shaving cream, towels etcetera are purchased on a weekly
basis depending on the remaining supplies. Because the number of items purchased are few,
the owner cannot enjoy discounts on bulk purchases. As there is no real cost of holding
inventory and neither are the supplies subject to obsolescence, Hubb-e-Ali should be buying
these items in bulk from Shahalmi. The extra cost of time and fuel spent to go there is much
smaller to the cost of not buying in bulk.
3) Bottlenecks and Capacity Utilization
For the whole processes, the time the customer steps into the shop till the time he exits, the
biggest chunk of time is spent on the actual hair cutting, shaving, cleaning etc. This time is
influenced by the skill of the barber. Mostly, only one of the two barbers (one of them being
the son of the owner) is present at the shop at a time. With three seats available, the current
capacity utilization is 33%. Hubb-e-Ali firstly must ensure that both barbers are present at all
times, and he himself should be there at all times to ensure that none of the seats are empty
even when customers are present. Furthermore, training of the staff is a necessity to reduce the
process time.

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