Operations Management Essay

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Introduction on Productivity NORSAL Background Norwegian salmon is probably Norway’s best-known export product. It is the main driving force behind the development within the Norwegian aquaculture industry. The value of exported fish and fish products from Norway was about 32 billion NOK in 2005, representing the third largest export category in Norway that year. The export value of aquacultured salmonids accounts for approximately 50 percent of this total. As wild capture will decrease slightly in the years to come, the growing demand for seafood must be produced through aquaculture production. The last 20 years, Norway has increased its market share significantly in relation to the total supply of salmon worldwide. Since the early 1970’s production of farmed fish has doubled every three years. Today, the aquaculture industry has reached the size and maturity where business can no longer be run efficiently merely by employing the ways and means that have been successful in the past. Moreover, during the last couple of years the Norwegian world market share have diminished, in large part due to competition from other countries like Chile, which has a strong and expanding aquaculture industry. The industry is confronted with a series of new challenges. The strong demand experienced by the industry since its inception is no longer outpacing supply. The firms are increasingly exposed to price pressures. At the same time, customer demands are becoming more differentiated, and not easily addressed by all aquaculture firms. Study Case: NORWEIGN SALMON PROCESSING FACILITY NorSal Trondheim operates a salmon processing facility where fish are purchased from local sources along the North Sea, processed at the facility, and sold to customers for distribution. The plant manager, Inger Hansen, is contemplating a plant modernization to upgrade the technology in the

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