Operations Management: Advantages, Disadvantages, And Strategies For R Griggs & Company Limited

Introduction to Operations Management

Discuss about the Journal Of Industrial Engineering And Management.

Operations management in concerned with the administration of business functions to create the maximum level of possible efficiency within the business organization. It is a part of business management which is related to converting raw materials and labour into finished goods and services in the best possible way to increase the profitability of the organization. Operational management team always tries to attempt the balancing cost of revenue for the purpose of achieving highest possible net operating profit. It includes the responsibility of confirming that business operations are effective and sufficient in terms of using few resources in order to gain maximum possible output to meet customer demands (Battistoni, et al., 2013). Operations management is responsible to handle different strategic issues which involve determination the size of production plants and methods of project management and implementation of the structure of information technology. In the present scenario, no business firm can become successful without considering the methods of operations management. Operations management methods provide a framework for the organization in which it has to operate for the successful implementation of plans and policies. Just like any other important stream of business management, it has its own advantages, disadvantages, features, techniques and methods (Scavarda, et al., 2010).

This report reflects a case study of R Griggs & Company Limited. The company took a decision of restructuring all its processes and functions in order to fulfil the rising demands of consumers. This report discusses various features of Operations Management. It also shows a number of advantages and disadvantages that can either lead to an impulsive growth of the business or can be cause of failure of the entire business of any industries (Dekkers & Kanapathy, 2012). Different examples have been used in this report to support the theoretical information and to link the theoretical aspect of real life business situations. Further it also includes the methods of channelizing the process of operations management so that an understanding can be created about the functionality of this process. In order to explain the concept more precisely, various examples used in this report also highlights the strengths and weaknesses of Operations Management (Mary, et al., 2015).

Capacity planning is concerned with the determination of the process of production capacity required by an organization to fulfil flexible demands for its products and services. In the relation to capacity planning, capacity designing is the main work that a business organisation is able to complete in a given period. The inconsistency between the demand of the consumers and the capacity of a business organisation results in ineffectiveness in underutilised resources and unfulfilled demands of customers. Capacity Planning aims at minimizing this ineffectiveness. Better and maximum utilisation of current capacity can be achieved through changes in OEE (overall equipment effectiveness). Capacity can also be increased through the introduction of new business techniques, materials and equipment, increasing the number of machines and workers, increasing the number of shifts and acquiring extra production abilities (Sule, et al., 2012).

In case of R Griggs & Company Limited, it has been given in the reviews that planning and scheduling system was not efficient so that capacity planning could be done accordingly. It was required to restructure the entire process of scheduling and planning. Introduction of Management Information System (MIS) was necessary to measure the performance of the operation team, suppliers, distributors and product sales. Griggs also had effective and sufficient support from Dr. Martens’ strong brand image that could help it in establishing a well-developed process of capacity planning (Aarabi & Hasanian, 2014). R Griggs & Company could adopt following strategies for its better capacity planning:

This is considered a good strategy for short-term capacity planning. This strategy is used when there is limited equipment available in the organisation and there is a large number of orders to be completed. In given case, management of R Griggs could use this strategy to complete their existed pendency of orders. But this strategy is not suitable in the long run because it increases production cost and labour cost which affect the price of the final product (Gill, 2015).

Most of the organisations do not make full use of their existing production capacity. Organizations try to reserve their capacity in terms of capacity cushion that can be used at the time of sudden increases in demand and losses of production. Griggs changes the entire time consuming process from placing an order to the production of the actual output. But he did not make full use of the equipment instead he simplified all time consuming steps in the production process. Increasing existing capacity is the widely used strategy for an effective capacity planning. This is neither incurs extra cost not requires extra time (Tenhiala, 2011).

Another important strategy of an effective capacity planning involves outsourcing of an important function of the manufacturing process to another company working in the same industry. In given case, management of the company could also be outsourced some of its processes which were increasing time in delivering the finished products. By outsourcing of processes, high level of accuracy can be obtained because work is get completed by professionals. It increases production capacity of an organisation and helps in managing the complexities of production processes (Cheng & Bing, 2012).

Coca-Cola is a well-known brand in food and beverages industry. It was founded by Asa Candler in 1892 and is concerned with manufacturing, retailing and marketing of non-alcoholic drinks and syrups. Coca-Cola operates according to the make to stock environmental techniques of capacity management. This helps the company to provide faster service to the customer by managing its resources and equipment. In the capacity management of the company, managing demands and distribution of products are the main factors to focus on. Capacity planning by the management of the company is performed in such a way so that it can serve its customer demands on time without any delay. For the better planning of using available capacity, Coca-Cola uses forecasting technique of liner regression for addressing long term occurrences and their solutions (Moose, 2016).

Timeliness is the key to get success in every aspect of human’s life. In the present scenario, this timeliness is an important part of all types of businesses and industries. Whether it is manufacturing industry or any service provider firm, all are required to deliver products or services on time. A very well-known method is used in manufacturing industries to make available raw material on time and to control inventory system. This method is known as JIT (Just-In-Time) method. It is a method of inventory management which aims at the availability of inventory to meet the demand of customers without carrying excess inventory on hand. Companies that face higher growth rate but do not have efficient inventory control processes often experience ineffective operations, lack of customer satisfaction and issues related to the availability of stock. Timely delivery of products and services enhances customer faith in the company thus it is responsible for creating goodwill of the company in long run (Suwa & Morita, 2014). The value and importance of meeting deadlines can be understood by below mentioned advantages:

Whether the organisation is a large firm or small one, it is required to meet client expectations. This includes completing the contract within the pre-specified timeline. Failing to meet timelines can result in creating the negative reputation of the business. Meeting deadlines help in creating repeat and regular clients to the business (Campbell, 2016).

Meeting internal timelines helps in enhancing the morale of employees. Employees valuing deadlines are always more successful than those who do not value deadlines. Completion of work on time also eliminates the burden and employees can work with free mind without facing any pressure related to deadlines provided (Sebastiano, et al., 2017).

At some point in time, every business requires investing in the business for which it needs to arrange credit either from financial institutions or from other firms in the market. Making the payment on time maintains positive credit history and a positive credit history increase the chances that the organisation will able to get credit easily. The outside investors also don not step back after knowing the positive payment and credit history of the organisation in which they are going to invest (Giuliani & Brannstrom, 2011).

Encouraging employees to work on time keep’s the organizational productivity increasing day by day. Fails in meeting internal deadlines of the organization leads to that company away from its projected growth. Once an organization goes beyond the track, than it is almost impossible to create positive responsiveness of customers towards that organization. And if an organization meets its all targets in time, then it may results in increasing productivity of each employee individually and thus results in increased productivity of organization as a whole (Umoh, et al., 2013).

Timely Delivery of Products and Services

Importance of meeting deadline can be seen in given case study. Griggs & Company fails to meet the deadline and this resulted in restructuring the process of whole organizational activities. If, the management of the company had given importance to deadlines than there would no need of nay restructuring process and a lot of investment could also be saved.

There are many companies which are famous among their customers for timely delivering products and services. Amazon Inc. is most popular virtual and online retailer famous for its delivery time. Amazon has introduced a number of technological advancements to cope up with the delivery tome of products. For achieving internal timeliness, it has introduced robots in its warehouses. Robots can perform a variety of tasks without any tiredness. Similarly, Amazon is in the process of launching Amazon Drones, to deliver products to consumers on time. Amazon Inc. is one of the main companies to understand the impact of delivering products and services on time (Sousa, et al., 2011).

It is the new style of management which focuses on high efficiency in all processes of an organization. These include businesses that create a strategy for producing best quality products with the minimum use of resources. This concept was first discussed by Henry Ford in early 1990s. In a lean operations based organization, management needs to perform two types of functions: Controlling and maintaining existing processes and tries to improve existing processes. Performance management is the primary focus of lean, management in all types of organisation. Lean management includes individual as well as communal organizational transformation plan for the purpose of improving quality of products without investing more resources. Lean management includes a Lean sociotechnical system, Lean educational system and Lean change management system (Manzouri, et al., 2014).

In order to achieve the benefits of lean performance, management is required to adopt the drivers of lean business and align resources for the proper functioning of adopted business drivers. The main concepts to understand the principles of lean management are as follows:

Value is undoubtedly the central focusing point of Lean management. It is the point at which Lean management starts its functioning. In this concept, the value is always considered from customer’s point of view. According to lean management, it does not matter that an organization came up with a great product, service or idea, it the consumer does not find it valuable and not ready to pay anything for it than the idea is totally wasted. It is an important fact to remember that a customer ready to pay for the product and service if it is presented in entirety instead of delivering piece by piece. However is a tricky concept, but if an organization does not pay attention than it may result in making customers unhappy and decreasing brand equity (Puvanasvaran, et al., 2010).

Importance of Meeting Deadlines

Value Stream management is a method of lean management which helps in analysing and examining the current state of a product that can help in designing future state for the entire process of events of a product life. This process aims at identifying and removing waste in the process of creating value, and increasing the effectiveness of a given value stream. Waste removal is done with a view to increasing productivity by introducing leaner operations which makes easy to find out quality problems and waste (Chen & Cox, 2012). It involves three important and critical management tasks of any business organization:

Product development Management

Information management

Operations management

As provided in given case study of R Griggs & Company Limited, it can be seen clearly that company did not followed lean manufacturing process completely. It adopted the process in partial way to overcome the current problems related to the delivery of products. Adoption of Lean Manufacturing System could help the company in log run in terms of enhancing the profitability and effective operations managements.

The flow includes how items and people are dealing with a process that flows from the first step to last. When a system is having “good flow”, it is assumed as working well and it tends to shift predictably and steadily. On the other hand, “bad” flow is the indication that works only starts and stops. Whenever there are changes in the flow, chances of occurring waste increases or decreases. There are seven flows of raw material is Lean manufacturing System provided by Mike Wroblewski:

Flow of raw material

Flow of work-in-progress

Flow of finished goods

Flow of operators

Flow of Machines

Flow of information

Flow of engineering

Organizations who successfully follows the principles of Lean Manufacturing are able to understand that when all the seven flows are working together in harmony, then they result in producing final output and services with almost no corrective action (Green, et al., 2010).

Toyota is a Japanese company founded in 1937 by Kiichiro Toyoda. Headquarter of Toyota Motor Corporations Limited is located in Toyota City, Aichi Prefecture, Japan. The company has faced many challenges in its path of success. It was the first company to export passenger cars in US market in 1957. Toyota Corporation is engaged in manufacturing and selling activities of vehicles and spare parts at international level. Currently it is working with more than 53 international companies in 28 regions and countries. Vehicles manufactured by Toyota Corporation are sold in more than 170 countries all over the world. To manage its global image and provide automobile facilities around the world, the company uses a set of strategies for taking some major decisions related to operations management of the company. Toyota is often considered as an example of the successful operational management company.

Case Study Examples

While discussing about the operations management of Toyota Corporation, major issues that are to be concerned includes quality management, product designs and services management, human resource management for assigning jobs, inventory control through inventory management techniques and providing customer satisfaction. Some of the main decisions taken by the management of Toyota Corporation related to the business operations are as follows:

Decisions regarding this are of operations management are addressed with the help of technological advancement and quality management. Toyota makes sufficient investments in R&D of the techniques and products and finds out their advanced features to attract customers. It also deals with providing after sales services to ensure the customer satisfaction in the long run.

In order to provide best quality products and services, the company has developed its own system known as Toyota production System (TPS). Quality is the primary considering factor in Toyota Production System. The company has developed a set of principles named as Toyota Way to address the quality related decisions of operations management.

As capacity management is one of the major factors of operations management, Toyota Corporation uses lean manufacturing techniques. Lean manufacturing methods are also involved in TPS. By using lean manufacturing, the company emphasizes on minimizing the waste and maximizing process effectiveness and utilization of available capacity. In this way, Toyota is concerned with maximizing business efficiency and cost-effectiveness in the process of providing satisfactory products to customers (Rodrigo, 2012).

Toyota uses local, regional and global locations strategies for its manufacturing plants and offices. For example, manufacturing plants of the company are located in Thailand, China and the United States and its official dealerships are located in all over the world except some countries of Middle East, Africa and Mongolia. It shows that Toyota Corporation addresses this decision area of operations management with the help of mixed strategies (Invest, 2014).

Lean manufacturing principles are applied in manufacturing plants of Toyota while deciding about layout design. In this area of operational management, Toyota aims at the maximum possible efficiency of the working process. On the other hand, layout designs should satisfy the standards of the company along with the decisions and suggestions of dealers (Roser, 2014).

The company follows principles of The Toyota Way and Toyota Production System to decide the jobs and roles of employees. Human resource management is directly linked to operations management because all the decisions taken in operations management are channelized by the human resources of the company. Toyota also organises training programs to ensure lean manufacturing process in the company. The company emphasizes admiration and respect for all employees in The Toyota Way (Liker & Hoseus, 2010).

Lean Management

This process of Toyota also involves lean manufacturing system. In this area of operations management, the company makes use of automation systems for adjustment of real time activity in supply chain functions. This reduces the bullwhip effect in supply chain management (Dudovskiy, 2012).

Inventory management is the main factor while discussing operations management of a company. Toyota is one of the top most companies that use Just-In-Time inventory management. It reduces inventory handling cost which directly affects the cost of final product of the company. The JIT approach to inventory management has been covered in the production system of Toyota (SCRIBD, 2013).

Lean manufacturing principles are in the DNA of Toyota Corporations as it follows these principles in scheduling the tasks of operations management. Scheduling of tasks aims at minimizing the operating cost. Cost reduction is maintained by resource scheduling that remains flexible according to the market conditions (Gao & Low, 2015).

Toyota has its own network of strategies and facilities to support it business at international level. The company also maintains a human resource network globally that assist flexibility and business elasticity. In this area of strategic operations management, the company uses its widespread global network to ensure maximum and continuous productivity.

Toyota maintains an effective and continuous operations management strategy to grow in the present competitive scenario. Adoption of lean manufacturing in its principles of working has given more flexibility and productivity to the company in last decades. Along with lean manufacturing, Toyota also uses kaizen method and six sigma techniques for continuous improvement in its operations management. The use of these additional techniques is adding the great performance of the organization by facilitating it with a tangible quality control system. This system includes highly encouraged workforce and highly effective system of waste management. Toyota is one of those successful companies that are continuously adopting innovation in its techniques with the effective and sound operations management (Lombardo, 2017).

Conclusion:

On the basis of above discussion, it can be concluded that operations management is a wider term in comparison to its understanding. It includes various main aspects of capacity management, lean manufacturing management, inventory management, management of delivery time and management of the whole process of production. All concepts and processes are inter-related to each other and the motive of all function is to serve the consumer’s needs on time and increases the profitability of the organization accordingly. It shows that how functions of an organization influence each other as a whole and collectively they influence the performance of the organization along with its employees. Thus, performance management has been considered as an important part of the operations management. It encourages the employees to give their best. As per the above discussion, it can also be stated that performance management and capacity management, together with forces the employees to work with their full possible capacity.

The study concludes that application of techniques of operations Management in the not hard nut to crack. As given in case study, sometimes situational demands are required for the introduction something better. But, in order to neglect the situations as given in case study, one should try to apply and conduct functions of operational management. It not only simplifies the work of production department but it also simplifies the work of management as well as other departments working for the same purpose. Further, it can also be understood from the entire study that customer service is the most important objective of any business organization because at the end, after considering all strategies and techniques, if the customer is not satisfied with the services provided, then the purpose behind all hard work is fallen. So, operational management techniques make sure that all the needs and demands of customers are met successfully with the best use of available resources. It available resources are not used wisely then it may result in increasing the production cost and hence the objective of the organization can be failed. So it is required to implement operations management efficiently so that both the requirements of the organization can be fulfilled.

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