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Operations Management In Business Strategies Add in library

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Question:

Furniture Supplier company who provides finished good to leading furniture retailers are reviewing their management of operations and would like to investigate new ideas which can be implemented to improve efficiency and effectiveness of their business?

 

 

Answer:

Introduction

Operations management is concerned with the effective production and distribution of goods and services to customers (Bamford & Forrester, 2010). It helps ensuring that goods and services that are being delivered to the target customers are of high quality. It helps enhancing the overall performance and productivity of the organisation thus enabling them to achieve desired organisational goals and performance objectives (Boyer & Verma, 2009). Established in year 2004 Westbridge Furniture Designs Limited was developed with a purpose of developing world’s finest furniture designs, manufactured using high quality materials in order to meet the high expectations of leading craftsmen of the industry (British Furniture Manufacturers, 2011). Today the furniture manufacturer employs more than 500 employees in 3 of their manufacturing facilities across North Wales. Westbridge Furniture Designs Limited wants to concentrate on the designing and manufacturing of high quality furniture thus they are not involved in direct selling of products to end-customers. They sell their products to high street retailers and independent furniture stores from where they are sold to end customers. Westbridge Furniture Designs Limited is today UK’s largest own brand upholstery manufacturer.

1. Concepts of Operations Management

Operations management is that field of management that emphasizes on administration of various business practices involved in the production and distribution of products and services in order to increase overall performance efficiency of the organisation (Brown, et al., 2013). It is concerned with managing the processes that help in the transformation of input resources into desired output products and services. It is also referred to as activities and decisions that are responsible for effective management of resources allocated to production and distribution process.

1.1  Importance of operations management for organisations

Activities of operations management differ with the type of industry it is performed (Chary, 2009). In case of service industry it is responsible for ensuring that high quality services are delivered to customers and human resources possess required expertise whereas in manufacturing industry it is responsible for ensuring that high quality good are delivered to customers (Galloway, et al., 2012). In case of manufacturing companies like Westbridge Furniture Designs Limited operations management is responsible for ensuring that production process is carried out effectively and finished goods are delivered to intermediates like retailers and distributors on a timely manner. Other activities include timely acquisition of high quality raw materials, proper equipments maintenance and allocation of human resources that are adequately trained.

Operations management helps organisations in enhancing overall productivity and streamlining activities so that value added products are delivered to customers that exceed their expectations (Brown, et al., 2013). Input, processes and output are the three key elements of operations management.

Input Resources: Input resources are of two types; transformed resources are those materials that are actually been altered. Raw materials, customers and information are the transformed resources (Greasley, 2007). Transforming resources are those that act upon transformed resources during the production process. Human resources, facilities and equipments are some transforming resources (Gupta & Starr, 2014). In case of Westbridge Furniture Designs Limited operations management helps ensuring that acquisition of transformed resources is carried out effectively and the adequate transforming resources are allocated to produce high quality goods.

Transformation Processes: It is actual transformation of input resources into desired output products (Hill, 2012). In case of Westbridge Furniture Designs Limited transformational processes refer to activities like sourcing, designing, cutting, assembling and polishing of furniture.

Output: Westbridge Furniture Designs Limited provides their customers with best quality products within specified time frame and at a price that guarantees margin for the retailers and distributors.

Thus, effective operations management has made them UK’s largest own brand upholstery manufacturer. They offer innovative, stylish and original sofas and upholstered products for those who equally value quality, comfort and fine design.

1.2  Operations functions of Westbridge Furniture Design Limited

Operations functions is that department of an organisation which is responsible for managing the activities involved in effective operations management (Jones & Robinson, 2012). It is helps ensuring that all customer needs are meet through effective production and distribution of goods. Operations functions occupy centre position within any organisation and are supported by functions of marketing and finance. An operation functions helps organisations in considerable reduction is operational expenses and planning continuous improvements thus is also called as best practices (Kamauff, 2009) In case of Westbridge Furniture Designs Limited operations functions help ensuring that high quality good are produced and delivered to customers in a timely manner. It is essential that all operations functions are in place and work effectively in order to ensure that the production processes are carried out effectively and meet all legal requirements and safety standards. Operations management helps ensuring strategic objectives are meeting. Strategic objectives refer to the organisational vision that must be achieved for successful implementation of organisational strategies (Brown, et al., 2013).

Strategic operations management helps ensuring that the products and services produced and delivered not only meet customer expectations but exceed them (Brown, et al., 2013). Operation functions at Westbridge Furniture Designs Limited help them in achieving strategic objectives. Their operation functions are concerned about effective allocation of resources to production process so that high quality goods with best designs are produced. Their supply chain network helps ensuring that goods are delivered safely and within desired time frame to customers. They have a very ethical supply base which ensures that remain most competitive and efficient.

 
1.3  Evaluation of operations management of Westbridge Furniture Design Limited using a process model

Process model is a puts together process of same nature and type in the form of a model, thus defining a process at its type level. (Walters & Rainbird, 2007). The production and distribution processes of an organisation are broken down into several small processes that works independent of each other, these processes can then be represented in the form of a process model. This enables evaluating the performance and contribution made by each system and system interfaces as the system takes up a hierarchical form. Based on the amount of interaction with the environment and output predictability systems could take up four forms namely; Open system wherein the system present high degree of interaction with the environment, high level of information exchange takes place between the system and the environment and the overall productivity of system is greatly affected by various environmental changes (Simons, 2011). Closed systems are those where no interaction or information exchange takes place between the system and the environment, thus the system are referred to as isolated systems (Panneerselvam, 2006). A deterministic system is one which tends to produce the same output without any randomness being involved when the initial state or starting conditions remain same (Mahadevan, 2010). A probabilistic system works in a opposite manner when compared to deterministic system, it involves a lot of randomness and occurrence of an event does not predict occurrence of the next event.

The entire operations management activities at Westbridge Furniture Designs Limited are arranged in a hierarchical pattern of process model. Nigel Holifield serves as the operations director and Marie Jones as the factory manager (British Furniture Manufacturers, 2011). They are mainly responsible for ensuring that operations management techniques are in place and work effectively in order to ensure that production and distribution processes are carried out effectively. The furniture production process is divided into small tasks of Sourcing, acquisition, cutting, designing, assembling and polishing. Subdivision of processes into small tasks facilitate in effective resource allocation.

2. Evaluation of effective operations management at Westbridge Furniture Design Limited

2.1 Three E’s of operations management

Economy, effectiveness and efficiency are the three E’s of operations management (Kumar, 2009). They are very effective in determining the position of organisation within the industry they serve. Economic aspect of operations management helps determining how the organisation is performing financially. In order to be economical stable it is important that a balance is maintained between operational expenses and profits earned (Krajewski, et al., 2011). It is important to ensure that all operational activities are performed in a economical manner within allocated budget. Effectiveness in case of operations management is a measure of realisation of benefits and achievement of goals (Leseure, 2010). Efficiency in concerned with how well resources like human resources, equipments, budget and information systems are allocated to carry out operational activities (Murthy, 2005). Effective operations management help ensuring that high quality resources are allocated for carrying out operational activities within the allocated operational budget such that process effectiveness remains uncompromised.

An audit of three E’s of operations management at Westbridge Furniture Designs Limited reveals that they have developed a policy of sourcing raw materials from international vendors which help them remain competitive in the market. Thus they insist on delivering uncompromised quality products within their economical limits and with high efficiency. All these activities enable them offer guaranteed profit margins for their customers. The operations audits performed at Westbridge Furniture Designs Limited evaluate each operation process against the three E’s of operations management. They have a global and ethical supply base which helps keeping distribution costs low making the entire process further economical.

2.2 Tension between cost minimisation and quality maximisation

Organisations have always faced a virtual fight between quality maximisation and cost minimisation (Sanders & CSCMP, 2013). Cost minimisation is about increase organisational efficiency and quality maximisation is about enhancing effectiveness. Efficiency in case of operations management is concerned about ensuring that the available resources are allocated in the most affected manner keeping in mind the economical boundaries (Brown, et al., 2013). Effectiveness on the other hand concerned about ensuring that best quality products are delivered to customers’ within definite time frame.

Westbridge Furniture Designs Limited has developed a clear vision of developing finest furniture designs that are manufactured using high quality raw materials and delivered within desired timescales. They are also pressurised by a virtual fight between cost minimisation and quality maximisation however they are very clear on this point that they will not comprise on quality. In order to provide high quality products they have adopted a policy of sourcing raw materials from international vendors so that they can offer most competitive prices to their customer along with best quality. They use a global and ethical supply base that further help them minimise operations cost.

 

2.3 Analysis of five performance objectives

Quality, speed, dependability, flexibility and cost are the five performance objectives of operations management against with performance of various operations processes are evaluated (Bamford & Forrester, 2010).

Quality: Adherence to policy that allows Westbridge Furniture Designs Limited source raw materials from international vendor help them purchase high quality raw materials at best prices. The various quality control measures are followed rigorously that helps ensuring desired quality products are delivered to customers.

Speed: Effective operations management help them save time by eliminating processes and steps that are not useful. They have employee highly trained professionals with good industry experience. They have implemented techniques like just-in-time and total quality management that help ensuring that allocated lead times are met. Thus operations management helps them in speeding up production and distribution processes.

Dependability: Westbridge Furniture Designs Limited owing to their sourcing policy and supply base offer the most competitive prices to their customers. They offer high quality products with unique designs within timescales at most affordable prices thus increasing customer dependability.

Flexibility: Westbridge Furniture Designs Limited offers their customers with widest possible choice in a range of sofas and upholstered products which help them in satisfying the most discerning customers.

Cost: Effective operations management help Westbridge Furniture Designs Limited in greatly reducing operational expenses thus ensuring profit margins for themselves as well as there customers.

3. Linear programming and the way it adds value to production process

Linear programming is an operations management tool that enables operations managers to make decisions so that the limited resources available to them are allocated in the most effective and efficient manner (Gupta & Starr, 2014). Today’s competitive marketplace faces a scarcity of skilled resources that are essential for businesses to achieve desired goals. Availability of skilled resources that have required expertise greatly affects the performance efficiency and effectiveness of the organisation. Linear programming thus helps ensuring that resources are allocated in a proper manner and help achieving desired performance objectives.

Production process at Westbridge Furniture Designs Limited uses a flow method of linear programming. Implementation of linear programming has helped them in maximising profits and work in coordination in order to achieve their vision.

3.1 Critical path analysis and network planning

Critical path analysis is a scheduling and planning tool that helps operations managers in deciding the order in which various operational activities must be performed and completed (Bamford & Forrester, 2010). Thus, it helps streamlining operational activities and processes that needs to be performed. According to critical path analysis there are two types of tasks namely; dependent tasks which depend on the output of preceding tasks and independent tasks which does not depend on output of preceding tasks (Galloway, et al., 2012). Diagrams that take the form of flow charts are used to present operational research results.

Networking planning helps operations managers in monitoring and controlling processes. It uses a network diagram to display processes that are a group of related activities. Westbridge Furniture Designs Limited ensures that all their operations managers are using these tools to streamline production processes so that high quality products are delivered within specified time scales.

3.2 Need for operations planning and control

Effective operations planning and control help Westbridge Furniture Designs Limited in achieving their desired vision and a competitive price to customers. It is concerned with creation of an organised plan that focuses on activities like resource allocation, job scheduling and flow method (Gupta & Starr, 2014). Operations planning and control suggests that plan should be worked once the work has been planned. Inventory planning, quality assurance, capacity planning and project management are some of the most effective operations planning and controlling tools (Simons, 2011). Inventory planning is a tool that helps determining the feasible cost and time needed to store the products as inventory. Capacity planning helps determining optimum number of resources needed to achieve specified targets. Quality assurance helps ensuring that desired quality standards are achieved. Westbridge Furniture Designs Limited follow all these tools rigorously to ensure that good meet customer quality and design expectations and are delivered within lead time.

 

 

4. Layout for producing furniture and analysis of operational outcomes

Process Layout, cell layout and product layout are the three possible layout types that can be selected for furniture production (Mahadevan, 2010). In case of process layout all processes that are of similar nature and type are located at same place and are easy to carry out. Cell layout is one in which all equipments needed to transform input resources into desired outputs are arranged in the form of a cell. In case of product layout all the equipments are located in the form of a passage and all input resources are needed to pass the pre-defined passage through a series of processes.

Westbridge Furniture Designs Limited has adopted product layout for their more than a million square feet of production area. All equipments are arranged in a passage and inputs have to pass through them. This layout is most effective when the ultimate goal of production process is to development products that have unique designs. Effective operations management has enabled Westbridge Furniture Designs Limited in meeting all five performance objectives of quality, speed, dependability, flexibility and cost.

4.1 Network plan and resultant critical path

Tools like network planning and critical path analysis help Westbridge Furniture Designs Limited in minimising the gap between desired outputs and actual outputs. They help ensuring that the production processes are being carried out both effectively and efficiently. Critical path analysis helps determining the most suited order in which operational activities should be performed to achieve best results and network plan help monitoring and controlling operational activities so that they ensure desired goals will be achieved. Network plan for manufacturing a sofa at Westbridge Furniture Designs Limited is shown below. Network plan shows that Westbridge Furniture Designs Limited takes around 25-30 days to manufacture a Sofa depending upon the availability of raw materials. They use just in time production technique so raw materials are generally purchased on demand basis. JIT helps Westbridge Furniture Designs Limited in considerable reduction of operations cost thus making them the most competitive sofas and upholstered products manufacturer in UK.

4.2 Quality management techniques to improve operations in Westbridge Furniture Design Limited

Quality management techniques help organisations in ensuring that their production processes are achieving effectiveness in terms of quality (Gupta & Starr, 2014). There are two main types of quality management techniques namely; Quality control mechanism is a set of quality check processes that help organisations in ensuring that their goods meet specific quality standards and customer expectations. Quality assurance is a process that ensure that product development cycle meet predefined quality standards (Panneerselvam, 2006). Fish-bones diagram that take the form of a fish skeleton and evaluates level of process dispersion; development of groups like quality circles which comprises of employees who are expected to solve their own issues and deliver quality output; Variance analysis that determine the difference between actual cost and standard cost, six sigma and Lean manufacturing are some of the most commonly used quality management tools (Leseure, 2010). Westbridge Furniture Designs Limited has implemented most effective quality management techniques and has rigorous quality control. They have created quality circles and use techniques like six sigma and lean for elimination of waste processes. All these efforts help delivering products that have uncompromised quality and designs, made of best raw materials sourced from international vendors and delivered within specified timescales.

Conclusion

Effective operations management not only helps organisations in delivering desired quality goods and services to customers but also in increasing overall organisational productivity and performance efficiency. Operations functions also referred to as best practices help reducing operations costs and enforcing continuous improvement. Effective operations management techniques at Westbridge Furniture Design Limited help them in achieving strategic objectives and delivering high quality products within definite lead times at the most affordable prices that guarantee profit margins for retailers and distributors.

 

References

Bamford, D. & Forrester, P., (2010) Essential Guide to Operations Management. New Jersey: John Wiley & Sons.

Boyer, K. & Verma, R., (2009) Operations and Supply Chain Management for the 21st Century. New York: Cengage Learning.

British Furniture Manufacturers, (2011) Westbridge Furniture Designs Limited. [Online]
Available at: 
[Accessed 2015].

Brown, S., Bessant, J. R. & Lamming, R., (2013) Strategic Operations Management. New Jersey: Routledge.

Brown, S., Blackmon, K., Cousins, P. & Maylor, H., (2013) Operations Management: Policy, Practice and Performance Improvement. New Jersey: Routledge.

Chary, (2009) Production and operations management. New Delhi: Tata McGraw-Hill Education.

Galloway, L., Rowbotham, F. & Azhashemi, M., (2012) Operations Management in Context. New Jersey: Routledge.

Greasley, A., (2007) Operations Management. London: Sage.

Gupta, S. & Starr, M., (2014) Production and Operations Management Systems. Boca Raton: CRC Press.

Hill, A. V., (2012) The Encyclopedia of Operations Management: A Field Manual and Glossary of Operations Management Terms and Concepts. London: FT Press.

Jones, P. & Robinson, P., (2012) Operations Management. Oxford: Oxford University Press.

Kamauff, J., (2009) Manager's Guide to Operations Management. Chicago: McGraw Hill Professional.

Krajewski, L. J., Ritzman, L. P. & Malhotra, M. K., (2011) Operations Management: Processes and Supply Chains. New Delhi: Pearson Education India.

Kumar, S. A., (2009) Operations Management. New Delhi: New Age International.

 

Leseure, M., (2010) Key Concepts in Operations Management. London: Sage.

Mahadevan, B., (2010) Operations Management: Theory and Practice. New Delhi: Pearson Education India.

Murthy, P. R., (2005) Production And Operations Management. New Delhi: New Age International.

Panneerselvam, R., (2006) Production and Operations Management. New Delhi: PHI Learning Pvt. Ltd.

Sanders, N. R. & CSCMP, (2013) Definitive Guide to Manufacturing and Service Operations, The: Master the Strategies and Tactics for Planning, Organizing, and Managing How Products and Services Are Produced. New Jersey: Pearson FT Press.

Simons, R., (2011) Operations Management: A Modern Approac. Boca Raton: CRC Press.

Walters, D. & Rainbird, M., (2007) Strategic Operations Management: A Value Chain Approach. Hampshire: Palgrave Macmillan.

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