AN ANALYSIS OF THE MAJOR MANAGEMENT OPERATION FUNDAMENTALS

AN ANALYSIS OF THE MAJOR MANAGEMENT OPERATION FUNDAMENTALS

CASES STUDY A BOUTIQUE: THOMAS SHOP. (Inge and Charles, 2011)

An organization should have a well defined and effective operation management system that results in high productivity. Operation management simply is the ability of an organization to metamorphose materials and labor to products and services for profits. Operations management fundamentals are the important requirements for satisfying and a large figure results. This analysis will examine the major problems an operational manager faces, and the major concepts of sustainability in management, this is a corporate responsibility and environmental compliance.

AN OVERVIEW OF THE COMPANY’S OPERATION MANAGEMENT SYSTEM

Operational management functions are the activities that are undertaken to provide products, services, and create value for customers. Four main operation management functions apply to all the organizations; planning, organizing, directing, and controlling all factors of production in an organization. These factors are finances, inventory, and processing, marketing, human resource, and management information system for quality results and customer satisfaction. (Slack et al. 2010)

For example the case study of a boutique business, competing in the age of Wal-mart regarding Thomas shop, has been able to stay in the market even when Wal-mart started. They have a well-structured operation management system that has helped them stay in the market longer. Kathy, the owner, does daily bookkeeping, payroll management, merchandise buying, and payment of tax on time. She is also in charge of sales, displays, and cleaning of the store to ensure that she attracts as many customers as possible.

Kathy, when procuring merchandise, she gives priorities to her best customers by selecting the clothes they would love. During the fitting, she gives suggestions for the customer and offers opinions on which color fits them. Her services and how she addresses the customer with the utmost courtesy, keeps them coming again and again. Her priority is the customers and standard maintenance of the shop.

A competitive advantage is a condition that makes the company more unique and loved by the customers compared to its competitors. Each company has practices that are exceptional to the only. More often, the competitive advantage keeps them longer in the market, and the business will not shut down easily. Also, it is the one that attracts more customers and keeps them coming, again and again, to procure the merchandise from your shop. ( David and David, 2016)

Therefore any business owner needs to have a unique operation management function that is different from their competitors. For instance, in the case of the Thomas shop, they have different and unique operation management that keeps them in the market even after Wal-mart had shaken almost all the shops. Their merchandise is branded and stylistic; this is a unique clothing advantage. According to Kathy, brand and style last longer in the market; therefore, it is fundamental to have consistency in the style they offer.

Additionally, Kathy offers bra fitting following mastectomy for women who just had their breast removed due to cancer disease.  This service was unique to her shop, it not only attracted more customers but also from friends and family of cancer survivors. She made this possible by working with suppliers and enrolled in a course to get certified to offer the service. Offering this service is a marketing strategy and also it creates a good relationship between the seller and the buyer.

Her daughter, Stacia underwent intensive training on colors to help tone the skin color of a customer and the clothing. The clients at the end of the day are satisfied with the clothes because they fit and they do not look like clowns.  Moreover, at the end of the year the Thomas shop holds a modeling event where models from all the ages participate. The best and regular customers are offered VIP seats. The idea is to showcase the clothing in which each customer can relate to. This gives them the advantage to offer their competitors because they relate to the customer’s needs.

Every organization and business has opted for new media journalism. They use the internet to advertise their goods and services, this kind of e-commerce business has become monotonous and other customers are left out. The Thomas shop not only does the new media journalism but also uses traditional journalism to promote its goods and service. They get to advertise their goods and services to more people who get access to both journalism media unlike the other shops with the same products.

Service operation is the intangible activities and process that leads to increased value to the organization or company. Manufacturing operations are the physical products the business offers to its customers. Manufacturing and services operations functions work in hand for customers’ satisfaction and profitability of the business. One operation cannot be effective without the other one for an effective business.

In our case study at the Thomas shop, Kathy offers stylistic and branded clothing and the after mastectomy bras.  The manufacturing operation is ensuring the clothes are stylistic and the bras are fitting. The service operates in its business is recommending quality clothes for the customer and the color that blends with their skin color. Both functions lead to customer satisfaction because they are satisfied with the clothing and how their seller is considering their needs.

THEORIES AND TECHNIQUES.

Material requirement planning is a computer-based inventory that helps in production and inventory control. Mrp is possible to calculate after developing product structure, building a gross requirement plan, and the net requirement plan. Material Requirement helps the organization easily adjust to market demands and therefore meet the needs of the customer faster. (Rossi, 2017)

The material requirement planning calculations of gross to the net is;

NET REQUIREMENT= GROSS REQUIREMENT – INVENTORY AT HAND (the number of orders)

Material requirement planning (MRP) is a system that keeps changing over time and requires. For the Thomas boutique the major inputs are master production schedule, the product structure records, and inventory records status.

The critical path method (CPM) and the program evaluation and review technique (PERT) is the project management tools used to show the flow of events and activities. CPM is used to manage recurring activities while PERT is used when the activities and events are uncertain.  PERT is a tool used for planning and control of time while CPM is a tool used for cost control and time. (Montazeri, 2017)

For instance, in Thomas Shop, the PERT technique will be suitable for planning the modeling event. This is because the event occurs once in a while. The CPM tool is applicable for day to day activities like procurement of goods and, also the cost and payrolls of the services. This is because this is a recurring activity that an organization must undertake.

Job sequencing is a management technique used to reduce the cost of production by arranging jobs in sections or departments. Sequencing is creating order, thus job sequencing is creating work force order for a well-organized flow of activities to save time and reduce losses.

For all organizations there are four major priority rules of job sequencing the first one is the earliest due date. All the goods that are due on a closing date are first processed. The importance of this rule is that the goods are processed depending on the due date. The major disadvantage is that a customer cannot get his or her goods early. The other rule is the shortest processing time. This method gives priority to the goods that have the shortest processing period. It is disadvantageous because it piles work for those that are processed longer. The positivity of this rule is that goods with the shortest processing time are processed faster.

First come, first serve is a job sequencing rule that gives the advantage to the orders depending on the time that it is ordered. The advantage of this rule is that a customer who came first gates his good before the one who came at a later time. The goods that need urgency and large goods are disadvantaged. The last rule is the longest processing time this is where goods with longer time are given the first process. This process slows down the general production process but longer processes are completed early.

A hybrid mixed approach is mixing all the rules of job sequencing for effective production. For instance, in the clothing industry this approach is applicable in the orders of clothes to fasten the production process. All the rules have an advantage and a disadvantage but if they are used together production becomes effective and efficient. This leads to all customer satisfaction.

The theory of constraints is analysis is a method used to determine the limiting factors to achieve the organization’s goals and objective, and slowly improve the constraint. The major steps of constraints analysis include;

1. Identifying the system constraint. Identify the place in management or the organization that is not effective.
2. Exploit the constraint. Use the resources available without incurring any cost to improve production.
3. Subordinate and coincide with the constraint. This is by ensuring all the activities support the improvement of the constraint.
4. Elevate the performance of the constraints. At these stages if the constraint is still there you come up with ways to further mitigate or completely get rid of the constraint.
5. Repeat the process. The process is continuous because there are always constraints that hinder effective production.

This analysis method (TOC) in the case of Thomas shop is applicable in the marketing method. To identify what is the limiting factor for marketing the goods to more customers and try to resolve the issue for future effectiveness. This method will widen the shop’s market and lead to more profit for the business.

The forecasting system is a technique used to predict future organization trends by using previous data. This helps in future planning of finances, processing, marketing, and services for the profitability of the organization. The first step is to identify why the organization is using the forecast. Then they determine what they are forecasting, estimation of the time of the forecast, this is followed by identification of a suitable forecasting model and then you compile the required data for forecasting. Then you approve and implement the forecast. The last step is to review the forecast.

These steps are applicable for the Thomas shop to increase the number of customers who come to the shop.

Step 1; Kathy will determine how she will increase the number of customer by 20%

Step2; at this stage Kathy will select marketing to be forecasted

Step3; the business will use the time constraint to be 1st June 2020 to 1st June 2021.

Step4; the business will determine the suitable forecasting model for them.

Step5; at this stage the business will compile the previous marketing history.

Step6; at this stage Kathy will come with a website and methods to bring more traffic

to the website like blogging.

Step7; at this stage they will keep reviewing the marketing status monthly.

Supply risks are uncertainties that could occur when providing products and services to the customer. The major five types of supply risk are strategy risk, market risk, implementation risk, performance risk, and demand risk. These risks can be mitigated through; identifying the right suppliers for your goods; ensuring you don’t compromise the below your standard supplied goods; understand your supplier and examine the possible risk that could occur during the production of your goods; monitor and evaluate your suppliers often to know their business status respectively. (Heizer et al. 2020)

A company for example the Thomas shop can mitigate supply chain disruption due to natural disasters by selecting a reliable supplier. Before selecting any supplier, the shop should investigate the capacity of the supplier to handle disaster and a comeback after destruction. Also they should identify a supplier who will not be too greedy to write off their contract for a money offer.

Lean production is a management technique whose purpose is to cut off waste and maintain quality productivity. Lean production consists of two strategies; the just in time and Toyota production systems. Just in time (JIT) is a type of inventory management strategy that is meant to cut costs and increase production effectiveness by processing goods as they are ordered. The importance of this inventory to Thomas shops enhances cash flow hence it will be easy to invest the profit in other businesses. However, if you do not have goods or services a customer requires at that moment you could easily lose them. (Ledbetter, 2018)

Toyota production system is an operation management strategy which aims at eliminating wastes to achieve maximum production. The advantage of this strategy is that all the operational activities that are managed are fully utilized hence reducing the production cost. Nevertheless, this strategy is complex to apply in business, and also it creates a lot of confusion in supply chain management.

Total quality management is the continuous effort for an organization to provide quality services and goods for its customers over time. The five principles of total quality management are; the first production should be of high quality, concentrating on the customers’ needs, have a strategy to continuously improve the quality of services and goods, they should improve constantly and finally, motivate teamwork and respect within the organization and with the customers. (Kiran, 2016)

There are seven basic tools for total quality management this include; check sheet, histogram, scatter diagram, Pareto chart, control chart, stratification, and the cause and effect diagram. Principles are more like directives steps in achieving continuous improvement of the quality of production while the tools are techniques used to implement these strategies for improvement. Tools and principles of total quality management help in the accomplishment of quality product and service processing.

DATA ANALYSIS.

Figure 1. Time-function map.

Kathy can use this value map to determine where delays occur before delivering the goods to the customer. By keeping inventory records it will be easy to determine which cloth is liked by the customers most and therefore, order them in bulk.

Supplier’s production            Sales department

Process                                     Inefficiency

Procurement organization         Transport system

            Figure 2. The cause and effect diagram

The main cause of goods not reaching the customer on time is due to poor inventory management for the sales department, the poor transport system in the region, the supplier’s production process is slow, and also the procurement department is not organized.

Figure 3. Rating factors

The company should locate its manufacturing plant in Mexico because the factors of production are higher and less costly for the business.

Figure 4. ABC classification system.

I recommend regular auditing and having a contingency plan. Most businesses use software to keep records for their inventory. It is essential to check from time to time that the physical records match with the software report like in our case above. Contingency planning is having an alternative plan for uncertainties that could occur for example change of cost per item.

SUSTAINABILITY

Triple bottom line is a financial model that encourages businesses to put focus on the social and environmental aspects as much as they focus on profitability. Instead of concentrating on one bottom line, they should add on people and the environment. This will bring balance and sustainability because people provide the human resources and they are the customers, the environment is the general surrounding that facilitates production while profit is what the business makes after selling their products and services. (Heizer et al.2020)

ISO 1400 is an international environmental management system that guides the manufacturing plant on how to conduct their operations without affecting the environment.  For instance in the case of Thomas shop, Kathy should get her products from an ISO certified manufacturing to ensure that the fabrics used are environmentally friendly and also the customers.

Corporate responsibility is a process of management whereby the company incorporates the society, the environmental concerns into their daily business, and at the same time meeting the stakeholder needs. For instance in the Thomas shop, when making stylistic designs, their designs should respect society’s culture. Also, the shop could create a good working environment for their employees, furthermore, creating a good rapport between them and the customers. ( Wang, 2016)

Work cited

Heizer, J., & Render, B., Munson C. (2020). Operations management. Sustainability and supply chain management. (13th Ed). Upper Saddle River, NJ: Pearson.

Slack, N., Chambers, S., & Johnston, R. (2010). Operations management. Pearson education.

David, F., & David, F. R. (2016). Strategic management: A competitive advantage approach, concepts, and cases. Pearson–Prentice Hall.

Rossi, T., Pozzi, R., Pero, M., & Cigolini, R. (2017). Improving production planning through finite-capacity MRP. International journal of production research, 55(2), 377-391.

Montazeri, B. (2017). Comparing critical chain project management with critical path method: A case study.

Wang, H., Tong, L., Takeuchi, R., & George, G. (2016). Corporate social responsibility: An overview and new research directions: Thematic issue on corporate social responsibility.

Kiran, D. R. (2016). Total quality management: Key concepts and case studies. Butterworth-Heinemann.

Ledbetter, P. (2018). The Toyota Template: The plan for just-in-time and culture change beyond lean tools. Taylor & Francis.

Inge.N and Charles R. (2011). Journal of the international academy for case studies. DreamCatchers group publishers, NC 28704, USA.