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A case Study of WHSmith
A Case study of WHSmith WH Smith is a famous publically quoted books news-age and retailer in UK. Recently a report showed how Kate Swann, who is a former chief executive office for the last ten years, has turned the company to a profit making one in just a decade. This was achieved through the use of adequate operational management throughout the business operation. A lot has to be observed during the production of goods and services. The essay will expound more on operational management to provide learners with knowledge on the significance of operations management in business operations. Operation Management and its key elements For a professional manager to be able to fulfil the strategic roles within the business of both the public and private sector there is a need to understand and practice operational management as it is so vital in the day to day business activity. Operational management forms the heart of any organisation carrying out business operations through controlling all the operations. It mainly deals with the plan, operation and daily improvement of the systems that lead to smooth creation of goods and services. Just like marketing and accounting, operational management forms a functional field of a company with a visible management responsibility as noted by Walsh, J. E. (1980). WHSmith is a highly successful travel group comprising of more than two hundred outlets spreading in many fields mostly in transportation such as in airports, bus stations, train stations, and hospitals throughout the United Kingdom (UK), dealing with a variety of stocks including books and stationery, confectionery and magazines plus travel essentials and high-ticket items like cigarettes. The company is very famous because it provides the right merchandise in the standardized quantity to meet the requirements of its customers. The company aims at producing high-quality services safely and on time to attract many buyers and more so, to effectively utilize the inputs well for profit. More customers lead to more sales and thus high output whereas effective use of the managerial skills boosts the overall performance of a business organization. Operational management and strategic planning are much connected as one cannot work without the other one. Operational management involves strategic operations to attain successful results in a business. They are both involved in decision making process. They are designed to help each other toward the success of the firm whether it is a profit making or vice versa. Though, with the same aim, they differ in the way they are defined, Strategic planning refers to a systematic and formal representation of this documented process for decision-making process in the organization to be able to compete with its opponents and more so, to run at a profit. In the above ways, WHSmith sets standards and rules that are carried through the entire group it makes use of the new technologies to improve on its operations. A good example is the voice-detected distribution which was installed at Holford, Birmingham. It is clear that time horizon of many decisions involved is another good difference between operational management and strategic planning. The objectives of WHSmith are to increase the warehouse productivity, archive high accuracy, and optimize the use of the warehouses’ resources and to improve on the quality of services to store. The outcome is accompanied with increased productivity with a daily peak of up to 25%, high accuracy, greater visibility of the company and increased quality in service delivery.
Three Es’ (economy, efficiency and effectiveness) in WH Smith The value of money is known as 3E’s which stands for Economy, Efficiency and Effectiveness. WHSmith works along with the 3’S in that; it can provide the services and goods effectively in an efficient way and on budget. Economy deals with the process of reducing the cost of the inputs, efficiency refer to performance of tasks with a reasonable effort and effectiveness is the extent to which the intended objectives are met. 3E’s is all about provision of services and goods of the right quality, standards and cost that is affordable to the existing customers. WHSmith endeavour to make sure that the services produced are fit for money, and this is so through a series of financial management, adequate business planning and good procurement processes. In WHSmith, there is a continuous review of the services to adjust on the down-pushing factors to always attain success. Tension between cost minimization and quality maximization at WH Smith Cost minimization and quality maximization do not go in line. For one to attain a high-quality output there is a need to incur a higher cost than when producing just standard product. WHSmith faces much tension trying to work on constraints budgets and at the same time obtain high quality outputs. It is nevertheless successful through the application of high-quality managerial skills to ensure a smooth flow of activities. Significance of the performance objectives that strengthen operations management of WH Smith Ø Increasing warehousing productivity This will create enough spaces to store stokes and the inputs. It is easier to handle the commodity from one place and also easier to record the business activities of the firm. Ø Archive high accuracy High accuracy is vital for the success of any business. WHSmith employs skilled workers both at production stages and the sales. The workers help to maintain high accuracy at the sales and production stages. They make the whole business operation to run smoothly. Ø Optimize the use of inputs The use of lower production cost help in setting sensible prices of the outputs. WHSmith aims at the use of the lowest input cost possible to produce high quality outputs. This makes it highly competitive in the market bearing in mind there are other producers of similar goods and services. Ø Good communication Communication is an important tool in the business operation. There is a need to communicate to the suppliers of the inputs, distributors and customers. WHSmith employs high technology in communication. The latest technology helps to reach the customers and hear on their views about a service, or good and adjustments can be made accordingly. The technological ways of communication includes the use of social media like Facebook and Twitter to market and talk to the customers. Marketing over the social media is again cheaper as compared to the older ways. A new commodity or service can easily reach the intended customers. Organizing a typical production process A typical process must have all the production process like those put in place by WHSmith in order to succeed in the long term running of the company. The production processes have to aim at satisfying the customers and using the lowest input cost. Let’s take an example of a manufacturing process. The increase in the inventory level may output to high demand although the holding costs are usually very high thereby affecting the cost estimation at minimum level. Paying much attention to the lowest input cost may result to fail to supply due to failing to meet the demand of the customers and, as a result, the company is bound to undergo a loss. The production process is the driving factor to all the other functions in any manufacturing activity. Mostly with inventories as the company exists due to the needs to production. The same way with other manufacturing control aim of making profit and to raising satisfaction of their customers, manufacturing industries have to have production planning control. The clients are satisfied when the deliveries are made on time. Production planning processes are established to routes and timeline for effort that will ensure the effective utilization of materials, employees, and machines and to offer the means for ensuring the operation of the company in accordance to the set goals. The company can make use of the four basic phase of control which depends on the type and scheduling of activities. They are as follows: Ø Process planning Process planning deals with determination of where the various procedure parts have to take place and the expected results. It entails every procedure in production. It is easier to know when a company is undergoing a loss and thus adjustments can be done to limit the closure of the business. Ø Loading Once a definite route of processes has been established, there is a need to make sure that the route is followed to the latter. The work needed can be loaded against the selected machines or equipments at the work station. The total time required is calculated by multiplying the unit operational times given on the standard process datasheet by the quantity of parts to be produced. The total time is then added to the planned work for the station. The overall loading results are tabulated to reflect the planned utilization of labor at the workstation (Juneja H. Juneja, FirstHimanshu, & Prachi.J, 2011). Ø Scheduling Scheduling gets the time when the operation has to be completed or when it should start. It can state when a process is to start and when it can end. There are different types of schedules according to the details they contain. Some may contain more information than the others. Ø Combining functions This can be taken as a full process as it entails the combination of the above three to enhance production. Works hand in hand with each and every other phase and the failure of one can easily be detected at this level. When a clear business protocol is used, the results will similar to those in WHSmith operations. More profit will be attained, as a result, of use of minimized cost and more so effective delivery services. This will support the business long term run. The network plans will comprise of the link between the company to the customers and suppliers and distributors of goods and services. The manufacturers need machines in their operations. The machine requires power in turn for them to work. The power may be in terms of electrical power, fuel and many more. It has to be supplied for the company to continue operating. The company, therefore, has to relate well with the supplies to avoid the stoppage of operations. Workers also have to be treated well as they aid in production and sales. They should be acknowledged through the gifts and allowances to enable them feel like part of the company as this is proved to improve the production (Badmin, P., Coombs, M., & Rayner, G. 1992).The customer, distributors and retailers are not an exceptional too. There should be a strong bond between every stakeholder in business process. The company at any time have to aim at producing quality services and good to the customers and listen to the customer’s views and preferences about their products. This will act as an attraction and will create many repeat customers who will always depend on the company for the supply of that product. In conclusion, operational management has a bigger effect to the business and should at all time be taken care of. Every business should look on ways to achieve cost minimization and maximize on the output quality and quantity. The business should coordinate well with all the stakeholders and develop adequate communication using the current technology to reach each stakeholder in the business. A protocol of all operation has to be set and review them regularly to enhance the smooth flow of all operation even in the long term run of the company or business. Social media site can work very well in communication as well as in reducing the cost of advertisement. Skilled labour is vital, and training has to provide in case the company makes a change in the routine operation to avoid losses.
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