Operation Management is an important part in an organization without which the organization is incomplete in itself. This is the department which provides the customers with the products and services which the company has offered to its customers. It involves various processes which ultimately leads to the final product or services of the organization which it brings out to the market for the customers to be delighted. The operations in an organization is plays a critical role in directing the organisation to its future, it leads them to stand in the market against their competition that has come to the market for the same product and services targeting the same customers.
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In every type of industry, whether it is manufacturing or services industry, operation management is included in the functional areas of the organisations along with the finance, marketing or accounting. As any functional areas of the organization, operation management also plays a vital role in connecting the operations departments to the business strategies the management has planned for the organization. The link is created between them with the operation strategy. This strategy supports the business strategy of the organization, therefore it is developed after the business strategy is formulated. This strategy is a base for the operations department so that they can make the business strategy work for the organization. The organization becomes a leading to the customers in the market.
Operational process or the transformational process refers to a process that converts the resources of the organisations to its final product or services to the customers to use, these processes involves a systematic procedure that transforms to the desired result of the organization. Before bringing it to the practice the process is tested in advance and so that the company doesn’t face any difficulty while using the systems and procedures.
There are different types of industry around us, which produces same or the either products or services and they are from different industries like manufacturing or services industries. Obviously these industries will be using different process in their operations management. There are some strategies which are of akin nature but they are of very small alike. The industries which are selected in this context is from telecom and cement industry. The companies chosen are BhartiAirtel Ltd and ACC Limited.
Cement industry has a second largest place for india among the world producers for cement. The cement companies in india functioned by employing high capacity for meeting their hiking demand in the market for the product. The Indian government is giving importance in improving the infrastructure facilities in the country by which the housing facilities and the road networks are getting more of improvement in the country giving the industry a high pace growth. It is expected that the production of cement will rise from 236.16 million tons to 262.61 million tones in 2001-2012 respectively. Whereas in telecom industry is the fifth largest industry in the world. This industry is regulated by the TRAI (Telecom Regulatory Authority of India). The ‘ Indian Telecom Industry ‘ services is not confined to basic telephone but it also extends to internet, broadband (both wireless and fixed), cable TV, SMS, IPTV, soft switches etc. currently expected to contribute nearly 1% to India’s GDP which is heartening and estimated to grow further and brighten the ‘ Scenario of Indian Telecom Industry ‘.
Operations Process of the organization
2.1 Marketing strategy
Customer Oriented: ACC Limited’s strategy is customer focused, the company has increased its medium of services to the customers mainly targeting the individuals rather than the builders group across the world. Among the individual customer target, the company has segmented the product in such a manner that different customer group are involved in it. Whereas BhartiAirtel also focuses on the customer and their behavior. For example, the customer focuses on the effectiveness and efficiency of the product than just going for the company name.
Surveys: the ACC conducts market survey to know the product demand and feedback from the market to improve the product. The company has even opened up help centres to guide the customers regarding the products of the company likewise the bhartiairtel also does the market survey and finds out the feedback of the services that is provided to the customers.
2.2 Competitive Priorities
Term of strategies: In ACC Limited the strategies are based on a long term basis, the decision is made by the management in the company but they are followed for months though improvement or changes are made in the present strategies based on the market demand or conditions. Whereas the BhartiAirtel Ltd is a service provider and their strategies are short term based, the strategies are changed or improved based on the weekly review from the customer feedback.
Technology: In ACC, the company keeps on updating the technology so as to provide the customers with new and improved products. The research and development department of the company comes out with new ideas to the company so that the company make the product rich on quality base. In the same way the BhartiAirtel, the service industry is also affected with the technological advancement. For example, the introduction of 3G in the country has made the users largely subscribe for it because of the high speed service that it provides to the customers.
Benchmarking or Innovation: ACC has many benchmarking like take over of cement marketing company of India in 1973 and winning PHDCCI Good Corporate Citizen Award in 2002 are some to mention, these kinds of benchmarking are important in a manufacturing company than innovating new things as for the services industries like for the airtel has introduced the 3G internet and number portability in the country.
The company is the first ever manufacturer of the cement in the country and has spread across country and world. The company established itself with many plants and offices and with employing large number of people. The ACC’s research and development function provides them with the innovative development of the product. Ever since its commencement the company has made regular benchmark in the history of cement industry mainly in the functional areas of the company. ACC as a organization has taken care of the responsible that it has towards the society.
The company has been the trendsetter in the market for the cement industry, the introduction in the technology that improves the raw material utilization and process management, energy conservation and development of concretes in the organization.
The in house research and technology of the organization supports them to be a frontrunner in the market of the cement industry. This department not only concentrates on the quality of the product but also comes out with the improvement for the existing products, process and applications. To promote the product to the customers the company has created website for the usage and the mobile vans have been introduced which tours the construction sites for the guidelines for them. The company has the long term strategy which is implemented for 6 months to know the result of the strategy so that they can change or improvise on the existing strategy.
With the above operational strategy, the ACC Limited is able to delight its customers need. The marketing strategy of the company is systematic which guide the customers to select the product which are useful for their purpose. The company even has opened the website for clearing the customers support and site tour van for touring the construction site. The survey conducted by a agency indicates that the company is very popular among the customers for the cement brand in India. ACC also has future plan to expand its business to Saudi Arabia for which they have made talks with the companies there.
the company was incorporated in 1995 together with its subsidiaries refered to as the group. The major shareholder in the group included the bharti telecom ltd and Singapore telecommunication international pte limited.
Bharti enterprises is one of the leading group in india with telecom, retail, manufacturing, agri business and financial services. Bhartiairtel is with its services industry, they are the first private telecom services in india.
With the above operational strategy, the bharti airtel conducts a market survey to know the demand for the new product to be introduced in the market. Regular feedbacks are collected from the customers to know the performance of the products. The company is effected by the technological advancement made by other company since the competition may shift to them. This industry is very demanding since the customers are looking for new innovations and new facilities to be provided to them. Since the industry provide services to the customers, the company have to look to the efficiency and effectiveness in their services.
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3.1 Capacity planning
Capacity planning refers to the planning the capacity that the organization will require meeting the customers demand for the product. It is a process of estimating the production capacity to meets its demand in the market. Capacity planning of an orgainsation changes depending upon the changes in the demand of the customers for the product in the market in the previous years or existing demand. Based on the demand for the product, the company decides its capacity for the production of its product.
In ACC Limited the company determines its capacity planning with the help of the market survey. These surveys are conducted by the agency who rates the market demand for the company products. The company also plans for the backup planning which helps the company to meet the sudden increase in demand. Whereas in BhartiAirtel Ltd, the company makes its capacity planning based on the market survey for the new products and the demand of the customers for the existing products.
3.2 Inventory Management
Inventory management refers to the stocks of the resources used for the production of the products by the company for the market supply. The inventory management is generally done in the company itself that’s the in house management but there are company who outsource their inventory who doesn’t have the space to store their resources. It is very necessary to have a control and management over the inventory. The main purpose of the inventory management is to ensure the availability of materials in sufficient quantity as and when required and also to minimize investment in inventories. In ACC, the company has the inventory are maintained in the warehouse of the company. These resources are then distributed to the different places where the product s id required. Whereas in AIrtel Ltd, the company has inventory management maintained with the corporate office from where the products are supplied to the franchises and to the other customers.
Case: Amazon.com’s Inventory management.
Jeffrey preston Bezos the founder of amazon.com started the company due to the demand or scope of online trading in the internet. Originally he started with the bookstore for the online readers, eventually it spreaded to other products to keep the competition good. The company has always taken care of its criteria while selecting the strategic partners with whom they are working for. The company uses many strategic for its inventory management. At a later stage when the company got expanded they decided to outsource the inventory to the distributors. The company also decided to sell the products of the competing retailers in their site for the demand to increase in the market.
3.3 Supply chain design
Supply chain design a total systems approach that manage the entire flow of information, raw material and services from raw material suppliers thorugh factories and warehouses to the end customers. The reason why the supply chain management is popular among the company because many companies are achieving significant competitive advantage by the way of configure and manage their supply chain operations.
Case: Pepe Jeans
Pepe began to produce and sell denim jeans in the United Kingdom and achieve enormous growth. Its success was determined by the brand style and limited variety. The brand was so strong in the market that the company can demand retail price that averages about £45 for its standard products. Highest sales percentage is received from the United Kingdom outlets. The company keeps in contact with these retailers through a group of agents, where each agent id responsible for retailers in particular area. These agents meet up with the retailers regular for presenting new collections and the taking the sales order.
Once the order is confirmed, the process upto delivery is administered by pepe. The status of the order is updated in the company website. The orders are sent through a sourcing agent who does the manufacturing of the jeans in hong kong. They handle all the details of the materials, fabrication, shipping of the completed jeans to the retailers. Pepe has a outstanding team with young designers who develop the new styles. Jeans are made on the specifications of this team.
A survey of the retailers indicated the jeans are becoming less in setting the trend in the market than earlier. Many of the retailers were unhappy about the pepe’s requirement of placing the order once in six months with no possibility of replacement, cancellation etc. the retailers expected to have a slow moving inventory but the six month order lead time made it difficult to accurately order and worsen the situation. The retailers wanted some method of exchange, limited returns, reodering to overcome the situation. This made the pepe under pressure since their competitors offered delivery in few days.
To find solution to this problem, the pepe decided to work with the hong kong sourcing agent to lead time of the order which the agent agreed to but increasing the cost. Even then it will be difficult to meet the target within the shortest period of six weeks. The retailers indicated of starting a finishing operation in UK which would reduce the time and cost of the orders. Pepe found this as an interesting idea and decided to setup the finishing operation in the basement of their office in Willesden with a renovation cost of £300,000
3.4 Performance Measures
The performance measure refers to the performance of the company product in the market. The demand for the product in the market determines the performance of its product. The performance of the product is determined by the major factor is the quality of the product and services the company is providing to its customers.
In ACC Limited, the performance measure can be made with the fact that the company was the frontrunner in the cement industry in india and it the largest organized company in the cement industry.ACC’s operations are spread throughout the country with 14 modern cement factories, more than 30 ready mix concrete plants. Whereas BhartiAirtel Ltd, they also have a track record of being the first private telecom services provider with a footprint in all the 23 telecom circles. BhartiAirtel since its inception has been at the forefront of technology and has steered the course of the telecom sector in the country with its world class products and services.
3.5 Total Quality Management
The total quality management refers to managing the entire orgainsation so that it excels at all dimensions of products and services that are important to the customers. It has two operational goals that are carfully designing the products and services and secondly ensuring that the organizations system can consistently produce the design. These two goal can only be achieved if the entire organization is oriented towards the total quality management. Quality management is focused not only on product quality but also the means to achieve it. Quality management therefore uses quality assurance and control of processes as well as product to achieve more consistent quality.
In ACC Limited, the quality control department of the company sets the standard level of the cement which is to be brought to the market for the customer use. After the production of the cement the sample is send to the department for quality check. If it doesn’t meet the required standards then they send for reproduction. Whereas in Bhartiairtel ltd,
Case: shortening customers’ telephone waiting time
The case explains how they implemented a quality circle program to reduce the waiting time of the calls of the customers. This program was introduced in the main office of the bank where on an average 500 calls were received in a day. It was noted that the customers waiting for 5 rings before the answer were tend to be irritated and whereas the customers whose calls were answered in just 2 rings were happy. To correct the waiting time of the calls, the bank started its program from the telephone reception because telephone reception is the first impression a customer receives from the company. In a brainstorming session between the employees it was noted the customer B’s call comes in when the operator is talking to customer A.
Now the customers has to wait due to the following reasons, the operator receives a call from the customer but due to lack of experience, doesn’t know where to connect the call, the receiving party cannot answer the phone quickly perhaps because he or she is unavailable at the desk and none else can take the call.
Later the operators decided to keep a check sheets on the finding to test the situation analysis. The result of the check sheet was that only one operator was present at the desk for answering the calls at the office and the other was out of office. After the major discussion it was set a QC program to reduce the number of waiting callers to zero. In the program, it was set that taking lunches on three different shifts, leaving at least two operators on the job at all times. Asking the employees to messages when leaving their desks and compiling a directory listing the personnel and their respective jobs.
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