Operation management as discussed above is concerned with the management of operations of the company regarding production of goods. Therefore it is concerned with the managing the process that converts the raw material into finished goods. All this process consists of the followings features of management that makes it a successful operation management.
Creativity in the product design varying the product style and output as per the changing tastes and habits of the customers.
Proper skills available in the production department in the designing and pre planning of the process of production.
Availability of raw material in amount required and also with the promised quality.
Labor presence in number as required for the production process.
Complete power back up so as not to halt the production process in between that may result in harming the quality of the product.
Proper technological knowhow needs to be present to make an innovative product.
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Machinery working properly is very important. Machinery which is not working properly not working at all can delay the production process.
Proper managerial controls over the production process so as to keep a close look on the production processes.
Packaging department fully equipped and ready for dispatching. Delay in dispatching can result in delay of the product entering the supply chain.
Finally the product packaging completion makes it ready for disposal for the next step which enters it in the supply chain.
Features of successful supply chain:
Supply chain management as discussed above is concerned with the transfer of goods to the sellers for sale. Thus supply chain in itself requires be designing, planning and executing with proper controls. Therefore a successful supply chain management consists of the following features of management.
Proper coordination of various processes under the supply chain.
Safe and secure transfer of product, causing no or lesser damage to the packaging.
Transport of goods in a healthy manner and in spacious way that does not affects the quality of the product.
Managing of the upward and downward movement of the material either raw material to the production house or the finished goods to the sellers. Thus maintaining quality performance and meeting customer requirements.
The goods transferred get delivered on time and at the right place.
The goods transferred are well checked before delivering to seller.
Integration of all processes well in advance so that the process does not face any halt in between.
Review of linkages from time to time to find out the better options available. Thereby motivating the removal of bottleneck and increasing performance efficiency and in result getting equitable reward distribution that adds value in the supply chain.
Proper back up required overcoming any unforeseen `contingencies.
A review of case study in light of successful Operation management and supply chain:
In the case study, Zara, a Spanish retailer has achieved competencies in Operation management and supply chain. The expertise in Operation management includes the followings.
Latest designs added on bi-month basis.
No repeating of designs that makes every product unique.
Limited supply is made that makes only 10% of the unsold items in the stores as compared to 17 to 20% in the industry.
New designs and limited editions makes the customer eager to come back more frequently to the stores and check out the required design for himself/herself.
Rapid creation and rapid replenishment of small batches of small goods makes the customer remain interested in the upcoming products of the stores.
Similar products are offered at lower prices by using lesser expensive fabrics.
Not only have the above had the Zara retailers also achieved in Supply chain in the following ways.
The latest products are delivered to the stores after every fifteen days.
The supply is done taking full care of quality of the products.
Constant exchange of information throughout every part of Zaraâ€™s supply chain.
Customers, store managers, designers, production staff, sub contractors, warehouse manager, distributors are all contacted and meet from time to time to find out their responses and feedbacks on latest products.
Always on Time
Marked to Standard
Thus Zaraâ€™s way of doing work has proven quite successful and well efficient as it is not only offering the customer with latest designs and products but also making quick transportation of goods to the stores and thereby offering the products at lower costs. The quick logistics movement helps in securing successful operations and processes resulting in product being at the right amount, right priced and at the right place.
Current issues with the logistics and operations:
A number of current issues with the logistics and operation are met. These are as follows.
Difficulty in network configuration with the increasing number of retail outlets.
The distribution strategy needs to be updated as the taste of the people at different areas is different.
The increasing logistics costs are adding the prices of the earlier low costs products.
Difficulty in inventory management and cost to maintain inventory rising.
Cash flow halts due to delay in arrangement of payments and exchange funds.
Increase in labor costs.
Rise in costs of maintain machinery.
Slump in sales due to economic slowdown.
How it works in Zara Stores in Spain:
In Spain, Zara always keep nearly 200 designers in between the production process to get the new variety of cloth with distinctive designs and features. The team designers refine colour, texture, and even cloth material through computer aided design system.
The use of telephone and PDA systems helps the store transmits all information about the customer requirement to the production cell. This way the designers are able to get updated requirement information about the customer changing habits, tastes and fashion. That makes the operational procedure, performance measure and lay out of all the varied designs become transfer easy and Zara gets the latest designs as per the customer requirements. On the other hand, the availability of single pick for single design and single colour tempts the customer to buy now or it will get sold out to someone else. Thus customers also make quick decisions in buying and owning dress material of their choice at Zara
In the end, the Zara retail stores are doing very well by introducing new products and delivering high quality and varied product every fifteen days in stores help in keeping customer eager to come often to the stores and remain updated with the latest design the stores has introduced on bi-monthly basis. Moreover offering the quality products at lower costs and making on time delivery makes them stay and proper in business for longer terms.