Definition Of Operation Management Om Commerce Essay


Brookside Dairy Ltd is a private company that processes milk and milk related products. The company has grown over the years form a relatively small unit expanding exponentially, scaling heights and levels that could have been probably seemed impossible. It has received acclaim from various quarters and has been accredited for introducing new products intro the market greatly surpassing older and more experienced companies. One of its strengths is the recognition of the fact that its business is primarily driven by farmers - both small and large scale - and therefore dedicating resources into their well-being through various programs. It also recognizes the potential of its competitors and therefore keeps on reviewing its strategies to ensure that it is able to achieve its objectives in a reliable way. It has over time developed polices that promote good farming practices for its producers with an aim of ensuring that they constantly increase their production capability, which would in return impact the company's processing ability and eventually the supply to the market. With such an enhanced mechanism, the company no doubt makes a good case study for operation management processes.

Definition of Operation Management (OM)

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In order to get an overview focus of this study, it is important to understand what process management is all about and how existing literature looks into it. Some scholars have looked at this process as the manner in which a given procedure is controlled and directed with an aim of transforming inputs into finished goods and services (Melao & Pidd, 2000). It has also been looked into as the process related with creation operation and control of transformation system which absorbs inputs and resources and in the long run produces outputs which are classified as either goods or services and are essential to the customers (Pritchard & Armistead, 1999). From these descriptions, it is deducible that operation process is primarily focused on producing goods or services that customers can enjoy. Lin and Pai (2002) assert that operations management deals with looking it what resources are needed where, how, in what quantity and for what purpose, as well as how these resources will impact the final expected product.

The Brookside Ltd Operation Process

From the company overview given above, it is evident that the company has a rather complicated structure that is significantly segmented for easy management. There are several interdependent departments that undertake specific tasks with an aim of reaching the overall company objectives. The process selected for this case study is the collection of milk from the farmers to the processing unit. In interrogating this process, it is important to add the aspect of response from the company to the farmers and vise versa.

The company has the responsibility of collecting milk from the farmers using its own vehicles and staff. The process is conducted in such a way that farmers deliver their milk to a designated location agreed upon between them and the company at constant time on a daily basis. Farmers store their milk in metallic cans that are easy to wash and can be used for a long time. At the specified time, the company truck collects milk from these centers. Here, individual famers, with the assistance of company staff, weigh their milk and record on a given card, a copy of which they retain while the company personnel takes the carbon copy with them. The milk is then transferred from the farmers' cans to the company's metallic cans before being transported to the company. This process is repeated several times at several centers. In some areas, depending on the amount of milk farmers are able to produce in a day, milk may be collected twice a day. Although this process may not seem to have several complications to it, it is no doubt a very demanding exercise and probably the second most important process for the company coming after the actual milk production by the farmers.

This process has several technicalities involved thus the importance of having a well managed process. To start with, milk is a perishable product. This means that it has to be collected in a timely way and delivered without delay to the processing unit. Secondly, milk demands high level cleanliness at all stages including the milking process itself. As such, the company must ensure that farmers are aware of the consequences of unhygienic handling of the product. Risk factors in the process are high given the produce may be contaminated in the process of weighing and transferring from the farmers' cans to the company cans. Further, vehicle breakdowns may delay delivery and there have even been cases where farmers add impurities to increase milk quality or quantity.

The process design may thus be outline as follows:


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1. Milk Production

2. Delivery to Collection Centre


6. Products



3. Collection Centre

4. Delivery to Processing Unit

Processing Unit

5. Transformation

For this case study, the operation management process will focus on processes 1-4. The study will look into how this process impacts the output and how it can be improved.

It is important to underline that the existing literature that focuses on this issued doesn't clearly give consensus on the principles or key characteristics of operation process management. Existence of various models, it is noted, does not provide an opportunity for both academic and practitioner communities to engage in the process with some guidance in terms of what parameters to use. Nevertheless, there has been identified some key elements that impact the operation process in one way or the other. They include: Process Strategy, Process Architecture, Process Ownership, Process Measurement, Process Improvement.

Process Strategy

The concept of Process Strategy has one major element in it. It tends to outline the link between the intention to undertake a given action and the manner in which the deployment of the task is to be carried out. In other words, it looks into the infrastructure of the process. Armistead and Machin (1997) observed that a cost effective strategy must increase delivery reliability, speed of new product introduction, increased flexibility and consistent product quality. For Brookside Dairy Ltd, this would be a relevant and significant application in an effort to improve the milk collection process.

Process Architecture

Process architecture has been looked into as a way for understanding the organization from a business perspective. Unarguably, processes are the key components of any company and every stage and phase that aims at giving an outcome, is done through a process (Slack Chambers & Johnston, 2009). Process architecture basically looks into how a given process articulates and integrates with other processes in the organization. It therefore means that it would look into how one action would affect another and so on and so forth. For instance, if Brookside Dairy decides to outsource for the transportation of milk, how would this reflect on the outcome? This outlook would no doubt give a business perspective of the whole idea before a decision is made.

Process Ownership.

Scholarly material has simplified this ideology by relating it to the champions or creators of the process. In most cases these would be managers who come up with strategies to counter a given problem. However, they quite often execute the process through their personnel. A process can also be owned by a team of persons who work for a common goal. One point that most scholars seem to agree on is that in as much as person or a group of people may create a process, it must be measured against a business profitability matrix.

Process Measurement

The essence of creating any processes in the organization is to enhance profitability. A question therefore rises as to how one measures the extent to which a process is profitable or efficient. Some authors have suggested that the best mechanism of measuring importance, relevance, efficiency and profitability of a process is by looking at the extent to which processes fulfils customer requirements (Lewis, 2003). This parameter has further been popularized by existing literature in Service Profit Chain.

Process Improvement

From a cross-sectional perspective, all organizations have several areas in which they want to do better. For this reason, they look at the various ways through which they can achieve this objective. Rummler and Brache (1995) correctly observe that improvement activity is central to realizing the benefits of all business management processes. One underlying concern that most of the existing texts make clear is that there is not a single way through which an organization is supposed to carry out improvement strategies since there is no single organization whose objectives are all the same. However, they seem to indicate that it is important for organizations to watch out for segments that need improvement from time to time - even when everything seems fine.

The aspect of improvement is perhaps one that organizations must pay much attention to. Brookside Dairy has had several cases where milk has gone bad due to delays caused by truck breakdowns. In most cases, there is no standby solution in case a truck breaks down, and farmers have to wait at the collection centre until it is repaired or at such a time when another truck is sent to do the collection. In such a situation, milk would have been exposed to impurities long enough to increase its perishability rate. The company must therefore put in place a mechanism where a standby truck is always available. It must be put into account that if milk goes bad in the hands of the farmers, there is normally no compensation, regardless of whether the delivery delay was a result of the company's fault. A frequent repetition of such an occurrence would lead to a dwindling relationship between the company and the farmers, yet this relationship is a key value in continued business operations.


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From the above analysis, it is deducible that operation process management principles hold the view that well progressed organizations have to undergo structural adjustments for their processes to remain relevant in view of increasingly changing business environment. This is primarily necessitated by mechanisms put in place to continuously point out segments of the process that may need changes. However, these theories note that companies adopting operation process management does not necessarily mean that they have to dismantle the established functional groups (Pritchard & Armistead, 1999). For instance, Brookside Dairy already has a working system in place through which milk is delivered into the processing unit. However, there are several structural adjustments that could be relevant to the whole system. There have been reports of milk going stale in the process of transportation, particularly after it has been collected from the farmers. Several factors such as unhygienic practices and even climatic conditions such as extreme heat could contribute to this. At this point the management process needs to introduce mechanisms that ensure minimal or no loss. It would be necessary, for instance, to make sure that before a farmer hands in milk to the company, it is checked for impurities. This would need the company to train its staff on this and outsource for gadgets that would help in this process. Prichard and Armistead (1999) note that such an adjustment would be seen to be essential and beneficial to all the concerned parties. In this case, the adjustment would make the farmer more cautious in the way he handles his milk while ensuring that the company gains from this adjustment.

While describing the process structure, Sivestro and Westly (2002) noted a marked shift in power from function to product categories, or from function to customer business units

(CBUs). This is to mean that any action taken in the process and at any one point will most certainly be reflected by the reaction or response of the customer towards the end product. That being the case, there must be deliberate effort to point out areas that need improvement and at the same time remain keen on maintaining the already established and working processes. While looking into the operation process management, these aspects come into the picture.


It is almost universally agreeable that process management is a rather natural undertaking that must exist in any organization. In other words, it is not optional but rather has to take place somehow. However, the degree to which the management of the process is carried out as a conscious activity rather than just being spontaneous could be the element of difference. At this point, though the question becomes the extent to which a process is said to be undertaken through a conscious and deliberate action or takes place by default.

There is also need to extend research into this whole idea of operations management in order to include other aspects such as the role of each participant in any given process and how they affect the outcome of the whole process. Further, there seems to be relatively high information regarding this subject and relating to the Manufacturing Sector with little concern being given to the service sector, an aspect that needs to be explored as well.