Operations Management And The Process Of Conversion Commerce Essay


The area of business concerned with managing the process of converting the inputs into outputs are known as operation management. This area of the business focuses on the production of goods and services, involves the responsibility of ensuring that with the use of little needed resources the business operations are efficiently sorted. It even focuses on effectiveness regarding the customer requirements.

Pepsi is one of the most known beverage brands that has been serving the people in terms of taste and quality for over many decades. Due to miss management and problems in the operations management, it suffered great losses not only economically but also its brand name and trust. At present, Pepsi positions as one of the trusted brands only for the reason that it has been using organizational marketing techniques and strategic planning and management. Hence, it can be understood that Pepsi again established its own position only because of contributing the most important role in operations management. However, even such a well-defined operations department of Pepsi could not grip the quality of the Cadbury products (Sweet, Franklyn H. 1964, pp 89-90). There was news in the media that the Pepsi was contaminated with pesticides. The news spread all over like wildfire in such a way that Pepsi faced so many troubles. This carelessness by the operations department of Pepsi exaggerated the organization in terms of financial values and also in terms of loss of trust and brand name (Peters, T. and Waterman, R. 1982, pp. 12-23). This without a doubt came as a upset to the whole nation as no one has expected that even the most trusted brands like Pepsi could have ever faced such as problem.

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Although the finding of pesticides in the Pepsi was world news and it started being banned in most of the places. All stock of Pepsi was seized and that in the factories were stopped from coming out of the company (Sweet, Franklyn H. 1964, pp 89-90). This questioned the already existing operations management techniques that were being used and prominent in the Pepsi industry. This also recommended the management of Pepsi to think of the processes that were already existent in the organization. In addition, the quality assurances of these processes as well as the validity of these processes were inquired and appraised.

There are various processes existing in the organization, which include manufacturing of the soft drink where the organization mainly concentrated on distilled and free of impurities in the water that it used. After the soft drink is prepared, Pepsi is transferring to the packaging house where the best technology is implemented to maintain the good quality. After using the best technologies, the other processes taken place are packaging and storage. During all the processes, Pepsi used relevant operations theories.

An organization needs to use different assumptions and methodologies in order to deal with the problems that an organization faces. These assumptions and methodologies assist an organization to be able to deal with the problems that have turned up due to carelessness on the part of the operations management department. The various assumptions are discussed below:

Total quality management (TQM): This is the main and most important part of every operations management department of any organization and Pepsi is no exception to this rule. However, more significantly, the operations management department of Pepsi should make sure that the principles and procedures of TQM techniques should be integrated in the operations department in order to ensure that there is no problem in terms of manufacturing of the goods of the organization (Peters, T. and Waterman, R. 1982, pp. 12-23). Therefore, Pepsi need to use the TQM techniques and principles and achieve the trust of the customers and stakeholders of the organization. In order to gain organizational goals, the strategies and principles of the TQM techniques are used to endure the quality standards (Rehfeld, J.E. 1994, pp. 56-59). So in order to solve the problem that Pepsi is facing by using the TQM techniques, they have to ensure that they go through the following steps and stages:

1) Identifying the problems: Due to the reason of problems facing by the Pepsi in the operations department, it is also continuously facing problems in the quality of the products. Hence, to solve this, the Pepsi co group has to first identify the problems it is facing and forward the problems to the top administrative departments of the organization. This will make sure that they are alert of all problems starting from the ground level and that resulted in this fall of quality of the Pepsi group. In addition to this, the problems are also put forward in a simple layout. In doing this, different methods such as Fishbone drawing, etc., can be employed so that the problems are easily identified by the senior management of Pepsi.

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2. Analysis of the Problem: The another step that the Pepsi must go through is to analyze the problems which are listed or showed in such a way that it can be read without difficulty, then the analysis of the problems can be easily examined (Peters, T. and Waterman, R. 1982, pp. 12-23). Only after the analysis of the problems, the various measures are carried out in a systematic way where the huge problems are firstly broken down into smaller one so that their main causes can be outlined.

3. Generating Ideas: The next very important step to solve the problem is generating of ideas. Problems are addresses in a better way and solved the problems when the effective ideas are generated.

4. Testing Ideas: Not only it is important to generate the ideas, but also they are tested whether the ideas can show helpful in solving the problems. Therefore, the efficiencies of these ideas are first tested; and then depending on the results, they are lastly executed. Without testing of ideas, it is not by and large used directly in any organization.

5. Implementing Ideas: After the ideas are tested, the feedbacks may generate and gives more ideas whether the ideas are implemented significantly or not. After the ideas are implemented, it is clear that the organization will never be faced similar kind of problems again in future.

6. Checking the Results: The last and final stage of the implementation of the TQM methods is to check the results. The check is always required at this stage, although all the process are done; as a result of which, it gives a feedback of the effectiveness of the ideas and helps decide whether the ideas are needed for the future processes or not.

Fishbone theory: The fishbone diagram now forms an important part of management studies and ensures that the problems that an organization faces is first jotted down and then analyzed. This gives the problems a pictorial looks and thus ensures an easy and clear understanding of the problems.

Fishbone diagram

This diagram when seen after the completion gives an impression of being drawn on the model of a fish. In fact the diagram is of the shape of a fish. A spine of the fish is drawn and this the plane in which the problems are written extending towards the outer sides. The problems are jotted along the sides giving an impression that these are the bones of the fish (Peters, T. and Waterman, R. 1982, pp. 12-23).

This graphical representation helps to understand the problems more easily. The problems are started from the ground level and decided into several categories. For instance, the several categories of the organization that might be responsible for the operation problems cropping up in the organization are decided and then the problems that can be placed in these areas are listed. This gives a clear picture of the problems; and when this is presented before the higher management, it become easy for them to link the cause and effect and then work towards solving them. Several questions arise like why the fishbone theory is used as a main tool in the analysis of the operations problems and the answer is that it divided the problems into tiny segments so that it will be much easier to solve the problems segment wise. Other than this, the connecting of the problem to the cause an effect also makes the problems easy to recognize. The other relevant reason that suggests the use of the fishbone theory is that it is normally made in a group. Both the fishbone diagram and TQM methods provided an idea of the various problems that Pepsi faced. In addition to this, the fishbone diagram also listed the various approaches that are already part of the Pepsi group. These methods or theories suggest that the operational department of Pepsi had taken up strict actions for sustaining the quality of the products of Pepsi.

Recommendations that can be given to the Pepsi group to solve the operational problems

After identifying the problem, various recommendations that can be given to the Pepsi co group are as follows:

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1. Most of the problems that cropped up regarding the quality of the products is due to the negligence of the employees. It was seen that the staff and crew that were part of the manufacturing department were not well trained and well skilled and they did not understand the importance of maintaining accurate temperature and pressure. They did not understand that minor changes in the level of temperature and pressure while purifying the water etc can lead to drastic disasters as it happen in the case of Pepsi. Thus Pepsi must ensure that all their staff are properly trained before they become part of the manufacturing and operational team of the company (Kearney, A.T. 1992, pp. 89-90)

2. The company should also understand that when the product that they are producing are consumable items special care is taken to neglect any health hazards. This is because a slight negligence on the part of the company may lead to severe results on the health problem and thus in turn may be disastrous to the life of the company and they may even end up losing their license. Thus, Pepsi should ensure that the machines that they are using in the production and purifying of water should be the best of quality. More and more high quality machines need to be brought to test the presence of microbes and other such organization and at the lowest possible level

(Chaffee, E. 1985. pp 34-35).

3. Quality assurance is an important part of the operational management department in Pepsi. This department has to take up the responsibility of ensuring that the products of the organization are best of the quality and that they are passed through various rounds of quality checks such that the products that finally pass out of the organization are best of the quality (Chaffee, E. 1985. pp 34-35).

4. The management also has to be sensitized towards this cause. They have to ensure that the work process of the organization needs to be changed as there are loopholes in the process. And the loop holes are such that they resulted in blunders foe the organization, Thus, the management needs to incorporate more levels of quality checks and ensure that there is strictly monitoring at all levels.


Therefore, it is seen that Pepsi faced many problems due to the carelessness by the operational management department as well as other problems that led to such loss of the organization. However, with various theories and approaches of the management of the organization, the main problems that the organization faced were identified and rectify them. By following these methods and theories, Pepsi was able to recover its lost trust and business.