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J&C Building Company Ltd is a fast growing hardware chain stores operating in the whole of Uganda. It has five branches in the core divisions of Kampala district. The store import durable building materials, plumbing and kitchen fittings from Europe and America and supply the entire country.
The company was structured in such a way that it had the following departments:
Administration department that was responsible for order/requisition, accounting and finance, procurement and general administration. This department was centralised in Kampala serving all the stores in the country.
Stores department that was responsible for the storage and supplies to customers. Whenever stores ran out, the stores must report to the central office in Kampala who will then place orders for that material.
Transportation division that was responsible for movement of materials to stores around the country.
The human resources department that was responsible for the hiring and maintaining of high calibre personnel who could serve customers as outlined within the mission of the company and the culture that had been built in the past.
The company had gained reputation for supplying excellent and high quality materials to customers in the entire country. They were the leading dealers in that sector for a number of years running and as such dictating the price as the market leader.
However, figures from the management accountant showed that like-for-like sales for the past three years had taken a constant dip. The number of customers has also fallen considerably as a result the profits fell by 10% in 2006, 20% in 2007, 28% in 2008 and 35% in 2009. The management account made a disturbing reading to the chief executive officer and senior management including the board of directors.
The board ordered an investigation on the constant fall in profits/sales and why the number of customers attending the stores in the country has been fallen year on year.
The results of the investigation revealed that customers has lost trust and confidence in the company's operating activities that is why the was the switch to other small suppliers.
A further analysis showed that the real problems were delays in supplying customer orders. Some customers would have to queue for a long time to buy materials. Some of the materials that ran out of stock took long to be replenished due to the lengthy process of store requisition to stores managers for vetting to the head of store operation in the head office to the accountant for confirmation to the chief procurement officer who places the order. This process take quite some time for stocks to be replaced given that stock levels were no proper controlled. Furthermore, it was noted that the quality of the materials supplied to customers had fallen so customers no longer want to buy low quality materials. The consequence of the above problem was justified in the results reflected in the management accounts and annual financial statement.
According to Slack et al (1997) operations management is that part of the management that is concern with the design, planning/control and improvement of the organisation's resources and the processes to produce goods or services for customers. Whether the activities deals with physical goods or services they all form part of the operations activity of an organisation. Plagiarism
The problems identified have a direct relationship with operation practice in an organisation in that they all form part of the process (transformation Process) that ensures that inputs are processed into output for customer satisfaction. In this particular case, the input will be the labour, materials that are ordered, administration processes and the output is the delivery of fast, efficient, effective and quality services to customers or buyers of building materials.
TASK 2 EXPLANATIONS OF PROCESSES AND PROCESS MAP
Waller (1999) has postulated that a process is made up of a series of activities that a performed in order to achieve a particular goal. While Galloway et al (2005) has stared that for an organisation to be successful, there must be an operation strategy which they states "involves the decisions on the design of the production or service delivery system and the organisation of operation's resources for updating the developing new products or services"
If J&C Company would gain its position in the market, it would need to review its operations and re-invent is activities and cut the delays and queues that currently affecting their operations. This will entail a root and branch overhaul of processes to sink inefficiency.
The success of the operations will depend on how well the processes flow and the location of facilities for easy access to customers. plagiarism
Operation processes that cover the whole country like those of J&C Company are described as macro processes while those that are with units of the same departments are known as micro processes (internal customers).
I am looking at the operation process of J&C Company at the macro level. The results from the management and financial account show that the company is affected in the whole country so i would like to look at the whole operation processes of J&C and then suggest for improvements in the system to build customer confidence. The overall operation processes of the company are:
The customer order supplies from one of the stores
The store worker inspect the order to confirm whether the goods are in store
The order is passed on to the store manager for approval
The order is sent to the cashier for payment and sent back to store for supplies
Stores then supplies the goods to the customer
If the goods are not in store, the store worker who raises a store requisition note and sent to the store manager for validation
The goods requisition note is sent to the procurement department in the head office in Kampala who acknowledge receipt by signing and returning a copy to the store in divisions.
All requisition from stores in the country are summed and presented to the accountant who approves for the procurement to go ahead before the procurement officer can place an order.
Goods are received in a central warehouse in Kampala before being dispatched to the various stores around the country using their fleet of transportation vehicle.
When materials run out in some parts of the country that are very far, it takes time for stock to arrive. Which means that some store have to go for some time without materials, further note that the whole of the process is done manually as the company does not have an IT department to run their process electronically.
The process map for the current process of the company is shown below.
The above processes show that when stock runs out the bureaucratic process that has to be carried out before the stock is replenished in warehouses in the country takes long. Secondly it takes long for customers to get their orders fulfilled. This creates delays that have moved customers to rival suppliers of material. Thirdly, given that Uganda has two major seasons; customers like to take advantage of the dry season to construct their home, thus increasing demand during that period which the company cannot satisfy.
TASK 3: RELEVANT OPERATIONS THEORY
The operations strategy should fit it the overall strategy as it is clearly part of the organisation's total strategy. While a strategy defines the total pattern of the decisions and course of action which a company like J&C has agreed to pursue, an operation strategy therefore involves exploiting the capabilities of the operations resources towards meeting the overall mission of the company.
Hill (1993) had developed the Hill methodology of operation strategy which connects the overall strategy to the operations strategy. On the other hand, Platts (1990) produced a method of operation strategy development which had three stages as follows:
Stage 1 - this involved the development of an insight into the market position of the organisation.
Stage 2 - involves assessing the capabilities of operations. At this level, current operations practices are identified the extent to which they can help in achieving the level of performance the market need.
Stage 3 - at this level, the management looks at the need for developing new operations strategy. This means that reviews are made and the best options are selected to meet current requirements.
The success of an operation depends on how effective the management can bring together the right quality and quantity of materials, labour, overhead and time to deliver to the needs of the customer.
The success of an operations management will depend on meeting the following objectives:
Quality objective: the company should strive to do things right first time with no room for mistakes. In the case of J&C Company, they should supply customers on time, with the right quality of materials.
Speed objective: this is concerned with the time taken to deliver services to customers. Customer should not wait for a long time to be served as seen in the case of J&C Company in some of its branches. Secondly stores should be supplied on time to the various warehouses. The over-bureaucratic procedure is likely to slow the speed of delivery thus defeating this objective.
Dependability objectives: this involve keeping on time with delivery to customers. Customer can only judge the dependability of a service one they are supplied with the service or product. Thus will be a mark of reliability for the company.
Flexibility objective: this involves the speed with which a company can adapt to changing circumstances quickly. An organisation should be able to adjust to unforeseen events fast without causing customer dissatisfaction.
Cost objective: operations should be cost effective to both the organisation and the customer who pays for the product or services. The organisation should strive to do things cheaply by mixing the right resources and facilities to provide the good value for money products/services.
Organisations will have to ensure that the overall strategy is translated to operation process for success to be achieved.
Theoretically, the operation of an organisation can best be judged by using some models. In my assignment, i have decided to use the input/output or transformation model of processes and the fishbone model to explain my company.
INPUT/OUTPUT MODEL (TRANSFORMAION PROCESS)
This model which is shown in the diagram below explains how an operation process takes in a set of input materials or services which are then transformed through a conversion process and finally comes out as output of goods or services which satisfy customer needs.
This model has three key components know as input, conversion process and output.
Input: these are the resources that are used by the operating system. They can be classified either as transformed resources. That is those resources that would need to be converted or treated into finished goods or transforming resources that act upon the transformed resources.
The transformed resources include such resources as materials, information, customers and. While the transforming resources include, facilities such as building, equipment, plant and process technology of the operation and staff that operate the facilities, plan, maintain and manage operations. In the case of J&C Company, the transformed resource will be the various material stocks for sale while the transforming resource is their staff, the buildings, warehouses and fleet of transportation vehicles.
Conversion process: this is concerned with the design of the operation system, planning and control and improvement needed during the manufacture and supply of goods/services. At this stage, the transformed resources are mixed according to the required specification to produce goods/services. The process involve as the design of activities to facilitate the free flow of the process. Conversion process also involves continuous improvement. This means that incremental improvements (kaizen) are carried out at this stage.
Output: these are the final product or services coming out of the operations process to satisfy the customer requirements.
SEE PROCESS DIAGRAM ON PAGE 7
Planning and control activities
Methods of conversion
TASK FOUR: COMPARISON THEORY WITH PRACTICE
TASK FIVE: CONSIDERATION OF CHANGES /QUALITY/CUSTOMER FOCUS
TASK SIX: RECOMMENDATION FOR IMPROVEMENTS