It is an important area of any company which basically concerned with the production of Goods or Providing Services. It uses the resources of the organization and convert it into valuable good or services."Operation Management (OM) is the set of activities that creates goods and services through the transformation of inputs into outputs" (Render, Heizer p.3).
This is a universal rule for any process that it is consists of three major steps, first one is the Input (in the form of labor, energy, resources) these inputs are gone through the second step of Process and convert in the Output (in the form of goods or services). Widely we categorized the Operations in to two, one the organizations which produce and manufacture products and the other one the Organizations that are service based.
The Organization which I selected is Chemtech International PVT Ltd, it is service oriented organization and its all processes are designed according to it.
Introduction to Company:
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Chemtech International is a ISO 9001:2008 certified company, and their ultimate goal is to provide better services to their customer. "Chemtech International involved in sales and support of Laboratory, Process and Environmental Instruments. Chemtech International (Pvt) Ltd. is representing world renowned manufacturers like Mettler Toledo Switzerland, Thermal Technology LLC USA, ThermoFisher Scientific USA (Process Division), Fischer Instrumentation Pte. Ltd., Singapore and ES&S (Environmental System & Services (Pty) Ltd. Australia) for their state-of-the-art instruments." (Sourced from www.chemtechint.com). They had a customer based all over Pakistan and company operates in the three major cities Karachi, Lahore and Quetta. There are 25 employees are working in Chemtech, who aimed to achieve the goals and objectives of their company by providing valuable services to the customer through their technical expertise.
Chemtech customer based involves the pharmaceutical, FMCG and consumer goods companies also they providing their instruments to educational and research institute. The instruments that are provided by Chemtech provided the instruments that are usually used in Quality Control and Quality Assurance departments and it is highly recommended that these instruments are validated and calibrated. For this purpose they had a qualified team and staff who provides the calibration and validation to the instruments.
Their Quality policy is to provide quick and good services to their customers, and due to company's commitment towards it goals and objectives they established a strong place in Pakistani Market. Chemtech uses the Performance management system to ensure that's the goals and objectives are consistently being met in a effective and efficient manner. "Performance management begins with purposes and objectives. It has been long established that a fundamental requirement for control is the existence of objectives,
which are the used to evaluate performance" (Otley and Berry, 1980). Through their higher aims and objectives Chemtech establish themselves as a strong part of Pakistan Analytical and Scientific instruments market. They evaluate their performances and success by comparing their services to their objectives and decide how effective they are to provide services.
In my following assignment I will discuss that what operational strategy is adapted by Chemtech? And will identify how they are achieving their targets and goals.
"Organization structure determines the responsibilities and accountabilities of organizational participants; it equally defines the activities that individuals with specific
roles should not pay attention to. It is then not surprising that these "arrangements influence the efficiency of work, the motivation of individuals, information flows and control systems and can help shape the future of the organization."(Chenhall, 2003, p. 145).
The Organization can be structured in many ways according to the products and services they provide. This structure can identify the objectives and ambiance of the organization. The structure is basically designed from hierarchical order and then divides in the different department and individuals. Following is the structure of Chemtech International;
There are three directors of Chemtech, who shares the responsibilities among them, Director sales is basically looking for the Sales and Marketing promotion of the company. He is responsible to look over the market change and conditions and revised their marketing strategy accordingly. Director Sales is immediate boss to Manager Sales who look after the whole sales team and lead them to achieve their targets.
Always on Time
Marked to Standard
Services is one of the major department of Chemtech, as it is a Service oriented company and also the company's future sales and growth is mainly dependent on the services that are provided. There services team is Head by Director Technical, who looks after all the services issues and check that all the tasks performed smoothly. Regional Manager lead the Service team and through the channel of service coordinator, assigns the jobs and tasks to its service team. Asst. Manager Service department helps Manager to take decisions and in assigning right person for the right job.
Director Finance looks after all financial matters of the organization and with help of Manager Accounts they cast the predictions for the future.
"There is also a relationship between organization structure and strategy, but this appears to be bi-directional. Some research suggests that structure needs to be matched to strategy." (Chenhall, 2003)
The Structure of an Organization is depends upon the strategy they have adapted, if they are working on the Diversification strategy they must take divisional structure, like the Chemtech had structured their departments in the divisional format.
"Operation strategy is concerned with setting broad policies and plans for using the resources of a firm to best support its long-term competitive strategy."(Chase-Jacobs-Aquilano, 10th Edition)
Operation Strategy is consist of two words, in which operations refers to the daily tasks of manufacturing goods or delivering services, while strategy refer to make the policies and plans for long term run of an organization and how they deliver to their customers. These plans and decision taken by Top Management of the organization.
Chemtech revised their operation strategy according to market changes, they usually takes feedback from their customer after each quarter of the year through Customer Feedback Form and call a meeting every quarter and evaluate performance of each employee, and after having all these things designed their operations and marketing strategy for next quarter.
"Strategy is the direction the organization chooses to pursue over the long term as the means of achieving organizational objectives" (Johnson et al., 2005)
The operation strategy results in the process design and layout of the process. Chemtech designs their strategy by focussing on different aspects that what are their primary tasks, what can they offer in market to do better than anyone else and also by identifying their market position.
"Operations require a more tightly defined set of objectives that relate specifically to its basic task of satisfying customer requirements. These are the five basic 'performance objectives' and they apply to all types of operations; they are Quality, Speed, Flexibility, Dependability and Cost." (Slack, p44-45)
These five performance objectives are key to success for any organization, and by using these performance measure an organization can enhances its output and provide effective services to their customers. "There is evidence that alignment between performance measures and strategy affect performance; in particular, the pairing of quality-based manufacturing strategies with the extensive use of subjective non-financial performance measures was found to have a positive performance effect." (Van der Stede et al., 2006)
Chemtech International focuses on three of the performance objectives that are Cost, Flexibility and Quality. I can relate these objectives with the company's perspectives and goals as follow:
"A company that emphasizes cost efficiency will see that its capital, labour and other operating costs are kept low in relation to other similar companies."(James, p.45)
Cost is the thing which is the value of money; it is the major factor that will attract customers. While talking about the Pakistani market, cost is the major thing which a company had to consider while offering something. Chemtech emphasis on Cost reduction policies, by giving 1 year free backup services for their instruments supplied. Also while considering instruments from Chemtech platform, customer gets free Calibration and Validation services for 2 years. These service and calibration charges are extra burden on the pocket of customer, and by considering Chemtech's offers they get rid of these issues. As I said earlier that these instruments are used to check quality of different materials, so it is mandatory to maintain instruments onto its default limits.
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"Efficiency, effectiveness, unit cost and all other criteria depend in part on the flexibility of the firm and its ability to respond quickly."Time-based competition" is the term used to describe them many efforts of the firm to increase innovation, decrease development time, shorten manufacturing or service delivery cycle times, and responds to the individual needs of the customer."(Ruch, p.38)
It is refers to the speed that adapt by the company for change. In today's competitive environment when there are numbers of competitors present, and it's really difficult to survive, in this race of winning orders and meeting customer requirements company had to adapt changes.
Chemtech is focussed on this performance objective, and after evaluating the customer feedbacks and responses they redefine their strategies and policies. For an instance, in this period, where normally company's manufacturing costs are increasing due to global changes and companies are not much focussing on their quality control departments, usually they required instruments of low costs, and for this Chemtech management introduced their new principals that are low expensive, and customer got their solutions while purchasing cheaper instruments. So Chemtech management had an eye over the market changes, and they make themselves flexible as per market requirements.
"It is a characteristic that determines its value in the market and how well it will perform the function for which it was designed. The quality of a product in general is expressed as a standard, and the quality of specific units of that product are measured in terms of the degree of conformance with the standard." (Harold, p.164)
In order to achieve maximum satisfaction from your customers it is necessary to maintain Quality of your products or services. Quality is also dependent on two major performance objectives that are Dependability and Speed. In order to improve the Service quality of Chemtech, management is dedicated to provide several in-house training and seminars to their technical staff, these seminars and workshops helps the employees to develop their technical skills and make themselves up-to-date as per market requirements. Also they provide foreign trainings to their employees so that they get technical knowledge on factory site and provide Quality service to their customers. In perspective of the customer this is the major factor that will lead a company to win an order from a customer, Customer measures the conformance quality and then compares it with competitor's products or services before taking any decision.
"A Process is any conversion activity that transforms input into outputs. Process analysis involves understanding what the process, how and why does it, and how it might be improved. All processes convert inputs into outputs, through some conversion or transformational process." (McGraw-Hill, p.272)
Any of the general process design is consists of the three main stages that are inputs from the customers, consumers or any external sources, after having all the inputs it gone through a Process stage which uses the resources that particular process layout has and generates Outputs. Following figure will shows a basic Process design layout:
(Sourced from Mc-Graw-Hill, p.273)
By using the Process design layouts and the performance objectives Chemtech has design their own processes for their each department, in my assignment I am mainly focussing the two main departments of Chemtech that are Sales and Services, these two departments are bread earner for Chemtech. I am discussing their flow of work in the following process diagram:
Enquiry / Sales lead
Other than tender
Prioritizing the Potentiality of the Lead
Preparation for Meeting / Visit/Presentation
Gathering Latest Product Information & Preparing Quotation
Acquiring Complete Requirements from the Potential Customer
Logging on to a Sales Follow-up Sheet & Review of Requirements
Meeting with the Customer and Proposal / Quotation Submission
The Process shown above is the core process that is used by Sales Engineers in Chemtech, and by using this they win the orders and enhance their knowledge. "Good Service - that satisfies the customer and meets the strategic intentions of the organization - is usually the result of careful design and delivery of a whole set of interrelated processes." (Robert Johnston - p. 137)
Satisfaction of the customer is directly proportional to the services rendered by an organization, and by having a systematic flow of work and tasks it is easy to satisfy customer demands.
Chemtech have mainly two types of prospects for their sales, that are Tender issued in Press or directly mailed to registered suppliers or Sales prospecting through direct contact, telephone, and sales team visits. After having an enquiry sales person needs to check that do we qualify for this enquiry or not? And for this they use their product range and technicalities. After qualifying sales person logs this in its log sheet and work on it as per priority order. It is essential to do the customer in the dates order. Sales Engineer prepares himself for the customer requirement by reading the Broachers and Manuals, and focus on the customer requirement, so that customer can satisfy in a better way. Then provides quotations and literature to the customer and meets the customer and convince it to consider their offer. Answer the technical queries and convince it to order, i.e. WIN-WIN situation. After having Purchase order the order is forwarded to the order processing department and then further to the Service department so that they will arrange the things for the installation.
The above is the main procedure that is followed by the Chemtech Sales and Services staff to satisfy their customer, they used the other procedure also, that are:
Customer queries and Complaint handling procedures
Process flow of Calibration and validation
Process for New Installation
Order Processing Process
Repair & Maintenance Process
Training and Demonstration of instruments Process
Process of Warranty request
Chemtech has designed a flow of work and tasks to be performed, which mainly helps them to win the orders and competing in the market. By using the principles of Operation Management and Performance objective they discover their own processes which help their employees a lot.
"Quality means only one thing to such people: conformance to the service's specifications as valued by customers. Even a cut-rate service could be termed high quality if customers valued it and it conformed to all of its specifications. Such a service could even lead to customer delight, another term that is nearly synonymous with Service Quality". (Roger W. Schemnner, 1995)
In the consumer or customer mind quality is the conformance of the specifications, he compare the product or services to the original specifications, or compare the services of the company with the services provided by the other competitors in the market. This is the most usual way that is adapt by the most of the customers in order to measure the quality of services they are getting from their vendor.
Chemtech International is always conscious about the Quality of their services, and their management always focussed on improving their services by keeping the mistakes from the past in their minds.
In order to meet the specification quality and the customer satisfaction on the Service quality, there are certain quality-related functions within the business. In which Quality Assurance is one of the major function through which a company can prevent itself through defects and bad quality. "Quality Assurance is focuses on assuring process and product quality through executing the operational audits, supplying training, performing technical analysis, and advising operational areas on quality improvement". (Hutchins, 1991).
As I have stated before that Chemtech Management is aware about their quality and due to expansion of their business in year 2007 when they got authorization of ES&S products also, which are relatively a big and expensive products, company faces difficulties in maintaining their Quality. In order to improve and maintain their quality they decided to have an ISO Certification and Quality Audit in the year 2008. "The ISO 9000 series is a set of worldwide standards that detail the requirements for an organization's quality management system. They provide a framework that governs the activities and procedures for managing quality that customer expect of a supplier to demonstrate the effective control of its processes". (Terry Hill, Second Edition)
ISO 9001 was originally intended for manufacturing companies. Therefore, our sample includes only manufacturing companies. While the 2000 version adopts the terminologies for service companies, it also acknowledges that service companies show different characteristics than manufacturing companies. (Beaumont et al., 1997)
Chemtech International is a Service based company, so they adapted the 9001 standard for their Quality Assurance. They got a Certificate of ISO and they performs the Quarterly Quality Audits in order to maintain their Quality.