The case study for this assignment is Sunrise foods PLC by David J Edwards (1999-2009), sunrise foods plc is a family owned small business which is a member of local SME support group working within the food production sector ,producing snacks products, pies, pasties and sandwiches selling to pubs, cafes and catering supply companies under its own brand name and also sunrise foods supply to the leading retailers under the retailers own brand name.
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As the company is a family owned small business and have limited resources it is clearly identified from the case study that the management have limited knowledge and skills to run this organization and many problems identified in the case study are there in the organization for quite a long period of time, although the CEO and higher management are ambitious and are commited to overcome the problems and to expand there business to new markets in Europe such as Holland and Belgium to maximize the profit and camputure more market share to survive and compete in the current competitive environment.
This report aims to I dentify the problems and issues that sunrise food is facding and after identification of the issues the solutions to overcome the problems identified will be given to help sun rise in addressing the identified problems and to excel and grow their business.
Further in this report problems in sunrise foods plc are discussed and are also shown in a fish bone diagram.
Problems Identified in Sun rise foods:
Sunrise foods plc is facing many problem due to the small size of the company it has limited resources and is suffering from both internal and external problems, as from the first paragraph of the case study It become abvios that the company has moved reluctantly into the 21st century which means it lacks modern practices and services provisions and also it has not made any good use of internet and communication technologies which results in poor performance and adversely effects the efficiency and effectiveness of the company.
The major issues the company is facing is quality issue,the products made by sunrise lacks proper quality control check and low quality ingriedients supplied by some of the suppliers result in bringing unsatisfied customers, increase in customer complaints, repeat business which effect the companies reputation and performance in the business.
Because of poor quality the customer experience is adversely effected and results in increased customer complaints where as the customer services department is not fully capable to deal with customer complaints and with lack of communication among different departments in the organisation thus making more problems for the company instead of solving any one.
There is no proper management information system for record keeping and communication which effects the mangers decision making process less effective and with no proper record keeping performance evaluation and future planning is effected.
Low motivation poor co ordination among the staff and wrong allocation of staff all these problems are effectin sunrise foods progress and with high competition in the market along with the future expansion plans of the CEO of sunrise, the management should make proper changes and take immediate actions to address all these problems in order to survive and grow and to achieve the future strategic goals.
Below is a list of problems identified in Sunrise foods PLC
FISH BONE DIAGRAM TO ILLUSTRATE PROBLEMS IN SUNRISE FOODS:
Conflicts in schedules
Lack of Confidence among each other
Temporary Staff hired from agencies
Limited Exchange of Information
Poor Coordination b/w various Departments
LOW MORALE OF EMPLOYEES
POOR CUSTOMER SATISFACTION
INCREASED PRESSURE FROM COMPETITORS
DECREASED EFFECIENCY AND EFFECTIVENESS
DELAY IN DELIVERIES
LOW QUALITY PRODUCTS
Poor/Lack of Vision
Lack of Determination
Reactive than Proactive
Task Oriented rather than team oriented
Number of Shifts
POOR QUALITY FROM SUPPLIERS
LACK OF QUALITY CONTROL METHODS
POOR ALLOCATION OF ROLES
Lower job satisfaction
Lack of quality training
(FISHBONE DIAGRAM SELF CREATED)
Continues improvement is a management tool that is an ongoing effort to improve product services or processes these efforts can seek incremental improvement over time or breakthrough improvement all at once.
This approach focuses on employees of an organization in the identification for improvement of processes, continuous improvement in Japanese terms is known as kaizen which refers to the philosophy and practices focusing on continous improvement in manufacturing activities,in buissiness sense it refers to the activities that continually improves all functions of the business from management to buissiness and from top level management to low level management.
Continous improvement can be applied and adopted through qyality circles i.e group of people from and organization to an individual level , where people from within the organization get together and propose improvement in the operations of the buissiness.
According to slack n chambers s & Johnston R (2007 pg 594) “An approach to operations improvement that assumes many, relatively small, incremental, improvements in performance, stress the momentum of improvement rather than the rate of improvement; also know as kaizen, often contrasted with breakthrough improvement.”
Advantages of continuous improve to Sunrise Foods PLC
The application of continuous improvement approaches will bring great benefits in improving the processes of sunrise foods plc some of them are described below:
The continuous improvement ideas will come directly from the involvement of employees making it easier to apply
The improvement made by the application of CI are based on small changes there is no need of spending big amounts by Sunrise Foods PLC on R&D
As these small improvement does not require big investments so Sunrise Foods PLC has no need to make big investment and spend big money on change process
These changes will encourage the employees of Sunrise Foods PLC to develop team building relations and improves employee’s motivation as a result all employees will be constantly seeking ways to improve their own performance.
Continuous improvement tools and techniques:
There are many tools and techniques available which can be applied to implement the approach of continuous improvement below are some of the tools used in the improvement of
Sunrise Foods PLC
Total Quality Management (TQM)
Business Process Reengineering (BPR)
These three tools and techniques will be applied to our case study first we will discuss these tools and techniques and then we will apply them to the Sunrise Foods PLC
TOTAL QUALITY MANAGEMENT (TQM):
According to DJ Edward TQM can be defined as the management approach of an organization
“Management approach of an organization, centered on quality, based on the participation of all its members and aiming at long term success through customer satisfaction, and benefits to all members of the organization and to society.”
Slack N et al defines TQM as”TQM is a holistic approach to the management of quality that emphasizes the role of all parts of an organization and all people within an organization to influence and improve quality, heavily influenced by various quality ‘gurus’.”
According to Slack N. et al (2007) TQM’s was on its peak in the late 1980s and early 1990s. However, it has suffered from something of a criticism in the recent years. The reason is because there is a little doubt that many companies adopted TQM keeping in their minds that it would transform their operations performance could not get the desired results.”Even TQM programmes which are successfully implemented are not necessarily guaranteed to bring long-term improvement. They may lose their impetus over time. This phenomenon has been variously described as quality disillusionment and quality droop.”
According to (http://www.asq.org )”The term “Total Quality Management” has lost favor in the United States in recent years: “Quality management” is commonly substituted. “Total Quality Management,” however, is still used extensively in Europe”.
TQM is probably the most significant approach for improving management operations it stays away from errors and is seen as approach to the way the processes and operations to be managed and improved generally that’s why the focus of TQM is on the basics of process management and operation which result in the production and delivery of products and services required by the market in short term as well as long term.
By adopting the TQM philosophy Sunrise Foods PLC will:
Become a more competitive organization
Create a new culture which will help growth and prolonged existence
provide a successful working environment to every employee
reduce waste, stress and friction
create teams, partnerships and co-operation between the employees
(Diagram : http://www.edrawsoft.com/images/examples/TQM_MODEL.png)
The management of Sunrise Foods PLC should apply TQM on their operations and processes in order to achieve increased efficiency and improvement in the business the implementation of TQM in Sunrise Foods PLC should be done from top level management down to low level management the management should make sure that there is involvement of their staff and should focus on quality policy in all aspects of operations the organization should announce incentive policies to their work force and should show concerns and commitment toward solving the problem both internally and externally. The company should focus on the customer requirement and all the products should meet the customer expectation.
BUISSINESS PROCESS RE ENGINEERING:
The second tool that can be used for the improvement and to address the issues identified from the case study of sunrise foods is to implement business process re engineering (BPR), According to Hammer and Champy cited by John Beckford (2002 pg. 194) BPR is “the fundamental rethinking and redesign of business processes to achieve dramatic improvements in critical, contemporary measure of performance, such as cost, quality, service and speed.”
“The philosophy that recommends the redesign of process to fulfil defined external customer needs”
Slack N. Chambers S. & Johnston R. (2007: 598)
Business Process Reengineering is a beautiful blend of various ideas in vogue in operations management. Concepts like Just In Time, Process Flow Charting, Critical Examination in Method Study, Operations Network Management and Customer Focused Operations contribute to BPR. Slack et al (2004)
BPR helps the organizations to become more efficient and modernize and it directly affect the performance of the organization.but there is some critics about BPR as according to Deakins E. & Makgill H. (Deakins, E. Makgill, H. (1997) article: What killed BPR? )
” The first half of the 1990s business process re-engineering (BPR) was one of the most eagerly embraced management techniques, although often with results that were far from satisfactory. This tended to reinforce people’s suspicions of information technology since IT is a key enabling agent, if not the driver, for BPR. The aim of this study was to provide literary evidence and reasons for the current widespread dissatisfaction with BPR. The analysis showed that 97.8 per cent of the BPR literature has been written since the beginning of 1993, since which time there has been an explosive growth in the number of publications. However, a recent sharp downturn in the number of articles may be a sign that BPR is maturing, if not reaching the end of it useful life-cycle. The almost complete absence of research articles to underpin BPR is a distinctive feature of the literature. Thus, opportunities for researchers, as well as hitherto untapped opportunities for consulting practitioners, are clearly identified. Concludes that, while BPR may not have suffered a sudden fatality, it is the victim of neglect in some critical areas of life support.”
BPR is a mixture of number of ideas according to david j edward
“Organize around outcomes not task
Buy-in; output users perform the process
Information integrated at the coalface
Loose-tight control of information workers
Delegate the decision making to the coalface
Information captured once avoid duplication”
Source:David J. Edwards, Handbook & Lecture Notes (Management and Developing Activities 2009)
EFFECTS OF BPR ON ORGANIZATIONS:
The two most important elements of an organization are people working in the organization and the processes that take place,the organizations performance will be poor even if the people work hard and with full motivation, if the processes in the organization are not optimized and upto the standards.
BPR is a key to transform the peoples way of working even a minor change in the process can bring drastic improvement to the service deliveries cash flow and customer satisfaction.
IMPLEMENTATION OF BPR
The best way to implement BPR in order to improve the organizations performance is to take a top down approach
Starting with mission statements that define the purpose of the organization and describe what sets it apart from others in its sector or industry.
Producing vision statements which define where the organization is going, to provide a clear picture of the desired future position.
Build these into a clear business strategy thereby deriving the project objectives.
Defining behaviors that will enable the organization to achieve its’ aims.
Producing key performance measures to track progress.
Relating efficiency improvements to the culture of the organization
Identifying initiatives that will improve performance
To be successful, business process reengineering projects need to be top down, taking in the complete organization, and the full end to end processes. It needs to be supported by tools that make processes easy to track and analyze.
Quality Circles or Kaizen Team
“Kaizen is a philosophy of continuous improvement of all the employees in an organization so that they perform their task a little better each dayâ€¦. Kaizen Teian is a Japanese system for generating and implementing employee ideas.” (Oakland, 2000:191)
People group together to form a quality circle or kaizen team to analyse and resolve issues related to work, in working time under the leadership of their supervisor. The focus of attention would be quality improvement. Oakland, 2000 stresses the need of right sort of commitment by higher management, introduction and environment of operation. Under these prerequisites quality circles can produce the ‘shop floor’ motivation to achieve required quality performance at all level.
According to David j Edward course hand book “QC is a volunteer group of employees who meet periodically to solve a problem”
Quality circles are used to improve job satisfaction through participation and responsibility for quality is pushed down to lowest level by using bottom up approach instead of top down resulting in a successful cultural change and enhance buissiness effectiveness.
Reasons for the failure of quality circles according to david j Edward course hand book is
2:little change in attitude to quality
3:reasons for volunteering
4:the divide between members and non members
5:mixing of organizational layers
6: Regularity of meetings
7: momentum difficult to maintain.
INFORMATION AND COMMUNICATION TECHNOLOGY:
It can be defined as Management Information Systems (MIS) is the term given to the discipline focused on the integration of computer systems with the aims and objectives on an organization.
The development and management of information technology tools assists executives and the general workforce in performing any tasks related to the processing of information. MIS and business systems are especially useful in the collation of business data and the production of reports to be used as tools for decision making. (Source:http://www.bestpricecomputers.co.uk/glossary/management-information-system.htm)
It is very important for the organization to make use of information technology for the successful operations of the business. Companies who realize the importance of the information system have made significant progress although in case of Sunrise foods PLC nothing much has been done. In this regard necessary actions should be taken by developing an IT department with an effective information system to cover all aspects of the business.
Management information system according to Slack, N. Chambers, S. Johnston, R. (2007:226)
“Any device, or collection of devices that collects, manipulates stores or distributes information, nearly always used to mean computer-based devices.”
Sunrise foods PLC should use MIS in their planning and control activities MIS can help to overcome the problems of scheduling of activities, order processing, inventory management, time management, supply management etc
Types of information system
I most of the business , there is a variety of requirements for information as the Senior managers need information to help in their business planning and in order to monitor and control business activities the Middle management needs more detailed information and Employees working in operational roles need information to help them carry out their duties.
Because of this the businesses tend to have several “information systems” operating at the same time. This highlights the main categories of information system and provides some examples to help in distinguishing between them.
The main kinds of information systems in business are described briefly below:
Executive Support Systems
An Executive Support System (ESS) is designed to help senior management make strategic decisions. It gathers analyses and summarizes the key internal and external information used in the business.
A good way to think about an ESS is to imagine the senior management team in an aircraft cockpit – with the instrument panel showing them the status of all the key business activities. ESS typically involves lots of data analysis and modeling tools such as “what-if” analysis to help strategic decision-making.
Management Information Systems
A management information system (“MIS”) is mainly concerned with internal sources of information. MIS usually take data from the transaction processing systems (see below) and summaries it into a series of management reports.
MIS reports tend to be used by middle management and operational supervisors.
Decision-support systems (DSS) are specifically designed to help management make decisions in situations where there is uncertainty about the possible outcomes of those decisions. DSS comprise tools and techniques to help gather relevant information and analyze the options and alternatives. DSS often involves use of complex spreadsheet and databases to create “what-if” models.
Knowledge Management Systems
Knowledge Management Systems (KMS) exist to help businesses create and share information. These are typically used in a business where employees create new knowledge and expertise – which can then be shared by other people in the organization to create further commercial opportunities. Good examples include firms of lawyers, accountants and management consultants.
KMS are built around systems which allow efficient categorization and distribution of knowledge. For example, the knowledge itself might be contained in word processing documents, spreadsheets, PowerPoint presentations. Internet pages or whatever. To share the knowledge, a KMS would use group collaboration systems such as an intranet.
Transaction Processing Systems
As the name implies, Transaction Processing Systems (TPS) are designed to process routine transactions efficiently and accurately. A business will have several (sometimes many) TPS; for example:
– Billing systems to send invoices to customers
– Systems to calculate the weekly and monthly payroll and tax payments
– Production and purchasing systems to calculate raw material requirements
– Stock control systems to process all movements into, within and out of the business
Office Automation Systems
Office Automation Systems are systems that try to improve the productivity of employees who need to process data and information. Perhaps the best example is the wide range of software systems that exist to improve the productivity of employees working in an office (e.g. Microsoft Office XP) or systems that allow employees to work from home or whilst on the move
Individuals, groups or teams make decisions every day. Some decisions are very
Important and affect a lot of people whereas other decisions are small and affect only
One or two people. A decision-making process based on data leads to good decisions.
The steps in this model are listed in a linear fashion but the steps are interrelated and
Can be repeated as needed throughout the process.
Clarify purpose and boundaries of the decision
Identify who is affected by the decision
Identify who will make the decision (individual or group)
Identify what knowledge or expertise is needed to make
Identify what information or resources currently exist to
Help with the decision making process
Define by when the decision needs to be made
Communicate to affected parties who is making the decision and
The rationale for it
Define how the decision will be made (e.g. consensus, voting, etc.)
Use appropriate tools that support data gathering (e.g. affinity
Diagram, brainstorming, fishbone, flowchart, force field, how-how,
Make the decision through the integration of ideas and data, and
Negotiation and prioritization of ideas
Identify who (individual or group) will implement the decision
Summarize the rationale for the decision
Communicate the decision, why it was made and the rationale for it
Define the steps in implementing the decision including the
Timeframe for completion
Define the method for reporting when something is completed and
Who receives the report?
Identify the process for assessing impact of decision
From all the above discussion and the case study of Sunrise Foods PLC we can conclude that problems exist in almost all aspects of the organization the major problem is the quality of the products and services besides this other issues identified are the lack of co ordination between the departments, training, scientific management lower motivation of employees no proper information system no proper decision making system and no time management the focus of the management is only on the output resulting in the above mentioned problems to overcome all these problems implementation of continuous improvement tools and techniques such as TQM, JIT and BPR are suggested to implement in order to overcome the operational and performance issues, also Sunrise Foods PLC should have a well developed and efficient information system to improve the decision making process both short term and long term in order to achieve the organizational; aims and objectives.
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In today’s age attracting customers is not a problem the problem is how to retain them. The customers want to be treated as the first priority of the organization and if they feel that organization is not treating them as their first priority so they move to some other organization. Sunrise foods PLC has the problem of delayed deliveries which leads to customer dissatisfaction and which ultimately will affect their profit so they should try to make on time deliveries possible.
One reason of this problem is that there is repetition of tasks which increases work load of employees and is wastage of all the other resources as well. In order to add efficiency in its operations the Sunrise foods PLC should follow the scientific management according to which they should develop a science for each task and should follow the division of labor principle. Employees should be provided with clear job description and their job description should be reviewed after regular intervals to accommodate the necessary changes.
Job analysis should be done and for each job, job specification and job description should be prepared same tasks should be grouped together and should be handed over to different teams for more efficient and effective work.
The organization should plan to get a new management information system as for this purpose they don’t have the skilled staff. If the organization is planning to install new MIS the first thing that they should do is first to develop its own employees to prepare them for the new change. The organization should provide some training programs to the employees to develop new skills in them that will enable them to work with the new soft ware.
For continuous improvement Sunrise foods PLC should standardize its processes to reduce the processing times and to reduce the stress from the top management.
Sunrise foods PLC should introduce individual bonus system this bonus should be based on the quality not on the quantity. They should implement the concept of total quality management so that every employee should work to improve the quality of its products in one or the other way.
The company should also focus on cost because it has lost a number of valuable contracts to Eastern European Standards due to high cost. The contract managers should make long term relations with the customers by providing standardized products and increasing customer satisfaction.
There is communication gap between management and employees. Employees feel that they are not supported, rewarded or appreciated. The management should involve employees in decision that concern them to improve employee participation and efficiency. There should also be rewards for employees on monthly/semi-annual best performance.
From the above discussion following is a summary of recommendations for the Sunrise foods PLC:
Sunrise foods PLC should realize the importance of quality of both products and services throughout the organization.
Regular use of tools and techniques
To increase the capacity of the staff in using these tools and techniques
To implement JIT technique in all operations of Sunrise foods PLC
To develop a better work environment with enhanced cooperation and coordination between the staff and among all level of management.
To make the organization a learning organization
To take necessary actions for the motivation of work force through bonuses incentives etc.
All the employees should work together enthusiastically to achieve the organizational goal
To implement an effective information system
There should be frequent communication and activities between the employees to reduce the communication gap
Using information system for making effective decision
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