Strategic Objectives of Operations Management Case Study

1) Evaluate the strategic objectives of operations management within the organisation

Effective operations management is directly related to overall organisational objectives, if operations within the organisation are not implemented properly, it will affect the profitability of the organisation in longer terms. Therefore, in order to achieve these objectives the need for operations management arises in order to professional mangers. These managers have the expertise in their related fields such as marketing, finance and human resource etc.

Operations Management relates to the production of goods and services within the organisation. It deals with the inputs and outputs that are vital for the effective operational management. Here, input refers to the managements of the recourses such as competence of the employees, machinery and raw material, and output is mainly focused on distribution of goods and services of finished goods to the customers (Gyte, 2009). Apart from input and output, there are other functions that are listed below:

• Quality management function
• Management control and Coordinating function
• Facilities management function
• Inventory control and management function
• Research and development function
• Finance function

The better coordination among these function will improve the control within the organisation and ultimately resulting in organisational. In order to prove how these functions can help an organisation to achieve its strategic objectives, the researcher has chosen the Jindal Stainless Ltd (JSL). However, it is to remember that these functions will be similar to any other manufacturing company.

JSL is deals in manufacturing of stainless steel products of different ranges. Therefore, the coordination of above mentioned functions becomes vital (JSL, 2009). These functions are discussed in detail in relation to the JSL.

In operations management quality management is imperative in every organization. Company like JSL, always concentrates on customers needs, which is directly related to product development. They understand the importance of maintain the standards as for as the quality of the product is concerned, which in turn help them to hold on to their customers. It will also improve the market share and will also be less attractive to new entrants. Continuous efforts to improve the quality of their product are the main reason that JSL is still growing even in current economic crises. Their continuous investment in research and development projects is also seen as the main reason for their success. Other factors such as internal auditing (benchmarking) and reengineering are also key drivers for their leadership in the market. Internal audit function helps the organizations to identify the flaws and weaknesses in different departments and suggests different ways that ultimately increase their customer base in the market (JSL, 2009).

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Management control (MC) is also very important function that has helped the JSL to achieve their strategic objectives. There are broad range of activities involved MC that ensures that organizational objectives are implemented in efficient and effective way. Under this function an organization always tries to figure out if it actually following and implementing the activities that were decided when original objectives were laid out. For example, JSL always implement those strategies that which are focused on customers. They are always concerned how the products will reach to the customers; therefore they have implemented the national level distribution systems in India. This type of strategy has helped the JSL to achieve their organizational objectives (JSL, 2009).

For JSL facilities management is also important in order to achieve the overall objectives. In facilities management, companies heavily rely on the better management of the facilities such as building, computer, signage, lighting and plant and machinery. Facilities management is very important to the JSL, which operates at national level in India, as mentioned earlier. This is because company is involved in the large scale production in relation to market demand. If there is high demand of steel products in the market, then it will be equally important that facilities should be provided keeping in mind the level of demand. On the other hand, if there is less demand in the market then facilities needs to be managed otherwise it may result in high cost to the organization, which will ultimately affect the profitability of the company (JSL, 2009).

Marketing or advertisement function is also equally important in current technological world. This helps the companies to reach to the customers quickly and make them aware of latest developments in different products, and make them aware of any new ranges that are introduced followed by the customer demand. The similar strategy is adopted by the JSL in order to ensure its product and services (output) are in the reaching out to the customers in each and every single part of the country. This in turn helps them to achieve their overall objectives and maintain the level of profitability (JSL, 2009).

In operations management inventory control is also equally important like any other function that contributes to the achievements of the organizational goals. There should always be control over inventory and procurement department plays the key role in this. In manufacturing company like JSL, the presence of procurement department is vital. If there is more production and less demand then it is highly likely that all the steel products produced will be sold. On the other hand, if there is high demand and less production, this will ultimately affect the profitability of JSL in longer terms and company may loose its customers. This will also increase the chances of competitors to gain the market share (JSL, 2009).

Another important function can said to be finance, which helps the company to have the control or manage its finance. JSL is involved in manufacturing business, which requires heavy capital investment. It is important to mange these investments in an efficient manner. Over the years it is seen that companies are employing professional managers those who have expertise in the financial sector.

Overall, it can ne said that operations management is embedded in each and every part of the organization, hence important for the achievement of the organizational objectives.

References

Gyte, (2009), “Operations management” (Online)

www.gyte.edu.tr/dersler/546/ISL536/Üretim%201.ppt

(Accessed on 09/12/2009)

JSL, (2009), “Company Profile”, (Online)

http://www.jindalstainless.com/profile.html

(Accessed on 09/12/2009)

ASKS 2-A ETOLA 10573

Define resources tools and system required to support business process

Introduction

Due to globalization, the market become more competitive, now a days the range of new tools are available in the market. To achieve a marginal development business need to develop its business process. The business process management help organization to improve productivity and recognize the value chain to gaining competitive parameters. The business needs a solution of all kind of hype. On the other hand, fear of making a selection that may result in a failure to meet strategic goals or achieve adequate return on investment can cause delays in making the decision to adopt a Business Process tool and, by omission, result in the same problems.

Define business process

The further step to identify the business strategy is to

One step is to identifying the business process strategy is to classify the main business processes which support the business value chain. The current business trend required a long term development planning to achieve a good, but it is possible when business have good business strategy and this strategy is Business Process Management, to achieve overall business objectives this process play an important role.

Revolutionary changes

To remain stable in the market, it is very imperative to make revolutionary changes by maintaining relationship between technology and current business scenario. If we glance over the real business situation over the last decade, there are huge revolutionary changes has occurred. The technology has changed and due to market competition the quality improvement plays an important role. And to fulfil these objectives there should be a overall contribution of all department.

Departments in an organization play key role in meeting overall objectives

To achieve organizational goals, all departments play important role like; Human Resource, Finance, Marketing, Production and Quality Control, and IT etc. In this globalization era, it is necessary to maintain clear objective and role to meet organizational goal. All above depart are run by the employee and so the employees are the main capital of the organization because the success and failure of the company is depend on the employees because the command of the all department is in the hand of the employee.

Tools and System to manage business recourses

To mange a better work system it is essential to establish a better technological tools and system. Now a days there are many technical tools are using in the organization to work smoother. Recently the new ERP established in organization, by help of this system you can operate all of your business function easily like., purchase, sales, time keeping HR outsourcing, and security Management.

There are different types of tools to run your business as under:

Management Information system

Integrated information systems

Executive information system

Corporate information system

Enterprise wide system

Material resource planning

Manufacturing resource planning

Money resource planning

Conclusion:

The growing information needs of an enterprise make it imperative to improve or replace old system, where the globalization has been initiated, full convertibility is coined, Infrastructure Projects are nearing completion, and it is expected that the whole business system will undergo a major shift. Gain the performance improvements offered by a service-oriented architecture. Enhance operations by combining new and existing information assets and making them available to users throughout the enterprise, and for combination with other resources to meet new challenges.

• References

  http://www.bpminstitute.org/articles/article/article/define-your-bpm-strategy-before-selecting-a-tool.html

  http://www.erpfans.com/erpfans/erpca.htm

  Task-2-b ETOLA-10573

  Define and implement quality audit systems/practice to manage and monitor quality to standards specified by the organization and process operated.

  Introduction:

  Quality audit is an important part of an organization to examine a product quality. It is a process of systematic examination of a quality to maintain good quality, because it is a key element to get international quality standard. Quality audits are typically performed at predefined time intervals and ensure that the organization has clearly-defined internal quality monitoring procedures linked to effective action. This can help determine if the organization complies with the defined quality system processes and can involve procedural or results-based assessment criteria. Audits can also be used for safety purposes. Quality Audit can save organizations from quality disasters. The goal of this article is to provide brief information regarding quality audit and it is importance in continuous improvement of any quality system.

  Audit System:

  In 2008, our audit volume declined by 19 percent compared to 2007. Wal-Mart’s ethical standards group and third-party audit firms conducted 11,502 audits in more than 7,000 supplier factories. Of the audited factories, approximately 5,000 produced merchandise for our direct import program, and 2,000 produced domestically-sourced merchandise. In 2008, we accepted more than 1,000 audits from the ICTI and ILO. We attribute the decline in overall audits in part to the change in the program’s frequency of audits. Additionally, the factory base across many regions has been negatively impacted by the unfavourable global economic conditions, thus leading to factory closures.

  Quality Audit Standard of Wall-Mart’s:

  Advancing our commitments

  In Wall-Mart’s they work with their supplier to help them to achieve new goals, they give their review and feedback to their supplier when necessary.

  Third-party auditors

  Third-party auditors will undergo thorough, independent assessments of their performance and work product quality. Third parties will be required to obtain and maintain certification to established industry standards.

  Improving the efficiency of our audit program

  Wall-mart’s is a member of the Clearinghouse (FFC) that enables us to share data among a group of global brands and retailers. Company also have developed a plan to accept high quality and fully establish audits from their peer companies. Company have created a program to evaluate and accept the audit conducted third party group.

  New requirements

  The company is improving their supply chain transparency by requiring all main manufacturers of direct import, non-branded and private label goods to reveal their factories and subcontractors company.

  A supplier development team

  To achieve high standard supplying the company have developed a supply team, this team is specialized to support the suppliers and their factories by activities such as root cause analysis.

  A special audit team

  This team member is responsible to validating audit results created by the quality department and third-party audit firm, after this result if any ethical standards issues arise they audit them and make investigation on it.

  Conclusion:

  Quality and knowledge management initiatives can be complementary rather than competing strategies. Continuous process improvement systems work well in controlled and ordered environments focusing on the performance of well-defined and repeatable tasks. Knowledge processing is context dependent and complex – the activities of thinking and learning. Cause and effect are discovered in retrospective analysis.

• References

  http://walmartstores.com/sites/sustainabilityreport/2009/s_rs_auditProgramResults.html

  http://www.kppub.com/articles/may2009/quality_audit_a_tool_to_review.html

• Task 2c ETOLA-10573E

• Embed a quality culture to ensure continuous monitoring and development of the process

  Introduction

  The methodological approach to “quality” was born at the time of the industrial Revolution, with natural resources being transformed into products having comparable features. The concept of quality is at the basis of competition: products offering similar features distinguish themselves on the basis of “how well” their features were developed and of how much they are appreciated by the public. Speaking about the quality of an intangible product or service implies substantial differences, as well as different organization and monitoring methodologies. The concept of quality, somehow intuitive in itself, is actually something strictly connected to the service received and the relating client satisfaction.

  Definition

  “Quality culture is a long-term, extended methodological approach involving all the bodies’ in charge of delivering a service, with the purpose to attain the highest possible customer satisfaction.”

  Hear in this topic we will summaries how does Wal-mart’s monitoring the process and develop the quality culture.

  Wal-mart’s Culture

  The corporate quality culture of Wal-Mart is one of the biggest contributing factors that make it one of the world’s most admired companies. When Sam Walton founded the company, he instilled in his people and his business a belief system that is still very much in place today. From the three basic beliefs to the sundown rule, we respect our customers, Associates and suppliers and strive to treat them as we ourselves want to be treated. In building and nurturing these relationships, as well as serving the communities where we live, we’ve helped build a better business-one committed to excellence.

  Monitoring and development of Quality Culture

  In Wall-mart’s they continuously monitoring their internal process of their quality and after monitoring the process, they develop the policy to gain business goal.

  From the three basic beliefs to the sundown rule, we respect our customers, Associates and suppliers and strive to treat them as we ourselves want to be treated. In building and nurturing these relationships, as well as serving the communities where we live, we’ve helped build a better business-one committed to excellence.

  Conclusion

  As we have reviewed and studied the quality culture, and the challenges and successes at Wal-Mart, However, it is surprising to find that many organizations though acknowledging the pressure that corporate culture exerts on an organization’s profit and loss figures do not more than document their quality culture in paper only and lock them away in files that are never read. So, it is very important for any organization to monitoring the quality culture and develops them to achieve the success.

• References:

  http://www.careerbuilder.com/Jobs/Company/C7H3TS6Y32JND3GZW88/Wal-Mart-Stores-Inc-Corporate/?cbsid=ca014d79eaf249a7acd25c7eebb99c0d-313812029-J5-5&&ns_siteid=ns_uk_g_The_corporate_quality_&cbRecursionCnt=1

• Task-III-Group assignment ETOLA-10573

• McDonald’s

  The McDonald’s concept was introduced in Southern California by Dick and Mac McDonald of Manchester, New Hampshire in 1940. It was modified and expanded by their business partner, Ray Kroc, who later bought out the business interests of the McDonald’s brothers in the concept and went on to found McDonald’s Corporation.

  It has more than 31000 restaurants in more than 119 countries and serves 47 million customers each day. It has more than 1.5 million employees It’s headquarter is at Oak Brook, Illinois, USA.

  Each McDonald’s restaurant is operated by a franchisee, an affiliate, or the corporation itself. The corporations’ revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company operated restaurants. McDonald’s revenues grew 27% over the three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion.

  PARTICIPATIONS

  Group viii

  Question number 3.a and 3.b is completed by:

  Dhaval B. Kanojiya (Leader)

  Yogita P. Kapadia

  Chinmay A. Chauhan

  Question number 3.c and 3.d is completed by:

  Sanjay Kumar Paul

  MD Humayun Rashid

  Baldev M. Bhetariya

  Task 19.3.a: Monitor systems, work activities, and identify problems and opportunities for improvement.

  McDonald’s system:

  To make the profit in the organization McDonald’s uses the franchise system. McDonald’s gives its franchise to other companies for the expansion of their business. The following diagram is about the introduction of the working environment of the McDonald’s.

  McDonald’s working environment:

  Figure no.3.a.1

  McDonald’s Working Culture:
  McDonald’s offers different kind of work and position to its each and every employee. The following positions are given to the employers by the McDonald’s.

  1) Main Manager:

  The manager has to run the company and it is his responsibility to expand its business in the market and also to make the company more profitable. Manager decides about the increment of the employer, gives permission for leave and also about the strategy of the company.

  2)Shift Manager:

  The Shift manager has to take care about a particular shift which is been given to him. He or She has to look after man force and food .One has to train the new employees as well.

  3) Customer assistance:

  The customer assistance has to deal with customers about taking orders and solving their problems.

  4) Crew member:

  The crew member has to deal with many activities like cleaning, preparing food, set up all the food items to the storage, changing menu daily, etc.

  Problems:

  McDonald’s provides many facilities to their customers. It provides counter and drive-thru service to the customers. Even after good services to the customers there are some problems that McDonald’s or the customers facing.

  • Parking is the main problem for McDonald’s.
  • Customers have to wait sometimes if there is any queue in drive-thru.
  • Managers in the McDonald’s keep minimum man force. So when it gets busy, People working in it faces lots of workload.
  • Kitchen area in it is very small.
  • They take maximum work in minimum wages and they do not provide extra wages on holidays. So employees feel exploited sometimes.
  • Minimum Chances for promotion.

  Though there are some problems there are chances for improvement. So in my opinion here are some points which might be useful as sources for improvement.

  • Customer reviews should be analysed on regular basis.
  • They should provide extra space for parking.
  • They should learn lessons from the past.
  • Rewarding system should be improved.
  • They should also consider the complaints of employees and stakeholders and must try to resolve them.
  • Open suggestion meeting or sort of suggestion box should be there and after regular time period they should go through all the suggestions and accept those who are useful.

  Task 19.3.b: Recommend improvements which align with the organisation’s objectives and goals and which result in a reduction in the variation between what customers and other stakeholders want and what products, processes and services deliver.

  Shareholders:

  Ø Shareholders have invested in McDonald’s to increase the value of their investment. So if McDonald’s does not give them profit, they could take their money back from company or remove their financial support. They can sell their part of shares or properties held in the company.

  Customers:

  Ø Customers can invest in the company by buying the product of that company. So if they are dissatisfied with their product they can ask for refund or can go anywhere else where the same product is present from the next time. Even more than that they could influence their other customers by word of mouth.

  In my opinion there are some points that I want to discuss that might be acceptable.

  • They should provide good wages to their employees as per level of experience and qualification.
  • For the progress of McDonald’s every employee must be keep in mind that they have to work better to get more customers satisfied.
  • Every employee should work in a team so each one contributes into progress of the company.
  • They should also provide some funds to their different franchises as required so they can also give their contribution into reaching company’s overall goal.
  • Any appropriate suggestion from any stakeholder should be considered seriously and should be discussed in a meeting.
  • Working environment should be warm and friendly that every employee would feel like a family. It gives more mental support to them.
  • Product development with minimum cost and resources will increase profit for investors and provide good value for money to consumers.
  • Operationally efficient organisations examine and improve processes, always in the context of what they are seeking to achieve for their customers and stakeholders.
  • Company should achieve all its goals within time frame with optimum utilization of resources to attract more shareholders to invest their money.
  • Managers in the company should focus on short term profit than long term growth to avoid risk involved in it.

  However, as observed by Post, Preston, and Sachs:

  • ‘Organizational wealth can be created (or destroyed) through relationships with stakeholders of all kind – resource providers, customers and suppliers, social and political actors. Therefore, effective stakeholder management – that is, managing relationships with stakeholders for mutual benefit – is a critical requirement for corporate success.’

  Task 19.3.c – Evaluate the wider implication of proposed change within the organization.

  In today’s workspace the change has become modus operandi to success. Now the rate of change in business prospectuses is accelerate more than ever. Accepting of Change can be rated easy to difficult. Change can be related with marketing, finance, production. Here are some principles that use to develop business pattern.

  1. Challenge yourself: One should try new things if it is possible each day. In short you should start adopting new things as they come.
  2. Practice constructive discontent: one should think about himself and the organization that “how could I improve? How could my organization improve?” Having attitude of thinking different way is always helpful. So for better change one should work integrally.
  3. Be adventures: Always challenge the challenge. Try to create new ideas and try to adopt them. Let other try it and also involve them in it. Set high targets and make all your efforts to get it.
  4. Always be open to suggestions: one should take suggestions and feedback from the members whose working in the organization as well as from customers. Change always takes time so contributing into the process will decrease the time for improvement.
  5. Be patience: Change in any process may take time, so one should learn to wait things to get happened. The change has to be process with its proper way and it needs to be time for work in organizational manner.

  Ø These are the steps forchanges within the McDonald.

  • McDonald should give their franchise at low price to small countries considering low profit in the mind.
  • McDonald should increase its franchise restaurants to earn more profit.
  • McDonald should provide garden for sitting facility.
  • There should be a specific person who handles the stock at store.
  • There should be an internet facility or Wi-Fi facility and children play station.
  • McDonald should start its free home delivery facility.
  • Open suggestion box should be there so that exchanging idea can make organization better.

  “Space” is the major problem for McDonald’s. So they should spend some more money on that and by doing this they can increase their asset. But from that work load for employees will be increased.

  Task 19.3.d – Develop the implementation plan and evaluate the results expected after the implementations of your approved solution from third question.

  Momentous organizational change occurs, for example, when an organization changes its overall policy for success, adds or removes a major section or practice, and/or wants to change the very nature by which it operates. For organizations to develop, they often must undergo significant change at various points in their development. Now in this case from the third question answer we can conclude some following point to develop the implementation plan.

  • In terms of company franchises, they can not give franchises to all small country but they can give by considering some criteria, they have to focus on community and culture, apart form this they can change some verity of product to cover the more customer. Macdonald’s have some own policy about their store but they need to change their policy while they give franchises in small countries.
  • If we talk about generating revenue, this is the main goal of every organization but, profit is not only a main aim hear for McDonalds’. By increasing franchises they can make more profit but they have to keep quality and expenses in mind. MacDonald’s’ can make more profit not giving more franchises but they can make cost cutting to increase the profit.
  • In MacDonald’s’ they have huge customer rush on week ends and some occasion, at that time customer faces the sitting problem so to cope up with this problem, they can arrange some facilities for waiting customer, moreover, they have to keep for extra berth facilities so they can arrange more sitting when required. The garden facilities can be very expensive to hire that much space in city area so this concept can be worst.
  • Stoke taking is the important function of organization to know the real trading of the business. In MacDonald’s’ to taking their stoke they can use some software like., SAP,ERP all these software have wide features which can take automatic stoke taking and order processing, they can also link their shop with main delivery shop to order the product by auto reminder facilities. Apart from this send all stoke data to head office from one country to another country any time and any day.
  • Implement plans: after making proper changes, it is very important to do implementation. Management have to make proper planning about how to implement the system properly. In McDonald’s while implementing the change, everyone should know their role and also they should know what is going on in the organization. Managing the work force and reaction of people is also part of the plan.

  Following are the advantages and disadvantages of McDonald’s operation Management.

  Advantages:

  • At least 21.5% of all franchises sales and profit goes to the company which are with McDonald’s.
  • 12% for rent of the restaurant and brand name, 5% for use of the McDonalds system (consultants, workers inside the corporation) and 4.5 % for the national marketing spend. So profit will increase.
  • Gardens will be used by customers if there is a long queue or waiting for the food.
  • Children can play in the children play area without disturbing the other customers.
  • Stoke manager will keep eye on stock so no food would be wasted.
  • Everyone could access the internet facility by Wi-Fi in the restaurant.
  • Medium class people can also afford their food on daily basis.
  • People can order the food at home.

  Disadvantages:

  • Shortage of staff for home delivery
  • They have to spend extra money for space for garden and its maintenance.
  • Area of restaurant should increase for child area.

  References:

• Information about McDonald’s

  www.aboutmcdonald.com

  www.mcdonald.co.uk

  www.bized.com/company

  Ø information for improvement can be found in

  Bradach, J. (1998), Franchise Organizations, Harvard Business Press, Boston, MA

  Ø Information on stakeholders can be found on

  Jones, G. R. (2007). Organizational Theory, Design, and Change (5th ed.), Lesson Plan of Chapter 2 New Jersey: Pearson Education, Inc.

  Ø Info on implementation of change can be found on

  www.authenticityconsulting.com , Authenticity Consulting, LLC

  Ø Information about successful organizational change can be found on

  http://www.knowhownonprofit.org/leadership/change/fivesteps

    

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