Operations Management Process - Coursework Example

OPERATIONS MANAGEMENT Student’s Name: Instructor’s Name: Course Code: Date of Submission: Executive summary Operations management is the process of ensuring the activities of the company are carried out effectively. The main elements of operations management as discussed in this report are the four Vs which are volume, variation, variety and visibility. The four Vs help an organization to achieve its goals by identifying the needs of the customers and satisfying them. Bundaberg Brewed Drinks Company has managed to create competitive advantage by satisfying the demand of the customers. Bundaberg Brewed Drinks has worked on the four Vs by focusing on customer demand and manufacturing different volumes of products depending on the season of the year which affects the demand. Moreover, the company manufactures variety of products to meet the different preferences of customers. The advantages of the four Vs include volume has increased competitive advantage, variation has led to improved reputation of the company, variety has helped to improve customer satisfaction and visibility has helped to create good relationship between the company and the customers. The disadvantages include wrong focus on demand, variety has increased the cost of production, variation has led to ineffective focus of demand and visibility has disclosed confidential information of the company. Strategies to minimize risks and maximize the benefits include increasing the volume, reducing the variety of products, conduct market research to determine variation and introduce information communication technology to improve communication with the customers. Introduction Operations management is one of the aspects which enable an organization to improve its competitiveness in the global market. It is the process of organizing all the activities of the organization to increase productivity and meet the demand of the customers (Dunn & Jeste 2001). In this regard therefore, this essay will discuss the four Vs of operations management, which are volume, variety, variation and visibility, their positive effects as well as negative impacts. The essay will finally discuss the strategies that can be put by an organization to maximize their output while minimizing their negative effects. This discussion will be based on Bundaberg Brewed Drinks which is the company specialized in manufacturing beverages (Bundaberg Brewed Drinks 2014). Bundaberg Brewed Drinks is a company which is based in Australia. The company is specialized in manufacturing beverages and it uses the traditional process when manufacturing the non alcoholic drinks. The company operates in over 32 countries. It was founded in the year 1960 and manufactures variety of products such as Ginger Beer, Peachee and Lemon lime and Bitters. The company has effectively applied the four Vs in its operations and this has led to improved competitiveness. For instance, the four Vs have enabled the company to manufacture beer volume which satisfies the demand of the customers and also manufacture of variety of products mentioned above to satisfy the different needs of the customers. The company started as a small organization but due to its good quality products and services, it expanded its operations to international market. It used various strategies to enter into foreign market like joint ventures and exporting of the products. Importance of four Vs in operations management The four Vs in operations management have great impacts on the operations of an organization. Volume is the amount of produce manufactured by an organization while variety is the number of different products which can be manufactured by the organization (Eppen 2000). Variation on the other hand measures the likelihood and the possible change of the demand over time and the possibility of the demand changing over a period of time and finally visibility is the exposure of the internal systems to both internal and customers. These dimensions have great impacts on the operations of the company. To start with, the volume of the company affects the operations of the company in that when there is high volume of products it implies that there is repetitive actions whereby the employees have repletion of the procedures (Stevenson 2002). Bundaberg Brewed Drinks conducts regular market research to determine the demand of the customers in terms of volume. This has enabled the company to focus on the demand and manufacture products which have met the customer demands. This affects the operations of the company in that it has to change its production schedule to meet the demand. For instance when there is high demand, the company outsources some human skills to help increase the manufacture output. On the other hand, the company manufactures products which meet the demand of customers. The company works on variety of products by focusing on the demand for each variety in each market segment. The company therefore supplies the different products to different markets according to the demand in that market (Stevenson 2002). The effect of this on the company is that it had led to effective inventory management in the store and effective distribution of the products to each market segment hence the company has been able to create competitive advantage by satisfying the customer demand. Variation has enabled the company to vary the manufacture of the products in different times of the year. For instance, Bundaberg Brewed Drinks manufactures high quantity of Ginger Beer during summer due to high demand (Barries 2008). This has enabled the company to create competitive advantage through satisfaction of the customer demand. This affects the company in that there is effective utilization of resources since some resources are outsourced to increase the manufacture of the beer. Visibility variation is the ability of the customers to follow up their order through all the stages of production. When there is low ability to follow up the order the company may change its operations to practice standardization since the customer is tolerant (Blanchard & Fabricky 1998). This has affected the operations of the company by practicing openness in the manufacturing process. Advantage and disadvantage of volume Bundaberg Brewed Drinks Company has reaped many benefits as a result of applying the four Vs. The first benefit is that focusing on the volume demand has increased the competitive advantage of the company (Chase et al 2007). This is because the company has been able to meet the demand of the customers which will help to improve their satisfaction. In this regard, they will develop loyalty with the company, thus they will be retained by the company due to quality services Count Cola Company offers. The disadvantage of volume is that Volume may be affected due to wrong focusing of demand (Meredith & Scott 2002). The company has sometimes made wrong demand focusing and this affected the operations of the company and the customers as well since the company could not satisfy the demand of the customers due to low volume. Advantage and disadvantage of Variation Variation on the other hand has helped to improve the reputation of the company. This is because the company offers different volumes of products depending on the demand and season of the year to satisfy the different demands of the customers (Vollmann 2005). This has helped to improve the reputation of the company hence it has led to competitive advantage of Bundaberg Brewed Drinks Company. Variation has led to ineffective focusing of the company’s products and the demand. This is because variation in demand has made it difficult for the company to effectively design systems which could enable it to manufacture products according to the prevailing demand (Eppen 2000). The customer demand prediction is not constant and therefore these changes in demands have made it difficult for the company to effectively manage demand. Advantage and disadvantage of variety The advantage of variety is that the company has been able to manufacture different products according to different preferences of the customers (Vollmann 2005). For instance, the company offers products like Ginger Beer and Peachee. This strategy helps to improve the performance of the company in the market thus leading to competitive advantage. Application of variety manufacturing in the company has increased the cost of production. The system needs constant monitoring and training of employees so that they can apply the skills in implementing the system (Crosby 1999). The company must have sufficient equipment which is reliable which implies that there will be no stoppages in production; hence the demands of the customers can be satisfied. This is costly to install the equipment and training the employees. Advantage and disadvantage of visibility Finally, the advantage of visibility variation has enabled the company to satisfy its customers better by improving its production schedule (Check land 2001). The company gives the customers the opportunity to follow up their orders which improves their knowledge on how the product is being manufactured. This enables the company to improve its relationship with the customers thus increased customer satisfaction. Visibility of the customers will compel the company disclose information which is confidential. This is because the customer has the right to follow up the progress of the orders (Evans 2003). This implies that the company may disclose the information which is essential and that can be used by competitors to lower the competitive advantage of the company. Strategies to maximize the benefits and minimize the problems Volume The company should manufacture the volume of products which satisfies the market demand and some inventory kept as buffer stock. This will enable the company to meet the current market demand and also satisfy any increase in demand by using buffer stock (Juran 2001). Variety The company should reduce the variety of products it manufactures. Bundaberg Brewed Drinks should be able to reduce the products to be manufactured by concentrating on best performing products (Russel & Taylor 2009). This will enable the company to reduce the cost of production hence increase the profitability of the company. Variation In order to manage variation of demand, the company should manufacture products adequate to meet the variation in customer demands by conducting market research to determine the most likely variation in customer demand (Robert 2007). This will help to manage the variation risks like stock outs and maximize the profits. Visibility variation Finally, the company can introduce information systems to manage the visibility challenges. Through information technology, the company will be able to communicate with customers better and the customers will be able to follow up their orders easily and this will improve their satisfaction (Montgomery 2012). Conclusion Operations management is where an organization applies effective strategies to increase the satisfaction of the customers. Bundaberg Brewed Drinks Company has applied four Vs which are volume, variation, variety and visibility to improve its competitive advantage. These four Vs influence the operations of the company in that it has to schedule its production according to the customer requirements and focus of the demand. The benefits of using four Vs include increased productivity, create competitive advantage and improve the reputation the reputation of the company. The disadvantages include ineffective in meeting the changes in demand and also it is costly to apply. In order to maximize these benefits, the company has to implement part time working, subcontracting and employing a varying workforce like hiring and laying off some of the employees depending on the customers’ demand. Recommendations Bundaberg Brewed Drinks Company can improve its competitiveness by introducing information communication to communicate with the customers. This will enable the customers to follow up their orders without following up the manufacturing process. In addition, the company can apply material requirement planning to ensure there is no overstocking or under stocking of the inventory which could otherwise increase the operation costs. This will help to cut down the cost of holding inventory. References Barries, D. (2008). Operation management, an international perspective. Thomson Learning: London. Blanchard B & Fabricky W. (1998). systems engineering. Prentice hall: London. Bundaberg Brewed Drinks (2014). Bundaberg. Retrieved on 8th 2014 from http://www.bundaberg.com/info/home/ Chase, R, B. & Jacobs, R, F. & Aquilano, N. J. (2007). Operations Management for Competitive Advantage, 11th ed McGraw-Hill: New York.. Check land, P. (2001). Systems thinking, systems practice. John Wiley and Sons: New York. Crosby, P. (1999). quality is free, making quality certain in uncertain times. McGraw-Hill: London. Dunn, B. & Jeste, D. (2001). Enhancing informed consent for research and Treatment. Neuropsychopharmacology, Vol. 24, No. 6, p. 595-607. Eppen, G. D. (2000). Introduction to management science. Prentice Hall: London. Evans, J. R. (2003). Productions/Operations management; Quality performance and value, Wadsworthy. Juran, J, M. (2001). Juran’s quality handbook. McGraw-Hill: London. Montgomery, D. (2012). Statistical Quality Control: A Modern Introduction. Thomson learning: London. Meredith, J. & Scott, S. (2002). Operations Management for MBAs. 2nd Edn. New York: John Wiley and Sons, Inc. Robert, J. Roger, C & Aquilano, J. (2007). Operations Management for Competitive Advantage, 11th Edn. McGraw-Hill: London. Russel, R, S & Taylor , B, W. (2009). operations management, along the supply chain. John Wiley & Sons ltd: London. Stevenson, W. (2002). Operations management. Boston: McGraw-Hill. Vollmann, T. (2005). William, Berry. Clay. Whybark & Robert, Jacobs. Manufacturing Planning and Control Systems. Boston: McGraw-Hill. Read More