Operations Management in the Supply Chain Context - Direct Distribution Centers - Case Study Example

Operations Management Name Institution Course Date Operations Management Description of Direct Distribution Centers Direct Distribution is a member company of the Canada Cartage System Group of Companies. Direct Distribution has since gone global in the provision of supply chain solutions as well as fully-outsourced trucking fleets (Centres, 2017). It has a network of high-level warehouse management systems which enables to manage the supply chain of its customer’s right from the receipt of the product to their customer delivery. Direct Distribution enables its clients to deploy their products rapidly which will, in turn, enable their businesses or their product lines to expand nationally and internationally (Centres, 2017). In a nutshell, Direct strives to offer its customers cost-effective, customized, and scalable supply chain solutions. Among its clients are recognized brands both in North America and Canada and large businesses in these countries. Its customer roster entails building products, retail, drug, and food sectors in North America and Canada (Centres, 2017). Some of the order qualifiers of Direct Company are its ability to offer a dedicated transport which is inclusive of specialty trucking services, delivery services, and dedicated fleet solutions. Regarding logistics, it has a full-service distribution and warehousing, home delivery services, as well as freight management services (Centres, 2017). The order winners of Direct Distribution include the fact that it avails itself to the client’s surge capacity so that they can fulfill their transportation needs efficiently through the economic and seasonal fluctuations. Also, the company, it benefits from offering low-cost solutions from its national footprint as well as economies of scale in ongoing process improvement, shared infrastructure, and bulk purchasing (Centres, 2017). Operational Processes Direct Distribution Centers utilize several operational processes in the delivery of their services to its clients (Centres, 2017). One of them is the input-transformation-output process. This operational process involves the company having to take in place a variety of input resources that are then used to transform their services and themselves to becoming outputs of the services that they offer. Therefore, the company uses this operational process to transform inputs like equipment, capital, and labor into producing outputs which are the trucking services as well as offering viable supply chain solutions (Barratt et al., 2011, p. 330). Regarding Direct Company, it has strived to continuously develop improvement plans which are the combined with a variety of critical inputs which then are transformed to drive achieving results which are their output (Centres, 2017). The cross dock area was subjected to a high-level industrial engineering scrutiny study which was concentrated in the particular areas of operation (Gharakhani, 2013, 49). This survey was done through staging some specific areas of interest, and the utilization of a unique product-identifier program that used a unique color code. This enabled the warehouse associates to recognize the goods that needed some route consolidations for the shipping of a full-trailer-load. The company was then able to transform its operational areas from being distinct areas to being consolidated areas where they could use the product identifiers and offer shipping services to these regions as a unit to increase efficiency. The output of this operational was that the cross dock productivity was enhanced significantly with the color coding process improving full-trailer-load shipping, and freight density. This then decreased the less-than-trailer load kind of dispatch. Some of the KPI indicators the on bound full-load trailer density rising which enabled 38% of the company’s trailers to be removed from the outbound delivery fleet. Following this, it was observed that the shipping accuracy improved to 99.8%. End-to-end Operational Process This end-to-end process is an operational process which excludes the numerous middle steps or layers as much as possible which will, in turn, optimize the efficiency and performance of the operational process (Sousa and Voss, 2008, p. 710). Additionally, it will reduce the costs and risks that are associated with the process which then allows a company to reduce the costs that are related with offering its services and gaining a comparative advantage over its competitors (Sousa and Voss, 2008, p. 710). Direct Distribution resolved to work directly in conjunction with its retail customers. The inputs that were made in this process was making improvements to the protocols of the Warehouse Management System particularly for the cross-docking area. The transformation process that took place in the company was the inbound goods being subjected to RF scanning (Gorm et al., 2007, p. 1110). The output that there was the broadcasting of some easy-comprehensive information about the staging lane, shipping date, and material status directly to their retailers and the other warehouse associates. The adoption of the end-to-end operational process through improving the Warehouse Management system led to the improvement of the company’s operational productivity. This process also oversaw Direct Distributors servicing 32 retail outlets, enhances the on-time delivery efficiency by 99%, and has managed to maintain their customer relationships that have lasted for many years. The KPI indicator of this process is the strong value proposition of the company that has led to high levels of customer satisfaction. This is evident because the company manages to process thousands of orders daily which vary from the natural health products, the after-market parts, to the specialty chemicals. Additionally, one of the things that make the company unique from its competitors is its low price for the services. Since it still makes profits while doing this business, it means that a lot of costs are saved by the company removing the middle steps significantly hence reducing the costs associated in undertaking these steps. Total Quality Management Total Quality Management (TQM) often describes the attitude and culture of an organization which aims at striving to offer their customers with services or products that satisfy their needs (Tasie, 2016, p. 45). It is, therefore, a method where the employees and the management get involved in continuously improving the production of services and goods. It is then a combination of the management and quality tools which are aimed at reducing losses associated with some wasteful practices while enhancing business performance (Cross, 2014). Top companies and industries have practiced TQM in their organization; for example, hotel industry, health sector, banking sector, distribution and warehousing sector just like Direct Distribution, among others. This approach is infinitely adaptable and variable. Although the TQM concepts were initially applicable to solely the manufacturing operations for quite a long time, it is currently being adapted as a generic management tool and can be applied both in the public and private sector organizations (Cross, 2014). There are numerous evolutionary strands where various sectors create their version of applying TQM. Additionally, TQM is considered to be a foundation for a variety of activities. Examples of these activities include improving teams, reducing the cycle times for development, striving to meet the customer requirements, lowers the service costs, and demand flow delivering, among others (Ooi, 2009, p. 640). TQM Implementation Processes One of the preliminary steps of implementing TQM is the evaluation of the current reality of an organization. This involves the assessment of the relevant company’s preconditions regarding its current needs, history, the precipitating events that led to the TQM and the existing working life of the employees (Cross, 2014). If a company has the record of being an efficient level of responsiveness to the internal and external environment and if it can change its operations as needed, the TQM will not be difficult to implement. On the other hand, if a company does not have the skill of enhancing its operating systems then there will be a lack of experienced agents and presence of employee skepticism then its implementation may be difficult (Sadikoglu, and Olcay, 2014). This, therefore, means that it is essential for an organization to be healthy before starting the implementation process of TQM. Concepts of TQM The TQM concepts can mainly be categorized into five distinct sections. These parts include the customer-centric approach, employee involvement, strategic improvement approach, quality production of work and the encouragement of teamwork and respect (Talib, and Rahman, 2015, p. 613). The customers are often the ones who are the determinants on whether or not the services to products are of high quality or not. Ensuring that there is total employee engagement and involvement in achieving organizational goals has a huge impact addressing issues that are related to quality (Cross, 2014). On the strategic improvement concept, companies are required to implement a strategic approach to the improvement of their quality for them to achieve the organization’s mission, vision, and goals (Jaafreh, and Al-abedallat, 2012, p. p. 93). Producing quality work entails the aspect of quality being built in the operational processes so that measures of continual improvement can be taken to enable the ultimate product or service quality. Encouraging teamwork is essential since it allows the fostering of a single and unique organizational culture that focuses on the company’s excellence (Barros et al., 2014, p. 239). TQM Framework TQM is essentially concerned with the continuous improvement in all levels of work; beginning with the high-level decision making and strategic planning to the detailed implementation of the work elements. This then results in improving results continuously in all levels of work because of the continuous improvement of machine, technology, process, and people’s capabilities (Barros et al., 2014, p. 240). Therefore, the continuous improvement needs to centrally focus on enhancing capabilities so that there can be the production of better outcomes in the future. Following this, the five central areas that are associated with capability improvement are people, operations, technology, and supply and demand generation capabilities. Additionally, TQM’s core principle is that people make mistakes, but most of these mistakes are either caused or permitted by processes and faulty systems (Barros et al., 2014, p. 241). This then means that the reasons of those mistakes can be known and eliminated and the possibility of it occurring again can be prevented if the processes will be changed. Benefits of TQM The implementation of TQM can oversee various advantages in the overall operations and productivity of the company. One of them is that it will ensure the provision of superior quality services. It is possible to measure the quality of services through reliability, performance, and customer satisfaction (Wanderi et al., 2015, p. 20). Since quality is a vital aspect that differentiates one company from its competitors, TQM is an imperative tool which will oversee alterations in processes and systems that will ultimately lead to superior services by the company (Jaafreh, and Al-abedallat, 2012, p. p. 93). The comparative advantage will then be enhanced. Another TQM advantage is that it helps to improve customer satisfaction and ultimately result in customer loyalty (Cross, 2014). One of the success factors of Direct Distributors is that it has been able to sustain long-term customer relationships which are an indication of their satisfaction with its services. TQM plays a central role in enhancing this customer satisfaction through ensuring that their services meet their customer needs and expectations. Through the regular collection of customer feedback, TQM allows for the elimination of defects and including some continuous improvements in the system to enhance their loyalty (Jaafreh, and Al-abedallat, 2012, p. p. 93). TQM also ensures that there is increased productivity and revenues for the company. This is primarily through the cost reduction that is associated with the tool. If TQM is implemented in the long-term, it can decrease the costs particularly in areas of warranty cost reduction, and field service, among others (Wanderi et al., 2015, p. 16). Given that the decline in costs flows directly to becoming profits without having to incur additional costs, then a startling rise in profitability can be realized. Evolution of TQM Concepts In the next about five years, there are some changes that that are likely to be observed regarding the implementation of TQM and especially supply chain management. Some of the entities are likely to disappear from the sight of the customer, but they will be managed behind the scenes (Gharakhani, 2013, 47). Implementing quality management is such an environment and system has the probability of being quite challenging. Therefore, it will be essential for different businesses in a broad range of industries to adopt the TQM approach as there will be a new way of doing business which will necessitate the adoption of this method. Additionally, more organizations are adopting technology in the operation processes (Gharakhani, 2013, 47). This means that the development and usage of different software will be a critical resource for the running of the organization. Following this, the area of software development will be a critical one for the application of TQM approach. This is because features will be established each of the pieces of software so that they can be reliable and user-friendly (Gharakhani, 2013, 47). TQM Concepts Some of the concepts that need to be implemented for the successful practice of TQM include the teamwork and participation by all the employees, continuous learning and improvement and focus on the customers (Zu et al., 2008, 633). Focus on Customers Usually, customer satisfaction, which is measurable by the market share and survey, fulfills one of TQM criteria. Therefore, focusing on customers include ensuring that their needs and expectations are met by the products and services offered by the organization. TQM requires regular monitoring and feedback collection to identify the gaps that exist between what they offer and customer’s needs to enhance their satisfaction and loyalty (Zu et al., 2008, 634). Teamwork and Participation This is one fundamental concept of TQM where it entails the involvement and participation by all the workers in an organization. This concept can be expressed with high levels of implementation success in a company with a culture which emphasizes on teamwork as opposed to the hierarchical culture which primarily stresses on the following of rules (Zu et al., 2008, 643). In an organization, the top management can strive to engage with a large employee proportion so that they can foster some form of commitment towards the principles of TQM. Continuous Learning and Improvement TQM also entails the need of coming up with a strategy which will aid in motivating employees and to weed out the ones who are underperforming. Although high competition levels among employees appear as though it conflicts the concept of team building that is highlighted above, several studies have documented that that is not the case (Gorm et al., 2007, p. 1094). It is essential for the employees of any company to have a perception of a competitive environment which will significantly assist in experiencing a lot of implementation success. In the end, this concept will play a significant role in enabling continuous learning and improvement which is an important TQM entity (Gorm et al., 2007, p. 1097). Barriers to TQM Implementation In the implementation of the TQM concepts, several barriers and challenges are bound to be faced. Some of them include the competitive markets, management infallibility, and the lack of an adequate measurement for quality improvement. Competitive Markets One of the obstacles to quality is the issue of there being a competitive market. Products and services that are of high quality usually have high chances of surviving in the market. One of the impacts of competitive market is lowering the quality standards until it gets to a minimum accepted level (Sadikoglu, and Olcay, 2014). However, if TQM is implemented correctly, there can be a significant reduction in the operating costs and the company will end up having a comparative advantage due to concentrating its resources. Management Infallibility Poor management practices, as well as the having low expectations, have resulted in unhealthy and unproductive attitudes. These negative attitudes are often as a result of the popular belief that their management is right at all times which means that employees need to implement their decisions without questioning (Sadikoglu, and Olcay, 2014). This lethargy is then propagated by the failure of the management to train its workers on the TQM fundamentals which are necessary to build better attitudes on their employees through involving them in the decision-making processes (Sadikoglu, and Olcay, 2014). References Barratt, M., Choi, T.Y. and Li, M 2011, Qualitative case studies in operations management: Trends, research outcomes, and future research implications. 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Tasie, G.O 2016, An Exploratory Review of Total Quality Management and Organizational Performance. International Journal of Business and Law Research, 4(1), pp.39-45. Wanderi, E.E.N., Mberia, H and Oduor, J 2015, Evaluation of Factors Influencing Total Quality Management Implementation in Rwadan Construction Companies: Case of Fair Construction Company. European Journal of Business and Social Sciences, 4(03), pp.14-28 Zu, X., Fredendall, L.D and Douglas, T.J 2008, The evolving theory of quality management: the role of Six Sigma. Journal of operations Management, 26(5), pp.630-650. Read More