Service Operations Management - American Global Logistics Company - Case Study Example

Service Operations Student’s Name: Instructor’s Name: Course Code: Date of Submission: Table of contents Introduction……………………………………………………………………………………..3 Services provided by the company……………………………………………………………...3 Operational structure of the company…………………………………………………………...4 Challenges faced by operational managers………………………………………………………5 Consumer perspective about the company………………………………………………………6 Recommendations……………………………………………………………………………….6 Conclusion……………………………………………………………………………………….7 References……………………………………………………………………………………….8 Introduction American Global Logistics Company is one of the best performing logistic companies in the world. It is an international organization with its headquarters based in the US (American Global Logistics Company 2013). Despite high competition from other logistic firms, American Global Logistics Company has been bale to be among the leaders in the market. The company offers variety of services. The strategies put in place by the company are unique from those of the competitors thus it has gained competitive advantage. This report will discuss the services provided by the company, operational structure of the company challenges faced by the operation managers and the consumer perspectives about the company. Services provided by the company American Global logistics Company offers variety of services to customers. Among the services offered include the following; firstly, the company provides air transport (American Global Logistics Company 2013). Air transport is among the core channels of transporting products to customers. Time involved in the supply chain is reduced because air transport is faster. Therefore, air transport helps to manage inventory better as it helps to reduce the amount of cargo in the store. Another service provided by the American Global and Logistics Company is Ocean transport. The company provides a variety of transportation channels to suit the needs of different customers. Ocean transport provides customers with secure truckloads when they are needed. Priority is given customers and their requirements while freight handling is the competency of the company. Inventory management problems are also minimized because of the availability of different modes of transport. The advantage of ocean transport is that it can handle huge loads of cargo and it is relatively cheap compared to air transport (American Global Logistics Company 2013). The company also provides land transport. For transportation of cargo within short distances, the most appropriate mode of transport is road transport. It is cheap compared to other modes of transport like air and ocean transport and it is readily available. It is also more flexible than air and ocean transport because it can deliver the cargo to customer’ destinations (American Global Logistics Company 2013). Rail transport is another service provided by the company. The advantage of Rail transport is that it is cheap and can carry larger cargo than road transport. The disadvantage is that it’s not flexible as it has fixed destinations. Operational structure of the company American Global Logistics Company operates under a functional structure (American Global Logistics Company 2013). There are different departments in the company and each department is given a mandate to conduct their own operations. For instance, there are corporate affairs department, finance department and human resource department. At the topmost of the company, there is the executive board of directors. The board of directors is followed in rank by the chief executive officer of the company. The head of departments follow in after the executive director. At the lower rank there are supervisors and the regular servicemen. The main function of the executive directors is to make policies for the organization. It is their responsibility to make long term policies for the organization (Jacobides 2007). The success or failure of the organization depends on their policies. The function of the executive director is to design strategies which can be used to implement the policies while the head of departments help the organization in managing various sections and the regular servicemen are responsible for implementing the strategies. The advantages of functional organizational structure are that this type of structure enables the top management to have control over the organization. This is because decision making is held by the top management. It also provides clear guideline as it ranks different positions (Jacobides 2007). Everyone in the organization is aware of the span of control. Functional organizational structure improves efficiency of the organization as it provides stability. However, functional structure has some disadvantages and they include poor communication between departments. This is especially seen when the departments do not cooperate leading to conflicts (Jacobides 2007). The structure can also promote dictatorship because instructions are given from top level. The lower rank employees may not be given the chance to give their views. Challenges faced by operational managers There are many challenges facing operational managers. One of the challenges is the sustainability of the strategies and operations. Some operational strategies cannot be sustained by some firms because they are costly (Chase et al 2007). Sustainability is in the sense that the managers are not able to turn the business into an improvement model rather than cost effective. Competing practices can also be challenges to operational managers. This is especially when two or more departments conflict one another (Chase et al 2007). For instance, the finance department may prefer to communicate through emails while human resource department prefers communication through memos. This conflict can be a challenge to operations manager because it will be hard to reconcile the two departments. Conflicts do arise and operations of the company can be interrupted. Operational managers are also faced with the challenge of corporate reporting. One of the responsibilities of the operation managers is to report to the stakeholders the progress of the company (Chase et al 2007). The report includes financial and performance data. If the respective departments did not make clear reports using current data, it may be difficult for the operational manager to explain the issue to stakeholders. In addition, the operational managers are faced with the challenge of social responsibility. Many organizations and their management do not want to be involved in the social affairs of the community (Robert 2003). But for the operation managers, they understand that corporate social responsibility is an issue to be observed by the company if it wants to perform better in the market. The challenge is that it is difficult to stakeholders of the company is the need for engaging in the corporate social responsibility. In order to manage these challenges, there should be various training programs in the organization which aim at improving the skills of the employees (Robert 2003). For instance, the financial and human resource directors should be trained to know how make reports using the most relevant and current data. This will reduce the challenges in corporate reporting. There should be clear policies for every aspect of the organization. These policies will help to reduce conflicts among the stakeholders or the departments (Robert 2003). For instance, there should be clear communication policies to avoid conflicts between departments thus reducing the departmental conflicts. Consumer perspective about the company The consumer perception about the American Global Logistics Company is that the company is competent in providing their services. There have been no complains about the company and how they conduct their services. This implies that the consumers are satisfied with service delivery by the company. The company has been able to create good relationship with the customers and that is why it has loyal customers. Building customers’ loyalty is not easy unless there is a good relationship between the company and the customers. In order to build good relationship, the company is reliable in terms of delivery of services (Robert 2003). The consumer products are delivered as agreed with the company thus there are no delays. Reliability minimizes conflicts thus good relationship. The price charged by the company in transporting the cargo or the products for the clients is appropriate (Chase et al 2007).. Compared to other logistics companies, American Global Logistics Company is the least expensive. This satisfies customers in terms of price requirement. In addition, the company encourages innovation and creativity. It always conducts research concerning the competitors and comes up with better ideas on how to serve customers better. This helps to attract and maintain customers because of their positive perspective of the company. In this regard therefore, the consumers perceive the company in a positive way. Recommendations In order for the company to operate efficiently and increase its market share, it should incorporate information technology in its operations. For example, the company should design a communication system where the customers can make orders without visiting the company premises. This will improve customer service delivery hence attract and maintain clients. The company should also ensure there are sustainable human resource skills. As the organization grows, the more it requires skills to manage its operations. This will enhance service delivery to customers. Conclusion American Global Logistics Company can be ranked as the best performing logistic companies in the world. The reason why it is performing well is because of the strategies it has put in place. The services provided by the company include air transport, land transport, Rail and Ocean transportation. The organizational structure of the company is functional structure. The advantages of this structure are it promotes easy control of the organization and good communication while the disadvantage is that it may lead to departmental conflicts. The challenges faced by the operations managers include interdepartmental conflicts, lack of sustainability, corporate social responsibility and ineffective corporate reporting. The consumers perceive the company in a positive way because the American Global Logistics Company has met their needs in logistics. References American Global Logistics Company. 2012. 28th Oct 2013 http://americangloballogistics.com/ Chase, R., Jacobs, R. and Aquilano, N. Operations Management For Competitive Advantage. Lodon: McGraw-Hill, 2007. Print. Jacobides, M. The inherent limits of organizational structure and the unfulfilled role Of hierarchy: Lessons from a near war. Organizational science, 18.3: 455-477, 2007. Robert, K. Operational planning and control with an activity-based costing system. New York: Emerald publishing group, 2003. Print. Read More