Delivering an Appropriate Quantity of the Product to the Customer - Essay Example

Operational Plan of the and number Introduction It is quite imperative for a product-based organization to be capable of delivering appropriate quantity of the right product to the right customer and at the right time without holding surplus inventory (Wagner, Ullrich & Transchel). Not only that, a product based organization also has to ensure a smooth flow of work between every operational department whether it is accounting, finance, manufacturing or logistics (Christopher & Holweg, 2011). It is important for a company to maintain equilibrium between quantity of raw materials required for an operation as well as quality of work force handling the raw materials (Kaplan & Norton, 2001). All these come under resource allocation and human resource management respectively. It is the requirement for an organization to have an accurate forecast of revenue that is supposed to be earned based on sales that is being achieved currently. The company has to implement appropriate strategies and plans in order to secure the fact that sales rate increases in the future. To be able to attain all these objectives, it is crucial for an organization to formulate an effective operational and strategic plan. Operational plans bear a significant relevance in almost every organization as those enable managers to have a broad perspective of present scenario of the company, in terms of operations (Navarro, 2005). Following that, the managers are able to formulate and implement effective strategies that are focused towards achieving operational growth and henceforth, success (Thome, et al., 2012). The route to success for a product based organization is paved by appropriately aligned strategic and operational plans and better equilibrium between supply and demand. In that way, the organization is able to gain competitive advantage in this intensely competitive business environment (Singh, 2010). This paper will cater to draft an operational plan for a product based organization (an automobile company), thereby seeking to explain various aspects of an operational plan and understand their importance towards achieving organization objective. Company background Ergon Motors is passionate about crafting, building and delivering superior quality automobiles to its customers based all over the world. The company is mainly engaged in production and distribution of sedans, compacts, SUVs and coupes as well as their parts worldwide. The brand names under which the company markets its vehicles include Turbo, Desire, Blitz, Hammer, Manza, Thunder and Slick. Ergon mainly targets the middle income group of customers present in Asia and Europe. Headquartered in Kolkata, India, the company operates with an employee base of 125,000. Ergon sales cars to not only dealers for consumer retail sales, but also to daily rental organizations, leasing companies, commercial fleet consumers as well as the government. Leading the way towards success is the company’s experienced leaders who adhere to the objective of setting new standards so that customers can be provided with a world class driving and travelling experience. The organization is committed to delivering automobiles that have a persuasive design, unblemished quality and unmatched reliability, which associates the vehicles with safety, infotainment and fuel economic features. Mission and vision statement Manufacturing superior quality vehicles, which the company has done so far, has only been possible because of the world’s greatest employees that work with the company. The company takes immense pride in its work and takes unfathomable care in order to manufacture and sell astonishing cars and provide overwhelming ownership experience to the customers based mostly in Asia and Europe. The new Ergon mission and vision is to lay solid emphasis on enhancing the level of satisfaction of company’s customers, partners, employees and several other internal and external stakeholders. The company is driven by robust principles that have been stated as follows: Quality and safety are the top most priorities. Establish lifelong customer base. Think innovative Deliver value for long-term investment Be adequately responsible and bring a change to the global society. Organizational values The company believes in operating with complete responsibility and accountability throughout the world as well as focusing on crucial areas such as, education and environment. The organization ensures that all actions are performed ethically and with complete transparency to the external world. Strictly abiding by regulations has been biggest strength of the organization and this is what the company will carry out for the rest of its operational life. Ergon is deeply rooted to the objective of reducing pollutants and wastes. The company always takes appropriate measures in order to recycle materials at every stage of automobile’s lifecycle. This practice has lowered the impact that manufacturing operations and automobiles have on the surroundings. Organizational chart Job role Job responsibility Administrators or top level management (President and Vice president) Decision making and strategy implementation Executives or mid level management (General managers) Enabling coordination between operational departments, formulation of strategy and setting forth recommendations. Supervisory or lower level management (Departmental managers) Implementation of strategy and regular supervision of operations. Organizational planning process The secret behind Ergon’s consistent performance is its organizational planning process and operational excellence. The company’s continued success has been driven by implementation of effective operational planning tools, which is based on the understanding of customers as well as employee motivation. The foundation of the planning process is grounded in company’s ability to develop leadership; teams and strong organizations culture in order to frame appropriate strategies, establish relationship with suppliers and facilitate effective information sharing. The planning process of Ergon includes the following steps: Setting goals: The company aims to simultaneously achieve superior quality, shorter lead times, low cost and flexibility while manufacturing products. Developing commitment: Following that, responsibility of the leaders is to encourage their employees to put in optimum effort and work smarter. Ergon’s employees are imbibed with shop-floor knowledge and the employee base is filled with managers, experienced and dedicated engineers and highly skilled workers whose efforts are completely aligned towards helping the company succeed in its mission. Develop effective action plan: The next and perhaps one of the most crucial steps in overall planning process is to develop an action plan, where the company lists specific strategies, people, resources and timeline in order to accomplish the set goals. Monitor progress: After the action is put into practice, strict measures are adopted to monitor progress of such an implementation. Monitoring advancements made towards the path of goal achievement fosters motivation among employees. Monitoring progress enables managers to revert performance feedback to the employees in order to make adjustments in direction, effort and strategy. Maintain flexibility: Maintaining flexibility is a pivotal step within the organizational planning process. The learning outcomes of previous strategy implementations are applied in formulation of the subsequent plans, which are directed towards achieving the highest possible customer satisfaction level. Figure 1: Organizational planning process (Source: Denver, 2013) Management’s influence in the organizational planning process The three levels of management (administrative or top level, executive or middle level and supervisory or lower level) have a significant influence in overall organizational planning process. Breaking down the influence that the three levels of management has on organizational planning process, it can be explained in the following ways. The administrative or top level management mobilizes the available resources. Their work is to think rigorously, formulate plans, make decisions and henceforth, implement them. That is precisely why they are called administrators. Bestowed with the maximum responsibility and authority, they prepare long-term plans, execute decisions and are directly responsible to shareholders as well as stakeholders. The executive and middle level management consist of departmental heads, brand managers and other junior executives. Their primary responsibility is to make recommendation to the top level management. They are assigned with the task of executing plans and decisions made by the administrators. Besides that, executives also bear the responsibility to coordinate task among the entire department as well as maintain a robust chain of communication. The supervisory or lower level management mostly includes the supervisors and foremen. Their primary task is to manage employees directly. Motivating employees, monitoring their performance, providing performance feedback, making recommendations as well as bringing forth organizational problems in front of the executives are some of the activities performed by the middle level management. Without their contributions, overall organizational planning process becomes null and void (Kalyan City Life, 2013). Importance of quality, productivity and profitability in planning process [s] Quality, productivity and profitability are crucial elements of the organizational planning process. This is precisely because objectives are set on the basis of quality that the company is aiming to achieve. In some cases, additional time is seen to require than that is initially allocated for a particular operation so as to ensure that the operational outcome is of superior quality. This is why the plans are set accordingly. Before imitating the manufacturing process, a company always has a forecast of the amount of products that is to be manufactured within a particular span of time and with application of allocated resources. This forecast regarding productivity allows managers to allocate resources as well as time efficiently and effectively for manufacturing a particular product. An organization’s current and expected profitability has a significant contribution in the overall organizational decision making process. This is precisely because each and every step within the organizational planning process are designed keeping in mind current profitability that the company has realized through implementation of existing strategies as well as need to modify strategies on the basis of expected profitability in the future. Human resource planning activities and organizational strategy Human resource basically refers to people whose skills, experience, knowledge and abilities are utilized by an organization in order to create and subsequently deliver a service or product. Human resource planning involves identification of ways in which right type and number of peoples are recruited for the appropriate job role. Human resource managers enable the workforce to develop knowledge, abilities and skills that are required to perform a job (Lam, n.d.). While formulating organizational strategies, the human resource management team ensures that departmental planning is in complete alignment with organizational strategies. This is precisely because of the fact that human resource planning activities are interconnected with the organizational strategies. Interdependence between the two factors suggest that outcome of what is planned for as well as acted upon with one resource will have a considerable impact on the overall organizational strategy. Organizational effectiveness is only achieved through an appropriate fit between the human resource strategies and organizational strategy. The Human resource managers need to have a thorough understanding of interconnectivity between the resources that they possess and the best way to develop strategic plans as per available resources. Figure 2: Interdependence and influence on organizational strategy (Source: Soberg, 2011) The figure given above depicts that human resource management is driven by its own operational plan, which in turn is complimented by the organizational strategy. Organizational strategy is based upon mission and vision of an organization (Soberg, 2011). Management philosophy to be implemented Firstly, a manager’s ability to lead employees has the strongest contribution towards enhancing the level of engagement among them. The leadership behavior exhibited by managers is a key determinate of the extent to which employees are committed to their work as well as to the organization. Greater the level of motivation, more are the chances of achieving success. This philosophy holds true for an organization like, Ergon as well. The managers working for this company will always adhere to a team or sound style of leadership, where equal concern is given towards ensuring welfare of employees as well as productivity (Zeidan, 2009). One of the fundamental management philosophies that will be implemented in Ergon Motors is to offer flexibility to employees, which will enable them to apply themselves freely while serving the organization. In return for offering flexibility to them, the management expects similar sort of coordination in work (Engagement for success, 2014). It is believed that the relationship that a manager establishes with subordinates is a key determinant of organizational success. Hence, the managers working for Ergon motors will look forward towards building a relationship based on trust and respect with the subordinates. Each and every employee will be given equal opportunities for attaining all round development and will also be encouraged to think innovatively (Ardichvili, 2001). This will give them space for inner growth in ways that they feel appropriate so as to enhance their skill sets and contribute the same towards facilitating personal as well as organizational betterment. The managers will also encourage the employees to share knowledge freely within a robust communication framework. The opinions provided by employees will always be taken into consideration by the managers while making any decisions. This in turn will enable Ergon managers to create a team consisting of highly committed and efficient employees; as a result, productivity can be increased (Apospori, Papalexandris & Galanaki, 2005). Organizational control process Organizational control process generally involves prudent collection of relevant information regarding a process, system, person or group of people so as to corroborate that information and make appropriate decisions. Following are the four key steps that are to be included within the organizational control process. Setting benchmarks to quantify performance: In this step, departmental objectives and goals are clearly stated in precise operational terms, which include the expected standard of performance. Measure actual performance: The performance of employees needs to be observed carefully on a daily basis and formal performance review report must be prepared. This quantifiers are then associated with the benchmark set in the first step. Conduct a comparative analysis with the set benchmarks: In this step, the actual performance of employees is compared to benchmarks set previously. The primary responsibility of managers is to identify whether actual performance is up to the set benchmark, has exceeded or has fallen short. Take appropriate course of action: Following the performance analysis, feedback is relayed back to employees in order to for them to be able to realize their strengths and areas of improvement. Appropriate modifications are brought about within the organizational strategies depending upon performance that is exhibited by the employees (Gossett, 2006). Conclusion As has been seen through this study, an operational plan is a critical determinant of an organization’s success and long-term sustainability. It is a key management function performed by highly skilled and experienced managers working within an organization. While making such plans, various organizational factors that range from organizational objectives, mission and values, current and expected performance to resources that are available to an organization have to be taken into consideration. By formulating such a plan, managers are able to know in advance what is to be accomplished, by whom, at what time, how and at what cost. Such a holistic view enables an organization to enhance efficiency and achieve unprecedented success in its line of operation. References Apospori, E., Papalexandris, N. & Galanaki, E. (2005). The motive and responsibility profile of Greek CEOs: comparing entrepreneurs and professionals. Leadership & Organization Development Journal, 26(2), 141-162. Ardichvili, A. (2001). Leadership styles of Russian entrepreneurs and managers. Journal of Developmental Entrepreneurship, 6(2), 169-188. Christopher, M. & Holweg, M. (2011). Supply chain 2.0: Managing supply chains in the era of turbulence. International Journal of Physical Distribution and Logistics Management, 41(1), 63-82. Denver, J. (2013). Planning process of Toyota. Retrieved from http://toyotamanagement.wordpress.com/2013/05/10/64/ Engagement for success. (2014). The four enablers of engagement. Retrieved from http://www.engageforsuccess.org/about/the-four-enablers-of-engagement Gossett, L. M. (2006). Falling between the cracks: Control challenges of a contingent workforce. Management Communication Quarterly, 19, 376-415. Kalyan City Life. (2013). Levels of Management - Top, Middle and Lower Level. Retrieved from http://kalyan-city.blogspot.com/2011/05/levels-of-management-top-middle-and.html Kaplan, R. S. & Norton, D. P. (2001). Transforming the balanced scorecard from performance measurement to strategic management: Part I. Accounting Horizons, 15(1), 87-104. Lam, S. S. K. (no date). Integrating HR planning and organizational strategy. Human Resource Management Journal, 8(3), 5-19. Navarro, P. (2005). The well-timed strategy: Managing the business cycle. California Management Review, 48(1), 71-91. Singh, M. K. (2010). What makes a winning S&OP program. Supply Chain Management Review, 14(3), 22-27. Soberg, A. (2011). The Link Between Strategic Planning and Human Resource Planning. Retrieved from http://www.hrvoice.org/the-link-between-strategic-planning-and-human-resource-planning/ Thome, A. M. T., Scarvada, L. F., Fernandez, N. S. & Scarvada, A. S. (2012). Sales and operations planning: A research synthesis. International Journal of Production Economics, 138(1), 1-13. Wagner, S. M., Ullrich, K. K. R. & Transchel, S. (2014). The game plan for aligning the organization. Business Horizons, 57, 189-201. Zeidan, H. (2009). The Blake Mouton Managerial Grid Identifying five different leadership styles. The Certified Accountant, 39, 82-85. Read More