Systems and Operations Management at Atokowa - Essay Example

?Systems and Operations Management Contents Contents 2 INTRODUCTION 3 ORGANIZATION OVERVIEW 3 SYSTEMS AND OPERATIONS MANAGEMENT AT ATOKOWA 4 Four V’s Typology 4 Volume 5 Variety 5 Variation 5 Visibility 6 SOFT SYSTEMS METHODOLOGY 6 Clients 6 Actors 7 Transformation 7 Weltanshauung 7 Owners 7 Environment 7 RECOMMENDATIONS FOR THE SYSTEMS AND OPERATIONS MANAGEMENT 8 Benefits of Enterprise Resource Planning System 10 Common Computing Platform 10 Cost Effectiveness 10 Integration of Operations 10 Enhancement of Work Efficiency 11 International Operations 11 Challenges of Enterprise Resource Planning System 11 Complexity of Implementation 12 Migration of Data 12 MANAGEMENT ISSUES IN IMPLEMENTATION OF THE NEW INFORMATION SYSTEM 13 Resistance to change 13 Lack of competence 13 Allocation of Tasks 14 REFERENCES 15 INTRODUCTION Systems and operations management is highly important for every organization notwithstanding the size of the organization. Each organization has certain business objectives which are pursued through the operations of the organization. The success of an organization depends upon the efficiency of its decision making process and the execution of its operations. The systems and operations management in the organization helps the organization in achieving its objectives (Kolli 2000). The information system of the organization helps the organization collect and manage the information that is required for effective decision making and the operations management of the organization helps the organization conduct its operations in an effective and efficient manner (Slack & Johnston 2004). If the operations of an organization are performed effectively and efficiently, the organization would acquire its business objectives more easily. In order to make the operations of an organization efficient, the organization shall give high importance to the operations management (Greasley, 1999). This paper would consider the importance of systems and operations management for Atokowa organization. ORGANIZATION OVERVIEW Atokowa Advantage are a significant part of the stationery and office supplies industry in Australia. The company sells a wide range of stationery and office supplies to individuals; businesses and other organizations. There are numerous retail outlets being run by the company. The company also offers a facility to deliver stationery and office supplier directly to the organizations. The company also offers customized printing for organizations. The business of the company was initially established as photocopying business which later extended towards printing. The company prints; brochures, flyers, letterheads, business cards, compliments slips, memo slips, fax headers and NCR pads. The products by Atokowa are marketed to two distinct types of customers; the individual customers and the business customers. The retail outlets by the company offer products to both the individual customers and the businesses at the same time. The businesses make a significant proportion of the overall customer base of the organization. SYSTEMS AND OPERATIONS MANAGEMENT AT ATOKOWA From the study done on Atokowa, it can be inferred that the current systems management of the company does not provide sufficient and accurate information regarding the type of market that generates most revenue. In order to make effective decisions, it is highly important for any organization to have complete and accurate information regarding its operations. The operations being conducted at Atokowa are also very complex. Invoices are generated after a complex formal procedure and the discounts are offered after significantly extensive paper work. In order to make the operations management at Atokowa more effective and efficient, the company may need to modify its existing information system that is called ASIS. The information system is outdated and with the introduction of new technology, the company may need to apply new information system in its organizational structure. Following is the analysis of the operations management of the company: Four V’s Typology The four V’s typology is used to evaluate the operations management of an organization. The four V’s that are evaluated are; volume, variety, variation, and visibility (Brown 2005). Volume Volume refers to the number of products and services provided by the organization. Atokowa has a wide range of products related to the stationery and office supplies. The company also provides the service of customizable printing. As mentioned earlier, the products of the company include numerous stationery items and the services provided by the company include printing of brochures, flyers, letterheads, business cards, compliments slips, memo slips, fax headers and NCR pads. Thus, it can be said that the volume of the operations of the company is large. Variety Variety refers to the difference in the products and services provided by the company. In case of Atokowa, it can be said that the products and services of the company belong to the same classification and there is not much variety in the products and services of the company. The stationery items produced by the company can classified under the same line of products and the services provided by the company are mostly related to printing. Variation Variation refers to the change in demand for the products of the company over time. The demand in the industry in which the company operates does not change at a rapid pace as it does in some other industries. The rate of consumption of the stationery items mostly remains constant however the demand for the printing services of the company may change over time. The company receives more orders at times but they do not rise significantly therefore it can be said that the variation is less in the industry in which the company operates. Visibility Visibility refers to the extent of the operations of the company that are exposed to the customers. The front end of the organization merely deals with the selling of the stationery products and accepts the orders for customizable printing. The internal operations of the company are not exposed to a significant extent. Therefore, it can be said that the visibility of the company is limited. SOFT SYSTEMS METHODOLOGY Soft systems methodology is a systematic method to evaluate the problems faced by an organization. The model consists of several techniques that are used to analyze the problems. Such techniques include; development of a rich picture, root cause analysis, CATWOE analysis, and other conceptual methods (Ho & Skulli 1994). At Atokowa, the situation that seems to be creating problem for the organization is the operating issues with the information system which is not in conformity with the processes carried out by the personnel of the organization (Matsatsinis & Siskos 2002). The customer feedback suggests that a large number of customers had to wait for a long time before getting any response in the store. It was also reported that the assistant didn’t know how to process the customer’s account. The perspective that should be followed by the company in order to resolve its issues is “modification of its existing information system and its conformity with the operations of the organization”. Following is CATWOE analysis in context of the root definition developed for Atokowa: Clients With the application of a new information system, the clients will be benefited because they will be able to get their requests processed in a shorter time. The time period for waiting in the store will be reduced and the time consumed in manual work will be eliminated. Actors The facilitators of the application of this information system would be the core management of the organization. Transformation The transformation to be done in the organization will be the replacement of the existing information system with a new information system that conforms to the processes of the organization. Weltanshauung This transformation is relevant because it will make the execution of day to day operations of the company much easier and the staff will be able to process the customer requests more efficiently. Owners The organization will be the owner of this improved information system. Environment The constraints that would be faced by the new information system would be resistance by the staff towards the change and the risks of loss of data in the process of transformation. RECOMMENDATIONS FOR THE SYSTEMS AND OPERATIONS MANAGEMENT The company has complex manual systems and the use of information systems is very limited. The company needs to maintain an effective supply chain with fast responsiveness in order to make the processes less complex. Responsiveness in the supply chain is affected by a number of factors including; high level of quantity demanded, handling a large variety of products, and marketing products to different types of customers. These factors are important for the nature of business of the company because flexibility and responsiveness are the main requirements for the supply chain of the company (Power 2002). The company seems to have old processes and procedures and there seems to be significant need for innovation. In order to manage its operations efficiently and to remove the complexities, the company should implement ‘Entity Resource Planning’ system. The innovation will be supported by the Enterprise Resource Planning of the company which would assist the company in having a stable position in the industry along with removing all the complexities in its current processes. ERP implementation would lead the company to build an effective supply chain. By the use of ERP, the company would be able to incorporate factors like; innovation, flexibility and responsiveness in its supply chain. ERP would help the company enhance its overall operations by integrating all the operations of the company. Enterprise Resource Planning (ERP) system is an integrated application that is used to control the external or internal resources of an organization. Enterprise Resource Planning System is generally used to manage resources like; tangible assets, human resources, materials and financial resources. The main purpose of ERP is the unhindered flow of information throughout the organization and outside the organization. Within the organization, ERP is used to integrate the information system of various departments in order to make the acquisition, storage and flow of information an easy process. On the other hand, ERP is also used to manage stable connections with the significant stakeholders of the organization. ERP system is based on a centralized database which is utilized by all the departments in an organization. ERP system integrates all the operations of an organization in a uniform system which is spread throughout the organization. Consolidation of all the operations in an organization facilitates the effective and efficient flow of information within an organization. ERP helps an entity enhance its productivity and its competitiveness in a number of ways. Productivity can be enhanced by using ERP because the ERP system saves an organization from any extensive and time consuming procedure to receive or forward information to other departments. In case of Atokowa, implementation of ERP will save the company from the complexities of manual work and extensively formal procedures. This conservation of time and other resources can be employed in other operations of the organization and it can enhance its efficiency. ERP system also helps an organization enhance its competitiveness because an organization can improve its supply chain by the implementation of the ERP system. Due to the centralized database and the unobstructed flow of information between different departments involved in the supply chain, it becomes easier for an organization to enhance the efficiency in controlling the inventory and managing the operations related to inventory management and warehouses. The company currently uses so much manual effort for flow of information within the organization and the intimation of sending and receiving of information takes so much time. By implementation of ERP, updating of the data at one point updated the centralized database and all the departments would be able to access the same information at the same time. Thus, the relevant information was acquired by respective departments simultaneously. Benefits of Enterprise Resource Planning System ERP system has a number of benefits that can help Atokowa enhance the efficiency of its overall operations. Following are some of the benefits that are acquired by an organization by the implementation of Enterprise Resource Planning system. Common Computing Platform Enterprise Resource Planning system is operated over common computing platforms therefore they are easy to manage. The hardware architecture and software framework which is generally used in organization is also applicable for ERP systems. ERP systems do not require experts to operate the system therefore ERP systems can be easily operated by the personnel of the entity after a suitable training. Cost Effectiveness ERP system significantly reduces the cost of operations in an organization. The only significant cost an organization bears is the initial implementation of ERP system and the training of its employees to operate the system. After the initial costs, ERP benefits the organization for a significant period of time and the cost effectiveness derived from the implementation of ERP system is greater than the initial investment made by the organization in the implementation and operability of the system (Salmaron 2003). Integration of Operations The main feature of ERP system is that it integrates all the operations of an organization. It enables all the divisions to access centralized information easily. ERP system is built as modules and its multiple software modules make the coordination of diverse operational departments of an organization easier. The integration of multiple operations of an organization provides the organization an opportunity to maintain a centralized database system to ensure effective flow of information within the organization. ERP system also includes effective system security for the preservation of confidential data. Enhancement of Work Efficiency The main benefit of an ERP system is that it increases the overall efficiency of an organization by integrating its diverse operations. ERP system saves an organization from multiple documentations of the same data and the time it takes. It provides an online central database which is available for all the operational divisions of the organization at the same time, therefore the retrieval of information becomes easy and quick. ERP system also ensures real time updating of the database. Due to continuous updating the organization remains aware regarding the market conditions and this information helps an organization enhance the effectiveness of its decisions. International Operations ERP system supports multiple standards at the same time. An ERP system can be used to manage diverse tax structures, languages and standards; therefore ERP system can be used for managing diverse operations of an organization. ERP also supports the linkages between geographically diversified branches and divisions of an organization (Salmaron 2002). Challenges of Enterprise Resource Planning System Along with the benefits offered by the Enterprise Resource Planning System, it also poses some challenges that an organization needs to face. Following are some of the challenges faced by organization with respect to the implementation of an Enterprise Resource Planning system. Complexity of Implementation One of the main challenges faced by organizations is the implementation of the Enterprise Resource Planning system. ERP systems are too complex because they have a wide scope of applications. In order to conduct the implementation of an ERP system, an organization needs to consult professional experts to implement and integrate the ERP system with the system of the organization. Consultation with experts also increases the cost of initial investment made by an organization to acquire the ERP system. An ERP system requires an extensive period of time to be completely implemented in an organization. A full fledged ERP system requires almost 14 months and a large number of consultants to be completely implemented (King, 2005). Therefore, the extensive time period for implementation tends to affect the operations of an organization. Migration of Data The success of the implementation of an ERP system depends upon the migration of data from previous system used by an organization to the ERP system. Migration of data is a comprehensive process therefore it requires an extensive plan to be conducted successfully. Since Atokowa conducts some of its operations manually, this step may require extensive care. This step is important because there is a risk of loss of data involved in this process. The extensive planning requires additional time and resources by an organization therefore it also affects the on-going operations of an organization to a significant extent. MANAGEMENT ISSUES IN IMPLEMENTATION OF THE NEW INFORMATION SYSTEM Replacement of the current information system of the company may be a very complex task. There may be numerous people and management issues relevant to the implementation of a new information system. Some of the issues and their possible solutions are provided below: Resistance to change The staff of the organization may show resistance towards the implementation of the new information system. The staff members may become used to the current system of execution of the operations of the company therefore they may find it difficult to accept the new system. The staff may also show reluctance towards learning how to operate the new information system. The possible solution to this problem may be management presentations to the staff members. The core management would emphasize the importance of the new information system to the staff members and it would emphasize the fact that the execution of operations will become easier after the implementation of the new information system. Lack of competence Staff members already hired by the company may lack the level of competence required to operate the new information system. Since ‘Entity Resource Planning’ information system is a highly complex system as it integrates all the aspects of the business of the organization and it consolidates the information in a centralized database, it may be difficult for the staff members to operate the system effectively. There is also a risk of mismanagement of the new system and the risk of loss of data. This issue can be resolved by conduction of a series of staff trainings. The staff may not be capable of operating the new system but the core management can arrange training sessions for the staff members in order to make them acquire sufficient knowledge and capabilities required to operate the information system efficiently. Allocation of Tasks The management may face the issue of allocation of tasks after the implementation of the new information system. After the implementation of the new information tasks, there may be redundancies in the organization as a significant number of tasks will be done automatically due to the new information system (Dallas 2006). The management would have to reallocate some of its human resource. The management can tackle this issue by conducting proper planning. The management should reallocate its resources and it should evaluate the benefit achieved by the implementation of the new information system. REFERENCES Brown, S. (2005). Strategic Operations Management, 2nd Edition. Butterworth-Heinemann Dallas, M. (2006). Value and Risk Management. Wiley-Blackwell Greasley, Andrew. (1999). Operations Management in Business. Cheltenham, UK: Nelson Thornes Ho, K.K.J. & Sculli, D., 1994. Organizational Theory and Soft Systems Methodologies. Journal of Management Development, 13(7), p.47-58. Available at: http://www.emeraldinsight.com/10.1108/02621719410063413. Kolli, Sai. (2000). Production and Operations Management. Piscataway, New Jersey: Research & Education Association. Matsatsinis, N. F. and Siskos, Y. (2002). Intelligent support systems for marketing decisions. Norwell, MA, USA: Kluwer Academic Publishers. Power, D. J. (2002). Decision Support Systems: Concepts and Resources for Managers. West Port: Greenwood/Quorum Salmeron, Jose L. (2003). EIS Success: Keys and difficulties in major companies. Technovation Volume 23, Issue 1, pp. 35-38 Salmeron, Jose L. (2002). EIS Evolution in Large Spanish Businesses. Information & Management Volume 40, Issue 1, pp. 41-50 King. W. (2005) “Ensuring ERP implementation success." Information Systems Management, Summer. Slack, N.; Johnston, R. (2004). Operations Management. 10th Edition. Harlow: Pearson Education Read More