Systems and Operations Management - Atokowa Advantage Company - Essay Example

? Presented by (Your school) Executive summary This is a business report for Atokowatm Advantage Company that deals with office supplies and stationery. The report analyzes how the organization run its operations and systems using various business models like, input-process-output, the 4Vs typology, business processing mapping, decision making hierarchy, systems levels and pareto analysis. The report also analyzes the issues associated with the business operations and systems. This is done using the soft systems methodology; rich picture building, root definitions, CATWOE analysis. Based on the analysis, the report gives recommendations to solve the problems affecting Atokowa’s operations and systems. Table of contents Introduction……………………………………………………………………….. 3 Analysis of Current Systems and Operations........................................................... 3 Input process output models…………………………………………….…………..3 4vs typology……………………………………………………………………….. 4 Business process mapping………………………………………………………… 5 Pareto analysis……………………………………………………………..….…… 6 Decision making hierarchy………………………………………………….…….. 7 System levels……………………………………………………………………… 7 Soft system methodology…………………………………………………………. 8 Rich picture analysis………………………………………………………………. 8 Root definition……………………………………………………………………... 9 Catwoe analysis……………………………………………………………………. 10 Recommendations………………………………………………………………….. 13 Conclusion…………………………………………………………………………. 14 References………………………………………………………………………….. 15 Introduction This report intends to analyze and evaluate the systems and operations management of Atokowatm Advantage, a company operating in Australia and dealing with stationery and office supplies. The analysis is conducted from a case study designed by Dr Helen Benton. The structure of this report is a business structure as the intended readers are business people. (Scholes,1990) Analysis of Current Systems and Operations Atokowatm has adopted the use of technology in their daily activities since Jonathan took over as the managing director. The use of ASIS (Atokowa stock information system) has made operations in the company more easily. Atokowa also enjoys the use of other systems in their operations like the Warehouse management System (WMS) that is used in the warehouse. To help us understand the systems used in Atokowa in a more elaborate manner we will analyze the systems using different platforms as follows. (Heizer, 2001) Input process output models The input process output model, illustrates the tree stages involved in information handling. The ASIS can be compared to input-process-output model. The ASIS helps to monitor the level of the stock in all the Atokowa outlets in Australia. In the input stage, the system collects data through scanning of the product at every sale at the shop. Payment of the product is also taken. This forms as the input in the system. The data is then processed in the ASIS Ms access database. At the end of the day, the system is able to give re-order report thus enabling the manager to determine the products that require re-ordering. The report is the output of the system. The ASIS was updated so that the unit cost of each product is input into the system. The GST is also added and this is processed to give the actual cost of the product therefore, enabling the managers to set their own retail price. The ASIS system helps in the management of retail operations in Otokowa. Otokowa also uses the warehouse management system (WMS). Every delivery at the warehouse is counted and entered into the WMS. The stock is then organized in the warehouse in such a way that each SKU is placed at its specific location. The operatives are then provided with handheld devices that help to locate the SKU more easily. The counting and entering of the delivery is the input stage, the organizing of the SKU is the processing stage and the results are the output, the easy location of SKU. (Stevenson, 2005) 4vs typology The 4vs typology stands for, Volume of the input, Variety of the output, Variation in the demand for the output and the degree of visibility, which customers have, of the production of the product or service. Volume in the management and system operations refers to the size, rate or magnitude of productivity of an organization’s products. Volume tends to determine the level of output in the company. Organizations with high volumes of output in most cases have repetitive operational processes in order for them to increase the speed of their operations. This therefore helps to cut on the organizations costs. Volume helps in determining how fixed cost is spread over a number of products in an organization. High volume brings about low cost per unit while low volume brings high cost per unit. Variety measures the number of products or services that an organization can offer to its customers. High variety in an organization allows for flexibility in the operations of an organization. The higher the variety in a system the higher the associated costs. Variation is described as the extent to which something diverges, from a previous state or value, from others of the same type, or from a standard. Variation in this context refers to the variation between the manual stocktaking as well as manual warehouse management and the ASIS system and WMS used in Otokowa. In operations and system management, visibility is the customer or the customer experiences can see the determination of how much of the system’s activities. The dimensions to visibility differ between businesses. Otokowatm engages in high volume operations, the ASIS and WMS handles a lot of products in a given day, ranging from the furniture to stationery. Atokowatm process and systems variety is high. The ASIS and WMS handle various types of products. The company also offers various types of products to their customers. Variation is low as the company has several outlets around Australia, the company also deals with different types of products hence the demand for its products is likely to remain constant at all time. Operations visibility is low as the customers witness the scanning of the products through the ASIS. (Chacko, 1976) Business process mapping Business process mapping is a set of activities that usually explain what a business or a company does. Process mapping also defines who is responsible for the process and to what extent the process is to be completed and how to determine whether the process is working. The first thing in business process mapping is process identification. This may include such activities like sales, manufacturing and other activities that take place in an organization. Process identification should be guided by the experiences in the company. Successful Process identification leads to successful business process. The second step is information gathering. This involves identifying the person to control the process. In this stage, there should be an agreement on what should be the objectives of the process and how to determine the success of the process. After collection of information, the actual mapping should be designed and the system be put into action. The process/system should then be reviewed regularly from time to time, in order to ascertain that it is working as expected. Reviewing also helps to assess whether something needs to be included in the process. Atokowatm has both the ASIS and WMS systems, which help in their daily activities. After operating for long using paper stock control, the company was in need of a system to control their stock easily. Paul Fairclough started by identifying that the Atokowatm needed a system that could record the daily transactions. Pareto analysis The Pareto analysis is ka technique that uses statistics to arrive at a decision that is more beneficial to the whole company. The analysis uses Pareto principle that by doing 20% of the work the benefit will be 80%. This technique is used to identify 20% of problems that can be addressed to solve 80% of the problems affecting a company. The first thing to know is the problem that is affecting the company. Atokowatm was able to notice that manual stock recording in the company was ineffective and led to wastage of resources in the company. The development of the ASIS and the WMS has really helped in solving more than 80% of the problem associated in stock operations and warehouse management. Decision making hierarchy Decisions in Atokowatm are made from the top management to the lower cadre management. Atokowa has however, given the local management the autonomy to make their own decisions on when to re-order stock in their respective local outlets. The warehouse manager has the power to make decisions on the activities of the warehouse; the manager was given the go ahead to invent on a new system that helps in the management of the warehouse. Pricing decisions are left to the outlet managers to determine what prices to charge on their products based on the local market situation. The ASIS helps the managers to know the actual cost and tax charged on prices. From this, the managers are able to determine the retail prices of the products in their outlets. The Atokowa custom print is left to George to manage it. The purchasing and procurement decisions are left to category managers to decide on what to buy and from whom. Generally, decision making in Atokowa is laissez-faire, where each manager is left to make decisions affecting his/her area of control. System levels Atokowa has several systems, which help in its operations; this includes the ASIS and WMS. The ASIS I s used to monitor and control the level of stocks in each outlet. The ASIS assists outlet managers in setting the prices of the products. The ASIS is able to show the managers the actual cost of the products plus the taxes charged, this help the manager to set the appropriate retail prices for the company’s products, based on the market situation of each outlet. The ASIS also helps the managers to make re-order decisions. The system is able to record daily transactions in each store helping the manager to know which products need to be re-ordered and by what quantity based on the demand of the product. The WMS has helped in the management of the warehouse. The system is able to locate the location of each particular product stored with ease. (Hopeman, 1969) Atokowa also has implemented finance and payroll system in their operations. The system helps in organizing the company’s cash flow and the payroll ensuring the company conforms to the law. Atokowa also has a website that gives its clients vital information about the company. The website gives details of the company’s outlets and the products that the company deals with. Soft system methodology Peter Checkland authored the soft system methodology (SSM) in 1970. The aim of the system is to identify problematic conditions that are encountered during management of an organization. The system involves several processes including, rich picture building, root definitions, CATWOE analysis and conceptual analysis. Rich picture analysis This involves identifying the description of the operations and systems in the organization. The rich picture involves building a much deeper representation of the whole situation in which intervention is required. The rich picture will involve collection information and views on the issues in the operations of the company. The management of the company should listen to all the stakeholders of the company. (Hughes, 2000) Atokowatm has several issues with its systems and operations. The ASIS has issues with business customers. The system does not support the business customer. The business customers cannot be able to settle their monthly account using the ASIS. The ASIS does not provide a chance for the managers to include discounts for the business customers; instead, the managers have to use manual paper work for discounts. The ASIS does not offer a platform for business customers to give their feedback to the company. The ASIS also needs to be integrated with the custom printing department in order for customers to place their orders directly from the retail outlets. The ASIS has issues with Atokowa and purchase department. Lauren says that the ASIS is only great for the stores. The system does not show directly the products that are fast selling in the stores. The purchasing department ends up purchasing more products that are not fast selling hence overstocking the warehouse. Atokowa’s website also has issues, as it does not satisfy the entire customer requirement. In rich pictures, the key issues should be identified from the structures and processes of the company. You should also consider the people involved in the structures and processes of the organization. The issues expresses by the people as well as the conflicts emanating from the systems and operations in Atokowa should not be ignored. (Krajewski, 2010) Root definition This is a structured explanation of the systems and operations that take place in the company. It involves having clear understanding of the activities that take place in the organization. A well-structured root definition will lead to understanding what a system in the organization does, how the system operates and why it is being done. (Nahmias, 2001) A close root definition in Atokowa, will lead to clear understanding of the operations and systems in the company. The immediate aim of the ASIS was to make store operations much easy, however, this came with its own issues. The ASIS does not assist the business customers in any way. The ASIS does not cater for the business customers who bring much more revenues to the company. Atokowa’s website does not satisfy all of the customers’ needs. The website does not provide online buying for customers. The ASIS as well though successful in the store, does not provide adequate information to the purchasing and procurement department. The department ends up overstocking the warehouse. Catwoe analysis CATWOE is a generic term used to analyze business operations and systems. The term stands for clients/customers, actors, transformation, worldview, owners and environmental constraints. To help us understand the operations and system issues in Atokowa, we will analyze each element of catwoe. (Pegels, 1976) The customers or the clients are the final beneficiaries of the system. This category means those who are receiving the results of the system. The customers of the ASIS are the actual buyers of the Atokowa’s products both business and the individuals. The ASIS has issues as it neglects the customers, it does not cater for the business customers. The ASIS does not also benefit all the departments in Atokowa, the purchasing department does not get the required information to guide them on what products to purchase in large quantities and what products to purchase in less quantities. This leads to overstocking the warehouse with non-moving products. The receiving end of the Atokowa’s website is the company’s customers. The website as it is does not provide the required services to the customers, as it has no online buying option. The ASIS as it is now, does not provide the required information/services to its customers in the warehouse department. The ASIS does not provide enough information to the purchasing department on what products are selling faster and therefore, the department ends up overstocking the warehouse with non-moving products. The finance and payroll system are not effective to the finance department and therefore ends up tiring the finance personnel. (Katzan, 1976) The actors are those people who are involved in implementation of the system or change in an organization. The main actor in implementation of the ASIS in Atokowa is Paul Fairclough who is the director of retail operations in Atokowa. The outlet managers are also actors in implementation of the ASIS since the ASIS operates in every outlet. Fairclough needs to adapt to changes. He should update the ASIS in order to cater for every department in Atokowa. The finance department has a system whose actors are the accountants in the company. They also need to come up with updated system that will have all the information they require. Transformations are the changes that a certain system will bring. This involves having inputs and the processes they undergo to become credible output helpful in the company. The inputs in ASIS are the information collected during the selling process when the product is being sold. The transformation brought about by the ASIS is the change from manual retail operations to computerized operation. The WMS also brings in transformation in Atokowa where the operations in the warehouse are now digitalized. The Atokowa’s website also brings some transformation to the company where customers are able to get the company’s information from it. The issues with its systems hamper transformation in Atokowa. The ASIS does not provide the required services to the business customers. The system does not also provide the purchase department with the relevant information it requires to make wise procurement decisions. The website is expected to change the customer buying habits as well as increasing Atokowa’s sales, but the website does not have the online buying option. The finance and the payroll systems are expected to make the operations of the finance department easy and less costly, but the system does not provide the required information to the department. Worldview is a broad picture and the expanded impact of a transformed process or system. This involves analyzing a system to get the positive and the negative effects of the system to the organization. The overall impact of the ASIS was to bring about increased efficiency in Atokowa and to reduce the costs of retail operations. The ASIS has achieved efficiency in the stores but has failed in other departments. The ASIS did not cater for the business customers, as it does not serve them. The ASIS does not provide enough information to the purchasing department to aid in purchasing decisions. Owners are the decision makers who have the power to effect any change or decide whether to go on with any change to the system. In Atokowa, the owner of ASIS is Paul Fairclough since he is the one in charge of its design and implementation. The owner of WMS is Anton Humphrey; he is in charge of the warehouse operations. Paul does not want to change the operations of the ASIS and therefore, this creates most of the problems that are there in Atokowa. Environmental constraints are external factors and limitations affecting the success of a system. This might include regulations, financial constraints, and limitation of the system scope. In Atokowa the limitations of the systems like the ASIS, is failure to integrate the system with other systems in the organization. The ASIS and the WMS are not integrated. The ASIS has a narrow scope where it only covers the retail operations of the company. The company’s’ website also has limitations to the customers as it does not offer online buying. Recommendations The first thing is to acknowledge is that the ASIS has problems as seen in the above analysis. Paul Fairclough has to know that the ASIS is the backbone of all the activities in Atokowa. The company can invest in a new electronic point of sale system or keep the current one updated. Investing in a new system is a costly venture to the company and Atokowa should re-develop the ASIS in order to cater for all the complaints from the different stakeholders. The ASIS should be updated to cater for the business customers. It should be updated to include a channel for the business customers to air their feedback as well as be able to clear their due balances using the system. (Kuester, 2008) The ASIS should be integrated with the other systems in Atokowa. Integration of the ASIS and the WMS will allow for easier warehouse management. The warehouse manager will also have the right information to be able to know which store needs more stock. The ASIS should also be updated in order to provide the right information to the purchasing and procurement department. This will help the department to purchase the products, which are selling and therefore avoid overstocking the warehouse. The ASIS also needs to be updated in order to allow more alignment of the Atokowa custom print and the retail operations in the company. This will allow print customers to place printing orders at the retail outlets. This will help to widen the printing business in your company. Atokowa needs to have a strong finance and payroll system, which allows the personnel at the finance department to record the business accounts with more ease. The system should be integrated with the ASIS for ease monitoring of the business transactions. The company needs to develop a strong company website that gives the customers all the services they require. The website should provide online buying for the customers. This will enable the company to remain competitive in the market and cut on its operating costs. The CEO, Jonathan, needs to bring cohesion in the company. There is many blame games in the company. The CEO needs to bring together all the managers of the company and enhance cohesion in the company. The company needs to work as a team and no competition between the departments. Paul Fairclough is the central man in bringing the much-required changes in the company as most of them involve the update of the ASIS. Tamara also needs to identify the best system for the finance department. Anton Humphrey also needs to update the WMS to cater for the changes in the operations of the company. Conclusion Success of every change in the company depends on effective leadership. Atokowa’s top management should encourage the participation of every employee in the management of the company’s affairs. The roles of every employee in the system should be elaborated clearly to avoid ambiguity in the system and operations of the company. References Scholes, Checkland, P,. (1990). Soft systems methodology in action. Chichester, West Sussex, England: Wiley. Heizer, J. H., & Render, B. (2001). Operations management (6th ed.). Upper Saddle River, N.J.: Prentice Hall. Stevenson, W. J. (2005). Operations management (8th ed.). Boston: McGraw-Hill/Irwin. Chacko, G. K. (1976). Applied operations research: systems analysis in hierarchical decision-making. Amsterdam: North-Holland ;. Hopeman, R. J. (1969). Systems analysis and operations management. Columbus, Ohio: Merrill. Hughes, A. C., & Hughes, T. P. (2000). Systems, experts, and computers: the systems approach in management and engineering, World War II and after. Cambridge, Mass.: MIT Press. Krajewski, L. J., Ritzman, L. 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