Operations Managment of Fullers Brewery and Vue Cinemas - Term Paper Example

? XXXX XXXX Operations Management 27/10/11 Operations Management This report will give a critical analysis and comparison of the operations of the companies Fuller’s Brewery and Vue Cinemas. In analysing and comparing the operations of the two businesses, the report will make use of a number of theoretical frameworks including the four V’s model which analyses an operation terms of volume, variety, variation and visibility (Slack et al, 2010, 2009). In the first instance, a major difference between the two businesses from an operational perspective may be seen as the fact that the first company, Fuller’s Brewery is a traditional manufacturing company providing a physical product. This is in stark contrast to the second company Vue Cinemas who may be seen as overall providing a service first with physical goods only forming a small part of the overall experience. In considering the operational differences between the two businesses, the essay will now give a compassion of the operational aspects considered in each of the four variables of the four V model: Volume In the first instance, the volume of an operation simply represents the level of production and will dictate the overall approach used towards manufacture or delivery of a good or service (Fitzsimmons and Fitzsimmons, 2008). In the case of Fuller’s Brewery volume can be measured in a number of ways but always relates back to the delivery of a physical product. In essence, from an operational perspective, volume is measured in liquid volume measurements. From a purely scale perspective, while the operations of Fuller’s Brewery are concentrated in the Southeast, distribution takes place on a national basis requiring an operation in scale which is able to accommodate such demands. By stark contrast, Vue as a service provider is unable to measure volume on such a simple commodity basis, instead volume here relates the number of “guest experiences” in other words, the number of tickets sold to customers in a given period. While this may be true of the main product, it should also be indicated that Vue makes a significant amount of profit from the sale of ancillary products such as beverages and snacks, items which may be easier to quantify with traditional measures of volume. Like, Fuller’s Brewery, Vue operates on a national basis. However, as a service provider, such large volumes require a more localised approach to supply, rather than a centralised production and distribution model as seen in the former business. Variety Variety represents the number of products or services provided by an operator (Slack et al, 2010). Here a broad or narrow view may be taken of the variety of products produced within an operation. For instance taking the operation at Fuller’s Brewery, at the broad level of the operation can be split down into just two key product areas, cask ales made for the licensed premises business and canned and bottled beers designed to be sold from non-licensed premises such as the supermarket. At the narrow level, it is possible to argue that each SKW requires an adaptation of the operations process, even if this is limited to a change of packaging. In such a case the operation then becomes intently more complex from the theoretical perspective. A similar approach may be taken with the analysis of the variety of products sold by Vue, at the broad level the operation may be seen as relatively simple with major categories including ticket sales and the sale of snack and drinks. However, again at the narrow level, it could be argued that each different film and each variety of snack of drink sold constitutes a variety of product in its own right. However, in comparing their operations of both businesses, it would appear that both operations represent a relatively simple operation with a small level of variety in comparison to other businesses such as those of a retailer. Variation Variation represents the concept of fluctuating demand over time. For Fuller’s Brewery the level of variation may be seen as related to two key concepts, seasonality and changes at the market level. In the first instance, the brewing industry suffers from a traditionally unstable demand throughout the year as consumers create peaks and troughs according to seasonal events such as Christmas and other events associated with high level of consumption of alcoholic beverages. In addition, Fuller’s Brewery has seen a structural variation in demand as over time both social changes and the state of the economic environment has seen a fall in demand for cask ales supplied on licensed premises and a corresponding rise in sales of packaged beers for the home consumption market (BBC News, 2007, Boseley, and Wintour, 2008). While this is a long term trend, it has raised key issues for the company including the operational capacity of the business in relation to the increased demand for beers suitable for the home consumption market. By contrast, variation from the perspective of Vue can be much more localised in nature and much more unpredictable to manage. Key variations in demand can be the product of the release of a new film or unexpected media event in relation to a film. In addition, individual branches suffer from high levels of variation according to the time of day and the schedule of films to be show. Such high levels of variation require individual branch managers at Vue to plan operations with a high level of detail so as to ensure that sales and capacities are maintained not only in relation to the core product, ticket sales but also in supporting areas of the business where overcrowding could lead to potential lost sales. As such, one can see that the variation experienced in the operations of each of the businesses is quite different in nature. While both businesses experience significant levels of variance, the variation seen in Fuller’s Brewery operation would appear to be much less disruptive and long term in nature. On the other hand, the variation experienced at Vue may be seen as having a much faster pace and potential for creating short term operational problems for individual branch. Visibility Finally, visibility represents the degree to which a customer is able to see the internal workings of a suppliers operations. Here, it may be seen that there is a fundamental difference between the two business models in operation which ultimately leads to a complete contrast in the level of visibility of the operations in question. From the perspective of Fuller’s Brewery, the customer’s visibility of the company’s operations may be seen as very restricted. The only real insight the customer may be seen as having into the operations at Fuller’s Brewery is when a customer interacts with the distribution function. By stark contrast, in order for Vue cinemas to be able to deliver its service based offering, it is necessary for the customer to directly interact with the operation which is effectively on show to customers at all times. As such, any problems in operational flow of Vue cinemas is likely to result in a negative customer experience without the company having the chance to rectify the problem before the customer receives the product. This may be seen as a key difference in comparison to the operation at Fuller’s brewery in which it is possible for the company to rectify an error without affecting service levels. Thus far the essay has highlighted a great number of differences between the operations of Fuller’s Brewery and Vue cinemas using the four V’s model of operational analysis. However, there are also some other key operational issues which vary between the two businesses which are not covered by the model. One of the key differences between the to businesses operations is how the company’s choose to evaluate and measure the effectiveness of their operations. On the one hand, Fuller’s Brewery may be seen as using a traditional method of evaluating operations though an evaluation of both on time and in full measures referred to as “OTIF.” This is in contrast to the approach taken by Vue cinema which makes use of Kaplan and Norton’s (1996) balanced scorecard approach, a tool which is much more holistic in nature and consider four key areas for success, namely, people, sales, quality and continuous improvement. Here the noticeable difference between the two approaches is that while the former method takes a simple recording approach towards the rating of an operation. The balanced scorecard is an integral part of improving the operation and making future plans. The differences in the approaches to measuring the effectiveness of operations may also be seen as reflected in the attitudes towards quality management. While both companies’ place an extremely high level of importance on the quality management of operations. The transcripts would seem to suggest that quality management techniques at Fuller’s brewery are largely based around a policy of inspection and rectification of any problems after a breach in quality has already occurred. By contrast, the approach taken by Vue, making use of the balanced scorecard and a high level of employee engagement would seem to suggest a much more proactive approach towards quality management with prevention and improvement being seen as the ultimate aim. There is however, one exception to this on the behalf of Fuller’s Brewery with regard to the procurement process. Here, the business attempt to engage with its suppliers, particularly in the packaging operation where the belief of the company is that a higher quality of operation can be achieved by making use of the suppliers expert knowledge of their own product. In conclusion, one can see that there are significant differences between the operations of both Fuller’s Brewery and Vue cinemas. When considering why the operations of the two companies are so different, it may be considered that there are a number of factors to take into account. The single largest factor resulting in the operational differences between the two businesses may be seen as linked to the fact that while Fuller’s Brewer operates in the manufacturing sector, Vue cinemas by contrast is a service provider and this the needs of the customers of both enterprises are fundamentally different. Secondly, the general organisational cultures of the two businesses in question may also be seen as highly different with Fuller’s Brewery operating a centralised, more hierarchical organisational structure while Vue cinemas adopts a flatter regionally based business model. Reflective Report Having conducted this research paper, the writer has learned a great deal on the subject of operations management. The most important learning coming from this exercise may be the ability to apply a theoretical framework such as the four V’s model to a variety of businesses and operational concerns in diverse industrial and operational environments. By understanding the key variable which affect an operation, the researcher has learned the valuable skill of being able to compare operations even when it appears that there is little commonality in subject matter. This has been demonstrated in the comparison of the operations between Fuller’s Brewery and Vue cinemas. While it would appear that due to the differing nature of the businesses there was little commonality from an operation perspective. By breaking the variable of an operation down in the four key areas, the researcher was able to consider that while the operations of the two businesses may look very different, there are often common problems and issues shared, such as the relatively low level of complexity identified for both operations and the level of variability expenses. Having considered the Nortel case study, it would seem that similar factors can be taken into account, this time the operation seeming to present differing challenges based around an increased level of variety in comparison to the simpler operations of Vue and Fuller’s Brewery. Quality management has also been an issue which has been raised and has potential application to the Nortel case study, for instance at present the Nortel case study indicates that quality management processes do not extend into suppliers operations. However, in analysing the Fuller’s Brewery transcript one can see that there may be a significant argument for the creation of a more integrated quality control system across the supply chain for Nortel. In addition, by conducting this exercise, the researcher has also been able to consider how operations management fits into the context of the wider strategy of an organisation helping to deliver a sustainable competitive advantage, whether through overall cost leadership, differentiation or market focus (Porter, 2004). As such, the researcher considers that a key learning coming from the project is the consideration that operations management has the ability to affect a wide range of internal and external stakeholder including, customers, finance marketing and suppliers, all whom directly or indirectly it would seem have an interest in seeing that the operations of a company runs smoothly and without interruption. Bibliography BBC News. 2007. Attitudes to alcohol in Europe. Available online at: http://news.bbc.co.uk/1/hi/uk/7093143.stm [Accessed on 18/11/09]. Boseley, S, Wintour, P. 2008 Mar 1st. Supermarket alcohol price “fix” to curb binge drinkers. The Guardian Newspaper. Available online at: http://www.guardian.co.uk/society/2008/mar/01/drugsandalcohol.supermarkets [Accessed on 06/11/09]. Fitzsimmons, J, A, Fitzsimmons, M, J. 2008. Service management: Operations, strategy, information technology. 6th ed. Boston: McGraw-Hill. Kaplan, R, S, Norton, D, P. 1996. The balanced scorecard: Translating strategy into action. Boston: Harvard Business School Press. Porter, M, E. 2004. Competitive strategy. New York: Free Press. Slack, N, Chambers, S, Johnston, R, Betts, A. 2009. Operations and process management. 2nd ed. Harlow: Prentice Hall. Slack, N, Chambers, S, Johnston, R. 2010. Operations management. 6th ed. Harlow: FT Prentice Hall. Read More