Systems and Operations Management Practices at Atokowa - Case Study Example

? ATOKOWA ORGANIZATION REPORT Systems and Operations Management Practices Case of Atokowa Organization [Insert [Name of the university] Executive Summary This report was based on Atakowa organization case analysis. The main purpose was to conduct an analysis on the systems and operation management activities in the organization. This was executed by use of models for systems and operations analysis such as business process mapping, levels of decision hierarchy and the input-output models. The study looked further on the three levels of decision making-strategic, tactical and operational level as applied in organizations. This followed the application of soft system model (SSM) to analyze current issues affecting Atokowa. The same was accomplished through CATWOE analysis. The study further discussed on appropriate recommendations for systems and operations managements whereby possible quality improvement strategies were provided. The TQM was identified as the best system which can improve overall quality performance of the organization. The investigation further covered on the relevant people and management issues which may come up during the implementation of new quality system in the organization. By doing so, possible ways of managing these issues were provided to support the implementation process. The study was summarized through provision of concrete conclusion which summarized the case analysis. Table of Contents Executive Summary 1 1.0 Introduction 3 1.1. About Atokowa Advantage 4 2.0 Analysis of Systems and Operations Management of Atokowa Organization 6 2.1. Input Output Model 6 2.2. The use of business process mapping model on Atakowa’s case 8 2.2.1. Use of process mapping model to analyze Atokowa’s case 9 2.3. Decision Making Hierarchy 10 2.3.1. Three levels of decision making 10 2.4. System levels 11 2.4.1. The role of systems to support business processes 12 2.5. Applying Pareto Analysis 12 2.6. Application of soft system methodology 13 2.6.1. CATWOE analysis 13 2.6.2. Current issues in Atokowa 14 3.0. Systems and Operations Management Recommendations 15 3.1. How the organization can improve quality management 15 3.2. Improving the quality management skills of our employees 16 3.2.1 Other important recommendations 16 3.3. The people and management issues which may arise during the implementation of business improvements and quality managements in Atokowa organization 17 3.3.1. How these issues should be managed 17 4.0. Conclusion 18 5.0. References 19 1.0 Introduction According to research, operation management is defined as activities surrounding the management of resources in an organization. Resources in a manufacturing environment are devoted in ensuring efficient production and delivery of goods and services to the market. Information systems on the other hands refers to a layout of interrelated components which are responsible for retrieval, processing, storage and distribution of information which are vital for decision making and control of activities in an organization (Ram, 2005). This study will focus on Atokowa advantage by looking at systems and operation management practices are handled in the organization. The question which should be asked is what are the systems and operations management practices in the company? What are the strengths and weaknesses of these systems and operations practices? And what are the possible recommendations which should be implemented to improve on the systems and operations management practices? Based on this brief introduction, the report will analyze these system and practices by use of appropriate models so that critical analysis can be provided to give insight on the way systems and operations activities are managed in Atokowa. By applying these models, the main business requirements will be examined thus understanding the way the company operates. The report will explain the possible quality management improvements strategy which may be implemented in the company. It will conclude by providing relevant recommendations which are very specific to the organization and are focused in improving systems and operations as applied in various departments within the company. 1.1. About Atokowa Advantage The company is based in Australia and is known for its leadership in office supplies and stationery. The sale strategy includes range of office supplies and stationeries which are sold to businesses and individual customers who are the potential consumers of the products. The company has its own retail outlets which act as delivery points for products to potential customers. In addition, they operate customized printing for potential organizations in various sectors. Atokowa was established in the year 1964 in Sydney Australia by Lachlan Atokowa. The business started as photocopy shop and was referred to as Atokowa printing. The rapid growth was experienced in the company whereby in the year 1970, Lachlan managed to buy out a retail outlet so that they could expand their photocopying and printing business. Among the products printed by the company include business cards, fax headers, bronchus, memo slips, flyers, NCR pads and the complements slips. As part of the strategy to command large customer loyalty, they transformed into high quality printing company. The business grew and Lachlan achieved his vision by developing Atokowa to the level of one stop center where all the office supplies and stationery can be purchased. In the expansion strategy, other outlets were acquired in Perth area and Melbourne area. The advantage they had was the high level of stock and here, all the outlets owned by the company were supplied adequately with stock of office supplies, furniture and range of printing papers. This retail business ran alongside the primary printing business which was the original business owned by Atokowa. By the year 1980, Lachlan rebranded Atokowa printing business into Atokowa Office Supplies. By the year 1983, he retired from the business after handing over the operations to Janathan Atokowa- The eldest son. Jonathan’s strategy was completely different because he was mainly interested in investing in new technology. This was evident by Atokowa initiating the sales of IBM PC 5100 and Commodore 64 which was the products considered to be of the latest technology. Through his ambition, the business expanded to other regions such as Newcastle, Brisbane, Adelaide and Canberra. A part from Jonathan, there is four directors who are members of the board and key participants in the managements of the business. They include Graham Newcourt, Ranjeev Patel, Paul Fairlough and Hayley Atokowa. The same is summarized in table 1 below. Table 1 Director’s Name Role and Location Paul Fairclough Retail Operations Director (Based in Sydney) Ranjeev Patel Purchasing and Supply Director (Based in Melbourne) Hayley Atokowa Marketing and Human Resource Director Graham Newcourt Finance Director Market segments for Atokowa The company focused on two main market segments (customers) which include the business customers and the individual consumers. All the retail outlets owned by the company are designed to serve both business and individual clients but the challenge is that the company has not set up a system which can distinguish individual sales volume from business sales volumes. It is the Atokowa Custom Printing arm which has 90 percent of its sales volumes generated from Business customers and this has made everybody to have no doubt on the facts that B2B sales commands the greatest percentage of the company’s sales volume. 2.0 Analysis of Systems and Operations Management of Atokowa Organization 2.1. Input Output Model Operations in an organization are characterized by a transformation process. In this case, Inputs are transformed into outputs which are then delivered to the market. Inputs resources in this case include materials, customers which are referred to as transformed resources. Facilities and staffs inputs are regarded as the transforming resources. Inputs, in this case undergoes a transformation process resulting to production of outputs. Outputs in this case are the products and services which are further delivered to potential customers. It is the outputs (products and services) which are of value to potential consumers. Input processing and the output model may also apply in the information management system in which data input takes place followed by data transformation process and then finally output information which may be directed to competitors, regulatory agencies or stockholders for decision making process. Table 2: the application of Input-Output model to analyze Atokowa Advantage Inputs Transformation Outputs Customers( Individuals/ B2B Consumers) Stocking and coding of products Atokowa office supplies and stationeries Materials (Stationery, printing papers) and Finances Repackaging using Atokowa Brands Printed Flayers, Business Cards, Bronchus, fax headers, letter heads complements slips Staffs (Directors, Store managers, sales team) Printing of products According to input output model, the Atokowa advantage have invested a lot (Inputs) in different forms. The four directors including Jonathan Atokowa who are working hard and transforming all the departments (Finance, Marketing &Human Resource Developments, Purchasing and Supply departments and Retail Store Operations departments). The company focused on two main market segments which include the individual walk in customers and business clients. The company is both in manufacturing and service industry. Material inputs in the service industry include stock obtained from suppliers which are transformed before supplied to potential client (Seuring, 2004). Some of these material stocks include office supplies, stationeries and electronic products. For the Custom Printing Company, they use of printing machines and therefore require a number of material inputs such as printing papers; inks and spares. The second stage in the model is the (transformation process) where Atokowa is engaged in a number modifying inputs to produced products and services which can be sold to the final consumers. The company obtained products from primary suppliers then rebrand them to look like they have originated from Atokowa. This is done through repackaging using branded package. The reason for this strategy is to build a strong brand and sell Atokowa instead of selling the actual products. Printing stage is another transformation process in which raw materials mainly printing papers are transformed into products such as letter heads, flyers, and bronchus. The last stage of input output model for the Atokowa’s case is the (output) which are the quality products and services the company offers within the target market segments (Products- printed materials, office supplies and stationeries which are sold to individual and corporate consumers. The models explain the operational process of the company from stage of procurement of raw materials to the point of sales. 2.2. The use of business process mapping model on Atakowa’s case Business process mapping model is analysis tool for business process which takes into consideration business objective, what need to be accomplished and how it would affect the final consumer. The four main stages in the process mapping include (1) Process identification where by the company should not only focus on their own understanding but also including customers experience so that sustainability is achieved. (2) Information gathering is the second stage in the model in which risks, control points and objectives of the process are identified. (3) Interviewing and mapping stage whereby views of people who are engaged in the process are understood before the actual map is designed. (4) Analysis stage where tools are employed to perfects the process so that efficiency is achieved. 2.2.1. Use of process mapping model to analyze Atokowa’s case Process mapping may be applied in the store managements so that effectiveness is achieved in the pricing, returns and in stock decisions. The first stage which is the process identification in this case is centralized degree of control which was in the hands of Sydney headquarter. This was found to delay process and decision making process because each of the store managers relies on instructions from headquarter. The management of the entire process became very complicated since without authority from the headquarters no decision on pricing, tax or addition of new stock could be made. This was the problem which reduced the efficiency in the store management. The second stage is the information gatherings where the use of interviews and questionnaires may be applied get as much information as possible. Some of the information includes retail manager’s view on the entire process, retail operations director’s views, employees’ views and consumer’s observations on the process. According to the operations director, decentralizations would work best for the company because retail managers would be given powers to supply customers and at the same time control product pricing. This is very important since enhance efficiency in retail outlet operations and speed up decision making process. Once decentralization has been achieved, it becomes important to conduct interviews so that views of respective stakeholders can be obtained before full implementation of the process is achieved. This becomes the third stage as far as process mapping is concerned. What are the views of retail managers, retail store employees, consumers and the managements as far as this strategy is concerned? Analysis which is the fourth stage is where the information generated in the interview stage is analyzed to obtain precisions. As far as my view is concerned, decentralization of the store managements would speed up the growth strategy of Atokowa advantage by supporting speedy decision making process and service delivery to consumers. 2.3. Decision Making Hierarchy This is another model which can apply in the Atokowa case study. It is a tool which provides a systematic approach to decision making in an organization. There are steps engaged in this process which include problem definition so that the root is well understood; the decision hierarchy is then structured from top with provision of a broader view as far as decision goals and objectives are concerned. This is followed by construction of a pair wise comparison and the priorities obtained are weight out before the final decision is made. The same model may apply to the Atokowa’s case in the system which the organization has employed to serve both individual and corporate consumers. There has been a lot of complains that the system does not fits business customers and the management should take an initiative to upgrade the customers service managements processes. 2.3.1. Three levels of decision making Strategic decision: This is considered the highest decision making which mainly concerns with philosophies, goals and general direction. Production of low or high priced goods, long term lowering of products pricing falls under strategic decision. Example decision by Atokowa management to purchase EPR system which would facilitate services for B2B customers Tactical decision: These are decisions made to support the highest levels- strategic decision. For example if the strategic decision was to lower product pricing, the tactic may include sourcing low quality products and reducing operational cost to cater for the reduced profit margin. Examples, Atokowa management conducting evaluation of the present system to determine its compatibility with the ERP for corporate accounts and the cost benefit analysis of the system Operational decision levels: These are day to day decisions which may be employed to support tactical decisions in place. They are short term and have low cost expense which reduced consequences. Training staffs on the use of the new technology and employing technical team who maintains the system. There are operating issues described in the case which affects customer service delivery. The retail store has data systems which were designed to support management of customers but the problem is that the designed cannot support business accounts. Corporate customers had only one option where they could settle their accounts by use of invoices as opposed to individual public who are offered the opportunity to pay for their goods on the spot. The problem is that in the current position, retail managers handle these activities in a complex paper work system and this requires a lot of time and effort to perfect. The decision to install new information system so that corporate or business customers can be served effectively plays an important role for the company. In order to establish the same, decision making hierarchy may apply in this case because it will provide a systematic approach for retail store managers and respective directors to understand currents problems and how it affects service delivery to business clients. The utmost thing which should drive operations of the company is executing activities in a manner which meets customer’s demands. 2.4. System levels The information hierarchy levels in Atakowa organization is at different levels. The top level in the hierarchy is the position Chief Executive Officer who communicates directly to the four directors. Under the directors are managers heading different departments. According to the case analysis, the company does not have advanced systems in place and this therefore means that it is in the interest of the Atokowa to invest in new information system so that efficiency in communications at different levels is achieved. The current stock management system in place is referred to as Electronic Point Of Sales System (EPOS). This was backed up by the establishment of Microsoft Access Data Base Applications. The two technologies were designed into a single unit system known as Atokowa Stock Information System. The advantage of this system is its simplicity and easy to use. The entire retail store is connected through a LAN (Local Area Network) to the centralized EPO system 2.4.1. The role of systems to support business processes Systems are very important in business process in a number ways. Business process as can be witnessed in the Atokowa case includes taking of new orders, management of revenues and the transaction issues. This means that designing of systems is conducted to support managements of products, managements of revenues, managements of new orders, managements of customers and the managements of human capital in an organization. Atokowa have developed these systems in place but still need to put more efforts to modernize the entire processes in the organization. This will enhance overall service delivery, speedy transformations, sales turnover and profitability. 2.5. Applying Pareto Analysis According to Pareto law, it was claimed that a smaller cause would produce a larger results. Alternatively, a vital few customers in an organization may represent the largest percentage of the overall sales volumes registered by the company. This means that few improvements made in an organization may cause exceptionally high results. According to the case of Atokowa, the number of business clients is small and yet they command the greatest percentage of revenue registered by the company (Ammenberg and Hjelm, 2002). The same implies to the use of Atokowa brand as the unique selling point. Every product supplied using Atokowa brand sells more compared to the use of original manufacturers name in the display. If new information system is installed in the organization to support service delivery for B2B clients, there is likelihood of registering remarkable improvements in terms of sales volumes and profitability. 2.6. Application of soft system methodology This is a methodology which can be used when resolving issues within an organization. It builds on rich picture and provides root definition of issues affecting the company. Root definition in this case involves a structure and systematic approach of naming the process, tasks to be accomplished and the purpose. It involves model selections which fits other designed models and meet the needs of the entire stakeholder group. The same model may be used to solve issues in Atokowa. A CATWOE analysis is classified as a systems thinking tool which helps in root definition. 2.6.1. CATWOE analysis CATWOE is a synonym for Customer (Victims / Beneficiary), Actor (People who can perform), Transforming process (Conversion), Weltanschauung (contextual meaning and worldview), Owners and Environment constraints. Customer related issues: As can be seen from the case, the company at the moment is not in a position to know the proportion of sales for the two market segments (Individual customer, B2B customers). By improving quality of products and offering average pricing, the customers are the highest beneficiaries. Installing new information system will not only benefit the company but also the clients. Actors: Key players in this case include the managements, employees and final consumers. The management installs the system, employees in the IT and operations department operates and maintains the system. The consumers give feedback on whether the new system has improved service delivery. Transforming process: These are processes which converts inputs into outputs. After new system is in place, it becomes the main tool for managing corporate clients to improve service delivery. Management supports the rest of the employees during process implementation. Weltanschauung: This new model when applied in the organization would provide the mechanism by which the company is able to distinguish sales volume for corporate and individual work in clients. It will modernize retail store operations in the company. Owners: The management must be satisfied that investing in the new system would add value to the entire process. Just as shown in the case, everybody in the top management supported the system but was against the use of online business sales. Environment Constraints: The current environment in the organization fully supports the installation of new ERP system. The only adjustments which should be made is to redesign departments and structures in the preparation to accept the modern system 2.6.2. Current issues in Atokowa The following list provides current issues and problems faced in the company: Strategy to increase sales volumes retrieved from individual customers Issues related to decentralization in which the retail store managers in the outlets are given powers to control deliveries and pricing Issue of tracking sales for business clients because the current EPOS and MADM do not support the entire customer base- corporate clients. Decentralization of printing work beyond Sydney. Expanding the product ranges – Dealing in new technology products, 3.0. Systems and Operations Management Recommendations Atokowa advantage can improve the quality of management in a number of ways. The analysis has shown that systems and operations in the company have faults which should be mended. This can only be achieved through business improvements approaches to attain operational excellence. 3.1. How the organization can improve quality management According to nature of operations and systems management in Atokowa, they are deficient of Total Quality Management system (TQM). This is a system which the management under the supervision of Atokowa Jonathan should embrace. The reason is that customer satisfaction and quality service lies greatly on the efforts made by top managements in the company. It is the top management team to declare the establishment of quality action policy. After the implementation of the same, the aim of the quality improvements should be specified and updated on annual basis. From this point, the quality should be supplied to all the departments- Retail Operations, Marketing and Human Resource, Finance Departments, and purchasing and supply departments. I recommend that each department should apply this policy while focusing on the TQRDC which is a synonym for (Technology, Quality, Responsibility, Delivery and Cost) and this should be employed alongside the SEM which refers to safe, environment and morality (Oakland, 2000). In order to determine the efficiency of the same, the company should set up evaluation criteria to measure the overall performance. The results obtained act as a stretch target guider thus creating a continuous quality improvement process in the entire organization. 3.2. Improving the quality management skills of our employees As a way of improving employees’ skills, quality management approached must be applied. I recommend the application of three categorized training program. The program is vital in developing human resource system. The first category in the program is basic training where employees should be trained on key elements which are necessary to support customer orientation. The second level is on management skills trainings and the third category should be training on professionalisms. The training program is very important because it helps employees to acquire skills and knowledge which would help them handles their responsibilities well. This training program should be tailored based on responsibilities and position of employees in various departments. In addition, employees should be supported to undertake personal developments and at the same time develop sense of self fulfillments in their work. The three areas in the training program include partner skills, technical and business skills. The curriculum contents for quality management should include Technical skills managements and quality control management skills. 3.2.1 Other important recommendations Installing new information system in the operations, human resource and finance departments Operations department: The new ERP will support stock managements, customer service (Bothe individual and Business customers) Marketing and Human resource departments: Conduct thorough market research, increase sales volume, customize Atokowa branding and organize training and developments for employees, reward schemes and promotions. Finance departments: Virtual environment creation by establishing an ERP system which can facilitate management of finance as it flows from the headquarters to retail outlets in the other regions. 3.3. The people and management issues which may arise during the implementation of business improvements and quality managements in Atokowa organization There are issues relating to people and management which may arise during the implementation of quality managements. These include: Team building as working in teams has been recognized as more productive. Motivation as it increases morale of relevant employees at all levels in an organization. The appraisals and supervision as it supports organizational and personal learning among employees. Job designs which should fits the process in organization and meets professional qualification in an organization and financial issues which must meet the demands of the entire process. 3.3.1. How these issues should be managed In order to streamline these issues, the management should set up a workable and productive implementation teams. They should further train employees to understand the significant of working as a group. In addition, employee’s motivation should be emphasized on in the quality management system implementation (Zwetsloot, 2003). By offering rewards, promotions and bonuses, a motivated employee would be building in the organization. Appraisals are a promotion of quality human resource management. Atokowa organization should organize appraisals on annual basis as part of continuous quality improvements. Again, designing jobs within the organization should be in line with structures presents and professionalisms. Lastly, the management should set aside adequate funding which would support the entire implementations process otherwise short of funding may reverse the process. 4.0. Conclusion In summary, the study has analyzed the Atakowa’s case through application of systems and operations models. The models applied include input-output model; business mapping models; three levels of decision making hierarchy. These approaches have clearly provided the insight of state of operations and systems presents in the organization. Alternatively, systems have been analyzed through CATWOE analysis. Based on the situations present in the company, there is need to implements quality and business recommendations as shown in the study. Among them include initiating Total Quality Management System because of its comprehensiveness in terms of wider operational coverage. There are issues which were identified to may come up in the process of setting up new quality standards in the company and therefore Jonathan should work hand in hand with the management teams to ensure a smooth ride in setting up a new system. These recommendations should not be ignored because they will positively drive the turnover and profitability of both the retail division and custom printing segments of the company. 5.0. References Ram, N, R 2005, ‘A Modern Approach to Operations Management’, New age International Publishers, New Delhi. Seuring, S 2004, ‘Integrated chain management and supply chain management comparative analysis and illustrative cases’, Journal of Cleaner Production, 12, p.1059–1071. Oakland, J 2000, ‘Chapter 13 Implementation of TQM and the management of change, in TQM Text with cases’, Butterworth Heinemann, London. Ammenberg, J, & Hjelm, O 2002, ‘The connection between environmental management systems and continual performance improvement. Corporate Environmental Strategy’, vol. 9, No. 2, p.183–192. Zwetsloot, GIJM 2003, ‘From management systems to corporate responsibility’, Journal of Business Ethics, 44, p. 201–207. Read More