The Operational Process of Al-Hassan Group of Companies of Oman - Essay Example

OPERATION MANAGEMENT: AL-HASSAN GROUP OF COMPANIES Table of Contents Introduction 2 Operational Process of Al-Hassan Group 2 Critical Gaps in the production system 3 Literature Review 4 Approaches to operational management 4 Managing Knowledge integrated Supply Chain 5 Lean Model for enhanced efficiency 7 Total Quality Management 8 Recommendations 9 Reference List: 10 Introduction Operational management process in the words of Goetsch and Davis (2010), is the base for the organizational planning and development. The statement reflects the importance of operation management, however considering the present situation of the business sector the complicacies in the concerned functions cannot be ignored. Murthy (2007) stated that most of the time there is a misconception that the operational process of a firm is only related to the supply chain functions which reduces the efficiency of the business decision making process. On the contrary, technological expansion has influenced the operational processes of the business houses in a major way. Firms engaged in production of diverse products in large quantities are trying to cut down the labor cost by implementation of automated systems. This report is focused on evaluating the operational process of Al-Hassan Group of Companies of Oman. Al-Hassan has a wide and varied product and service change however their core manufacturing process is centered on production of heavyweight and household electrical solutions (Al-Hassan Group, 2014). Operational Process of Al-Hassan Group Al-Hassan Group of Companies is one of the largest corporate in Oman (Al-Hassan Group, 2014). They operate mainly in the energy sector and are engaged in catering services as well as products to their customer base. The market of Al-Hassan is not only confined to the domestic consumers but they also export products to other Gulf nations (Al-Hassan Group, 2014). They are also trying to enhance their operations in the European and Asian markets for further increasing the profit generation process and organizational development. The operational process of the business is thus developed in a complex manner which encompasses service as well as product management (Al-Hassan Group, 2014). The services are majorly dependent on the demand of the local market place of Oman whereas the product manufacturing process considers the demand at a multinational level. The manufacturing segment of the company can be segmented mainly to three groups which are Al-Hassan Switchgear Manufacturing Co. LLC (AHSG), Al-Hassan Power Industries LLC (AHPR) and Al Hassan Lighting and Fan Industries LLC (Al-Hassan Group, 2014). The activities of all three production units are maintained with the help of strict monitoring and performance development processes. Al-Hassan’s operational functions are not responsive or fixed, rather they are adaptive in nature which allows the company to adjust with the changes in demand of the consumers and accordingly develop their supply processes (Al-Hassan Group, 2014). The regular flux in the operations no doubt reduces the market risks but this also can disrupt the production processes. Also it was noted that in comparison to the ratio of changes being implemented in the supply chain system, the implementation of change management procedures are limited in Al-Hassan (Al-Hassan Group, 2014). Critical Gaps in the production system The gaps in the production system of Al-Hassan were briefly mentioned in the previous segment. It was noticed that the supply chain and other production functions of the concerned firm is developed with the help of adaptive approach. However the problems created as a result are not efficiently attended by the business. The managerial aspects of Al-Hassan are not focusing on the change being activities in the work place as a result of the adaptation to the marketing demands. Limited change management aspects of the business will not only hamper the operational fluency but also disrupt the connection between the different production units (Germain, Claycomb and Droge, 2008). Relating to the aspect of change management, it should also be considered that the alignment of the supply chain with the overall requirements of the business should always be monitored. For instance the relationship of the production plants with the supplier base of the company has to be managed in accordance with the market demand and this also initiates increased logistics expenses for the business (Patel, 2011). Increasing operational expenses and change management factors are the major gaps in the existing supply chain management processes of Al-Hassan Group of Companies. Literature Review The literature review section of the study will focus on gaining background knowledge on the operation functions model and supply chain management concepts for analyzing the situation of Al-Hassan. Approaches to operational management Operations management process of the business firms are mainly developed considering the organizational structure, culture and the nature of the products or services being provided by the business houses. The development of the operational process also considers the financial and managerial variables of a firm in order to encompass the organizational objectives within the supply chain functions. According to the study of McCrie (2006), the business firms operating in the contemporary scenario are mainly influenced by the changes in the market place and thus design the supply chain functions in a responsive or adaptive manner. However, these approaches are costly and may not be suitable for firms who are newcomers or even big players making new ventures. Germain, Claycomb and Droge (2008) argued that cost of operations affects a business and hamper its growth in its domestic market if the opportunity created is being utilized by the competitor business houses. The adaptive operations approach is mainly designed to help the organization align with the changes taking place in the internal and external environment of a business. The adaptive approach is considered as one of the most curial aspects of operational process as it connects the entire functional section of a business while helping the business adapt to the changes. Patel (2011) mentioned that business houses are not only focused on the growth of their profits but also assess the sustainability of the market acceptance. In this regard, adaptive system may crash considering the continuous changes taking place in the work structure. The inclusion of responsive operational approach focuses on helping the firms design a new strategy or modifies their existing strategy for countering the challenges of the market. The responsive marketing process of a business focuses on the entire work force and working units similar to the process followed by the adaptive approach. However, the primary difference between the approaches is based on the process implemented for handling the supply chain requirements. Aravindan, Devadasan and Selladurai (2008) noticed that responsive approach allows a firm to manage their resources and help in serving the market demands without altering the work process in any major manner. Chang, Hyun and Park (2008) argued that responsive strategies fail to recognize the impact of the changes in market needs on the operational process of the business increases the time taken for countering a response to the market demands. This also slows down the overall supply chain and hence can create opportunities for other firms to enter the market place. Managing Knowledge integrated Supply Chain Integration of knowledge and information management systems in the supply chain process of a firm has been a mandatory activity for the business houses. The management of knowledge and information for improving the efficacy of the business firms has been considered as specific yet complex responsibility. Longenecker and Scazzero (2007) reflected the technological influence on the business processes and stated that the requirements of businesses are being solved with innovative technology. Relating to this statement it can be noted that technological systems such as ERPs and information management and accounting management processes are some of the commonly used systems in supply chain alignment. The supply chain management processes is fueled by information processing and knowledge management (Germain, Claycomb and Droge, 2008). This also brings in the aspect of database management process and flow of information among the work force of the firm. The ability to ensure that right data is being transmitted to the right person at the right time is mother objective for information and knowledge management personnel of a firm. Not only communication but proper database management also allows a firm to focus on the market demands and relate them with the core competencies of the firm. This in turn ensures that the customers receive their product in due time (Song, Song and Di Benedetto, 2011). However, some of the negative aspects of knowledge management are that it increases the slack time of the functional segments and hence may reduce the efficacy of the service delivery process. One of the most apt examples of effective information and knowledge management integration can be observed in the production of Heinz. They have developed an automated assembling system for their beans where the packaging of the product is being done (Theoharakis et al, 2007). This automated system keeps proper record of all the cans that are being filled and processes through the system. Any elimination made in the further stage of the packaging process is also updated instantly in the database of the company. This shows that the business has a proper track of their production capability and also designs their marketing process and in accordance to their production capability. Furthermore, the automated system also records all the reasons for selection of the raw materials and the necessary conditions for which the final product can be eliminated or considered as below the set benchmark of quality (Theoharakis et al, 2007). However, the entire process is being monitored by manual labors as well in order to prevent overutilization or over production of the resources. From this, it can be gathered that information and knowledge management aspects of a business help the supply chain in alignment of their units with the specific guidelines of the company (Theoharakis et al, 2007). Lean Model for enhanced efficiency Lean management style is one of the most debated aspects of the supply chain process of a firm. The business process of the firm implementing lean management has numerous benefits which can help them climb the level of control in aspect of supply chain management (Hines, Holweg and Rich. 2004). The lean management process was originally developed in Toyota Automobile Corporation of Japan for improving the functionality of their supply chain process. According to Horvath (2001), lean manufacturing and management model focused on three basic goals namely, reducing waste from the production process, enhancing human control over the production system and reducing the lead time of the manufacturing system. Womack and Jones (2010) stated that the lean management model was created in order to ensure that the organization is not spending over their head in the urge of satisfying their customers. The lean model also known as Toyota Production System is supported by many other concepts such as JIT or JIDOKA which are considered to be the pillars of the lean manufacturing process. JIT (Just-In-Time) is one of the primary factors that are being commonly used for improving the production system in the business houses (Hines, Holweg and Rich. 2004). The fundamental concept behind JIT is to collect, produce the right amount of products and services and deliver them to the customers in the shortest time possible. The implementation of JIT In the operational process of business not only enhances its ability to produce but also creates a vibrant strategy for consumer management processes (Patel, 2011). On the other hand, JIDOKA is focused on the requirements of a firm in context of reducing wastage. They try to develop a responsive production system which will allow the company to start or stop the production process at a moment’s notice. These are the key factors of the lean management model. However, the overall concept is governed by the law of wastage reduction in terms of resources, time and money. Muda, Muri and Mada are three different segregations of waste that is generated during the production process and should be nullified in order to improve the capability and efficacy of the supply chain management (Hines, Holweg and Rich. 2004). Goetsch and Davis (2010) reflected that lean model is not just a supply chain model but also helps the business in gaining a competitive advantage. The relation of lean model process with change management is that it creates a flexible approach for the businesses which accommodates for the demand and directs the supply accordingly. This also ensures that the business process of the firm does not have to endure regular changes in their operational processes. Total Quality Management Total quality management is a crucial aspect of operational management and design which is based on achieving the decisive level of quality in the products and services and does value addition to the supply chain system of a firm. Horvath (2001) mentioned that Total Quality Management processes are used when the customer demands are fluctuating and is focused on deriving value from the products and services being offered from the business. Goetsch and Davis (2010) argued TQM is utilized more in the HRM practices of a firm for developing the skills of the employees and other resources of the production system of a business rather than focusing on the outcome of the supply chain management aspects. The utilization of TQM allows the business houses to manage the changes taking place in consumer behavior or the employee production capability and relate them with the organizational functions. The primary characteristics of TQM are the involvement of the work and materialistic resources in the improvement process which creates value for the final product or service being offered to the customers. The utilization of TQM in respect of managing change is limited, however TQM ensures that the employee base of a company is prepared to take on the challenges of the market and also develop steady quality standards. Recommendations Considering the working style and the nature of the products and services being produced by Al-Hassan, implementation of lean manufacturing model may be the most appropriate choice accessible to them. The company will be able to align their functional aspects of the production system and also develop a strict discipline in their quality standards. The changes will be reduced in the work structure and hence employee performance can be monitored in a better manner. Reference List: Al-Hassan Group 2014. Corporate Communication. [Online] Available at: < http://www.al-hassan.com/corp_comm.html> [Accessed 13 February 2015]. Al-Hassan Group 2014. Manufacturing SBU. [Online] Available at: < http://www.al-hassan.com/manufacturing_home.html> [Accessed 13 February 2015]. Al-Hassan Group 2014. Vision and Mission. [Online] Available at: [Accessed 13 February 2015]. Aravindan, P., Devadasan, S.R. and Selladurai, V., 2008. A focused system model for strategic quality management. International Journal of Quality & Reliability Management, 13(8), pp. 79-96. Chang, S.J., Hyun, P.Y. and Park, E.H., 2008. Quality costs in multi-stage manufacturing systems, Computers & Industrial Engineering, 31, p.115 Germain, R., Claycomb, C. and Droge, C., 2008. Supply chain variability, organizational structure and performance: the moderating effect of demand unpredictability. Journal of operations management, 26, pp. 557-570. Goetsch, D., and Davis, S., 2010. Quality management: introduction to total quality management for production, processing and service. 5th ed. USA: Douglas Brooks. Hines, P., Holweg, M. and Rich. N., 2004. Learning to evolve: a review of contemporary lean thinking, International Journal of Operations & Production Management, 24(10), pp.994-1011. Horvath, L., 2001. Collaboration: the key to value creation in supply chain management. Supply chain management: an international journal, 6(5), pp. 205-207. Longenecker, C.O. and Scazzero, J.A., 2007. Total quality management from theory to practice: A case study, International Journal of Quality & Reliability Management, 10(5), pp. 24-31. McCrie, R. D., 2006. Security Operations management. 3rd ed. London: Harvester Wheatsheaf. Murthy, P. R., 2007. Production and Operations Management, 4th ed. New Delhi: New Age International Publishers Patel, P.C., 2011. Role of manufacturing flexibility in managing duality of formalization and environmental uncertainty in emerging firms, Journal of Operations Management, 29 (1–2), pp. 143–162 Song, L.Z., Song, M. and Di Benedetto, C.A., 2011. Resources, supplier investment, product launch advantages, and first product performance. Journal of Operations Management, 29 (1–2),pp. 86–104. Theoharakis, V., Voss, C., Hadjinicola, G.C., and Soteriou, A.C., 2007. Insights into factors affecting Production and Operations Management (POM) journal evaluation, Journal of Operations Management, 25, pp. 932-955. Womack, J. P., and Jones, D.T., 2010. Lean thinking: banish waste and create wealth in your corporation. London: Simon and Schuste. Read More