Challenges to Business Success an Operations Management Focus - Bidvest - Case Study Example

Challenges to Business success an Operations Management Focus Name: Course: Instructor: Date: Introduction Operation is the section of an organisation that is mandated with the transformation of a range of inputs such as raw materials into outputs with the required quality standards (Kumar & Kuresh, 2009, p.6). The process of combination and transformation of resources used in an organisation’s operation system into value added services is called management. The interrelated management activities which are involved in manufacturing and production of service are called operations management (Kumar & Kuresh, 2009, p.21). In a nutshell, operation management is the process that deals with the production of goods and service delivery to the customer Bidvest food service Company in Australia Bidvest is one of the top leading Australia’s distributor of wholesale food products. It majorly deals in food service, fresh produce foods and meat. The company employs to about 2500 employees nationally. Currently the company has over 30 branches in Australia and serve over 40,000 customers. (Sun, 2005, p.3) argues that the sensory characteristics of food are the most important attributes of a food product, hence determines an individual’s preferences for different products. As noted by (Nolan, 1996, p.88), Amongst the many operational challenges that Bidvest is likely to face includes: technologies change continued globalization of markets, changing customer expectations, changing job designs, quality management and global manufacturing are the most common current challenges that are likely to impact its operations in future. Technologies change The main aim of every food manufacturing company is to produce quality products through employing processing technologies that will retain the required sensory qualities as well as creating or reduce undesirable changes. Bidvest food service Company is no exception. Some of the methods of food preservation that includes physical and chemical methods such as heating and use of preservatives respectively are still employed in food preservation by the company. For instance, the use of food preservatives may preserve the food but alter the natural taste of food. In that case, the advances in technology and efficiency to improve these methods are growing rapidly so as to attain the consumer demand requirements. For Bidvest food service Company, new technologies should be aimed at meeting the needs of consumers such as improved quality, the shelf life of food, the hygiene and the improvement in quality. Also the changes in technology are not lasting and have been a challenging issue in the company and in the future. Edosomwan, (1995, p.32) suggests that it requires that the change from one product type to another will be done at a much faster rate. Continued market globalization Globalization is the act of interchanging of views, ideas and culture among nations. Market globalization is the act of expanding and giving access to a business globally so as to ensure the customers’ needs are met worldwide (Salaheldin, 2002, p.5).First Wave of Globalization happened in 1870-1914 which was triggered by reduction in transport costs and tariff barriers. The second wave of globalization occurred between 1945-1980, whereby partial reduction in trade barriers were reinforced by reduction in transport costs. The lifting of the ban made rich countries to greatly benefit by expanding their manufactures exchange. (Collier & Dollar, 2002 p.127),states that during this time most developing countries never participated in global manufacturing and service trade. In the new wave of globalization that began in around 1980, international, migration and the movement of capital have become substantial enough. Currently with the developments in technology and IT such as internet, the global market has got fewer problems with the issue of boundaries as customers and companies are able to communicate at a common place. This has enabled both parties to conduct business at lower costs hence reducing the cost of products. One important question that production and operations management should ask is how the firms are going to keep pace of the growing globalization (Salaheldin, 2002, p.11). It is, therefore, one important issue that Bidvest Company has to address in future to ensure the company stays on course. Food manufacturing In the manufacturing sector such as processed food processing firms like Bidvest benefits mostly from increased exports of processed foods. The global market presents with it the increased competitive pressure that arises from the production of processed import processed food products. Some of the imported product are direct substitutes for the domestic products and hence competes with the domestic product that will present a greater challenge to Bidvest. Food service The food service in international product trade is affected as foreign direct operations tend to induce foreign direct operations in food manufacturing. It is therefore important for Bidvest to develop strong ties with new foreign markets in future. Research and Development As globalization market continues foreign market brings in different food products including those not offered by Bidvest. This will force Bidvest company to expand their efforts in new product research and development in their food process, thus will even lead to increase in further variety of products. Changing customer expectations Customer expectations are credence about delivery of a certain service having a standard reference points over which performance based on such services are judged (Wild, 2003, p.72). In food processing industry for instance consumers may go for a certain food product due the existence of certain food ingredients (Shim & Siegel, 1999, p.56). In a case where one does not get the required ingredient the customer will automatically not purchase the product. It is therefore a challenging task for Bidvest to ensure the customer expectation is well predicted so as to achieve the desired target. One challenging factor in customer expectation is that it can lead to loses as the operation man agent may concentrate so much on an issue that does not reflects customer expectation (Shim & Siegel, 1999, p.61). Some food products have limited shelf life, it is critical for the operations management to consider much on the customer expectations. Changing job Designs Job design is the development of the best way in which each and every individual task is carried out within the working system (Shim & Shiegel, 1999, p.180. One of the factors that have influenced the changing job designs is still the advancement in technology. This is where most duties consist of use of machines such as computers and have change the workers’ way of doing their duties. This is also one area that Bidvest operations manager to concentrate on so as enable the work system to revolve around people, the machines and how the two relate. Some of the approaches of job design include job rotation where worker changes roles with another worker on a rotational basis. With these changing job roles it is very challenging as it is not so productive. This has not been found to improve the job design and can make some workers to get to rotate within those duties that only interest them. Greasley (2008, p.58) argues that, ``at worst it can mean rotation between a number of boring jobs with no acquisition of new skills’’. It is therefore one of the challenges that Bidvest is likely to face and lead low annual turnover returns. Quality management Quality is the degree to which a product or service meet or exceed customers’ needs or requirements (Wild, 2003, p.644). In the quality management sector, a number of issues have been an impediment in the quality management section. Technology advancement is one such area. The food production sector has become more automated and complex .It is therefore important to note that with the new technology in place it will require Bidvest to invest on more advanced skills, proper implementation and maintenance. This implies that quality management will require the company to seek knowledge from different disciplines combined together. Another issue with the quality management in future is the motivation of workers to increase quality in the work industry. In this era of technology the motivational methods used will require to address the changing values needed. Quality issue to be addressed include: Professional standards With the rise in technology, some of the customer requirements will require a more professional approach. For instance, it will force Bidvest to introduce some concepts either in the menu standard or general advertisements of their products that reach or pass better information to customers. One-stop customer oriented service The services provided by the Bidvest are still limited and hence most customers are developing a trend of one stop service system. This will be a challenge for the company to ensure they provide a variety of products under one roof so as to keep maintain the customers. Service expansion For quality service to prevail the company will be faced with challenges of ensuring the expansion of their services like provision free samples and incentives in ensuring they give good service to their customers. This might involve providing a customer with incentives on complementary products of foods during the service. Global manufacturing The set of principles that govern the way things are planned and done at a manufacturing facility in order to get quality products, full customer satisfaction, flexibility in production and just- in-time manufacturing and a management style that promotes these characteristics is called Global manufacturing (Maskell, 1991 p.13) The increase in global manufacturing has enabled customers and consumers to continuously seek for better and efficient ways to satisfy one another. The food processing industry has had a great number of products being exchanged from one corner of the world to another at an alarming rate. World class approach to manufacturing requires the management to be more focusing on funder- mental issues thereafter develop performance measurement methods that can effectively address these issues as they apply to certain facility, but always doing it to the clearest and most straightforward way to avoid getting lost somewhere along this tremendous journey that has just begun (Maskell,1999 p.26). Global manufacturing in the food processing has caused many companies problems. Some of the challenges include: Increased competition As mentioned, the manufacturing of some food products offered by Bidvest by other international companies will present a greater competitive and challenging market for the company. For instance the production of fresh foods like processed juices that either is for export purposes leads to decreased income as competition persist. Product varieties Globalization tends to force most companies to conduct more research on the customers’ preferences. This is because as many companies come in, the production of a variety of products continues hence it becomes a challenge for the Bidvest to also involve in production of a variety of products. Management Areas that most impact success in food industry Operations management are usually tasked with decision making for the transformation of system and operations function (Maskell, 1999 p.39). It is therefore important that a framework that categorises decisions in operations be established in accordance to purpose and function. In food processing industry a proposed framework of three critical areas include: goods and services design, quality management and management of inventories (Sun, 2005, p.43). Goods and service design Approach to designs for products and services differ in different operations within the same industry (Kimbell, 2001 p.2). Usually the products and services becomes the first thing in customer’s perspective of a particular company (Bose, 2006 p.13). This is why most emphasis must be put on them so as to meet the customers’ needs or expectations. In design much effort needs to be made in narrowing the gap that exists between marketing and operations perspective on service design. Design can be addressed in several ways. That is; understanding the design a method of solving issues within the management that aims in realization of what has been conceived. In addition, design can be regarded as an inquiry to explain an issue concerning what has been designed that involves the users and the difference between goods and service as an important figure (Kimbell, 2001 p.34). .For instance, the design of the Bidvest facility will have an impact on the food service efficiency. The design for the facility is properly designed to ensure enough space and not too large that that hinders movement between stations.( Grossbauer, 2002 p.93) In the menu design the meals should be prepared to ensure that an extensive variety of foods to be offered, there should also be need to have space for additional storage of foods. The fact that the menu indicates the type of food products to be prepared it is important to ensure such products are always available. In the quantity of foods to prepare the facility must have more space and also equipments as compared to its competitors. Design of receiving and storage areas Bidvest must pay attention to areas that are being used for receiving and storing of food products. It is important for the receiving areas to be as close to storage areas. In the storage areas they should be sufficient space for that can house the quantity of dry, refrigerated and frozen products. Storage rooms should have walls that extend from the floor to the ceilings and ceilings that cannot be entered form the ceiling room so as to limit access for unauthorised persons. Design for food preparation and service areas The design in the production areas should ensure cooks have enough space for products already made but still held. For services that involve use of tray, enough space should be created for the service. It is also important to consider entry and exit points for customers that ensure movement for customers around. In cases where food is supposed to be prepared on the basis of order, equipment that ensure foods are kept hot and at point of service will be needed . Managing Inventories Inventories are resources of any kind with an economic value and consist of raw materials, work that is in progress finished goods, consumable and stores (Bose, 2006 p.4). There are tangible reasons for holding inventories in an organization, some of which include: to ensure the demand variation does not occur as well as in production, to enable availability of goods in sufficiency so as to meet the abnormal demand that has not been anticipated to ensure that shortages the firm does not occur at all cost (Abdulraheem, Khadijat & Sulu, 2011, p.31). Control of inventories entails coming up with procedures that maintain an optimal level of the resources. Inventory management is the concerned of all firms. With the good inventory management, this will ensure the smooth running of the production processes without delays, maintenance of the customers’ requirements and needs in proper time and maintained the overall production method thus results in inventory level increase (Abdulraheem, Khadijat & Sulu, 2011, p.48). In inventory, demand can be classified as independent or dependant and dynamic or static. Independent is demand that which is not related to the demand for similar or related product while dependant demand is the demand that is dependent on the demand for another similar or related product. Dynamic demand is the demand that varies over time and static demand is the demand that remain stable over time. Bidvest may have realised that in food processing certain kinds of food are dependant and hence the analysis of whether a certain food product requires which type of demand is very important. This is very important in a case where a firm has gone global in production; it will help to determine what type of demand to apply in supplies chain management. For instance, certain foods in Bidvest will be in demand in relation to some such as the demand for fresh fruits getting on demand as a supplementary to meet some products (Wild, 2003, p.76).. Inventories are found to offer meaningful ways of reducing costs and increasing profits. It consists of different types of costs such as cost of ordering, cost of handling or carrying inventory, under stocking cost and overstocking cost. Usually ordering costs opposes the cost of carrying while the under stocking cost goes against overstocking cost. The duty of ordering and carrying cost is to help in maximizing the quantity of inventory and orders while both the under stocking and overstocking cost helps in determination of the level of service that has been stabilised (Abdulraheem, Khadijat & Sulu, 2011, p.55). Inventories have a direct influence with lead time. Always during lead times, suppliers do not deliver materials and the departments shall be served by inventories which are held. There might be increases in both lead time and consumption rate without prior noticing and therefore inventories should be able to cater for these deficiencies (Abdulraheem, Khadijat & Sulu, 2011, p.71). For example, in a case where Bidvest expects a customer for a particular product that requires coming up with a special menu for such occasion and requires a special item for the menu. The fact that this item will be used on as single basis, it is important to count the number of expected customers and make the order according to the requirements of the recipes. The ongoing inventory needs can be maintained by use of either minimum or maximum methods that works well for non perishable goods such as, canned foods, spices and dry goods. The minimum method ensures the minimum quantity that must be available and inventory levels should not fall below this point while maximum quantity is the quantity that should be kept in stock and the levels of inventory to not go beyond or lower than this level, the setting of minimum and maximum inventory has a great impact ( Early, 1995,p.215) In cases where Bidvest sets an inventory that is too low, it may risks running out of products stocks and excess also incurs disadvantages that lead to losses increase such as products reaching expiry date. Quality management The degree to which a product or service meets or exceeds customers’ needs or requirement is called quality (Wild, 2003, p.89). Quality has been viewed by many in terms of characteristics and features of goods and services with some predestined thoughts in their minds. In the case of Bidvest Company, quality the quality of food systems has been more complex in terms of management. It is of importance to ensure the improvement on customer relationship though monitoring the behaviour of the customer and the processes that occur within the firm. It is through continuous monitoring of customers satisfactory level and the success of a product. Many research conducted have shown much correlation between customer relations and quality management. Prabhu et al (2000, p.6), showed that the improvement in competition is significantly related to total quality management. This shows that quality management is one factor that impacts mostly in the success of Bidvest. In most cases customers’ satisfaction helps in evaluation of many facts about the company progress. For instance, customer satisfaction will always tell us whether the firm’s production is done correctly and also if it is done in the right way. In cases when completion between two or more firms is harsh, the customers’ behaviour is of much importance because the contribution of the customer will be of much benefit in terms of purchase decisions. In the management system, the most critical areas of quality control are: procurement, marketing, and design during process, packaging and storage and product service. Many a time’s marketing has been implemented in management but with much focus on quantity rather than quality. However, in implementation of total quality strategies there has been much shift from quantity to quality in the production that is represented by total quality management. Quality has been evaluated in a model known as the GAP model which recognises that different way can be applied in the mismanagement of delivery of high profile quality. The `gaps’ are categorised into five stages. Gap 1 expresses the difference between the customers and the management where the managers may think they are aware of the customers’ needs but their perception on a certain commodity is wrong (Greasley, 2008, p.65). Gap 2 is the difference that exists between the management and what kind of features constitutes a target level of quality and what lies ahead in achieving the goals. Gap 3 is the difference between the quality conditions as documented in operation and training manuals and the implementation of these. Gap 4 is the discrepancy that lies between the manufacturing and service delivery where customers are promised a certain kind of quality that has not been attained. Gap 5 is the difference between customer expectation and perception and it is where the customer judges quality and goes for the product (Greasley, 2008, p.66). This Gap model theory suggests that with the minimization of gaps 1-4, it is possible that higher customer satisfaction can be achieved. The quality of food products for Bidvest control factors will involve: Customer requirements The customer requirements for different food products must be understood properly so as to ensure that the customers get the quality of variety of food products that is offered by the company. Product specifications The company should ensure good product specification to ensure confirming its ability to make the products. This is because of increased knowledge concerning food safety, allergies and nutritional contents that has led to complex specifications for food products. Management of Bidvest should ensure the product specification is in agreement with the customer requirements. Planning The resources allocated for production purposes such as food preparation should be marched to the demand for the expected customers to ensure adequate service for every customer. In cases of food manufacture like batch processes or flow processing, effective planning is important to in maximizing the utilization of plant. This will involve a higher demand for cleaning of the most infrequent used plants as compared to the one used continuously. Conclusion and Recommendations Having recognized the possible challenges that might impact on Bidvest Company and possible solutions to such problems for a future success, it is therefore important for every operation manager to take not into such so as to ensure proper management in operation for better results in future. I also would wish to recommend the use of quality control, proper management inventories and good product and service design so as to ensure firms like Bidvest in the proper operational management services. In addition to that technology has been realised to encompass all sectors of operation management, it is therefore important that each and every firm like Bidvest to be well equipped in technology so as to ensure the issues to do with global marketing, customers preference change and the advance in technology well tackled by the management. This will ensure the reduction in misuse of firm’s resources in other ways of marketing and lead to accrued benefits in the overall production. References ABDULRAHEEM, A., Khadijat, Y. & Sulu, B. (2011). Inventory management in small business in small business. British Journal of Economics, Finance and Management Sciences vol. 2 (1). BOARD, P. (1988). Quality control in fruit and vegetable processing. Rome, FAO. BORJA DE MOZOTA, B. (2003). Design management: using design to build brand value and corporate innovation. New York, Allworth Press. BOSE, D. C. (2006). Inventory management. New Delhi, Prentice Hall of India. 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