Operation Management at Acorn Furniture Distributor Company - Essay Example

? Running Head: OPERATION MANAGEMENT Operation Management of the of the Operation Management Introduction Operationsmanagement is a field of knowledge that deals with the management of operations. This paper reviews literature concerning Operations Management (OM), from its definition, evolution, covered areas, methodologies and main outlets. Afterwards, the paper presents the application of operation management theories at Acorn furniture Distributor Company located at Burnt Oak Broadway, Edgware. The Development and Consolidation of Operation Management as an Area Operations management is a branch of learning that deals with the management decisions where limited numbers of resources are combined mutually in such a way as to be changed into sets of desired products and services that help meet the aims and objectives of an organisation. (Chase, 2001, 5) Buffa discussed that 'OM had progressed from an entirely explanatory foundation through the Management Science/Operations Research (MS/OR) phase, and is currently in the course of finding itself as a practical field of organisation. Amoako-Gyampah, K., Meredith, J., 2004, 251), Many authors, since the beginning, advocated that OM should be an area of knowledge with a 'sense of purpose’, in terms of providing insight into problems of the real word, the ones engineers and managers face in their work. As Chase (2001) observed, when analysing the four journals that historically, at that time, had published most extensively with OM subjects - namely, AIIE Transactions, Decision Sciences, Management Sciences and the International Journal of Production Research - that the orientation (people or equipment) and emphases (from micro to macro) were heavily focused on equipment and micro analyses as, for instance, inventory control and scheduling. This picture was changed, as we will see in this literature review. 2.2 Areas of Operation Management As presented by Buffa, the first call for papers sketched out a list of topics that defined the Operation Management subjects. Since then, relevant studies as Miller and Graham, Voss, Amoako-Gyampah and Meredith, Pannirselvam et al. and Gupta, Verma and Victorino, among others, using different approaches, were carried out looking to identify the content, new topics and trends in the field, and also to establish new research agendas. Nowadays, the scope of the journals focused on OM is considerably broader. (Miller, J., and Graham, M., 2004, 548) Operation Management borrows theories from other areas and that 'this field has changed from its narrow occupation with strategic, disjointed topics toward more premeditated, incorporated and large-scale subjects. For instance, as an alternative of studies in the tactical, stand alone areas of 'Inventory' and 'Process Design’; researchers are now looking at the complete 'Supply Chain' and organisation-wide 'Flexibility', correspondingly (Anderson, 2008, 58). Decision Areas within Operation Management includes Design of products and services Quality Management Development and capacity plan Location strategy Layout strategy Human resources & employment design Supply chain management Inventory, material requirements, progression and JIT (Just-in-time) Intermediate and short-range scheduling Maintenance Description of Layout Strategy of Operation Management The arrangement of equipments, departments and work centers with special concentration on movement of work (consumers or materials) all over the system is called Layout of organization. Selecting an appropriate layout of an organisation requires significant investments of funds and hard work, which involves serious commitment. Appropriate layout of an organisation leaves considerable effect on cost and competence of various operations within the organisation. There are several types of layout, which are as follows. Fixed Position layout In Fixed Position layout manufactured goods and whole project remains motionless. However, employees, materials, and machinery move from their position according to the requirement. A good example of Fixed Position layout is a hotel, where facilities are provided at one location for entire period of production. Fixed Position Layout requires comprehensive maintenance work. Process layout Process Layout maintains different processing necessities. For example, Hospital, Employment agencies or Supermarkets. Process Layouts have capacity of maintaining a huge range of processing requirements. Their setup remains unaffected in case of minor equipment failures. Their equipment is usually less expensive. However, in-process supply costs can be little elevated. These set ups require individual attention for each customer or manufactured good. Cellular Production Cellular Production is a type of Layout that involves grouping of machines into a cell that can process goods with same processing necessities. Examples for Cellular Production are equipments or machinery used or grouped together, various departments in super markets or shops or menu of restaurants. Cellular Production is utilised for repetitive or constant processing. Product layout Product Layout utilises standardised processing operations to accomplish continuous, fast and high-volume flow. Product layouts usually involve high rate of production and reduced unit cost. It involves particular expertise of employees. Product layout involves high utilisation of empoloyees and machinery. It involves accounting and purchasing calculations. Disadvantages of Product layout include tedious and repetitive jobs. There is a possibility of lack of quality or maintainance of equipments due to less-skilled workers. These businesses are usually nonflexible to changes in amount of production. They are greatly vulnerable to shutdowns and require enormous amount of preventive maintenance. Proper layouts are helpful in maintaining flow of goods, information or employees within the business. However, it needs a lot of money to change layout within organisation and wrong decision of layouts may cause blockage or loss etc In order to adjust to an ever-changing marketplace it is must to meet the short and long-term objectives for the company, the most challenging and controllable needs over the next years would involve changing a number of factors including: the culture of the organisations; fostering teamwork and participation among employees; integrating technology into the organisation; providing quality service to customers; continuing the profitability of the company; and growing the relationship. 2.4 Application of Operation Management at Acorn Furniture Distributor Company Acorn Ltd is a small size furniture distributor company located at Burnt Oak Broadway, Edgware. Mr. Simon Joseph firstly founded the company in 1986. Famous Eliza James Inc. is the main furniture manufacturer that Acorn represents. Currently, Mr. Christopher John who bought this company in 2000 from Mr. Joseph owns the company. Mr. John currently has 105 employees working for the company. Operation Management and Layout of Acorn Ltd Acorn Ltd utilises Cellular Production Layout, as it involves import of furniture into a location, which is then delivered to various furniture outlets with same processing necessities. It possesses equipments and machinery used to maintain outlook of furniture. Acorn Ltd. utilises same strategies of Cellular Production for repetitive and constant supply of furniture. However, there are some disadvantages of choosing a cellular production layout for the company that are as follows. It is not an easy task to maintain the flow of distribution through a single cell. It is more time and money consuming to train workers for assessing the quality of product of various furniture manufacturing companies. The cell needs to be big enough to accommodate all sorts of furniture under one roof. Different types of furniture may require different types of maintenance, which will be difficult to uphold. Some items may have need of different machines or expertise from the workers, which will be difficult to achieve. It is also expensive to provide all the desired facilities in one cell and maintain quality at the same time. . Desirable equipment can be too big to fit in one cells or it may loose its finishing when kept in one cell for long duration. Extra machinery of the same sort may have to be bought for various cells. Depending upon the nature of the enterprise, different types of managerial competencies are necessary for the CEO of the enterprise to operate effectively. Since the CEO of a small business enterprise typically is the owner of that enterprise, it is necessary for the parties to put an appropriate monetary evaluation on the enterprise. The CEO of the company is instrumental in providing leadership. Trust and respect abounded within the company. Mr. John strongly believes diverse points of view should be expressed and welcomed by every individual. Individuals must share responsibility and work together in setting goals and accomplishing those goals. Change should be perceived as inevitable and individuals are better prepared for it and make appropriate adaptations. The above all became possible through the leadership efforts of the CEO. Due to the agreement between two owners of the company and the changing business environment, a number of significant changes took place in operation management in the company over the ten-year period. Some of those changes involved the following: cultural change, fostering a collaborative environment and a team oriented-structure, and a technology and service integration. Prior to 2004, service was frequently referred to as fixing the occasional broken part and certainly not something that was a positive opportunity. The certification programme was a programme revolved around the continued performance levels of leadership, information systems, business planning, human resources, process management, business results and customer service. Corporate culture consists of the pattern of basic assumptions, values, attitudes, beliefs and expectations shared by members of an organisation that guide their behaviour (Greenberg & Baron, 2003, 514). In the early stages of the changes, employees often had trouble working together effectively because they felt safe with the way things were done in the past and resisted the need for change. The improvement of operation management process was allowed to evolve over the ten years. Most aspects of the work continue to change along with the changing expectations of a growing, diverse workforce. In the past there was a linear flow of work and a high differentiation of tasks. The customer service category examined the company's knowledge of the customer, overall customer service systems, responsiveness, and the ability to determine and meet requirements and expectations. The organisation was monitored and rated on a monthly basis by a customer satisfaction survey. This tool was used consistently with all dealer customers, tracked by market segments and the products and services provided to those market segments. Customer satisfaction results were communicated to all employees and compared to industry leaders and competitors. Organisations in the process of making important choices may occasionally look disorderly, but the apparent disorder can provide the latitude and the time required for the development of consensus. Consensus is a lofty goal and many times unattainable by an organisation. Acorn. Ltd, attempted to develop a collaborative setting prior to 2000 with limited success. The cross-functional teams were reluctantly implemented at Acorn at the insistence of Mr. Simon Joseph. A typical team consisted of a salesperson, which was considered as the team leader, a designer, and an installer. These three individuals, working cooperatively with one another, had total responsibility starting with the sale of a product to its design and installation. The technological and service needs of each customer were also extensively considered. As a consequence of the implementation of the team-oriented structure, the nature of the work significantly changed for all workers, and dramatically changed for sales professionals. They work in teams with responsibility for results of their own and provide direction to create enabling environments for efficient joint effort. The direction of the company after 2000 consisted of making improvements in technology and service as well as expanding the furniture products distributed by the company. All businesses use informational technology; few integrate it well. Technologies had the potential to improve operation management in terms of speed, quality, and efficiency. The tools alone, however, no matter how sophisticated, would not assure high production. People also needed to be empowered through information access, constant skill improvement, and authority that match responsibilities. Realising the potential of technology required shifting to the spread of information and restoration of power structures. Management had to integrate technology effectively to maximise technological influence on the organisation. The decision to allow Eliza James. Inc. to initiate the development of the software was one of the best decisions Acorn made over the ten year period. This decision kept the company focused on the task at hand and allowed them to effectively integrate technology into the culture of the company. This ultimately resulted in higher levels of customer satisfaction. The customer service was largely improved due to regular monitoring and rating with the help of a customer satisfaction survey. This tool really helped in improving Operation Management processes. Results of an improved Customer satisfaction were also declared to employees and compared to industry leaders and competitors so that future directions can be determined for a further improved Operations Management at all levels. This paper reviewed relevant literature concerning Operations Management. We presented its definition, areas, research methodologies and important outlets. Organisations in the process of making important choices may occasionally look disorderly, but the apparent disorder can provide the latitude and the time required for the development of consensus. Consensus is a lofty goal and many times unattainable by an organisation. The particular process of Operation Management utilised by the company assisted the company in providing a new direction towards success. References Amoako-Gyampah, K., Meredith, J., (2004), "The Operations Management Research Agenda: An Update,", Journal of Operations Management, 250-262. Chase, R., (2001), "A Classification and Evoluation of Research in Operations Management," Journal of Operations Management, 9-14. Miller, J., and Graham, M., (2004), "Production/Operations Management: Agenda for the '80s," Decision Sciences, 12 (4), 547-571. Anderson, C. (2008). Talent management: Succession, planning gains momentum. Pg 58-63. Read More