Coca-Colas Operations Management - Essay Example

?Word count: 2,506 Coca-coal HBC Case Table of Contents Page Executive Summary 3 Introduction 4 Question 4 Question 2 6 Question 3 9 Question 4 10 Question 5 11 Conclusion and Recommendation 12 References 13 Executive Summary This report completed the following tasks: Finding how Coca-cola HBC (CCHBC) and its operations management practices enable it to achieve its strategic aims; initiating critical evaluation of CCHBC’s approach to capacity management involving production planning and control; knowing the nature of relationship between CCHBC and its suppliers and some reasons why it was able to manage relationships with them the way it does; discussing how could an MIS help CCHBC to monitor the achievement of its strategic goal such as “availability”; and finding specific examples in order to explain how data mining and related search tools can enable CCHBC to analyse performance and showing the importance of knowledge rather than information. The proponent found that CCHBC’s entire strategic efforts boil down to one specific purpose, to increase the value it gives to its customers. In line with this, the said firm essentially came up with meaningful strategic options. Introduction In today’s highly advanced economy, every firm or organisation is faced with the need to achieve their competitive advantage through giving focus on providing value for customers and ensuring teamwork and efficient working organisational structure and system. This paper tries to establish some important strategic issues associated with Coca-cola HBC (CCHBC), one of the largest bottlers of non-alcoholic beverages in Europe. In this paper, the proponent discusses relevant issues concerning how CCHBC provides value for its customers, its capacity management, issues concerning its suppliers, and the role of management information system and data mining in improving its effort to increase the value it provides for its customers. Question 1: How do its operations management practices enable CCHBC to achieve its stated strategic aims? CCHBC has four strategic goals to achieve and these include availability, affordability, acceptability and activation. All of these have one thing in common and that is to provide high value for customers. By having substantial understanding on giving high importance for customer value, CCHBC was able to formulate essential moves in order to achieve its strategic aims through its operations management practices. In great detail, the success of CCHBC in achieving its strategic aims includes its operation strategy, operation model, operation process and supply network. One important reason why operations management practices of CCHBC enabled it to achieve its strategic aims is simply made possible by activating control within its target market, an integral part of its supply network operation. This is made evident by ensuring that its supply chain management (SCM) could function efficiently. When it comes to what is efficient, CCHBC was able to invest in technology, infrastructure and organisational practices especially in its demand-driven SCM. The main point of CCHBC is to reach its target market at a highly affordable cost so it is important that its service delivery together with its associated customer value is controlled through its efficient SCM. Product availability, operational performance and reliability, the nature of demand are some of the most important factors to be considered in understanding the nature and implementation of efficient SCM (Mentzer, 2001; Li, 2007). For instance, CCHBC wants to optimise positively some certain costs associated with inability of certain products so it is important that primary attention should be focused on product availability and monitoring. In fact, this is one of its reasons why there is a need to diversify its product offerings up to certain range anywhere and at any time ensuring availability whenever customers would need them. Its operation management practices enabled the company to put everything in order to meet the organisation’s expectations of quality and efficiency, an integral part of its operation process and model. This task is particularly focused on sales and operations. CCHBC was able to come up with capacity management under this concern in order to meet both the issue of quality and efficiency in providing high value for customers. Capacity planning applied by CCHBC is called a resource requirements planning because it intends to focus on sales and operations planning especially in times of uncertainty and managerial decisions (Higgins et al., 1996; Argoneto et al., 2007). This is to anticipate necessary investments that would be required if ever there is an increasing sales in the future. Finally, aside from ensuring effective control on its supply chain management, CCHBC has specific strategic moves in working with its suppliers, an integral part of its operation strategy. This strategy aims to develop strong working relationship between them that could make their both businesses sustainable in the long run. This would add additional value to the supply chain (Jones and Tilley, 2003). This further would lead to long-term benefits between them (Lai and Cheng, 2009). Based on the above discussion, it is evident that CCHBC’s operation strategy, operation model, operation process and supply network are interrelated leading to the success of the firm. In great detail, CCHBC created a working operation model which particularly includes how it primarily puts high value for its customers. This model ensures that the firm’s entire business function is associated with a highly improved customer service through its strategic supply chain management model. Based on this business model, an implementation process is necessary which particularly includes the actual execution of its strategic moves in its supply chain management system. At this point, it is evident that the operation process and business strategy are to work together in the case of CCHBC. This is due to the fact that the absence of the other would mean a lot to the whole business operation. CCHBC’s business process is quiet complicated, but what it has substantially performed is a highly organized system which paves way for an effective operation strategy, operation model, operation process and supply network which work altogether in order to supply high value for customers in meeting their expectations. Question 2: Critically assess CCHBC’s approach to capacity management (including production planning and control). What are the most significant challenges faced by the company in following this approach. Stated in this section is the critical evaluation of CCHBC’s approach to capacity management involving production planning and control. CCHBC is composed of different managers who are to take charge of its whole operation. To take charge of production capacity concerns are the Supply Chain Management (SCM) managers, concerns on profitability are given to Chief Financial Officer (CFO), and sales target matters are delegated to commercial managers. Each of these individual groups of managers has specific targets. For instance, the CFO is concerned about the issues of profitability and his internal individual targets are the bases of his performance evaluation. Aside from this, CFO has also to contribute something in order to satisfy the CCHBC’s stakeholders. The same expectations apply to both commercial manager and SCM manager. The only difference is that they have different individual targets to follow; internally and externally. However, there seems to be a challenge in this structure. While CFO and other managers have individual targets to accomplish, this may be hindered by each of them due to conflict of interest as there is consideration about their individual performance evaluation. For example, in reality, the accounting department come in conflict with marketing department due to their individual functions and performance evaluation (Kotler, 2011; Boone and Kurtz, 2011). A particular case would be refusal of approval of credit on potential customers. The approval would mean increase of sales which would be points to the sales department. It is in this reason that substantial challenges might exist among CFO, SCM managers and commercial managers, it might be in other situations though. Another significant challenge is in line with the alignment of internal targets with external targets of the managers. This issue significantly requires effective communication and cooperation of the team members. However, such may be hindered by conflict of personal interest as there is individual performance evaluation. The ultimate strategy that CCHBC needs to implement in order to minimise or eliminate probable conflicts is to consider the design of performance evaluation that will eliminate potential bias and ensure the best possible teamwork in the long run. However, corresponding challenges are eminent in this approach. Team player behaviours or teamwork competencies have to be integrated in the performance appraisal (Parker, 2011; Smither, 2009). The design of this alone requires more time to internalise prior to its implementation, but when implemented, evaluation is necessary in order to come up with some corrective measures if there is a need so. In line with this issue, one particular evaluation should be able to find out how capacity planning helped CCHBC in terms of technology, relationship, production planning, demand management and control. To target certain amount of production, technology is necessary because this would ensure the capacity of the production plant to obtain the required and existing demand in the market. In other words, it is important to consider in the capacity planning the prevailing capacity of technology for production as in line with hitting target goals. Along this process, it is also important to understand that capacity planning should be able to come up with working relationship among different departments involved and with customers. The very point is actually substantially considered in understanding the current customers’ market demand. In other words, demand management is actually addressed by capacity planning by ensuring that all concerned department managers need to specifically consider both their personal goal and the company’s goal in general. Such requires high value or level of control. That is why it matters a lot to conduct regular capacity planning activity. Question 3: What is the nature of the relationship between CCHBC and its suppliers? Why does CCHBC manage its supplier relationships in the way that it does? In this section, the proponent tries to discuss the nature of relationship between CCHBC and its suppliers and some reasons why it was able to manage relationships with them the way it does. The relationship that exists between CCHBC and its suppliers is fair and mutually beneficial due to the following reasons. There is an indication of relationship management, partnership model and multiple suppliers’ model. It is always the concern of companies like CCHBC to ensure healthy condition of the supply of their raw materials. Thus, it is important that they could keep substantial amount or number of supplies from time to time in order to ensure continuous business operation. Partnership model is very effective in this case because this would mean having the right person or department to focus with suppliers. This would pave way to better relationship in the long run. Furthermore, ensuring that there are many suppliers to be potentially tapped in times of needs is a remarkable advantage due to the development of options which would ensure productivity and profitability on the part of CCHBC. A simple reason why CCHBC was able to manage its relationship with its suppliers is due to having procurement specialist whose task is to maximise their relationship with their suppliers. This specialist ensures that there is enough supply for the production department to maximize resources and obtain its sets goals. Both CCHBC and its suppliers deliver innovation and efficiencies and develop mutual trust and partnership that intends to improve processes and reduce costs as well. The result would be to deliver the best value in terms of quality, cost, service and innovation. Furthermore, due to fair and mutually beneficial relationship between CCHBC and its suppliers, strict standards for business ethics, human rights and sound environmental management are implemented. This is to ensure that again fair and mutual benefits may be experienced to the fullest by both parties. The good thing about the operation of CCHBC is its ability to maximise achievement of resources from both local and international sources, an indication of a multiple supplier model. In fact, CCHBC continuously obtains its supplies from either international companies or local companies whichever may be more beneficial or advantageous on the part of the former. Question 4: How could an MIS help CCHBC to monitor the achievement of its “A for availability” credo? Support your answer with specific examples that demonstrate the value of your chosen reports and information. The discussion on how could an MIS help CCHBC to monitor the achievement of its strategic goal such as “availability” is integrated in this section. It is stated in the case that CCHBC provides the right package of products to its customers in the right location and time. This is the very essence of CCHBC’s strategic goal towards the achievement of one of its strategic goals which is availability. It is important that this has to be monitored accordingly. The Management Information System (MIS) has something to do about this. The MIS consists of set of people, devices, procedures, databases that can be used by managers and decision makers and to provide them information which leads to the achievement of organisational goals since its characteristics include the ability to produce demand, exception and drill-down reports; fixed and standard formats reports; hard and soft copy reports; internal data in organisational databases; and developed and implemented reports by information system personnel (Stair and Reynolds, 2011). MIS also consists of actual situations, actual processes, connection of the processes and performance, and tacit knowledge and processes (Argyris, 1999). Using substantial information from MIS, managers can gain insights on organisation’s regular operations. Monitoring of the regular operations can lead to the ability of the manager to control, organise and plan the organisation the efficient and effective way. For instance, the Accounting Information System consists of different formats and reports (Hall, 2010). This makes it an essential target for the application of MIS. Furthermore, it helps decision makers decide with the right information (Shajahan, 2007). Thus, it shows that it can be eventually used at CCHBC’s capacity management. Question 5: CCHBC’s Acceptability factor demands, among other things, “effective customer service” Using specific examples, explain how data mining and related search tools can enable CCHBC to analyse performance here. Where will knowledge rather than information be important? In this section, specific examples are provided in order to explain how data mining and related search tools can enable CCHBC to analyse performance and to show the importance of knowledge rather than information. Data mining is a way to sort and organise data in order to come up with relevant pattern or relationship from them (Han et al., 2011). There are various parameters of data mining and these include association, sequence or path analysis, classification, clustering and forecasting (Ye, 2003). Let us take a look at forecasting for instance. Data or information which remained unprocessed may or may not provide substantial meaning. However, in forecasting, they would make sense because patterns and relationship will be established. Moreover, the use of data and information in clustering techniques can provide more knowledge about relationships, trends, associations or even classifications of things. Thus, in this case, information can be even further transformed into great detail by reducing them into significant knowledge. These can have substantial impacts on increasing the knowledge about the customers prior to enhancement or improvement of customer service. Conclusion and recommendation CCHBC is a company that essentially looks forward to how it could present the best part it could offer to its customers. Creating the best value for customers is therefore tantamount to achieving the right possible approach within the bound of both internal and external business environment and including economic and non-economic factors and other related business concerns. It is therefore recommended that CCHBC has to explore further in great detail other relevant strategic moves that could help enhance its capacity of creating the best value for its customers. At some point, it is important on its part to explore more about the impact of MIS and sophisticated data mining approach on its strategic objectives prior to understanding its customers and creating a need and value for them. References Argoneto, P., Perrone, G., and Renna, P. (2007) Production planning in production networks: models for medium and short-term planning. London: Springer. Argyris, C. (1999) On organizational learning. 2nd ed. Victoria: Wiley-Blackwell. Baldwin, D. A., and LaLiberte, R. (1996) Humanistic management by teamwork: an organizational and administrative alternative for academic. Englewood, CO: Libraries Unlimited. Boone, L. E., and Kurtz, D. L. (2011) Contemporary Marketing. 15th ed. Mason, Ohio: Cengage Learning. Hall, J. A. (2010) Accounting Information Systems. 7th ed. Mason, Ohio: Cengage Learning. Han, J., Kamber, M., and Pei, J. (2011) Data Mining: Concepts and Techniques. Waltham, Massachusetts: Elsevier. Higgins, P., Roy, P. L., and Tierney, L. (1996) Manufacturing planning and control: beyond MRP II. London: Springer. Jones, O., and Tilley, F. (2003) Competitive advantage in SMEs: organising for innovation and change. West Sussex: John Wiley and Sons. Kotler, P. (2011) Marketing Insights from A to Z: 80 Concepts Every Manager Needs to Know. Hoboken, New Jersey: John Wiley and Sons. Lai, K., and Cheng, E. (2009) Just-in-time logistics. Surrey: Publishing Ltd. Leithwood, K. A., and Hallinger, P. (2002) Second international handbook of educational leadership and administration, Volume 1. Norwell, MA: Springer. Liegeois, J. P., and Ivatts, A. (1998) School provision form ethnic minorities: the gypsy paradigm. Hertfordshire: University of Hertfordshire Press. Li, L. (2007) Supply chain management: concepts, techniques and practices enhancing the value through collaboration. London: World Scientific. Mentzer, J. T. (2001) Supply chain management. London: SAGE. Parker, G. M. (2011) Team Players and Teamwork: New Strategies for Developing Successful Collaboration. 2nd ed. Hoboken, New Jersey: John Wiley and Sons. Rosenhauer, S. (2009) Teams and Teamwork as the Basis of Effectiveness: Developing Business Knowledge: an Independent Learning. Norderstedt: GRIN Verlag. Smither, J. W. (2009) Performance Management: Putting Research Into Action. Hoboken, New Jersey: John Wiley and Sons. Shajahan, S. (2007) Management Information Systems. Delhi: New Age International. Stair, R., and Reynolds, G. (2011) Principles of Information Systems. 10th ed. Boston, Massachusetts: Cengage Learning. Ye, N. (2003) The handbook of data mining. Mahwah, New Jersey: Routledge. Teamwork Commentary Teamwork fuels the ability of a certain team to achieve something far better than any other performance and highly important goals for the success of the group. It ensures the right communication, collaboration of information, and sharing of learning with each member. Teamwork at CCHBC is remarkable and it is evident in its capacity management planning. During such event, concerned members who include the CFO, commercial managers and SCM managers collaborated in order to come up with something better that would benefit the whole organisation. As stated earlier, there are significant challenges that are associated with capacity management which in great detail has other important impacts on teamwork. Each member has personal motivation towards obtaining high level of individual performance. Personal concerns like this may potentially hinder the ability of an organisation to work as a team. Applying this concept in the context of CCHBC seems quiet reasonable due to the underlying issues of the said organisation which involve how the CFO, commercial managers and SCM managers performed as individual entity and as a team. They have both the capacity to act independently and dependently. This may at some point may pose some significant contradictions and it is necessary that CCHBC should be founded more about the idea of teamwork. Teamwork has been quiet around for centuries. Teamwork existed as a result of group efforts and formulation of groups in general. People tend to associate with each other as they are social beings with the capacity to communicate and interact. As the name implies, teamwork requires the whole team to work each other not just for personal gain, but for the entire company that is involved. Each individual can maximize his or her potential and this is recognised within the bound of teamwork (Baldwin and Migneault, 1996). However, this potential substantially increases as individual learns to understand more about teamwork and appreciates its value in great detail. It is then important to understand that some individuals learn about teamwork a lot, but others do not (Baldwin and Migneault, 1996; Rosenhauer, 2009). It is therefore a function of the whole team to make the whole group appreciates a lot about the entire role of teamwork. Teamwork is significantly advantageous. In unity there is strength and this is the basic principle underlying the value that teamwork can add to the team. Teamwork is a way to achieve organisational goals (Leithwood and Hallinger, 2002). It is hard to achieve organisational goals if there is only one working on it. An organisation is such a complex group. Just like CCHBC, the complexity of this group can be depicted on the level in which the decision-making process needs to include managerial team which consists of the CFO, commercial managers, SCM managers and other concerned. Teamwork exists at various level but its principles and advantages have been proven the same for all (Liegeois and Ivatts, 1998). Thus, teamwork is such a universal approach in dealing with organisational change for the better. Based on the case of CCHBC, teamwork is an essential management approach that could eliminate some challenges that are potentially encountered in its capacity management. There are many things to be considered in this organisational task and it is very complex because it considers many essential points, including economic and non-economic components, human resource, organisational structure and system and many more. In implementing this, an organisation should require more sufficient background in teamwork and how it could be potentially used to the fullest. Teamwork after all does not provide answers to all specific organisational issues and concerns. What it can only address in great detail is the human resource. Thus, with teamwork, the success of the entire concerns in the team is indirectly addressed considering that it is the whole human resource which establishes and run the whole organisation. Finally, it is also important to consider teamwork as a powerful move in dealing with unproductiveness. Just like in the case of CCHBC, unproductiveness was totally eliminated because of regular implementation of teamwork within the human resource. Each company should invest therefore in teamwork and it should be vital in its growth and success. CCHBC is a remarkable picture of a team which succeed accordingly due to its employment of teamwork which is tantamount in its capacity management and other relevant strategic approaches. With teamwork, potentially good results are expected because they are integral parts of a successful team. Although teamwork may be complex at some point depending on the response of each individual, the acceptance and its success within the team rely on the ability of the group to understand what most likely it can actually do. Read More