Overseeing and Controlling the Procedures of Manufacturing - Assignment Example

?Operations Management Operations management is a field concerning with designing, overseeing and controlling the procedures of manufacturing and reshaping business operation for producing goods and services. Operations management includes responsibility of ensuring that the business operations are effective and efficient enough to utilize few resources to meet the needs and requirements of customers. Operations management involves concern of managing procedure, which converts inputs (labor, material, energy and other resources) into functional outputs (goods or/and services). Over the past few years, some small concepts have become vital for operations manager. They include: Customer care Just in time Kaizen Total Quality Management (TQM) For operation manager, it is important to understand the need of these concepts and their impact for the success of overall business. These concepts can also be significant for enhancing employee morale and creating customer loyalty. Further, they can assist in providing direction to the company for its future planning. The role of operations manager is to oversee the manufacturing concern of the organization along with the successful implementation of these concepts. This paper discusses the implementation of the above-mentioned two concepts in form of Information Technology and Consumer Satisfaction. Moreover, a detailed discussion has been presented related to integrating technology for operations and business challenges confronted by retailer in terms of technology. Implementation of Information Technologies in Operation Management of Retail Industry The management of operations and information technology in an integrated manner along with their strategic alignment is vital for business models in order to achieve success. Excellence in operational activities is the key driver to performance, which is driven by information. Information technology helps in redefining the probable business operations and models across various industries, providing new space for interactions, new channels and markets. Information technology is fundamental part of developing new products, managing customer relationships, designing new organizations and achieving operational success. Operations Management provides techniques and tools to evaluate, improve and place firm's operation in such a way that it best fits the competitive strategy, financial constraints and marketing priorities of the firm. It provides a link to successful execution and strategy. It helps in managing businesses such as capacity utilization, six sigma quality, inventory turns and order to delivery. Inventory Management The purpose of inventory management is to balance the uncertainty in quantity demand and quantity supply. Inventory should be kept in a way that on demand side, it meets the cyclical demand, prospective demand and fluctuant demand. On supply side, it should maintain the operations of equipment and machinery and should prevent shortages (Loar, 1992). Before the advent of information technology in 1970s, companies used to stock up the surplus inventory to meet the uncertainty as well as flow of material. The cost of money was relatively lower than now, therefore companies could afford to pay for excess inventory in order to buffer against uncertainty and fluctuation in the part of procurement, production and distribution, which are three major stages in process of material flow. However, the increased cost of management since 1970s compounded the focus of asset productivity and contributed to increased attention to inventory management. As a result, number of different methodologies emerged which includes MRP, JIT, Lean Six Sigma etc. (Loar, 1992). The advent of information technology has made the inventory management processes more proactive that companies nowadays can time phase the planning of inventory to minimize the impact of uncertainties. The advancement of information technology has given rise to higher possibility of enhancement in performance. The future demands inventory management to adopt systems view in order to obtain significant inventory improvements (Loar, 1992). Supplier Integration Information technology has influenced each stage of supply chain. Many studies have been conducted in order to determine the impact of information technology in improving supplier-buyer relationships. Subramani (2004) conducted a study in order to determine how suppliers benefit from utilizing information technology. Subramani (2004) collected data from 131 suppliers, which were using Supply Chain Management Systems (SCMS). The results of this research supported the vendor-buyer relationship. It validates the thesis statement that deployment of IT in supply chain leads to better and closer relationships between buyer and seller (Subramani, 2004). Hogarth-Scott and Parkinson (1973) state that changing dynamics of European retail marketplace influence the relationship of retailers and their suppliers. Sales has been concentrated to fewer, more powerful and larger retailers, marketing and operational benefits of information technology to retailers, growth and expansion of own label brands, all affect the vendor-buyer relationship. The extreme case of these trends is the market of UK. It is seen by everyone as a model for future for the rest of the Europe. In today's evolving trading environment, the problem of conflict versus collaboration takes a particular attention and importance. A look at these issues can be taken from the perspective of 11 producers, each of which delivers to the same large retailer in UK. Hogarth-Scott and Parkinson (1973) concluded by affirming the importance of information technology in maintaining the buyer-supplier relationship from the perspective of suppliers (Hogarth-Scott and Parkinson, 1973). Forecasting Information technology is substantial when it comes to forecasting in supply chain. High-tech tools and computer software help in predicting what goods customers might require and stocking model to satisfy changing demands of customers, at the same time reducing the amount of capital, which has been invested in obtaining excess inventory. About 80% of the surveys of retailers divulged that forecasting is extremely important for the financial success of the company. In history, forecasting systems were mainly observed as tools of supply chain management, where the prime emphasis was on reducing the operational cost. Today, such techniques and systems have become more important to upsurge sales opportunities. A retail consulting firm, RSR says, "Advances in hardware computing power make sky-level forecasts not only feasible, but imperative." A good forecast cannot be made without understanding your customers and what they may want. Queuing Theory Queuing theory is a mathematical model of analyzing the delays and obstructions of waiting in a queue/ line. Queuing theory evaluates every component of waiting in queue to be served including services process, arrival process, number of systems, number of servers and number of customers. Number of customers can be in form of data, people or cars. In manufacturing concerns, queuing theory holds great importance. Queuing is required for flexible systems in which varying factors of production may be consistently adjusted to handle intermittent increases in demand. In periods of low demand, excess capacity can be transformed into different forms of working capital, instead of forcing these periods as non-productive and idle assets. Capacity Planning Lutz, Boucher and Roustant (2012) stated that in contemporary production systems, Information Technologies (IT) are strongly linked to production functioning. In order to become a trustworthy service provider, IT departments must make sure a sufficient sized IT infrastructure which can support company's current and future industrial activities. Lutz, Boucher and Roustant (2012) further stated that using statistical approaches can overcome the usual issue of planning of contemporary IT systems capacity by establishing quantified and direct links between IT activities and business operations. Source: Edarat Group Technology Consultants How Retailers Integrate Technologies Despite of the fact that managers has never-ending quest to decrease quest and increase sales, retail industry is the one, which survives on the basis of minute margins. Technology is now considered as a matter of intense factor in order to accomplish both goals in retail industry. Substantial enhancements have been made in the areas such as inventory management, supply chain management, loss prevention and customer experience. Wireless Technology in Retailing Sherman (2012) states that nowadays the difference between losers and winners in retail industry is upsurge by just one thing; tech savvy. Retail sector is experiencing substantial changes in merchandising process. According to a recent survey, businesses that surpass industry averages in terms of sales turnover tend to utilize and understand professional and specialized computer software and other technical tools in order to manage different aspects of merchandising (Sherman, 2012). Wireless technology has permitted communication between devices and people without any cables and therefore has transformed the business processes as compared to past. Hasty advancement in technology of Wireless Local Area Network (WLAN) in recent times has eliminated many obstacles. Today, a completely new lot of opportunities exist for retailer in order to increase margins through utilizing wireless technology. In general, retailers utilize the opportunity of wireless LAN in order to support applications such as file server access, web browsing, email and other conventional applications. Fine-tuning Operations through Social Media Social media is another venue for retailers to promote and sell their products. Retailers, such as Wal-Mart takes cues from its customers through social media in selecting its products and developing its services. Wal-Mart lately begun a "Christmas layaway option" based on the comments received on Facebook. Additionally, it launched more than 3000 store specific pages on Facebook in order to get responses from its 'community' on Facebook. This community of Wal-Mart on Facebook has more than 9 million members (Brin, 2011). According to Carolyn Everson, who holds the position of vice president at 'global ad sales at social media behemoth', out of 100 popular global marketing brands, ninety-six of them utilize social media as a significant part of their corporate strategy. Everson further stated that she was not able to think of a single retailer, which does not have a page on Facebook (Brin, 2011). Location tracking and RFID Radio Frequency Identification (RFID) has received a large amount of attention in the recent times. Many people are predicting that information technology will revolutionize every aspect of supply chain from inventory processing to logistics to customer experience. Time will verify these predictions, but the use of technology in tracking objects is definitely promising (Technology Advances in Retail, n.d.). Two major types of RFID are being used nowadays, active and passive. Passive RFID is typically used to track merchandise as it moves through loading docks, doors and other choke points during retail operations. It contains inexpensive, small stickers or tags that hold a unique identifier (Technology Advances in Retail, n.d.). Active RFID contain active electronic and a battery and are slightly more expensive and larger than passive RFID. It interoperates with other devices for instance PCs, barcode scanners etc on a similar WLAN. It means that a single network is required to manage and deploy all radio devices, which are being used on the same network (Technology Advances in Retail, n.d.). RFID is a system, which is mostly automated and it can diminish the need of manual scanning. By using RFID, flow of goods gets complete, oversupply is curtailed, stock outs decline and accounting discrepancies are eliminated. An efficient and effective distribution system is vital for the success of retailers. Major consumer goods companies and retailers are already utilizing plot projects of RFID. It seems that effective use and implementation of RFID can assist companies in getting competitive edge in future. Major Challenges in Implementation of Technologies One of the biggest problem that retail industry faces is keeping up pace with the changing technology. For example, retail point of sale technology usually uses those computer systems, which are a number of years behind the modern computer industry. Given the constantly changing economic environment and rate of turnover, constantly updating and keeping their networks and equipment running on the latest technology can be troublesome for the retailers. Inability of SMEs to cater online For small retailers, unlike Wal-Mart, Sainsbury and Tesco, it is very difficult to face the intense competition thrown to them by online shopping. Rapidly changing technology has induced large number of shoppers to navigate websites, look for desired products, comparing prices with other stores and making purchases online. Not only websites, social media and digital avenues of marketing are making it even more difficult for Small and Medium sized Enterprises (SMEs) to conduct businesses and increase turnover. There is a need for these small retailers to jump into the technological sphere in order to protect their survival in the retail industry. Figuring out the possibility of mobile devices A large number of customers are now using tablets, smart phones and other mobile devices to find coupons, make purchases and learn about from where they can get best available deals. Nowadays, in a retail store there is a possibility that the shopper might be using their smart phone and browsing to check competitor's prices. Retailers say that it is a tricky puzzle to solve that how to take best advantage of this technology. Embrace assistance of social media Wal-Mart struck a deal with Facebook in order to allow its shoppers to connect with nearest store in a better way. Other retailers are also following this suit. Booz Allen Hamilton says that by 2015, around $30 billion will be spent through social commerce. Retailers have to find the best way to utilize Youtube, Facebook, Twitter and other social media platforms to its advantage. Retailers need to spend wisely not just throw money at it. Security Challenge for Retailers Advent of smart phones, tablets and other mobile devices certainly help the retailers in accessing its shoppers in a more convenient manner, yet to certain extent, retailer bears the risk and enormous complexity. A retailer has to scrutinize where and how sensitive data and information is sent outside and within their offices and stores. Not paying attention to security threats can cause loss of huge time and money to retailers. Security threats can be in any of these two forms; advanced persistent threats (APS) and financial threats. Online competition Technological challenges for retailers' do not stop here. Online competition is another facet, which is very tough and retailers need to work hard to stand out of the crowd. The crucial part of doing this is to develop and maintain user-friendly, good quality digital content. It is essential part of online trading - from sales turnover to customer relationship. IT has developed those areas, which were hard to predict five years ago. Multi-channel Environment Retail market is busy and at the same time, is very confusing. Choosing which area to invest can be very difficult. Retailers also face immense pressure from multi-channel environment. Retailers have to consider how their stores can be equipped in a way that technology encourages customers to purchase there and then, rather than via their smart phones or computers later on. Retailers and Customers Expectations Bengier (2011) states that the one truth regarding today's retail environment is that its conventional methods of trading and commerce are obsolete. Nowadays, customers are wired with greater expectations that channel distinctions redefine the shopping experience and process by demanding number of options at each step. Consumers trust social networking websites and other mediums, which influence their buying decisions. According to the survey conducted by IBM, profound results were revealed. Some of them are mentioned below. Thanksgiving sales 2011 were up 39% as compared to thanksgiving sales in 2010. Black Friday online sales were 24% higher in 2011 than Black Friday online sales in 2010. Cyber Monday online sales were 33% higher over cyber Monday sales in 2010. These estimations reinforce the fact that customers are expecting more visibility across channels and are turning to social networks, instead of to retailers, in order to find out guidance from their friends about what to buy. A lot of them share shopping disappointments, which include challenges with returns, out of stock problems, inferior quality etc. Technology is not going away and there are very little chances of consumers wanting to stay less connected in future. Therefore, instead of feeling it as a burden, retailers need to grab this opportunity and utilize every possible way of approaching customers. Nowadays, customers are no longer contented with the shopping experience (research, buy, receive, carry, try and return). Customers are expecting more flexibility and convenience from retailers. There are number of channels through which customers can interact with their retailers for instance, kiosk, call center/ catalog, online, in-store, TV, special order, mobile etc.) consumers are expecting more integrated experience irrespective if the medium of channel through which they are buying and receiving. New expectation is that the experience has to be seamless, no matter through which way they are being served whether it is over web, in stores, via call or catalog, through delivery etc. In return, retailers are also modifying their business models. The new service avoided return shipping charges and the customer can easily drop the merchandise at nearby store. In this way, they boost customer satisfaction by providing more convenient and positive experience. Retailers are also becoming more customers oriented now. They consider the possibility for customers whether they can: Place orders online and pick up the merchandise from store. Place an order via call center or catalog and track the status of shipment through website. Receive product at home but if not satisfied, return it to the nearby store. If retailers are taking care of these points, then certainly they are not only multi-channeled but also cross-channel. Customers do not like a fragmented shopping experience, which for retailers ultimately leads to loss of customers and low sales turnover. In order to meet customers' expectations, retailers need to consider the following mentioned ten tips. i. Offering a flawless experience at each touch points ii. Provide complete product information at the time of placing order iii. Provide consistency in service by making it more convenient, pleasant and easy process for customer iv. Taking care of Pricing by researching what the competitor is offering since customer constantly compare price in different stores to get the best possible deal v. Identify the core audience as they will be the ones who support the retailers in the coming years vi. Define what brands, assortments and styles are working best for your stores vii. Captivate customers through engaging them in mobile marketing programs. viii. Must have the 'wow' factor, whether its knowledge, deals or promotions, staff friendliness, merchandising. ix. Implement in-store technology to enhance staff engagement x. Never let shopper check out without offering contest entry, rewards or discount. Increase in number of products/ services and increase in number of stores, it can be difficult to gather information and in this regard, technology plays a vital role in accumulating information and making it accessible for the right set of people. If implemented properly, under the surveillance of professional, technology can be a helpful hand in boosting sales in retail businesses. Works Cited Bengier, J., 2012. Are Retailers Meeting Today’s “Empowered Consumers’” Expectations? [online] Available at: [Accessed 12 March 2013] Brin, D. W., 2011. Retailers Use Social Media to Fine-Tune Operations, [online] Available at: [Accessed 12 March 2013] Buzzell, R.D. and G. Ortmeyer, 1995. Channel Partnerships Streamline Distribution. Sloan Management Review, 36 (Spring), p. 85-96 Fogarty D.W., Blackstone J.H. and Hoffmann T.R., 1991. Production and Inventory Management. Stamford: Southwestern Publishing Co Loar, T., 1992. Patterns of Inventory Management and Policy. Journal of Business Logistics, 13(2), p. 69-96. Lutz, Michel, Xavier Boucher, and Olivier Roustant, 2012. Information Technologies capacity planning in manufacturing systems: Proposition for a modelling process and application in the semiconductor industry. Computers in Industry. Sandra Hogarth-Scott, and Stephen T. Parkinson, 1973. RETAILER-SUPPLIER RELATIONSHIPS IN THE FOOD CHANNEL: A SUPPLIER PERSPECTIVE. International Journal of Retail & Distribution Management, 21(8). Sherman, E., 2012. How High-Tech is Changing Retail, [online] 30 August, Available at: [Accessed 10 March 2013] Subramani, M., 2004. How do suppliers benefit from information technology use in supply chain relationships? MIS Quarterly 28(1), p. 45-73. Thomson, R., 2012. Comment: Retail technology is a challenge [online] Available at: < http://www.retail-week.com/comment-retail-technology-is-a-challenge/5040997.article> [Accessed 10 March 2013] Vincenzo, M. D., n.d. Challenges Facing Today’s Retail Industry [online] Available at: < https://www.openforum.com/articles/challenges-facing-todays-retail-industry/> [Accessed 10 March 2013] Read More