Global Manufacturing Strategy and Operations Management of Holly Farm - Case Study Example

Global Manufacturing Strategy and Operations Management A Case Study of Holly Farm Introduction Operation Management is related to the decisions taken by the business with reference to production of goods and services which is central to the existence of organization comprising of key functions like marketing, finance, research and development, personnel, purchasing and technical and application of these key functions varies in organization. (Chris. V., 2001)1 Capacity planning and control is necessary to balance the capacity and demand right so as to enable the management to produce goods and service satisfying the customers, failure in doing so will increase the costs. The capacity and demand is calculated for different products and services that an operation might produce without any discrimination. (Nigel et al, 2007)2 Shim et al (1999) mentioned that the term ‘production’ so far was linked with factories, machinery and equipment but with the introduction of production management; but the span has been expanded over the management of nonmanufacturing sector such as banking, hotel management, transportation and education. Further production and operations management is the process which includes decision making to ensure that goods and services are produced according the accepted norms and at minimum costs.3 In today’s global environment, it has become necessary for every organization to involve all the components of operation management while making decisions and the present paper based on Holly Farm, is an attempt to analyze the existing strategy, constraints, future goals and its probability of achievement. 1. Issues and Constraints Fred and Gillian Giles expanded their existing farming business to mixed dairy and arable farm in a bid to overcome their losses by opening the gates to visitors who will pay for moving around the farm and to use the space as a picnic spot and spend the spare time with their families. Gillian was the person in-charge for the operations and management of the new activities while Fred was content with taking care of the previous business. Gillian’s plan was to increase the profit of the company by getting as many visitors as possible to the farm by continuously promoting various activities like exhibition, offering picnic spots, view of milking, etc. Akkermans and Van Aken (1992), mention that organizations faces problems with regard to management of the business which include involvement of persons, cognitive skills of the persons involved and attitudes of the persons involved. It is also pertinent to mention here that that lack of involvement, lack of representation and lack of cross functional communication are some of the problems that organizations face in their operations.4 Gillian who is responsible for the new business involved her in the process of getting visitors to the farm by marketing and advertising like giving lectures to local schools and organizations such as Women’s Institutes and coach firms which increased the number of visitors increased. Anyhow, Gillian was solely in operation of the business activity without any assistance from either her husband or employees those who were working in Fred’s farm. Due to unavailability and financial constraints to employ people, Gillian was left with no option to manage the business on her own which resulted in reduced marketing and advertising activities. Gillian and Fred are not interested in taking financial assistance, as they may have to pay it back at the interest rate of 10%. Gillian faced constraints in the areas of workforce, finance and technological assistance in case of milking farm which needs to be formulated to achieve the goals and objectives of the new company. 2. Evaluate Gillian’s proposal to increase the number of farm visitors in 1999 by 50% According to the past records, it is revealed that the farm had a good number of paid visitors, thanks to Gillian hard work in promoting the products and services in various institutes by giving lectures, collaboration and various other tie ups. The records reveals that there were 14800 visitors to the farm which is opened to outsiders only from April to October, four days a week i.e from Friday to Monday. Gillian states that most of the visitors used to come on weekends which were actually double the visitors coming on Friday and Monday. Analyzing the situation that there were more number of visitors on weekends, Gillian decided to increase the number of visitors in 1999 by 50% which would further improve the profits on farm tours, assets and improvement in the sales of ice creams. Though ice creams are mostly sold to retail shops with good profit margin, farm shops are also involved in the sale of ice cream. The following figure reveals that though ice creams were sold through the year, majority of the sales can be seen during the period when the gates are opened for visitors from April to October. The diagram shows that the increase in number of visitors has definite impact on the sales of ice cream. Thus the decision taken by Gillian to increase the number of visitors by 50% is appreciated in view of decreased sales in ice creams at retail outlets as analyzed by her. And in order to achieve the target, it is necessary to address the capacity constraints like of workforce and inefficient management. Gillian must continue to promote the business and its activities as done earlier and try to attract other breed of customers like companies, factory workers, offering discounts, and other attractive packages so that more visitors come to visit the place. And it won’t be a bad idea to offer discounts not only on coaches but also to other institutions to encourage more visitors who can be recommended by them which can be an added advantage. 3. What factors should Gillian consider when deciding to increase the number of flavors from 4 to 10? Another business managed by Gillian is the Ice Cream factory which operated throughout the year manufacturing 350 one litre box per day due to the inability to freeze the ice cream over 24 hours period and half frozen ice cream cannot be transferred to finished goods freezer container because it can spoil the texture of ice cream. Only one flavor of ice cream was produced each day out of four flavors they produced, due to the above factors. The following figure shows that during the past five years sales in ice cream has been increasing year after year, both in retail shops as well as farm outlets. Gillian made an analysis of the future demand and predicted that the sales in ice cream will increase in the farm outlets whereas the sales in retail outlets will decrease from £75000 to £65000. The graph clearly shows that the future demand is sloping downwards in retail shops. The reason for decrease in the demand at retail outlets could be limited flavors of ice cream and low storage capacity in the equipment that cannot produce more than one flavor each day. Therefore it is necessary to improve the equipment and technology to increase the production and quality. Thus Gillian’s decision to increase the flavors in ice cream from four to ten will be motivating enough to the retail outlet owners to maintain their relationship with Gillian’s products and it will also increase the sales of ice creams at farm outlets as forecasted. Conclusion Gillian Giles has problems regarding the non availability of workforce, inability to afford the workforce, capacity and inefficient management. Fred is not involved in new business activities and Gillian has to manage it all alone from promoting to managing and decision making process. Gillian should utilize available resources effectively in the process of advertising and marketing the service and products as rightly stated by Nigel et al (2007) if she needs to overcome the business constraints. Gillian’s proposal of increasing the number of visitors for the next year along with added flavors in ice creams is appropriate in view of the increased sales in ice creams at farm outlets and it might also increase the sales of ice creams at retail shops. References 1. Akkermans H.A. and Van Aken J.E (1992) Process – Related Problems in Operation Strategy, International Studies of Management and Organization. 2. Chris Vidler (2001) Operation Management, Studies in Economics and Business, Heinemann.UK 3. Nigel Slack, Stuart Chambers and Robert Johnston (2007) Operations Management, Ed. 5th, Prentice Hall, England 4. Shim, J.K and Siegel J.G (1999) Operations Management, Barrons Educational Series Read More