The Business Process at Kudler - Assignment Example

Operations Management Business process at Kudler that could be affected by the decision to start contracting with local growers of organic produce The decision of Kudler to proceed to contracting with local growers of organic produce will affect directly and significantly most business’ processes. More specifically, the firm’s supply chain management (the firm’s sector that will be mostly affected by the specific business decision) will have to be adapted to the demands and the needs of the particular plan. However, in order to examine thoroughly all the effects of the specific business decision, we should refer to the particular sectors of the operations management as they can be observed in the specific firm. More specifically, the following ‘stages’ of the firm’s operation management should be examined: inputs (materials, energy, information, management, technology, facilities and labor), transformation (or conversion process) and disposition (marketing and sales) (Gomez et al., 2002, Ch. 15). In order for the particular firm to provide the organic products to the public, the above stages of the business’ processes will have to be differentiated. More specifically, specific procedures for the ‘collection’ of the organics products from the producers should be implemented followed by appropriate processes of ‘transformation’. However, in this case the ‘transformation’ of the product would be limited with only a few exceptions where there will be disposition to the public of ‘slightly processed’ products (jam etc.). As for the disposition of the organic products, specific areas within the firm’s departments should be ‘restructured’ in order to provide the necessary space for the above products to be disposed to the public. It has to be noticed that the firm will have to resolve the following issue before proceeding to the implementation of the particular business plan: who will design the stages of this plan (as they have already presented above) taken into account the fact that the managers of the three departments of the firm are responsible for all issues involving in their department including the negotiations for the price and the quality of the products purchased by the company. 2. How Kudler’s supply chain would be affected by this decision Kudler has a standard supply chain on which the firm’s operation is based. After Kudler’s decision to start contracting with local growers of organic produce a significant part of the firm’s supply chain has to be alternated in order to be adapted to the relevant managerial plan. It should be mentioned here that the importance of supply chain for the success of businesses around the world has been extensively admitted in the literature. In this context, Krishnan et al. (2001, 259) supported that ‘supply chain management has become an important part of strategic planning in both large and small businesses since the 1990s as firms increasingly choose outsourcing as an externally-driven strategic growth path’. Towards this direction, Cook et al. (2001) proposed a series of tools that should be used by any organization that try to develop its supply chain management. These tools are the following: ‘making and keeping relationships, implementing new technology in the supply channel, the use of forecasting to increase supply chain effectiveness, outsourcing to increase efficiency, and cost management as a strategic weapon’ (Cook et al., 2001, 14). However, it should be noticed that the above proposals are just indicative. In fact, there could be a series of similar tools that Kudler would probably use under the specific conditions in order to enhance the firm’s supply chain management. Moreover, in order to present the sectors of firm’s supply chain management that could be ‘harmed’ by Kudler’s specific decision we could refer primarily to the problems that every supply chain management has to face under normal commercial conditions. These problems have been considered to be the following ones: [1]: a) ‘Distribution Network Configuration: Number and location of suppliers, production facilities, distribution centers, warehouses and customers, b) Distribution Strategy: Centralized versus decentralized, direct shipment, cross docking, pull or push strategies, third party logistics, c) Information: Integrate systems and processes through the supply chain to share valuable information, including demand signals, forecasts, inventory and transportation and d) Inventory Management: Quantity and location of inventory including raw materials, work-in-process and finished goods’. The above issues indicate the sectors of Kudler’s supply chain management that they are going to be affected by the specific Kudler’s decision. More specifically, the firm’s distribution network will have to be adapted on the increased needs for ‘collection’ of ‘organic products’ directly from the local growers. An additional investment in this sector will be necessary creating need for additional financial support of the firm’s specific department. Moreover, the firm’s distribution strategy will have to be restructured in order to respond effectively to the needs of the specific plan. In this context, information providing to all participants (staff and suppliers) will have to be accurate and descriptive in order to resolve any possible issue that may arise during all stages of supply chain management (especially its part that is going to be ‘implemented’) through the firm’s innovative decision to incorporate the selling of organic products in its activities. In order for all the above efforts to meet the required targets, a thorough and accurate inventory would be necessary (the existing inventory will have to be restructured in accordance with the increased needs of the particular type of commercial activity). 3. Quality control tools and performance standards that Kudler would need to put in place to ensure the effectiveness of its operations Kudler will have to implement specific control tools and performance standards in order to ensure the firm’s effectiveness after the implementation of the specific plan. In this context, two issues could be characterized as of primary importance for the particular decision. More specifically, visibility and organizational effectiveness if ensured they could help the firm to achieve the required targets ensuring that the company’s performance will not be ‘harmed’. In this context, Rand (1999, 97) stated that ‘businesses fail because management does not have effective control of the business as management is too far removed from revenue-producing processes; the interval between the time a revenue plan is launched and the time the actual revenue is collected is, to all intents and purposes, a black hole into which human resources are poured with no mechanism to measure their effectiveness; Visibility is nonexistent or, at best, extremely limited’. As of the second element, organizational effectiveness, this has been examined by Robertson et al. (1995, 547) who stated that ‘because private sector organizations are driven primarily by market or consumer preferences, organizational effectiveness is more readily measured in terms of efficiency and profitability; as a result, change activity can be implemented and assessed using these narrow criteria as the primary basis for evaluating their success, possibly making it easier for these change efforts to be successful’. Another issue that needs to be taken into consideration is the fact that the processes that are going to be implemented by Kudler have to ensure the competitiveness of the company. For this reason it has been supported by Chase et al. (2006, Ch 5, 2) that ‘a process that does not match the needs of the firm will punish the firm every minute that the firms operate’. Regarding specifically, the measurement of quality regarding the organic products purchased by the firm, this can be achieved at a first level using statistics and more over through the integration of manufacturing operations with the firm’s strategic planning (using computers) as the above suggestions have been stated by Gomez-Mejia et al. (2002, Ch. 15). The issue of ‘total quality management’, i.e. the belief that ‘all of an organization’s activities need to be focused on improving its product’ (Gomez-Mejia et al., 2002, Ch.15) would be proved to be helpful towards this direction. As for the most appropriate performance standards that could be used after the implementation of the particular business plan these could be summarized in the following three: maintenance, kaizen (continuous improvement) and efficiency. The above standards, which could be regarded also as quality management tools, can help the firm to achieve the level of performance targeted through the introduction of the specific business plan, i.e. the direct contract with local growers of organic produce. Moreover, it should be noticed that the firm should set in primarily the required financial targets (referring to a specific period of time) in order to avoid possible negative outcomes but also to ensure that all problems related with the particular initiative will be addressed promptly and on time. References Agrawal, M. K., Pak, M. H. (2001). Getting Smart about Supply Chain Management. The McKinsey Quarterly: 22-25 Chase, R., Jacobs, R., Aquilano, N. (2006) Operations Management for Competitive Advantage, 11e. The McGraw-Hill Companies Cook, J. S., Debree, K., Feroleto, A. (2001). From Raw Materials to Customers: Supply Chain Management in the Service Industry. SAM Advanced Management Journal, 66(4): 14-23 Gomez-Mejia, L., Balkin, D. (2002). Management, 1e. The McGraw-Hill Companies Krishnan, H., Park, D. (2001). Supplier Selection Practices among Small Firms in the United States: Testing Three Models. Journal of Small Business Management, 39(3): 259-269 Rand, T. (1999). Why Businesses Fail: an Organizational Perspective. Emergence, 1(4): 97 Robertson, P. J., Seneviratne, S. J. (1995). Outcomes of Planned Organizational Change in the Public Sector: A Meta-Analytic Comparison to the Private Sector. Public Administration Review, 55(6): 547-558 Read More