Operations Management of Youngs Seafood Company - Assignment Example

Q1. The seaport town of Grimsby, situated on the Humber Estuary in England boasts of over 400 seafood processing business in its vicinity. With more than 100 food processing companies in Grimsby, the town has become the largest seafood processing centre in Europe. With a total of 2500 employees, Young’s seafood is the largest seafood processing company in Grimsby, the company has been recognized in the industry for its operational and supply chain excellence. The company offers its services for the production, processing and packaging of frozen seafood and cold storage facilities. The company has been keen to take on new markets in Europe and other near by regions. With this, the company has undertaken a number of investments to set up new chains of restaurants in some parts of the continent and provide logistics supply to other destinations in order to meet the growing demands of its clients. The company operates is the market of frozen and chilled fish, shrimp, shellfish and other seafood. Other subsidiaries of the company operate the restaurant and the catering business as well. The company has acquired a number of companies in the past 10 years to attain the top spot in the market sector having surpassed its main competitors – Bird Eye, owned by its competitor Permira. Q2. The market priorities for the company is to focus on sustainable expansion of its business, strengthen its brand position in the market, and build a long term relationship with its clients. The main strategies behind this are to provide high quality seafood at low costs, with faster delivery, and more efficient client service. Also in the wake of growing competition, the company has marked order flexibility as one of its priority marketing strategies at attract more clients. The most obvious trade off for Young’s Seafood was the relationship between business profits and environment sustainability. Initially the company resorted to the process of peeling of scampi by machine in Scotland. Young’s seafood used this, method in order to make faster orders and cut costs by the use of machine. This process however, led to concerns by the customers as they did not wanted the machine peel process to be a part of the food, and the environmentalists targeted the company for adding carbon dioxide emissions by the use of machines. As a result of this, the company has now taken to more sustainable methods – it ships the scampi to Thailand, where it is hand peeled. This creates more job opportunities and the carbon dioxide emission in the shipping transport from Scotland to Thailand is the same as the machine co2 emissions. Thus, the company managed to successfully cut down at least one of the significant tradeoffs in its business. To remain competitive, Young’s Seafood has some strict criterion for order qualifiers and order winners so that it gets a higher edge in the market competition. Young’s seafood has been very focuses as result of which the order winners have become the order qualifiers for the company. As already stated above, the main order qualifiers for the company are faster and higher quality food with efficient services at low costs to the client. In order to achieve those order winners / qualifiers and gain an upper edge from its competitors, the company has done a number of changes in its operational chain and logistics. Better stock management, demand prediction, centralized distribution, order batching are some of the methods that were used by the management to convert itself into the main option for purchasing seafood in the market. Q3. Facility based services are those where the clients approach the company to utilize their services, while the field based services include those where the company sends its representatives to cater to clients. Young’s sea food originally started as a field based service where it used to only dispatch its food products to clients at the preferred destination. This required intelligent scheduling and dispatch management of products and representatives. At the same time, cost was an overriding factor for the company. This also requires a mobile system that connects the delivery representative with the office. The mobile system reduces the paper work, manual errors, offers effective time management, however, it was not an option for the company when aiming to expand its services in the continent. Subsequently, the company has opened many outlets and restaurants ( facility services) where clients are served and can also buy the young’s seafood products. Youngs seafood has also tied up with other retailers to keep its products and sell them. Also, this has helped in the brand building of the company in the market. Q4. The system design matrix for the young’s seafood shows the relationship between three main factors and how do these factors interlink with the operations, service and delivery system of young’s seafood. In the case of young’s, the first factor is the customer contact with the company. There are three degrees of contact – no contact, permeable contact and the react able contact. In this case, young’s lie somewhere between the last two degrees, as it has developed an excellent degree of permeable contact with the customers through phone order systems, online orders and a good react able contact through outlets and restaurants. On the left side, the second factor lies – sales opportunity which is higher for young’s seafood has it has a higher amount of customer contact. The company in this case lies near the left upper corner. The last factor is the production efficiency. In case of services that are customized as per client requests, the production efficiency is low. However, in the case of young’s seafood, the products are all custom made from before and packed and shipped to retailers for selling purposes. Therefore the production efficiency fop the company is also high. Therefore, in this case, the young’s seafood is placed in the upper left hand corner of the matrix. The matrix is shown below. Due to the limitation of time, a proper matrix could not be redrawn. The adaptation of the matrix has been taken from the internet and explained. Q5. The service offer approach used by the company rests on some basic characteristic listed below - Excellent product quality at low costs, Efficient customer service, trained staff members, willingness to customer support, transparent feedback systems ( both internally within the staff and with clients), environmentally sustainable business practices, legal outsourcing of products. Offering regular promotional services, discounts, free coupons, future discount schemes has been a strategy developed by the management to lure customers during the off season. The service approach seems to be appropriate in the highly competitive market that is full of small low cost competitors of young’s seafood. However, the only disadvantage of this service approach can be devaluation of the company’s products in the long run. Among the various advantages of this service approach is the increased consumer interest in its products. Also the environment sustainable business practices of young’s seafood have increased consumer awareness and respect for its products’ and services. Following this, a number of other small time companies have come forward to partner with young’s seafood in its business. Since the company legally outsources food products, customers are willing to pay more for safe and healthier food products, rather than buying from illegal outsourced food outlets, thus the profits have risen for the company. This has in turn increased the customer loyalty and brand value. This all helped the company to stay away from the economic downturns and risks of the economies. Q 6. In the case of Young’s seafood, there exists no defect prevention and correction policy. In this section, such a policy is recommended – the basics for such a policy for young’s seafood will be as follows - The first point of the defective prevention and control mechanism is that the quality of the final product should be as per the requirements set down by the company management. This would include the delivery time of the order, quality of the product, and cost. These concerns should be met by the management in order to avoid any defects. The second issue that is recommended is that it is always better to prevent the defects rather than implementing measures and procedures to cure it. In the business of seafood, it is important that the client tastes and preferences are given due importance and priority. The third is based on this aspect. If in case, a particular batch of products is completely as per the laid down instructions, and another batch also present is not as per the laid down instruction, but still caters to the client needs, then the second batch is taken as the quality standards. The last one is the monetary measurement of defects found in the chain. It is important for the young’s sea food management to understand that defects are a result of some activities, which are basically a loss on the revenue. Thus, the costs behind these waste activities should be examined are tried to be reduced. As an example, the company management identified the costs of transport of empty containers and soon devised a method to share costs and even generate value from this concern. Q7. Q8. Q9. the most basic assumption in a lean approach is that the management and the entire system concentrates on enhancing product quality and providing more value to the client by decreasing the wastes and reducing costs. Young’s seafood has been able to keep in mind these issues about lean approach. The company has implemented some methods to reduce the wastes that are present in the operational and supply – logistics chain of the company. For example, the company was keen to reduce the loss that incurred in bringing back the empty containers after delivery. In order to eliminate this waste, the company has collaborated with other companies who use these empty containers during the return route. Lean management has been able to assist the young’s seafood management to identify the excess suppliers in the operational chain, and the stocks that have been kept idle in the company warehouse and at the processing centre. Also the problems of transportation that at many times were late and kept the inventories idle were resolved. The concept of JIT has already been applied in the company. At different points in the operational chain, systems have been deployed which signal about the current status of the inventories and when the next batch should arrive for the production process. This has improved the production flow, quality and employee management. In case of stock depletion on the production process line, a signal is generated and is sent to the concerned executives to renew the order stock line. Also, forecasting methods have been applied to forecast the demands as early as 13 weeks. Also point of sale systems have been used which are installed at the points of sale of products. These system on a daily basis transfer the inventory information to the management, which takes replenishment actions as required. Q10. The service delivery approach offered by the company has until now been able to offer good returns to the company. With the variety of methods applied by the company ( as explained in question 5) there has been substantial gains and enhancements in the value chain. However, one recommendation can be given with respect to the service delivery approach. Use of GIS for the purpose of tracking the logistics and deliveries can further promote efficiency in the system. A GIS system is a technology that basically gathers / captures, stores and transmits data relating to the position / geographically referenced data. Use of GIS helps in better management of the distribution system and faster decision making by managers for shorter routing of goods is possible. Q11. There have been a number of technologies and processes that have been implemented by the company management, however, there has been a new technology that is recommended for young’s management. Recipe creation is a new and innovative method in the food production sector to manage the inconsistency in production line. This method if applied by young’s seafood can help them gain a controlled environment for recipe creation and at the same time also reduce waste activities and loss of inventories. The method of recipe creation can also assist in customizing processes or particular batch orders on special client request. This method is a control process technique applied in operations in various industries. A system module is assigned at the beginning and end of each production line which collect all the information regarding required resources, time and quantity of resources required, temperature and the composition of final product required. At the end, this information is matched with the product created and subsequent improvement is done if any variation is noticed. Q 12. The paper studies the value and operational chain of the young’s seafood company. The various problems that the company management faces and what could be the possible solutions were discussed in this paper. Other than the problems already present in the operational chain, some logistics recommendations were also presented. Also the lean approach for the company has also been studied with a reference to the Just in time concept. Also, the paper studies the system design matrix for the company and the defects prevention and control mechanism. References http://www.youngsseafood.co.uk/ Read More