Effective Business Operations Management in Amazon - Case Study Example

BUSINESS By Amazon.co.uk Limited Introduction Amazon.co.uk Limited is an online store located in Slough, United Kingdom. Amazon was formed in 1998 and is the number one client-centric organization where people can buy online used products of high quality at the lowest prices. Amazon.co.uk. offers the public a variety of items that are new, used and others are refurbished. These are items such as books, Pc, software, garden products among many other products. Amazon is widely reputed for its free delivery services in different European states. The items at the company’s stores can be delivered to the customer through the free delivery services, so long as they are above £25 (Hill & Jones, 2012, P.280). In addition to the services that Amazon provides, the company has also introduced a currency converter, where the Irish customers who may be using master cards have the chance of paying using the Euro currency at the company. Part 1 Critical Components for Effective Business Operations Management According to Johnston and Clark (2008, p. 10) operations management has everything to do with business support and making deliveries against an organization’s strategy. The contributions obtained from an organization’s operations are the main aspects of a firm’s success because it delivers what most business analysts view as “transformational”. The function of an operation management team in an organization is valuable to an organization because it is known to create something that most customers are willing to pay for. The effectiveness of the operations management team determines how a business is profitable in the short term and also how the business survives in future in long-term (Oliver, 2012, p.6). This means that a business should be able to survive when the environment changes and be able to determine when opportunities arise. In addition to this, having an effective operations manager also contributes positively to the success of an organization. The key fundamental components of an effective operations management at Amazon.co.uk Ltd are three. The first essential element for effective management is that that Amazon should have a design of operations in regard to the product and processes in the firm. This means that Amazon should be in position to notice when competition increases and if the customers are satisfied with the quality of products (Hill & Jones, 2012, P.279). It is an element that will assist the company to identify the role of having an effectual customer service team. The second essential element is that Amazon should observe the planning and control of its operations and whether the appropriate designs are in place. The operations management team has to ensure that the process of planning and control goes smoothly while at the same time meeting the quality of its product designs. Amazon Company has to ensure that its operations are performed according to plan. The operations management team in organizations ensures that modifications are done in the event that the design of the product does not meet the cost or quality among other requirements (Johnston and Clark, 2008, p.20). The third essential element is that the company should ensure that quality services and products are produced. As aforementioned, in the second elements above, delivering high quality products is crucial. To achieve this goal, the operations management team at Amazon Company has to ensure that the customer service section is well organized. Offering high quality products and services is one of the ways in which Amazon Company is able to compete with all the other firms providing that are offering similar services. For a firm like Amazon Ltd which also provides internet services, promoting a personalized experience for small businesses is one of the ways in which the operations management team can promote the quality of products. The parcel delivery conundrum at Amazon.co.uk Ltd For anyone who has ever ordered an expensive online product or package, the problem of parcel conundrum is something that affects most. It is difficult to determine whether the product a client orders will reach home when he or she is available. There is always that fear, because most people do not know whether the delivery man will leave an expensive item right outside the door step. For a company like Amazon, these are common problems that over the years have had the management team concerned. Amazon has in the last few years received these complains from so many clients and the management responded by applying new ways of solving it. It has been an issue of major concern because Amazon is paid first by the customers before it makes its payment to the suppliers. These problems are always caused when the management team of an organization cannot answer the question; why the customer requires the parcel to be delivered at home (Johnston and Clark, 2008, p.12). The company has to solve the customer’s question as to whether they will be waiting for delivery and whether they will be at home or at work. The company in return may want the customer to indicate that he or she has received the parcel in a good condition. Parcel delivery issues arise more when the customers make a differentiation between where the product was purchased from and the courier. The courier is usually the representative of the original company; therefore, the customer’s view is that if the company is not reputable, the product must be of low quality. However, with the appropriate parcel conundrum experience, customer’s experience is promoted and as a result sales are increased. When the customers recognise that the courier which delivers the products or items is only an extension the company that is making the shipping process, some of them are not satisfied. Nonetheless, Amazon Ltd has made its priority show its customers that the cost implications for making such decisions may be higher. Business operations models in Amazon.co.uk Ltd CATWOE Analysis and Root Definition A CATWOE analysis assists organizations in formulating the Root Definition. It is mnemonic in nature and assists the operations management team to identify all the stakeholders and other aspects of an organization like processes in formulation of Root definition. The CATWOE is hence, an abbreviation of Customers, Actors, and the process of Transformation, the World view, Owners and lastly letter E for environment (Bedward & Stredwick, 2004, p.309). Bedward and Stredwick (2004, p.309) explain that root definition refers to a structured description of a system. It gives a clear statement of the activities that are likely to take place in the firm that is being studied. Root definition comprises of elements such as how, what and why. The word customers in letter C means that these are the people who are the last group of people to get the services or the products that the company is offering. They are also termed as the beneficial clients of the system. The actors are the people who are tasked with the process of carrying out different activities as defined in the system. This is the group of people who transform the inputs in the firm into outputs. Letter “T” as aforementioned stands for the transformational processes in the firm. These are the processes that the system uses to convert the inputs into outputs. World view also termed as “Weltanschauung” gives a different perspective of the root definition. An excellent example of this is one where the system may be in place to ensure that the world has a safe environment, however, the consequences identified from such a system could mean that there is a significant level of pollution. Letter “O” stands for the owner, the people who have the power to commission the system and at the same time gain sufficient power in the firm to be able to control the systems and ensure that it no longer exists. Lastly, letter “E” of the CATWOE word represents the environmental constraints (Bedward & Stredwick, 2004, p. 309). These are constraints such as resource limitations, financial constraints and regulations, all of which are set by different terms of references. In Amazon Company, a CATWOE is used for the purpose of solving numerous problems in a business which may be contrasting the stakeholder’s interests. Giving a consideration to the global views, a CATWOE in Amazon Ltd makes provisions for the ethical framework of a root definition and when it comes to solving problems. In Amazon Ltd, a CATWOE is there as a means of resolving the problem of individual perceptions. Figure showing Amazon’s Rich Picture Analysis Part 2 Recommendations on How to Respond to the Parcel Conundrum Amazon Ltd has in the last few years decided to cooperate with other companies such as the 7-11 company with the aim of solving the parcel conundrum problem (Hill & Jones, 2012, P.277). The new system that is in place consists of numerous storage lockers of different sizes. The whole idea behind this process is to have packages sent to clients who may be in other locations and not necessarily at home. This is possible through the entry of a customer’s email code so as to unlock the Seattle test lockers that may be holding a customer’s package. This is a bright idea from both companies as Amazon is able to eliminate its customer’s reluctance to make orders from the company. However, it would be recommended for Amazon to respond to the parcel conundrum problem through more ways as identified below. One of the ways in which a customer receiving packages from Amazon can solve this problem is by arranging a delivery with a consolidator in the area. For example, in U.K. area most customers are likely to find the services of the Parcel Centre Basildon very helpful. The centre uses eco electric vans for making deliveries at home. The centre ensures that all parcels are delivered to them and reach the customer once a week at home. Another excellent example is that of Bordelinx Company which enables the customers who are in the U.K. to make various purchases from other states and make arrangements to have the package delivered to the location that they would like. The other way of solving the parcel conundrum problem, is for Amazon to make a connection with Mobile companies to send messages alerting the customer when the package arrives. Using mobile technology to solve this issue is much economical and saves on time. It is easier for the company to send instructions to the person making deliveries. The customer will also be aware of the actual location of the person or vehicle that is making deliveries, most particularly if the vehicle is within a customer’s reach and not necessarily at home. This is not only a method that save on time, but one that is secure. Most carriers today are able to identify the location of packages using technology. The other recommendation would be for the customer to have a box known as the iBin in their home compounds. This is a technique that has worked for a few European states, so it is also likely to work in the U.K. The box should be lockable and at the same time easily accessible to the courier. It would be recommended for Amazon to look for ways that prove the delivery was made successfully to customers. This is only possible via a signature. When a person receives the product and signs, this is proof that the item was not left outside to be rained on, or lost while in the process of being delivered. According to Johnston and Clark (2008, p.20) it is important to note that making a home delivery is always an excellent reducing on the CO2 transmissions as compared to the customer going to the company to collect it when the item is not a food product. Part 3 Managerial Qualities and Necessary for Effective Implementation of New Processes Business organizations experience change during their growth cycle. Change is necessary if a business is to remain competitive for a long time (Johnston and Clark, 2008, p.55). However, many people tend to have a negative perception about change. The aim of enforcing change in a business is to ensure the change is received positively by the employees and the change inspires them to execute the mission of the organization with zeal. The most effective way of initiating and implementing new processes within a business organization like Amazon is by creating as many communication channels as possible and encouraging employees to communicate. If there is no communication, false facts may be disseminated hence, making employees anxious and demoralized. Hiatt (2009, p.30), When planning for execution of a change in business, the employees should be actively involved. During the change phase, Amazon Ltd should ensure that it aims at gaining the confidence of people. Various steps can be followed by the management of Amazon in order to implement the new process successively. The first step is to understand what the customer needs are. The management of Amazon limited should strive to identify what the customers require and what makes them satisfied. This should include an assurance on fair pricing, good customer support or even safer environment. Once the management has established the customers’ requirements and preferences they can now be able to connect with customer and give guidance to the support employees on how to handle customers’ needs. The second step is to ensure communication is done in an effective way with people from all levels of life. The managers should be able get information to their subordinate staff, the executive staff and even with the customers. Communication channels should be put in place so as allow flow of information from executives to customers and vice versa. The third step that Amazon can put in place so as to be able to effectively implement change is to understand the financial status of the organization. The management should be able to prepare budgets and examine the profits and loss financial documents so as to make informed financial projections. Employee motivation is also a critical step in implementation of new processes in the firm. The management of the organization should realize that team building is the key in developing positive perception of planned change. Team building can be carried out properly if the management understands the concerns and necessities of their staff and address these concerns so as to keep employees motivated. According to Johnston and Clark (2008, p.56) it is essential for any management to keep track of performance of their staff as per the objectives they are supposed to accomplish. The management needs to implement a procedure with which they can be able to look at the performance of their staff versus the objectives to be achieved. The tracking of individual’s performance helps the management to focus on the factors that may affect the performance of personnel leading them to not be effective hence affecting the whole organization’s performance. In addition, the human resource management software can be used so as to streamline how goals are set and how evaluation of employees is done. How to measure Business Performance by Post Implementation Measuring of business performance is fundamental for any organization, irrespective of its size. Without this process it becomes hard to establish whether an organization is productive as per its set objectives. In the article by Nicolaou & Bhattacharya, (2006, p.18), the study conducted proved that post-implementation is carried out to assess and review whether the completed work was successful. This assessment is done after the completion of a project. Post-implementation assessment is done to ensure that similar projects do not encounter the same problems in future and also so as to establish additional benefits in a firm. The Reference model in Post Implementation There exist well-established measures for financial performance but the scenario is not the same for non-financial measures. However different standard organizations such as the international organization for standardization have been developing standard procedure for non-financial measures. Financial performance can be measured using common models such as the reference model. There also exist other few business performance models which may be attributed to popularity of equilibrated scorecard used to measure organizations strategic plan. Systems that are used for business performance measurement have become proprietary and extremely set apart due the differentiated nature of strategies. Reference models usually cover non-core procedures such as the management of supply chain or development of a new product. In post-implementation the reference model follows certain steps so as to obtain the best information about the success of a project (Nicolaou and Bhattacharya, 2006, p.19). The first step is defining scope of what is to be assessed before beginning the assessment. This is important since it makes sure that people are able to share the experiences they have been through openly. The second step can be to review the main documents, whereby the key documents related to a project are gathered so as to evaluate the benefits that a project returned. Considering getting some independent assessors is another step that can be taken. This enables one to get an unclouded opinion of the project. Another step in the implementation process is using this model can be that of acquiring the appropriate tools for data collection. Post-implementation model can be used to assess various businesses. It can be used to evaluate the liabilities that a business has versus the assets owned by the business. This is essential in order to determine how much a business owes creditors so as to make decisions when sourcing for loans. Another function of the post-implementation model is to review the amounts of cash allocated to different departments and then activities the cash is supposed to handle in those departments. Thus, the income and expenses can be understood properly. This enables the Amazon to compare between the current and the past performance of the business in financial terms hence, they can evaluate whether budgets were done properly (Hill & Jones, 2012, P.280). Lastly, the model enables the organization to be able to review customer satisfaction. This is done through review of complaints from customers, consistency in an organization and quality services are key measures that determine how the business performance in comparison with its competitors. Conclusion As aforementioned in the introduction, Amazon is a company that is dedicated to making on-time deliveries to its customers. It is important to note that the company is not the only body of distribution that is responsible for the safe delivery of a product. As evidenced in the recommendations, customers also have to play a part when making orders and receiving their items. For example, if a customer wants the item delivered at the hospital, it is wise to first ask the hospital whether it has staff members who accept deliveries or whether the delivery person is allowed to make a direct delivery to a patient. In conclusion, making safe and on-time deliveries should therefore not be the company’s business alone, but also the customer’s responsibility. Bibliography Bedward, D., & Stredwick, J. (2004). Managing information: Core management. New York: Routledge. Hiatt, M. (2009). Exploring implementation methods in a long-term leadership development program. Michigan: ProQuest. Hill, C., & Jones, G. (2012). Strategic management: An integrated approach. New York: Cengage Learning. Johnston, R., & Clark, G. (2008). Service operations management: Improving service delivery. New York: Prentice Hall. Nicolaou, A., & Bhattacharya, S. (2006). Organizational performance effects of erp systems usage: The impact of post-implementation changes. Journal of International Journal of Accounting Information Systems, 7(1), 18-35. Oliver, G. (2012). Foundations of the assumed business operations and strategy body of knowledge (bosbok): An outline of shareable knowledge. Middleton: Darlington Press. Read More