Key Operational Management Decisions - Report Example

Business Introduction The aim of this study is to critically analyse the key Operational Management decisions that have been taken by Concept Design Services (CDS). It is also important to evaluate the impact that these decisions have had on the success of the business. Operations Management is an integral part of Concept Design Services (Von Solms, 2005). In order to stand out as an emerging player in the field of Home ware business, operations management becomes imperative for CDS. CDS had always tried to enhance its final products by the process of value addition. Value addition can be ensured when the available resources are used to enhance sustainability in the long run. CDS has changed its line of business from aerospace to items related to home wares. This transition has been possible by using advanced technologies and equipments. The organization has been evolving since then by innovating and developing new products with the help of integrated operations and expansion plans. The company has collaborated with reputed designers to improve the sales volume and enhance the procedure of production. In order to excel and sustain in the future, CDS has been trying to modify its process of operations management by concentrating on both operational and strategic level. Thus, to ensure a sustaining growth in the future, it becomes essential to identify the challenges and understand their impact on operations management (Power and Bahri, 2005). Critical Analysis and Evaluation This section aims to critically analyse the chief decisions related to operations management that have been considered by CDS. Operations management influences the strategies and operations of CDS significantly. It helps in improving the production processes by enhancing the methods of designing, planning and controlling. It is important for CDS to ensure that the resources are not wasted during the production process. This helps in enhancing the profit of the company. The strategies have to be designed in such a manner that it helps to create a comparative advantage for the company. The manufacturing process of the company is carried on in steps. The products are inspected and assembled in the initial stage. CDS also emphasised on its distribution services. With efficient operations management, CDS have been able to formulate strategies that have helped it to deliver services without much difficulty. CDS also needs to focus on good scheduling. It is imperative to maintain efficiency in plant utilization. The batch sizes reduced with the use of complex technologies. There were several issues that were faced in the process of manufacturing even though the operations were carried efficiently. The new developments in products were aimed to increase the customer base. This would affect the profitability position of the company. There would be enhancement in revenue with the increase in variety of products and customers. Maintaining of long term growth is essential to carry on operations effectively in order to ensure efficient management of production and supply chain (Mabert and Venkataramanan, 1998). Concerns related to sales forecast would be resolved if operations are managed at the strategic level. Sometimes, there was continuous disruption between the production and manufacturing process. The problems within the organization increased. Proper and accurate sales forecast is crucial for effective implementation of operations management. The effective utilization and management of resources would ensure exceptional services for the customers. The production cost would reduce with application of the above strategies (Kell, et al, 2006). There are various decisions taken by CDS that has influenced its business activities to a great extent. The primary decision making always involves strategies related to system designing. The process of designing begins with the development of innovative products. It is essential to determine and identify the nature of the products that has to be developed. The determination of products range is also based on the feedback from the customers. This feedback would reflect the taste and preferences of the customers. This would also give an idea of the scopes and opportunities that are available in the market. There is also a system that helps in controlling and monitoring the performance of the entire process of designing. The decisions made during the process of manufacturing, forms an integral part of operations management and the failure or success of the entire process depends on the effectiveness of the decisions (Vonderembse, et al, 2006). There is a team in CDS which ensures effective communication to appropriately implement the plans related to financial and marketing development. CDS has been continuously providing services for the design houses. The growth of the business entirely depends on the appreciation from the design house. This acts as a motivation for the company and helps it to develop innovative designs and products. CDS always try to offer services which would help them to differentiate from other competitors. More importantly, CDS tries to cater to the design houses by providing customized facilities. The products are also designed with reference to the customer needs and requirements which in turn, enhances the profitability of the design houses. CDS decided to collaborate with Villessi which is an Italian designer house. This collaboration proved to be beneficial for both the parties. The design of CDS was quite popular among the design houses. CDS has achieved this position by appointing highly skilled designers. These skilled employees had an advanced knowledge of different technicalities related to complex designing procedures and were able to translate tricky design plans into saleable and manufacturing products. The designs were developed in such a way which helped CDS to maintain high margins for itself. This helped in the enhancement of the brand image of not only CDS but also that of the design houses (Von Solms, 2005). This indirectly strengthened the operations management processes. The expertise in the field of design was the main factor that helped in forming collaboration with different design houses but later on, it was seen that CDS was equally valued for their distribution, manufacturing and marketing competencies. CDS emphasises on the process designing techniques in order to ensure that the production procedure is clear to the employees who are responsible for the entire procedure. It is important to select the suitable technique for product manufacturing and identifying the most appropriate sequence in which the entire process would be carried on. CDS uses the facility designing process to understand the perspectives of the suppliers and customers. This procedure helps CDS to understand its own capacities. Such understandings help the company to estimate the time that would be required to deliver the services to its clients and customers. This system also ensures that CDS effectively manages its abilities and capitalizes on its capacities to produce the products with respect to its requirements and demand (Slack, Chambers and Johnston, 2010). The manufacturing operations of CDS sometimes suffered, because of the commonality in the production process for all the products. All products were manufactured using the same process route. Some products needed advanced and specialised moulding and more stages of assembling. This increased the complexities in the process and it led to an increase in recycling of process flow. CDS used various strategies to overcome the issues. It started to develop a separate process for the products which were more complex in nature. This would increase the investment cost, but the process would be more effective in the long run. With the advancement in production concepts and techniques, the older tools were disposed. The company continuously focused to update its technologies. This enhanced productivity to a great extent and thus, the company was able to update itself with the changing taste and preferences of the consumers. The range of products also increased as a result. Complex and high quality moulds were used which led to some inefficiency in the production process. However, the productivity was increased in the whole process and more products could be produced within a specific time period. The enhancement in production techniques also helped to ensure consistency in product quality i.e. the colour was consistent for all products, the surface finish was excellent and the products were accurate with respect to the product samples and orders. This accuracy was a result of the expertise which was already gained from the production of aerospace products. CDS also tried to follow a standardised technique of production so that any machine could be used for the moulds in the manufacturing process. This strategy proved to be beneficial for the company as this helped in fastening the production process in case of emergency. The entire process of production has helped the company to increase the volume and reduce the initial cost. CDS has also been able to subcontract to the smaller companies. This was not possible earlier with the complex designs. However, the above strategies have led to various issues in the production processes. It has been difficult to coordinate the schedules of production among the members of the manufacturing team. This in turn, led to challenges towards the maintenance of quality standards. Inefficient steps in the process of subcontracting were identified as the main cause for the problems. The inefficiency affected the relationship of CDS with its subcontractors (Wiendahl, et al, 2007). CDS’s distribution services are one of the main reasons for its popularity in Europe. The customer service of the company was satisfactorily maintained due to the efficient distribution networks established by the company. The main objective of the distribution channels was to integrate the various operations of the company, to enable an efficient process of planning. The most important driver in the production process was to maintain a sequence for each product. This minimized the time required in the process of setting up of the initial proceedings. The sequence was started with a light colour and eventually, moved to the darker shades for the moulds. Maintaining of inventory at a specific level was also a concern for the company. Increased production of complex products has led to decrease in the average utilization level. It becomes difficult to accustom with short run changes. These problems can be solved by efficient forecasting results. Accurate forecasts would help to identify the available inventory level that becomes important during short notice product deliverables. It is however, difficult to forecast the production outcomes related to innovative and new moulds. The requirements of the designers have been given the utmost priority even during short notice production operations (Krishnan and Ulrich, 2001). The delivery system of CDS also suffered due to inefficiencies in the dispatching operations. A specified time was allotted for the normal deliveries and a delivery premium was charged from the customers in case of express delivery requirements. However, it was noticed that most of the express delivery methods were initiated by CDS and not by the consumers. There were many failures in the dispatching system. Thus, it can be seen that the principal Operation Management decisions had significant impact on the success of the business (Roth and Menor, 2003). Challenges and its impacts on Operation Management The operations management decisions had several positive impacts on the productivity and profitability of the business operations of CDS. However, the company faced various challenges and issues while surviving in the industry for home ware. The first challenge was concerning the department of designing and its role in the development of new product. Development of innovative and new products is essential for the survival of the company. The importance of the development process increased due to its collaboration with the design houses (Voss, Tsikriktsis and Frohlich, 2002). The department of design has significantly grown in its influence and size. The threat for the company arises from the fact that it would be difficult for the company to retain the same experienced team for the future operations. The growth of the company is ensured due to the efficiency of the design team who has continuously engaged themselves in the process of innovation. The skilled employees have helped the company by integrating their creative thoughts to meet the requirements of the customers. This has helped CDS to fetch substantial contracts. Thus the growth of the company is directly related to the capabilities of the employees who are responsible for the process of designing. It was difficult to retain these skilled individuals even in future, and the company faced challenges in overcoming such issues. The other sections of the company also had several issues with the designers. This was because of the rising popularity of the design department. Sometimes, the individuals from the design department are restricted in their independent thought process. They are forced to work under the supervision of the other departments. This discourages them and their productivity is affected. The designers always expect professional services. In several cases, problem arises due to ineffective decisions of the designers. The designers also fail to understand the consequences of their erroneous decisions. Demands of the design houses do not get fulfilled in such cases. The designers and the individuals from the other team fail to cooperate to achieve organizational goals (Voss, Tsikriktsis and Frohlich, 2002). The next issue was related to the forecasting methods and procedures that helped in identifying the sales outcomes of the company. There were conflicting views within the company. There was an imperative need to enhance the process of forecasting. There was tremendous disruption in the distribution and manufacturing operations. This was due to the unexpected changes in the distribution and production schedule as consumer’s orders started coming with the weekend sales proceedings. Accurate forecasts of sales would have ensured significant savings in cost, efficient customer service and higher utilization. Precise forecasting is difficult in the industry in which CDS operates. It is impossible to predict the outcomes on a weekly basis even if accuracy in monthly predictions were still achievable. However, the company always tries to meet the unexpected demands of the consumers (Ulrich, 2003). The main objective of CDS has always been to serve the demands of the customers. They have catered to the needs of the customers and have aimed to satisfy their desires effectively through the means of providing effective services to the retailers. However, with the passage of time, the company has collaborated with design houses and expanded their business operations to serve the manufacturing, distributing and processing activities. This had led to apprehension within the business organization and raised questions concerning sustainability of the company in the long run (De Mozota, 2003). Finally, the company has been facing challenges in terms of strategising appropriate expansion plans in other markets and other sectors. There have been various debates that were raised within the company. The company has already formed alliance with the design houses in several parts. Now the question is, whether it should further expand its operations all over the world. The company has already established its brand in the European market. The company is now concerned whether global expansion in other sectors would be profitable or not. This is challenging for the company as the expertise of the company is limited to only few manufacturing areas. The company always had an evolving process of Operations Management but, deciding an appropriate plan for surviving in the competitive market in the future is challenging. Thus, this is how the issues in the future would impact the operational management of CDS (Vonderembse, et al, 2006). Conclusion The critical analysis of the key operational management decisions that have been taken by CDS reveals that these decisions had a positive and negative impact on the success rate of the business operations. Operational Management plays an important role in the strategic planning of operation within the organization and is one of the driving forces that guide the entire manufacturing and designing process. There have been various outstanding developments by the company which has helped the company to ensure a sustaining growth. However, there have been certain flaws in the decision making process which has affected the profitability position of the company. It can be seen that the operational management decisions are vital for the effective growth of the company. The company has evolved with the passage of time and moved from one industry to another. This has enhanced its expertise in various areas which has helped it to diversify its product line. The company has also identified major challenges and issues that would be faced by it in the future. This would certainly impact their operations management in the long run. The challenges were mainly associated with their evolving business trends and thus, it becomes imperative for the company to make optimizing decisions and strategies at the operational level (Power and Bahri, 2005). Reference List De Mozota, B. B., 2003. Design management: using design to build brand value and corporate innovation. New York: Skyhorse Publishing Inc. Kell, L. 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