Agile Competitors and Virtual Organizations - Essay Example

Introduction The manner in which organisations operate is one of the most dynamic areas of discussion in most industries. Through the years, operations management has become a primary source of competitiveness that benefits most companies. Several theorists and managers have developed varying style in effectively handling operational responsibilities. These strategies were channelled to the employees and subsequently became a vital component of the organisational culture. Indeed, operations management is one of the priorities of most firms to ensure that their goals are achieved. It involves the creation of projects that are aimed at establishing competitiveness. Nersesian (2002) defined operations management as the design, operation, and improvement of the system that create and delivers firms' products and service combinations. Moreover, it deals with the proper allocation of resources and the strategic acquisition of technology. Some managers contend that the external environment is too influential to be ignored. Therefore, operations management also includes the proper consideration of the outside entities as contributing agent that will eventually affect the performance of the firm. The external environment consists of the customers and other economic indicators that contribute to the success and failure of firms. The analysis of operations management is critical in the success of firms. Some practitioners have instituted organisations that specifically tackle issues concerning operations management. In the next discussion, manner in which IFS renovated its operations will be illustrated. It is interesting to examine the approaches used by IFS to address the current operational predicaments. Moreover, it is important to equate other processes that were excluded from the methods used by the company. Situational Analysis IFS Limited is a manufacturing company primarily providing supplies for retail and other purposes. Although the company has continued to exist with relative success, recent setbacks have made the company revisit its operational procedures. In particular, clients have cited the lack of quality delivery provided by IFS. The specific complaints of the customers involve the failure to satisfy the delivery requirements in quantity. In addition, some clients have pointed that the company has failed to provide prior notices for failed orders. Furthermore, deliveries that were completed exceeded the agreed time causing delays in displaying the goods in retail outlets. It is indeed imperative to create a supply chain that allows more flexibility and eliminate the problems as identified by the consumers. Initially, the plan was to implement Agile Operations Initiative that secure top notch supply chain and will limit tendencies of tardiness in deliveries. The project has adapted advanced technologies and focused on communication as its core attribute. In addition, information is being updated to determine changes in trends especially in designing quality supply chain. Definitely, the process will require several changes and an evaluation of the current system used by the company which determined as problematic. The process involves the entire organisation and the attributes that combine with the entities. Developing the supply chain requires the similar methods used in project planning. Stages such as conception, development, implementation, and termination are important points to be considered. The company needs to specifically create a system that will integrate the positive attributes of the company and the operational procedures that provide positive short-term and long-term outcomes. Project Evaluation The extent of scope covered by the project is creatively established in the project. Forecasting is an effective mechanism and allows the strategist to determine trends in customer demands. The predictions based on previous orders will enable the company to design supply chain that is flexible and becomes highly responsive in periods when the demand is high. After the forecasts have been provided, the production planner handles the next step. The firm plan used by the company has its advantages. First, systematic production schemes will be reached using the method. Second, the company will avoid the situation where it has to produce because of sudden demand. The distribution approach involves a third party, which are the distribution centres of the company. This method is used because several customers are distant from the manufacturing site. Establishing a distribution centre will cut the time needed for the delivery. In addition, the third party assumes some of the tasks usually performed by the central company. The process involves internal outsourcing which will eventually allow the manufacturers to focus of its core competencies. Moreover, the distributor will serve as the second quality assurance stage. Most important, the information and technology system makes communication of all parties smooth. Since the company manufactures food products, the days required for production and delivery needs to be fast. As provided in the plan, it will take 4 days for the production and delivery to be manifested. This appears to be effective because such period will allow all requirements to be satisfied. Most of the time during the process is devoted to the processing of plans and acquisition of the orders. The production takes only one day and the delivery requires twenty minutes. Interestingly, the company has preferred an independent distributor instead of having its own distributor. Since the distributor also provides other retail products to the same clients of IFS, such strategy is beneficial. First, the cost compared with creating distribution centres is less when the current method is used. Moreover, the distributors can accommodate different hours of deliveries considering the varying necessities of the clients. Furthermore, the company is expected to dedicate its labour on other productive activities and leave the delivery to the distributors. On the other hand, it has to be noted that the company has no direct control over the process of delivery. Problems in the distributor will directly affect IFS. The software being used by the company is packed with attributes that will address the problems caused by the current system. The software has the capacity to provide accurate forecasts, valuable collaboration, meticulous planning, scheduling schemes and performance measurement. It is important that the software is capable of identifying shortages and allows the company to properly respond. Communication is boosted with Internet based approaches. The usual planning process becomes more vital and allocated with the most time. Finally, the process has included the capacity of the company to evaluate the results of the project. Unlike before, orders are processed faster and the production process is manifested upon determination of order details. The software analyses the orders and provide approaches that will ensure timely production and delivery. Scheduling is also significant because it will allow IFS is budget its time of the different activities. The process, however, that serves most notice is the manner of evaluation because the project takes time before the benefits are reaped. Lean Operations Management The idea of setting leanness on the operations is founded on smart tools that presuppose standardised work, establishing strength in determining problems, generation of valid hypotheses, and rigorous experimentations. This process is similar to the use of the scientific method in manifesting operations management (Jackson, 1999). In production, lean means wastes are eliminated in all areas of production. The concept, however, was expanded and has included waste elimination factory management, supplier networks, product design, and customer relationship. Holistically, the process involves less effort on the company, but the quality still improves. Jusko (1999) identified lean methods are winning strategies and designed to be components of quality enhancements. The process in which development is manifested is manifested with effectiveness and efficiency. Instead of creating immediate changes, the gradual procedures slowly addresses problems in the company and eventually arrive at solutions at less cost with best results. Improvements are critical to maintain the competitiveness of the company. Allowing the company to have leverage in resources will provide more flexibility and capacity to address risks and uncertainties when lean methods are used in the company. In implementing lean operations, the company has to be focused on the products pull to the consumers' end. Moreover, quality of process needs to be filtered from the problems and defects. Activities that provide no value and insignificant results have to be eliminated from the entire process. The improvements have to be continuous and the emphasis has to be focused on quality. Finally, the diversity of the process has to be promoted and flexible approaches need to be preferred. The process of lean operations discourages loopholes such that right situations and timing needs to be manifested. Aside from the technical aspects, the social nature of the process is essential. Logically, the operations are implemented by the employees from the top executives to the rank and file. The concept of lean operations concentrates on the ability of the employees to understand and appreciate the process. The integration of the operational tools with talent provided by the workforce is vital. It is important for the companies to properly orient the employees with the changes that have to be made to effect improvements. Unless the employees take part of the process, the method will become a useless strategy. The core concepts of lean operations according to Womack and Jones (1998), has to show specific identifiable value to the clients. It is the clients who will recognise the difference in the operations implemented by the company. The company needs to draw clear processes and segregate the entire operations into segments. From there, the source of wastes has to be identified. The flow of the value adding mechanism has to be established. It is imperative that the end result in reference with the necessity of the clients. Moreover, employees need to involved and provided with ample power. It is also important that the process of gradual improvement is geared towards perfection. The concept of lean operations has expanded and has become a monumental instrument among manufacturing teams. Some industries have also adapted the manner n which lean operations are implemented. The concept of lean operations continues to improve and explored by practitioners. Accordingly, some ambiguities regarding the method need to be revised to further enhance its capacity to improve the quality and overall performance of firms. Related Lean Concepts The notion of kaizen is highly valued in the process of lean operations. Literally, kaizen refers to the gradual improvement that has to take place in the operations of the company. Kaizen has been expanded and has also signified the use scientific approach in improving (Imai, 1997). The process involves the standardisation of the operations, measurement of the operations, gauging the measurements against the requirements, promotion of innovation to increase productivity, and standardise the new operations. This is cyclical and continues to evolve until the perfect operations are achieved. The primary concentration of the process is productivity and other related outcomes. Total quality management is defined as a management approach that suggests participation of all entities in the decision making process. TQM emphasizes on satisfying consumers using competitive pricing schemes. (Colman, 2001) Juran (1969), Ishikawa (1985), and Deming (1993) contended that the main purpose of firms is to stay in the industry with goals that seek to improve customer satisfaction through useful products and services. Companies have to secure continuous growth within organizations and the development of the individuals involved in realizing the aims of the organisations. Theoretical support and quality performance have further improved the use of TQM among firms working for competitiveness. TQM as developed assumes concepts that are existent in organizations. Juran (1969) explained that the cost of low quality products is greater than the cost of developing the products into high quality commodities. Using traditional gauges of performance, it is indeed more advantageous to spend and ensure high quality than to limit production expenses and produce sub-par products. Just-in-Time (JIT) inventory is a strategy that seeks to improve revenues through the reduction of inventory and other related cost. The process reduces the costs in building warehouses. Ohno (1988) explained that JIT is a philosophy that has to be followed by companies. The philosophy has evolved from different areas of knowledge that are important in operations. JIT seeks to allow firms to produce only when orders are determined. Mass productions are discouraged because the cost associated with its maintenance can affect the return on investment. It is believed that the flow of products from the manufacturer to the client is improved. Employees are also trained; thus skills and competencies are boosted. Agile manufacturing is another lean operational process that focuses on the creation tools to readily respond with the demands of the customers. The key in this process is having a common database where the components of the operations share the information that allows the creation of valuable mechanisms. Goldman et al. (1995) stated that agile firms have to deliver value to their clients, provide positive approach to change, value employee skills and knowledge, and form long-term relationships. The firms consider the anticipation of changes in the environment as main motivation for creating agile and lean operation mechanisms. As goods are processed, it is expected that value will be added in each stage before the final product is delivered to the consumers. Porter (1985) identified primary activities and support activities in the process of value-adding. This lean method is associated with TQM focusing on quality as each operational stage is being manifested. Indeed, firms will gain more from this method because it is expected that the end product will be valued more than what clients expect. Application of Lean Operations in IFS In applying the methods of lean operations in IFS, there are important guidelines and steps that have to be completed. A lean implementation program consists of various stages that address the meaning of leanness in IFS. First, the top management has to establish its vision of lean. As the top decision maker, the role of senior leaders in initiating the strategy is critical for IFS. Second, project teams have to be established wit leaders acting as the facilitator of the projects. This process is similarly observed in IFS where specific tasks are assigned to different groups. It is important that responsibilities are standardised and assigned properly. Third, the plans of the company have to be relayed to the employees since their role in the process is the most critical. Orienting the workforce with the goals of the company is vital because their acceptance to a new direction will set the tone for the strategies. The communication has to be done using modern networks that directly connects the rank and file to the top management. After the employees are equipped with the knowledge, IFS has to create a team that will be solely devoted in monitoring the leanness of the processes being implemented. The group will act similar to a quality assurance team guided by some fundamentals on lean operations. From the initial team, IFS needs to identify the final group that will undertake the lean initiatives. This part is important because selection needs to be properly carried out objectively. Naturally, the selection will be followed by training and knowledge sharing. The employees have to be provided with sufficient support and IFS needs to reinforce the learning tools with updated technology. Eventually, it is the capacity of the employees that will decide the success of the project. Project selection is also part of entire process of embracing lean operations. IFS have selected software that will assume the responsibilities of providing quality delivery options for the clients. The project appears to be appropriate when considering the ideals of lean management. Software will definitely lower the cost and eliminate other activities that have been unproductive. The essence of the project clearly emphasises the importance of improving the traditional method. Based on the program of lean operations the pilot implementation is undertaken for 2 to 3 months. It the process, the team needs to record useful inputs especially the areas where improvements have to be made. These concepts have to be successfully accounted for prior to the manifestation of the next step. Once the project has been implemented, it is important for the company to channel the project to other processes. The results of the lean projects will be greatly realised when all entities in the company will embrace the idea. It is also possible that the company will provide inputs to the distribution sites especially on the manner of improving their delivery mechanisms. Moreover, IFS has to allow the evaluation team to freely assess the different results obtained. Specifically, feedbacks have to be asked from the entities to determine the response of the employees and the systems to the project. In evaluating the project, the lean guidelines have to be adhered religiously. After being satisfied with the results of the project, the project team needs to conceptualise new projects that sustains leanness in the operations. Projects have to maintain the ideals of lean operations and to comply with the changing demands of the clients. It appears that IFS is on its way to improving its performance and regaining its credibility. The concept of lean operations, however, provides a viable alternative that will further improve the results of IFS projects. References Colman, A. A Dictionary of Psychology. "Total Quality Management." London: Oxford University Press. Deming, W. E. (1993). The New Economics for Industry, Government, Education. Cambridge, Massachusetts: MIT Center for Advanced Engineering Study. Goldman, et al. (1995). Agile Competitors and Virtual Organizations - Strategies for Enriching the Customer. New York: Van Nostrand Reinhold. Imai, M. (1997). Gemba Kaizen. New York: McGraw-Hill Publishing. Ishikawa, K. (1985). What is Total Quality Control The Japanese Way. Englewood Cliffs, New Jersey: Prentice-Hall. Jackson, T. (1999). Beyond the Pilot Project: An Essay of becoming Lean. St. Louis, MO: 4th Best Annual North America Conference. Junko, J. (1999). Industry Week. "A look at lean." Juran, J. (1969). Managerial Breakthrough: A New Concept of the Manager's Job. New York: McGraw-Hill. Nersesian, Roy. (2000). Trends and Tools for Operations Management. An Updated Guide for Executives and Managers. Westport, Connecticut: Quorum Books. Ohno, T. (1988). Just-in-Time Inventory for Today and Tomorrow. London: Productivity Press. Porter, M. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press. Womack, J. and Jones, D. (1998). Lean Thinking. New York: Free Press. Appendix A Activity January February March April May June Week 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Conception Period Development of Work Plan Determination of Specific Projects Designation of Project Leaders Completion of Project Teams Assigning of Projects Determination of Distribution Schemes Establishing of Delivery Routes Securing of Warehouses Assessing the Condition of Vehicles Completing Logistic Requirements Communication with 3rd Party Communication with Suppliers Information Dissemination Acquisition of needed Software Physical Quality Assessment Tests and Reruns Technical Quality Evaluation Debugging Final Testing Start of Operations Read More