Introduction to the Problem
Within the sphere of operations management, paying attention to transformational processes within organisations is considered fundamental. Operations management represents a set of actions ranging from planning to supervising in order to make adjustments leading to the higher profitability of organisations (Galloway, Rowbotham & Azhashemi 2012). Transformation processes are a part of operations management efforts and refer to any activity or a range of activities that take inputs, transform them and increase their value, and provide outputs to clients or customers. Such inputs can range from raw materials to resources already available to a company. In the case when an organisation uses raw materials in its transformation efforts, it is relatively easy to identify the changes, for instance, as milk is transformed into butter or cheese. When inputs include people or information, the nature of organisational transformation is less obvious; for example, a healthcare facility transforms sick patients (the input) into healthy patients (the output) (The Open University 2011). In the current exploration, the focus will be placed on discussing the transformation process at Concept Design Services in order to gain further understanding of the relevant process types. In addition, the evaluation of strengths and weaknesses that exist between the core functions of the organisation will be presented.
Concept Design Services (CDS) once was one of the most profitable producers of plastic household products. After being acquired by a large consumer production group, the company extended the range of available products to include everyday household items such as bins, washing up bowls, buckets, dustpans, and many others that were sold under the Focus brand. However, as time went on, the management of the organisation realised that industrial markets became more difficult and less profitable overall. Because of this, CDS decided to implement a range of transformational processes to change the orientation of the company to customer-focused services in the form of high-quality products that were impeccably designed and manufactured.
Transformation Implemented at Concept Design Services
The move away from the production of industrial products made it possible for CDS to eliminate the use of old and inefficient equipment. This led to an increase in productivity through the use of complex and high-quality moulds that produce products of better quality compared to those that CDS was manufacturing previously. According to the estimations of the management, the company experienced a 600% increase in productivity and a boost in dimensional accuracy, high-quality surface finish, and the better consistency of colours. Thus, with the abandonment of producing average-quality industrial products that were seen as commodities to most consumers, CDS reached a high level of superiority in quality performance and the orientation on customers’ demands.
The inputs of new materials and equipment led to the emergence of a new system of product development. As mentioned by Grant Williams, the company’s Operations Manager, the new process of product development for the Concept line of items was based on the principles of high precisions, complicated objects, and technical challenges. The company’s objective to overcome the challenges and reach the highest standards of quality allowed to development of innovative mould machines that would provide the best outputs possible. In addition, it is important to mention that the operators at manufacturing facilities were highly motivated to get through each stage of production as quickly as possible because the company was motivating them in the form of bonuses for good outputs.
Strengths of Operations Management
The abandonment of old and inefficient equipment that was used to manufacture plastic parts for industrial companies allowed CDS to increase the overall efficiency of its manufacturing processes. Having only large machinery allows the organisation to produce multiple products at every machine cycle. While such equipment is seen as more complex and more cumbersome, it produces the highest quality of products that has not been possible before. An example of increased efficiency is illustrated in the number of items made by one machine. Before the transformation and the optimisation of the company’s manufacturing, one machine was making only three items per minute. However, the new six-cavity mould available during transformation makes eighteen items per minute, which is a 600% increase in productivity. Such modernisation increased the quality of products and standardised operations processes.
The optimisation of manufacturing at CDS plants put the start to the development of new products. The expertise that the company has gained previously contributed to the increase in the quality of products, which was confirmed by the company’s customers. This made the company attractive to international partners and designers who would be interested in incorporating the products manufactured by CDS into their projects. The introduction of the Concept Office branded products is the direct result of the optimisation and the shift in orientation. Such new products as storage boxes and an array of desk items with innovative styles and seasonal colours. This development put the company in a beneficial position – the end consumers were satisfied with the range and the quality of introduced products, while CDS gained popularity as an innovative brand that cares about the quality of items.
Weaknesses of Operations Management
Despite the positive outcomes of the transformational processes implemented in CDS, there are some significant weaknesses in the core functions of the organisation. With the introduction of new equipment and the disposal of inefficient machines, supply services in the organisation have experienced significant disruptions. Since factories have not been set up to address weekend product and maintenance, it had to reduce its batch size and bring down the average utilisation of the inputs. In addition, the company has encountered some disruptions in schedules as well as short-term unplanned changes in schedules that take place on a frequent basis.
Schedule disruptions represent the main weakness in the functions of CDS. These take place because of the occurrence of urgent requests for production. For example, the Sales Department at CDS may file an urgent application to produce a run of 500 specific products because of an un-forecasted demand for them. Such a request creates a disruption in the production’s schedule that requires a complete reconsideration as to what products should be manufactured as soon as possible. Therefore, the lack of stability associated with changing demand levels creates some level of uncertainty within operations management. Also, the seasonality of some product ranges contributes to the increasing disruption because predicting the necessary number of items to be produced is near to impossible.
In addition to increased demand for seasonal or promotional products, CDS is challenged by the scheduling of mould trials. The testing of the equipment disrupts the everyday manufacturing schedules and increases the likelihood of shifts in deadlines that are complex to monitor. CDS finds it complicated to choose whether to put the products that are high in demand and urgent first or to implement testing for new moulds. Therefore, it is essential to determine the way in which products should be scheduled.
Improving Identified Weaknesses
Better scheduling represents the first solution for improving the weaknesses associated with the transformational process of CDS. Scheduling refers to the range of activities related to when and where each operation is needed for manufacturing the product. The establishment of times at which each event and operation is necessary for ensuring that the manufacturing of products is completed seamlessly. The principles associated with the scheduling refer to the planning of the sequence of work so that production can be arranged systematically towards the completion of products by their due dates. While there are three principles of scheduling, which include the principle of optimum task size, optimum production plan, and optimum sequence, the last two are recommended for implementation. The principle of an optimum production plan implies such planning that will enable the distribution of the equal load on all manufacturing locations. The principle of the optimum sequence is linked to the method of scheduling that tends to reach the maximum level of efficiency when the work is planned.
Inputs to scheduling that may be integrated into operations management at CDS include detailed, cumulative, cumulative detailed scheduling, and priority decision rules. Unlike detailed scheduling, which will not work in a manufacturing situation due to the frequent changes in orders, the breakdown of equipment, and unforeseen events, cumulative scheduling can bring some important benefits. This strategy deals with addressing total work in scheduling and includes long-range planning of different capacity needs. Priority decision rules also apply in the case of addressing CDS schedule challenges because they can be used in combination with other approaches.
The combination of both backward and forward scheduling at CDS is expected to address the weaknesses associated with scheduling. Forward scheduling implies the type of planning that begins a new task only when the previous one has been completed (Kurbel 2013). According to this approach, the manufacturing processes at plants will be finished within short timeframes in order to finish jobs early and create an extra inventory (Reid & Sanders 2016). Thus, forward scheduling will determine both start and finish times of priority processes and assign the earliest available time slots. Such a method will guarantee a smooth inventory process needed for sustaining a high level of productivity.
Backward scheduling is necessary to implement when there is the need to deliver products at specific dates (Hatten 2018). It is concerned with determining the starting and finishing points for waiting for processes through their assignment to the latest slots of time available at manufacturing facilities. This is expected to enable each process to be completed by the established deadline. Backward scheduling minimises inventories and contributes to the decreased costs of keeping stock. For CDS, it is advised to implement testing procedures for moulds and equipment with the help of a forwarding schedule. However, for urgent orders, backward scheduling will work the most efficiently since it will not disrupt other procedures while delivering the necessary number of products by the set deadline.
Opportunities for the Future Success
When speaking of the opportunities that exist in the wider operating environment of CDS, it is important to mention that the company is continuously working on product development to ensure that customers receive the latest products. The introduction of the “Concept Office” brand allowed CDS to develop a range of innovative marketing ideas to introduce to the market. With the alliances with German and Italian designers, CDS can position itself as a unique service partner to designers and work on its further operational capabilities. This also means that the reputation of the company will inevitably shift from the industrial product provider to a design-oriented and high-end provider of innovative products.
Therefore, the fundamental change in how CDS does its business presents unique opportunities. Instead of looking inward and focusing on the satisfaction of end consumers’ desires, the company focuses on also providing good services to retailers, which puts it into the sector of ‘business to business.’ Designer house collaborations represent opportunities for getting into areas that are beyond the core focus of CDS and broadening categories. Such collaborations are attractive to design-house partners because of the ability to transfer their ideas into actual products. In addition, the relationships that CDS develop with designers is similar to a type of joint venture that plays to the strengths of the company. The design expertise of the company allowed it to enter new partnerships while such operations management processes as marketing, distribution, and manufacturing enable the continuous improvement and access to unique capabilities.
Threats in the Wider Operating Environment
Taken into account the complex nature of operations management at CDS, the threats identified in the course of the analysis are concerned with disruptions in procedures as well as the availability of resources necessary for completing processes at manufacturing facilities. Such risks include supply chain complications, human resources risks, transportation, equipment, and security. Such threats are seen as important to the operations of CDS as the company has implemented a transformation and requires building a cohesive operations management system that will enable the successful production of the range of products offered by the company.
In regards to the supply chain, the company can experience limited inventory availability due to the need to produce high-demand products within short time spans (Li 2014). Due to schedule disruptions mentioned previously, the internal threats for the organisation are on a high level. Being unable to produce the necessary number of items before the deadline, CDS can lose its clients who will choose another competitor that follows deadlines. Therefore, manufacturing disruptions and issues of internal operations represent the key risks that can limit the organisation’s capabilities and stagnate profits.
Externally, CDS can experience risks associated with demand and supply. Demand threats are linked to unpredictable or miscalculated customer and end-customer demand (Weisman 2008). This threat is illustrated through the example of production at manufacturing plants being disrupted by urgent orders placed by the Sales Department that experiences an unpredicted spike in demand for a particular product. Supply risks are usually caused by product flow interruptions and can affect the established deadlines due to the absence of needed materials such as moulds that are used for the manufacturing of CDS products.
Competitive threats also represent a challenge for CDS since there is an abundance of other companies that manufacture similar products, which increases the risks of substitution. In the market of design and household items, the threat of replacement is high because consumers can get benefits from multiple product offerings manufacturing by other companies. Threats of substitution affect the competitive environment of an organisation in a particular industry and influence its ability to reach the desired level of profitability (Bowhill 2008). Additionally, high rates of competition also increase the chances of suppliers raising their prices, which will negatively affect CDS expenditures and enable the company to increase its prices also to maintain the previous level of profitability.
Identifying and Addressing Threats
The identification of threats that can limit the success of CDS begins with the analysis of the internal environment and the recognition of variables that hinder the company’s capabilities. It is recommended to look at everyday operations processes and identify gaps or limitations that make it harder for the organisation to reach its objectives. The use of property and equipment should be considered in this scenario to ensure that the company implements all necessary safety measures and precautions to operate smoothly. From the external perspective, CDS operations management should evaluate the company’s relationships with suppliers and customers.
The integration of a model that will address the primary threats within the organisation can help to significantly reduce the occurrence of disruptions or other limitations. Threat assessments must be based on honest and open internal communication as well as third-party risk analysis (Chibili 2016). For example, hiring an independent operations management specialist can reveal the issues that are not visible from the inside. Risk evaluation and mitigation strategies must be established to reduce the impact of threats through defining the probability, range, and reach of each identified threat. This will allow us to accurately prioritise the extent of risk and integrate an appropriate response (Ahmed 2017). The development of a mitigation strategy will allow the company to define and outline action steps as to how the company will reduce the risks at an acceptable level. An effective model should be based on relevant information about the company’s finances, contractual obligations, as well as service level agreements (Ross & Williams 2012).
Overcoming threats of substitutes is possible through the elimination of weaknesses that CDS products may have when compared to other market offerings. For example, high prices on items that competitors sell should be reduced in order to reduce the chances of customers choosing substitute products. Also, the quality of products should be maintained at a high level due to the risk of customers choosing substitute products of higher quality. Through product differentiation and the maintenance of a positive brand image, CDS can satisfy the needs of the customers and create a brand image that will encourage loyalty.
Concluding Remarks
The transformation process implemented at Concept Design Services is an example of how a company can move away from inefficient procedures and reach new levels of success through innovation. Operations management principles ranging from the supply chain processes to new product development allowed the organisation to develop a reputation of an experienced and reliable manufacturer that ensures excellence at each step. Disruptions in manufacturing and limitations that exist within the operations process present opportunities for improvement, while the collaboration with knowledgeable specialists in the field of design will bring CDS to a new level that could not have been reached previously.
Reference List
Ahmed, R 2017, Risk mitigation strategies in innovative projects, Web.
Bowhill, B 2008, Business planning and control: integrating accounting, strategy, and people, John Wiley & Sons, Chichester.
Chibili, M 2016, Model hotel operations management, Noordhoff Uitgevers, New York, NY.
Galloway, L, Rowbotham, F & Azhashemi, M 2012, Operations management in context, Butterworth Heinemann, Oxford.
Hatten, T 2018, Small business management: creating a sustainable competitive advantage, 7th edn, Sage Publications, Thousand Oaks, CA.
Kurbel, K 2013, Enterprise resource planning and supply chain management: functions, business process and software for manufacturing companies, Springer, Berlin.
Li, X 2014, Operations management of logistics and supply chain: issues and directions, Discrete Dynamics in Nature and Society, vol. 2014, pp. 1-7.
Reid, D & Sanders, N 2016, Operations management: an integrated approach, 6th edn, John Wiley & Sons, New York, NY.
The Open University 2011, Understanding operations management, Web.
Weisman, J 2008, ‘The rise of the unpredictable consumer,’ The New York Times, Web.