Week 2 Assignment Operation Excellence- ITS 631

Week 2

                                                                        Assignment

Operation Excellence- ITS 631

Company overview

For this assignment I have chosen Walmart as my company. Walmart is an American multinational retail corporation that operates a chain of hypermarkets, discount departments stores and grocery stores. Walmart was founded by Sam Walton in 1962 and currently has 8446 retail units under 55 different banners in 15 countries. It has employee more than 2.1 million people all over the world. The starting slogan of Walmart was “Always Low Prices” but hey have changed it now and new slogan states “Save Money Live Better”. Walmart provides general merchandise: family apparel, health and beauty aids, household needs, electronics, toys fabrics, crafts, lawn and garden, jewelry and shoes, pharmacy, tire and lubes and photo processing center.

Situation/ Problem

Walmart’s operations management covers the approaches that are focused on managing supply chain, inventory and sales performance. The huge success of company is partly based on effective performance in operations in operations management. But the markets are changing and competitors are growing day by day. Customer all over the world are going online to purchase the products and it seems that Walmart is not doing good enough to step up in online markets. Companies like Amazon and Best Buy are taking lead in online sales but Walmart is trying to find ways to compete. With Amazon posting web sales of $61 billion compared to $7.7 for Walmart, it seems Walmart has lost valuable market share to its competitors. It seems strange that a company as large as Walmart has not been able to more competitive in ecommerce. The other challenges Walmart faces includes warehouses overstocked with seasonal items making difficult to fulfill of sales of everyday products. Seasonal items such as electronics, toys and clothing items are stocking up in inventory which makes difficult in managing everyday sales items.

Recommendations

With massive fleet of stores across the country Walmart can really step up in the online markets.  Let’s discuss how the strategic role of operations function help Walmart to achieve its goals. The three attributes of operations strategy are implementing, supporting and driving. By opening warehouse in existing stores, Walmart can easily attract new customers. With all items racked up in stores, Walmart does not have to invest much more in day to day products. On the basis of its customer needs and the customer buying pattern Walmart can easily differentiate the popular products from the low selling products. This increase sales in one hands and also help in inventory management system by reducing seasonal low selling items from the inventory.

Walmart should focus on its competitive factors such as low price, high quality, fast delivery, innovative products and services, reliable delivery and wide range of products and services.  Walmart really needs to work on the thought of ordering an item online and receiving it the same day. With technology becoming more integrated and the demand for instant gratification same day delivery seems to be achievable.

Walmart is doing a better job of having fresh food in stock, the retailer now needs to focus on improving the quality of the items on its shelves. Improving quality includes training employees to recognize which items needs to be replaced and which items needs to put first. Grocery accounts for more than half of Walmart’s U.S sales and is facing immense competition from stores like Target and Amazon Whole foods.

Recommendation II

Through efficiency, innovation, quality, responsiveness to customer and other factors Walmart has always been able to successfully build a competitive advantage. Product and service innovation includes significant improvements in technical specification, components and materials, incorporated software, user friendliness or other functional characteristics. Competing Amazon on this global market specially to boost online sales Walmart has to integrate all the department efforts and focus on diverse workforce into its organization to keep pace with changing consumer needs. Innovation whether incremental or revolutionary is the engine that keeps organization moving forward. At the heart of innovation is collaboration and integration of systems, designing and updating new technology and constant improvements and implementation.

With mobile technology regarding smartphones and wearables is becoming more prevalent within the retail landscape, Walmart should initiate to serve a more in this comprehensive market allowing anyone with these technologies to participate. The other thing Walmart should consider doing is leveraging their greatest assets ‘associates’ to get online orders to customer’s doors. This will eventually help in cutting shipping cost and increase efficiency as well as help packages to get their destination faster.

References

Wal-Mart In The Global Retail Market: Its... (PDF Download Available). Available from: https://www.researchgate.net/publication/228477402_Wal-Mart_In_The_Global_Retail_Market_Its_Growth_And_Challenges [accessed May 20 2018].

Walmart sparks SMS innovation to transform in store product search. (n.d). Retreived from https://www.retaildive.com/ex/mobilecommercedaily/walmart-tech-competition-sparks-sms-innovation-transforming-in-store-product-search [accessed May 20 2018].

Stevenson, W. and Sum, C. (2007). Operations management. 9^th ed.[Singapore]: McGraw-Hill Education (Asia).

Slack, N., Brandon-Jones, A. and Johnson, R. (2016). Operations management 8^th ed. Harlow, UK: Pearson Educational Limited.

Eroglu, C., Williams, B. D., & Waller, M. A. (2013). The backroom effect in retail operations. Production and Operations Management, 22(4), 915-923.

Week -1 Assignment Operation Excellence- ITS 631

                                                            Week -1

                                                            Assignment

Operation Excellence- ITS 631

Submitted By: Bipin Lamichhane

Student ID: 2841983

Definition and Company Overview

Definition

Duggan (2012) defined Operation excellence “When each and every employee can see the flow of value to the customer, and fix that flow before it breaks down.”

APICS The Association for operations management also defines operation management as the field of study that focuses on the effectively planning, scheduling, use and control of a manufacturing or service organization through the study of concepts from design engineering, industrial engineering, management information system, quality management, inventory management and other functions as they affect the organization.

 In a simple way, in a company each employee has good knowledge about the product moves from the process A to process B in a specific quantity at specific time, to a specific location; if not something is wrong. It is vital for any companies whether they are small or big whether they are private, public or non- profit organization, drive operational excellence into their operations. Especially at this time where technology has played vital role in everyone’s life and customers are more aware about the products and services they are buying.  Operational excellence nowadays played important role not just in shaping the structure of company but also the future of company.

Company Overview

Bata India is one of the largest retailer and manufacturer in Southeast Asia and is part of Bata Shoe organization. It was incorporated as Bata Shoe company Private Ltd in 1931 and was first manufacturing facility in Indian shoe industry to receive the ISO:9001 certifications. The company went public in 1973 and changed its name Bata India Ltd. Today Bata India has established itself as largest foot wear retailer in India and its neighboring countries like Nepal, Bangladesh, China and Sri Lanka. There are 5 production plants, 1500 retail stores and 27 wholesale depots spread in different location in India. Bata India sells around 60 million pairs every year and have given employee to more than 15000 people. But it was not easy to achieve this success without constant improvements in its operation over the period of time.

Situation/ Problem

Bata India has faced continuous challenge from internal or external environment throughout the period. In this case we are going to discuss the current issues and problems faced by top management and we will try to recommend the solutions to those problems with the help of operation management and operation excellence techniques and tools. Things always won’t go as planned, there will be many obstacles and issues that company faces in daily manner. Successful tackles of these issues not only determine the success of business but also helps to understand the abilities of employee and management team.

Problems mentioned by management team:

1)      High cost structure and surplus labor

2)      Low productivity in some plants

3)      Inefficient and unskilled manpower

High cost structure and surplus labor: The cost of operations in many Bata plants are in increasing trend where the production level remains the same. High cost structure will affect the price of end products which will definitely affects the sales revenue of company. The main reason for this problems is poor management of resources and inefficient distribution of labor.

Low productivity:  The main problems Bata India shoe factory now faced is low productivity. This resulted in late deliveries. The demand of Bata shoes is 40000 pair every day but due to low productivity the company only manages to manufacture 33000 pairs. Productivity is affected by the factors such as use of outdated technology, poor management and poor quality of raw materials.

Manpower: Due to inefficient and unskilled manpower Bata India is now facing serious production and operation problems. Lack of training in works and poor human resource management contributes in inefficient and unskilled manpower. Unskilled manpower will increase the operating cost, increase the product failure and errors in production which will affect the quality of products.

Recommendation I

On the above mentioned issues we will try to solve those issues on the basis of operations management. Here we will discuss the issues in depth and relates to the operations management and its principles to solve the problems.

High cost structure and surplus labor: High cost structure is basically resulted from increase in production time and disruption of work from various factors. For this issue, in every new upcoming project, all the team members and project manager are clearly briefed about their task and responsibility. Each and every production batch are provided with certain standard time to finish the batch and each batch time is regularly monitored by managers.  Every employee should be given a good knowledge about transformation process which includes input resources, transformed resources, transforming resources, transformation process and finally output product and services.

Low productivity: Productivity is directly related to the operations of company. How a company operates its day to day activity and how operation is handled by general employee to the top level of hierarchy determines productivity of the company. Production can be increased with the constant improvement in end to end business processes. Business processes such as increase in production time, flexibility in production unit, routine follow up of the employee activity, constant improvement of technology. Production can also be increased with the efficient supply network flow between operations.

Inefficient and unskilled manpower: Skilled manpower are the pillars of organization. They can turn the deficit into profit in the matter of time. Most of the Bata India employee lacks proper training about the operation management and system of the company. The knowledge and experience of human resource management team should be frequently observed and updated so the new employee in the company are hired on the basis of their experience and expertise about the system and operation of company.

Recommendation II

On this section we will solve the issues of Bata India on the basis of operations performance. Operations performance is the alignment of all business units within an organization to ensure that they are working together to achieve core business goals. In relating to current issues of Bata India the operation performance of company needs to be more enhanced and needed to be increased in certain standards. Here we will try to give some recommendation to the issues we talked above in our case.

 High cost structure and surplus labor:  There are three level of operations performance, operational level, strategic level and societal level.  Operational level performance focuses on quality, speed, flexibility and cost of operations. All the projects need to be flexible so if something doesn’t go along with plan the projects does not have to be start from the beginning. Speed in the project focuses on finishing all the necessary task in given period of time. Time is always important factors in the project so all the necessary task should be well planned and executed in order to achieve goals and objectives of a project. Another important factor to reduce the cost of structure is dependability of project. Dependability of project reflects the on time delivery of all the necessary variables in the project. Dependability of project prevents lateness causing disruption and wasted time and effort.

Low productivity: Low productivity is often the results from inefficient operations in various department of organization. To tackle this issues Bata India should assess their operation and should make adequate decision in their operation management. They should focus on reliable operations, error free process, fast through put. Bata India must prevent errors causing internal unreliability and low dependability, prevents error causing wasted time and effort, therefore saving cost and increase in productivity.

Inefficient and unskilled manpower: Skilled manpower in different areas of operation ease the process of operations and yields to success of the project. Bata India should focus on employing skilled people and encourage them to contribute ideas for cutting out waste and working more effectively. They should hold regular meetings where staff share their experiences and think about how they can build their knowledge of customer needs, new technologies and how they can add value for their customers.

References

Johnson, Jamie. (1028, May 7). “Core Principle of Operational Excellence [10 core principles].”  Retrieved  from https://tallyfy.com/guides/operational-excellence 

Essays, UK. (November 2013). The operations of shoe manufacturer Bata. Retrieved from https://www.ukessays.com/essays/management/the-operations-of-shoe-manufacturer-bata-management-essay.php?vref=1

Stevenson, W. and Sum, C. (2007). Operations management. 9^th ed.[Singapore]: McGraw-Hill Education (Asia).

Slack, N., Brandon-Jones, A. and Johnson, R. (2016). Operations management 8^th ed. Harlow, UK: Pearson Educational Limited.

Brown, S., Lamming, R., Bessant, J. and Jones, P. (2000). Strategic operations management. Oxford [u.a]: Butterworth- Heinemann.