Operations Management assignment sample

Introduction:

In the today’s world of immense competition, firms need to develop competitive advantage which will enable them in long run sustainability of the organization. It is important to mention that development of competitive advantage can be done in various way right from development of new innovative product or reorientation of the existing process which essentially reduce cost and also at the same time helps in delivering right value to the customers (Greasley,2008). Therefore organizations conducting business in the highly competitive business environment must transform its process or product as per the requirement so as to fulfill the needs and demands of the customers. Thus it can be essentially inferred that operations management which deals with the entire management of the operations of the company right from the procurement of raw materials, transforming it into final products and delivering it to the targeted customer must be done in an orderly so as to maintain the efficiency in the system (Slack, Chambers & Johnston, 2010).

Al-Futtaim group is one of the oldest Dubai based organization who are specialized in retailing, real estate, electronics and finance. The company was established in 1930s and today it is the 3rd largest business conglomerate in the entire region of United Arab Emirates. As of the latest available figure the company have a net worth of $ 3.6 billion and has 30000 employees for managing the entire operation of the business in different functionalities. It is due the complexity of managing the huge operation of the business, the firm should have an efficient operational plan so as to manage the business. This research study on the operations management issue will be done on the retailing arm of business.

The Importance of Operations management in Al-Futtaim:

Al-Futtaim as one of the biggest retailer in UAE and therefore it must have a proper operation management system in place which will help to maintain a smooth and efficient functioning of the business. Being a retail organization in the free economy like Dubai, the company has to continuously curve out strategies which will enable them to maintain a competitive position for the long run sustainability of the organization. In essence operations management have an important role to play in the retail based organization like Al-Futtiam. The company have to efficiently maintain the stocks which are generally of huge variety. The complex operation of the retailer includes real time coordination with the various types of supplier and maintaining the entire logistics so that the needs of the customer can be fulfilled. Moreover the organization has to maintain the cost of inventory and the other cost related for lead time of order processing. So in essence the importance of operations management for the efficient management of the inventory and reducing the lead time for timely aggregation of stock in the store is of huge importance for the providing the customers with the required products. Moreover the demand estimation must be done so as to reduce the wastage and thus reduce the blockage of capital and the inventory cost associated with the procurement of the product.

It is also absolutely to note that the inventory of the product must be managed in an efficient way specifically for perishable products or products with low shelve life. The main importance of the operations management in the retail organizations is also with the entire logistics of the products. The logistics of the products are to done in such a way that the quality of the products must be maintained right from procurement to final delivery of the products are maintained.

The role of operations management is also not limited to the inventory control, procure and delivery of products in the retail organization such as Al-Futtaim. The operation management department have to maintain the store in an orderly manner such that the products can be categorized for the ease of the customers. Moreover the accountability of the each of the large volume of the product must be maintained so as to reduce the pilferage in the entire process of the supply chain process of the organization.

The operation department of the retail organization like Al-Futtaim is also entitled to give exclusive service to the customers so that that needs and the requirement of the customers at the ground level of the can be fulfilled. So it is of absolute necessity for the operation department of the company to provide the required training to the employees with close consultation with the human resource department so that the employees can give an exclusive customer satisfaction through providing of quick solution for their needs. This will not only help the organization to gain customer loyalty but also to gain a competitive advantage to its competitors.

The importance of Operations management in retail organization is of utmost importance and helps in gaining of competitive advantage. The reasons for such importance of the operations management for retail companies like Al-Futtaim are summarized below:

• The efficient functioning of the operation department help in predicting demand thus reducing loss on unnecessary capital blockage for the organization.
• It helps to procurement of kind of product at right quantity ad right quality which helps in providing delivering value to the customers.
• Operations management in retail organization helps in maintaining proper inventory which is highly essential for conducting the daily operation of the retail business.
• It oversees the entire logistics of the company and ensures timely procurement of product in the store and also efficient delivery of products.
• The operations management also deals with providing time bound customer service and thus ensuring customer satisfaction which help in long run sustainability of the organization (Slack, Chambers & Johnston, 2010).

The Process of Operations Management in Al-Futtaim:

The management of the Al-Futtaim has an integrated ERP system through which they management the entire operation of the retail arm of the company. The analytics department of the company through an in-depth analysis estimates the demand forecasting of the various types of product and then with the help of statistical modelling predicts the quantity of demand for each category of products. It is with the help of the demand estimate, the operations department of the company process the orders for the products with the required quantity. It is also essential to mention that before the processing of the orders, the operation manager of the company checks the inventory levels of the company through the integrated ERP for each category of products. The resource planning software is made in such a way that, it provides a signal for low inventory and thus enables the operation department to maintain the optimum level of inventories.

Moreover linear programming model based logistics system are performed in the Al-Futtaim. This model based logistics system help the company to reduce the cost of transportation of products and timely procurement of product in the store, thus providing the availability of wide range of products for the customers at all the time at different store location of the company (Fernie & Sparks, 2009).

The Transformational Process Model of Al-Futtaim:

Al-Futtaim being a retail organization with multiple store location and are dependent on large number of suppliers for the procurement process, the transformational process of the company starts from procurement and ends till in the final delivery of the products to the customers. Being a service sector firm, the input stage of the transformation process of the company starts with the order processing of the required product. The entire management of the daily operational affair of the company is done with the start of the demand estimation and the required logistic facility for the transportation of the products and the inventory management of the process. These processes which constitutes the planning and control for the above stated functions is basically the transformational process of the Al-Futtaim of the Transformational Process Model of the operations management of the company with respect to the operations management. Finally the selling of the products at the various store location of the company and providing the required after sales service constitutes the output stage for Al-Futtaim with respect to the Transformational process model of the operations management.

It is essential to mention that though the process seems an easy task to accomplish, given the largeness of the organization, the firm have to undergo a very complex process. Proper planning and control is required in every stage of conversion process; right from the input stage of the entire process till the output process of final delivery of the product an realization of the revenue for the company.

A Transformational Model of Al- Futtaim is explained through the diagrammatic representation which is given below:

The Process of Inventory management in Al-Futtiyam:

It is due to the presence of large number of stores and retail outlet in the entire Emirates of Dubai and other zones of UAE, there is a need to have significant amount of inventory for each of the products that are sold by the company. The inventories which are stored in the warehouses are done so as to provide the necessary products when they are required by the retail outlet of the company. The inventories are efficiently managed in such a way through an ERP which recognizes the danger limit of inventory and thus help to maintain the optimum level of inventory. Therefore it can be observed that from the inventories are managed based on the traditional methods whereby proper inventory are maintained and requisition of further orders for inventory are don with the estimated level of demand in the present system of the company’s operational management

The Need of Implementation of Change in Process for better Operations Management:

The present system in operations management which is followed by Al-Futtaim is traditional in its process through the implementation of advanced ERP. Therefore in the set of liberalization of the economy of Dubai and with foreign players coming in the retail sector there is an urgent need of revamping the process which will enable them to meet the growing needs of the consumer and also help to reduce the cost of operation of the company. This will not only help in efficient management of the entire supply chain and the operations of the company but also help in the long run sustainability of the organization. Moreover the company will also help gain the required competitive advantage over the existing player and thus help to achieve a better performance than its competitor in the region of the business operation (Peters & Peters, 1991).

Recommendation of the practice of TQM in the operational process for competitive advantage:

The operational processes of the retail firms are very complex in it nature. Any wrong estimation of the demand may lead to increase in cost of the operation and hence profitability. Therefore there is an absolutely necessity to upgrade the entire operational system of the company. The company must implement Total Quality management in the operations of the company which will help to deliver high quality of service to the customer at affordable costs.

Lean Management:

There is an urgent need to implement the Lean management system which will help the company the wastage in the entire supply chain process of Al-Futtaim. Presently it is from the close observation of the existing process there is huge amount of wastage in the process right from procurement till the movement of goods to the retail outlet of the company. This pilferages and wastage in the entire operation of the company is responsible for huge amount of loss to the company which in turn reduces the performance and the profitability of the company.

Six Sigma:

It is also absolutely necessary to mention that apart from lean management, techniques such as sig sigma must be implemented in the each operations processes of the company. This will help to continuous improvement of the techniques that are involved in the entire operation of the retail organization Al-Futtaim. This will also ensure strict quality control in the procurement process. Therefore the required quality standard for each category will be checked against a benchmark standard for each of the category of products (Lowson,2005) So diversion of quality from the benchmark standard will enable to reject goods and make the supplier responsible for the mistake.

It is through the implementation of Six Sigma, the logistics process also can be improved and also ensure immense cost reduction in the entire logistic which will help through gain competitive advantage through cost focus approach in the logistics process of the company.

Therefore it can be assumed that operations management plays a vital role in the entire daily operation and the maintenance of the business. Especially in the retail organization like Al-Futtaim which is operating in the highly competitive retail market; this department needs to constantly innovate process for providing right quality of customer service for customer retention and thus gaining competitive advantage for long run sustainability of the organization (Stevenson,2005).

Therefore it is with the implementation of the Six Sigma and the lean management system in the procurement function and the logistics system the firm could help to maintain the quality of the product and also the cost associated with the entire operation of the business. The adaptation of the process and the strategic implementation of these techniques will enable to gain competitive advantage and thus ensure the much required long run sustainability of the organization in the competitive environment of the retail business in UAE (Loader, 2002).

Implementation of the Just in time concept in inventory management:

It is essential for the company to implement the strategy of the Just in time in some of the inventory which is costly to the company. So the operation department need to act in way so as to predict the exact demand of those product and ensure procurement of the product and delivery of the product at the right time to the customers. This will help in efficient cost reduction in the entire process of these goods and ensure better profitability for the organization.

Conclusion:

In the immensely competitive environment of the retail industry in UAE especially in the emirates of Dubai, there is an urgent need of the company Al-Futtaim to upgrade the existing operational process to a new process for competitive edge over the other players. The implementation of the techniques like TQM, lean management system and JIT techniques for efficient management of the entire supply chain, logistics and the operational processes of the company. This will not only improve the total system and the operational processes of the company but will also enable them to gain a competitive advantage and ensure the long run sustainability of the organization in the today’s competitive environment particularly in te retail industry of UAE.

References:

Books

• Fernie, J. and Sparks, L. (2009). Logistics & retail management. London: Kogan Page Ltd.
• Greasley, A. (2008). Operations management. Los Angeles: SAGE Publications.
• Hugos, M. and Thomas, C. (2006). Supply chain management in the retail industry. Hoboken, N.J.: John Wiley & Sons.
• Loader, D. (2002). Relationship and resource management in operations. Burlington, MA: Butterworth-Heinemann.
• Naidu, N., Babu, K. and Rajendra, G. (2006). Total quality management. New Delhi: New Age International.
• Peters, B. and Peters, J. (1991). Total quality management. New York, N.Y.: Conference Board.
• Slack, N., Chambers, S. and Johnston, R. (2010). Operations management. Harlow, England: Financial Times Prentice Hall.
• Stevenson, W. (2005). Operations management. Boston: McGraw-Hill.

Journals

• Lowson R; “Analysing theEffectiveness of European Retail Sourcing Strategies”, European Management Journal, Volume19, Number 5, (2001) pp 543-551
• Fernie J. and Sparks L; (eds.), “Logistics and Retail Management Insights into Current Practice and Trends from Leading Experts” Kogan Page Ltd., London, UK. (1998)
• Popp A;“Swamped in Information but Starved of Data”: Information and Intermediaries in Clothing Supply Chains, Supply Chain Management: an International Journal, Vol 5, No 3, (2000) pp 151-161.
• Gaur, V., Raman, A. and Swaminathan, J. (2009). Special Issue of Production and Operations Management : Retail Operations. Production and Operations Management, 18(2), pp.240-240.
• Special Issue of Production and Operations Management : Retail Operations. (2009). Production and Operations Management, 18(1), pp.127-127.