Introduction to Operation Management
Addition of values to existing resources is operation management. Business processes have to be developed with keen perfection for achieving objectives and goals of an organisation. From efficient use of resources to effectively providing products and services, companies need great efforts and strategies. End results of such strategically evaluated results gives high productivity on a long term basis. Clarks has been utilising its operational management techniques in supply chain and logistics which is elaborated in this assignment. From manufacturing to delivering its foot wears in market, report gives an insight about the complete business processing of Clarks International Ltd. Organisation goals are based on effective functioning of it various departments. This report helps in getting a deep understanding about different operational functions. When developments are made in predefined functions, company has to utilise its resources effectively and set operations objectives; this is justified in final part of the assessment.
For getting better understanding of operations managements in an organisation, Clarks International Ltd. is taken as reference. The company has been functioning effectively since 1825. Known for its high quality and beautifully crafted shoes, Clarks is an example of efficient operations management. Technological developments and changing demands of audiences never hindered functioning of the company. Over 1000 branded stores and franchises are under ownership of Clarks International. About 84% share is under control of inherited owners while 16% is acquired by employees and other related people (About Us, 2016).
Overseas management of supply chain, logistics, human resource and variety of other functions is difficult. This indicates the need for developing manufacturing units and control offices in specific regions, so that export and import operations can be easily handled. Development of about 400 outlets in China is a great example of efficient operations of company. From about past six years, enterprise has been working on a mission to connect its supply chain with store shelf. Customers are much more comfortable in purchasing goods from authentic sellers. If Clarks would devise strategies in such a manner that all its supply chain, waste and inventory are under control; then costs applicable for meeting consumer demands can be effectively managed. Kimberly Clark is the current head of the company.
With launch of e-portals and better shopping options, customers from across different countries are now familiar with brand’s products and services. This has led the company to develop its functioning departments that were initial not available for guiding consumers. Increasing options for payment and delivery, local retailers and proprietors have shown more interests in collaborating with Clarks. Partnerships can be at international level or local level, as these are important for increasing brand reputation of organisation.
Company has been developing customer oriented strategies. Stakeholders are people who are interested with functioning of company in some form. Every organisation has two types of stakeholders that are internal and external. Complete business processes of Clarks affects stakeholders in a particular way. Internal stakeholders are groups or individuals who are directly influenced by operations or functions majorly financial ones of the company. For Clarks, internal stakeholders are employees, managers, investors; shareholders are people who get directly influenced. External stakeholders are people who indirectly get affected by working status of company. Clarks being a products oriented company has major stakeholders in form of customers (About Us, 2016). If company faces a problem or crisis in its functioning, then all its pricing strategies will change. Buyers will only be impacted by this strategy. If company shuts down, consumers will be least sufferers because substitute products are already available in market.
b) Main operational functions of organisation
Clarks International Ltd. has been working from about 190 years. Such a huge journey can only be achieved through great management techniques (Corporate Services, 2016). The operational management of this company is very strong. Following operational functions are managed by the business globally:
1.Brand: The organisation has been working by creating, innovating and inventing exceptional styles and trademarks in shoe industry. This technique has helped it acquire good brand reputation amongst customers.
2.Business Improvement and Procurement: With advancements in technology through internet, it is very important that companies must also engage their profits in spreading roots across the globe. This function of business improvement and procurement helps in developing and establishing centres in different parts of world with effective planning and management of resources (Slack, 2015).
3.Customer Services: For a product manufacturing firm, customer satisfaction is the first priority. All the queries related to company and its products from the customers are handled by this functional department. The media used for this purpose is email, social media, phone and post. Complaints, requests and all sorts of customer related problems are heard and solved through these portals.
4.Digital: Online shopping is trending in 21st century. Internet evolution will lead to development of more e-portals through which companies can sell their products in any part of the world without actually setting a physical store. Once online website for purchasing and trading is developed it has to be maintained and checked regularly. Competitors may develop strategies for hacking and breaking into credentials of these portals. Hence, digital department takes care of all these functions across specific region. Although consumer felicitation is main objective but protection from threats is also taken care in this department (Bozarth and Handfield, 2016).
5.Finance: Money is needed for conducting all operations in a company. Finance function maintains all records and systems that are needed for supporting global framework at every key location. It is a crucial function of operations in Clarks.
6.Human Resources: Organisations are dysfunctional if major resource that is human resource is not available. A company won’t be called so if no labourers or work force is present. Human resource department is necessary for maintaining peace between employee and employer. They work for making company a better place to work for. Issues related to internal environment of a business that affect the functioning of labourers are resolved by human resource department.
7.Legal: Even if a company follows all rules and regulations that are led by particular government of a region, competitors or rivals can create situations in which allegations can be faced. Legal department is therefore necessary. This function keeps Clarks away from judicial complications and also provides advisory help in all range of business issues.
8.Merchandising: Practises that contribute to sales of products to retail customers is merchandising. Apart from self-owned stores, Clarks has to maintain and build up relations with shopkeepers and retailers who are a second option for building links with consumers. Merchandising helps in building this relation. Demands from different business clients and consumers are managed by this function of company (Corporate Services, 2016).
9.Outlet: Customers always prefer authentic products. Inclination is more towards full price channels that is company outlets than retail stores. Hence, Clarks had to develop its physical stores for such audiences so that they can avail all products that are shipped directly from factory to shop without third party intervention. Outlets can be owned and produced through mergers or franchises.
10.Product Development and Sourcing: Fashion is a trend and these change at any moment depending on current situation of market. Being a shoe manufacturing company, Clarks has to develop and innovate every now and then so that it doesn’t lose its competitive advantage. Product development and sourcing is staged because any sort of negligence can result in declining customer share which cannot be afforded by the company.
11.Retail Operations: Maintaining a multinational operational business, it is important that all small and big mergers, partnerships and franchises are supported with effective resource. Retail Operations department manages all business relations. It also provides support for outlets across the country and continent.
12.Supply Chain: Demand and supply network has to be stable. Imbalance in any of the two given things can destabilise the operations management of company. Information and resources that are involved in processing product to consumers are managed in supply chain. Evolution and improvements are important for this function of organisation because needs and demands of customers change every moment (Krajewski, Ritzman and Malhotra, 2013).
c) Changes for improving effectiveness and efficiency of operational function
Major operational tasks for Clarks Ltd include human resource, supply chain, product development and sourcing, finance, marketing or merchandising and brand maintenance. It is significant that company will develop within coming times but it is not essential that this development can be sustainable. Customer segment that is targeted by company is people with high income level. Efficiency of operations management can be increased by accommodating changes in the main functional architecture of company (Hill and Hill, 2012).
Business processes play a vital role in fighting competition. Significance of changes is realised only when performance graph of company decreases or slows down. Strategies have to be developed so that market position and profitability are maintained. Following recommendations can be considered for increasing operational efficiency:
1.Although Clarks Ltd. has a very good brand reputation. Business has its own competitive advantage that cannot be easily substituted. This advantage is acquired because of unique products and strategies that have been developed and evolved over time.
2.Internal structure of an organisation must be strong enough to fight outer competition. This durability will be retained only if employees are secured. Its responsibility of human resource function to bestow with information that is necessary for them. Employees cannot be deserted when it comes to discussing strategies. This will decrease their interest level in working for organisation. They will tend to turn their backs for company which cannot be afforded. Secure, reliable and self-defendant network can be adopted by company for giving employees information and technology for their own development (Hendricks, Hora and Singhal, 2014).
3.Just like customers, business partners are conspicuous for Clarks. Being a large enterprise doesn’t mean it can overpower its partners or alliances. Effective business relationships help gather a good reputation in market and decrease rivals in competition. Business processes must be developed according to needs and requirements of business partners. Stable infrastructure is based on secure and reliable relations through these operations.
4.Company must concentrate on inviting more easy collaborations. Be it small, medium or even micro enterprises, chance must be given to all for creating a link with brand. This will help in achieving sustainable development. According to triple bottom line theory effective business operations are sustainable only when company meets requirements of employee, people and environment. This decision doesn’t demand a compromise in profits but new ideas can definitely change future perceptions of company (Brown, Bessant and Lamming, 2013).
5.Streamlining better communication channels for consumers. Although company has been giving great services through its customer services block but this relationship has to be managed. Automated CRM (Customer relationship management) software is available in market. Clarks can adopt such technology for maintaining call records and customer queries. While devising new or improvised product strategies, these records can be accessed for innovating new methodologies. Pending orders and easy returns feature can be facilitated for consumers. This will enhance better online shopping experience (Foropon and McLachlin, 2013).
6.A major internal change Clarks can indulge in is uniqueness in working style of employees. Productivity of human resource will only increase if core competencies are enhanced. Every single employee working for the organisation must be unique and competent. Duplication decreases efficiency of employees. Interaction with innovation is necessary in employees. It is duty of human resource function to monitor discrepancy action so that incompetent employees can be rejected while skills and talents of deserving individuals can be polished.
7.Critical function of any business is supply chain and logistics. Inventory management is necessary. Excess supply and no demand will lead to decreasing prices of products (Bromiley and Rau, 2016). This situation is definitely not favourable for long term. Profits margins will suffer and performance graph will slow down. While more demand and less supply will ruin customer relationships. This situation can have a positive impact also. Curiosity will arise amongst alien audiences about empty stocks. People will gather more interests in knowing about company and its products. Clarks being a renowned organisation can change this threat into an opportunity.
8.The only thing that customers expect from company is on time delivery and best quality products. Clarks can develop even better products by using technologically advanced material for shoes. Finance functions must focus on investing in research and development (Gunasekaran and Ngai, 2012). This expenditure is an investment because research will enhance innovation and even invention can be attributed by the company. Hence, investment functions must be included in operations management of complete business structure.
Also Read: Operations Management & Service Excellence
d) Validation of recommended changes
Operation management is complete processing of an idea to final reach in market. All inputs have to undergo certain changes and evaluations so that best results can get company a source of income. This value addition process is very crucial. Any sort of negligence or confusion will change actual purpose and design of the proposed idea. Customer centric approach is a must in developing this product. Clarks is a company that provides products that help in improving lifestyle of customers. Henceforth above mentioned recommendations must be applied for improving efficiency of its operations.
Changes are strides for evolution. What would have happened if Clarks had been working in same conditions and with same equipment? Global expansion of the enterprise would have remained just a thought. Slow and steady changes in the processing system of organisation helped it gain brand reputation that now exists in current situation. Traditionally operations were limited to production and manufacturing (Brown and et. al., 2013). People concentrated less on marketing and development. Internet came up as a boon for every industrial section. People connected more and more in virtual world. Real distances and barriers of communication don’t exist in virtual world of internet. This technology can be used by organisations for developing its marketing strategies. Social media marketing is a strategy that can be enhanced in marketing function of Clarks. Portals like Facebook, Twitter, Google-plus help companies in marketing their products to people from all countries and diversities.
As recommended before, framework depends on strength of foundation or base. If people working for company are not satisfied by working atmosphere or pay scale, they will tend to find better opportunities in other firms. This will deplete Clarks internally which cannot be afforded. Hence, it is moral responsibility of Human resource to look after needs and demands of employees and develop strategies in such a manner that these demands are regularly attended. Another major stakeholder of company is customers. Brand image and reputation are decided by customers (Drake and Spinler, 2013). Effective customer relationship management is need of hour. Digital platforms need to be developed constantly for maintaining customers. Company must not neglect even one customer because as stated before, media has emerged as a powerful tool in today’s world.
Optimisation of operation management helps in managing costs and producing better quality products. People won’t mind spending a bit more than other company products if quality is exceptional (Sekar, 2014). Complete financial structure gets better when changes are implemented in strategies of business processing. Major areas that require more investments and techniques, is supply chain. Management of supply chain refers to complete controlled flow of raw materials and resources in manufacturing of products. Headquarters of company manage operations but warehouses are built in various other locations. Supply chain management is an important aspect of operation management because other functions are dependent on this single function. Demand and supply has to be controlled for every company. Distribution networks like logistics and delivery services are involved in supply chain because they take manufactured good to stores; outlets and places customers can complete product cycle by purchasing (Rosemann and vom Brocke, 2015).
Supply chain and logistics are backbone of Clarks. Revenues and profits are generated through effective functioning of these branches. Marketing and sales only enhance their working. Inventory is managed under supply chain management (Subramanian and Ramanathan 2012). Control and visibility of products has to be strategically arranged so that no extra costs are laid on shoulders of operations. There are certain objectives that have to be focused before implementing supply chain strategies:
- Generating effective pricing for all raw materials and services that suppliers will give to company.
- Planning of products according to requirements of consumers.
- Deciding locations of warehouses and transporting centres for company.
- Declaring mediums through which products will be transported.
These objectives help in implementing proposed changes in the supply chain management strategies of Clarks.
If these changes are effectively implemented and managed then efficiency of operation management will increase which will definitely result in better productivity and market acquisition by the company. Moreover, better investments options will be available for Clarks.
Operations management engage competent use of resources that are required in developing a product at every stage. This was realised from above report by considering the operations of Clarks. The report encloses analysis of variable functions that are managed by Clarks for accessing all its customers across Europe and Asia. Enhancement of different functions helps in setting pace of competition and provides company with a sustainable advantage. Complete decision making of a company depends on business processes and the way they are managed. Advancements in information technology have helped in attaining a place in global world where consumers cannot easily be lost. Despite of adapting great technologies, company still has to cultivate better techniques which are enclosed in the report for getting improved efficiency of complete business processing.
- Bozarth, C. B. and Handfield, R. B., 2016. Introduction to operations and supply chain management. Pearson Higher Ed.
- Bromiley, P. and Rau, D., 2016. Operations management and the resource based view: Another view. Journal of Operations Management. 41. pp.95-106.
- Brown, S. and et. al., 2013. Operations management: policy, practice and performance improvement. Routledge.
- Brown, S., Bessant, J. R. and Lamming, R., 2013. Strategic operations management. Routledge.
- Drake, D. F. and Spinler, S., 2013. OM Forum-Sustainable Operations Management: An Enduring Stream or a Passing Fancy?. Manufacturing & Service Operations Management. 15(4). pp.689-700.
- Foropon, C. and McLachlin, R., 2013. Metaphors in operations management theory building. International Journal of Operations & Production Management. 33(2). pp.181-196.
- Gunasekaran, A. and Ngai, E. W., 2012. The future of operations management: an outlook and analysis. International Journal of Production Economics. 135(2). pp.687-701.
- Hendricks, K. B., Hora, M. and Singhal, V. R., 2014. An empirical investigation on the appointments of supply chain and operations management executives. Management Science. 61(7). pp.1562-1583.
- Hill, A. and Hill, T., 2012. Operations management. Palgrave Macmillan.
- Krajewski, L. J., Ritzman, L. P. and Malhotra, M. K., 2013. Operations management: processes and supply chains. New York: Pearson.
- Rosemann, M. and vom Brocke, J., 2015. The six core elements of business process management. In Handbook on Business Process Management 1, Springer Berlin Heidelberg. pp. 105-122.
- Sekar, K. V., 2014. Manufacturing engineering and technology. Prentice Hall.
- Slack, N., 2015. Operations strategy. John Wiley & Sons, Ltd.
- Subramanian, N. and Ramanathan, R., 2012. A review of applications of Analytic Hierarchy Process in operations management. International Journal of Production Economics. 138(2). pp.215-241.