Comparing and Contrasting the Main Operation Processes of Two Organizations - Essay Example

INTRODUCTION As defined by Slack, Chambers, and Johnston operations management aims to provide the s with products and services to meet the demands of the customers in the market. Furthermore, operation management is regarding the management of processes to provide the customers with mixture of goods and services that could satisfy the needs and requirements of the customers. In simpler words, operation management is the transformation of input (i.e. raw materials, information) into final products (i.e. output) to meet the requirements of the final customers in the market (Loader, 2006). This assignment will focus on comparing and contrasting the main operation processes of two organisations in terms of their volume, variety, demand variations and visibility characteristics. Furthermore, this assignment will also use the five performance objectives (i.e. speed, quality, dependability, flexibility and cost) in order to analyse the implications that these characteristics have for the respective operation strategies of both the companies. COMPARISON OF TWO COMPANIES AND HOW THEY MANAGE THEIR OPERATIONS In order to compare and contrast the operations management, two organisations have been selected and these organisations are Coca Cola and Pepsi. Under this heading, both of the company’s operations and processes would be compared and contrasted in terms of volume, variety, demand variation and visibility characteristics. COCA COLA Coca cola is one of the most recognised and popular beverages in the world. The company aims to provide the customers with soft drinks that could enhance their experience (Miller, 1998). The company operates in over 200 countries. Regarding operations management processes, Coca Cola’s volume, variety, demand variation and visibility characteristics are explained in detail below; a) Variety In order to attract the customers and to meet their requirement, the company has an extensive product line (Wan, Evers, & Dresner, 2012). Along with this, the company also has some other brands such as Sprite, Fanta and Diet Coke etc. to meet the customer’s expectation in the market. In addition, the company also provides its customers with sparkling beverages, ready-to-drink coffees and juices (Coca Cola, 2013). b) Demand variation In order to provide the customers with quality beverage around the globe, the company keeps itself in touch with the demands of the customers. This has helped the company over several years to provide the customers with soft-drinks that could satisfy their unending needs. To meet the variation in consumer demand, the company offers its customers with variety of brands from time to time (Yoffie, 2002). c) Visibility characteristics According to Slack et al., (2010) visibility in operations management refers to the extent of how much the customers can see the organisation’s operation activities. For Coca Cola Company, the visibility characteristics would be low. Since the company has low visibility characteristics, it indicates that the company is centralised and the cost per unit production is low. d) Volume Regarding volume of Coca Cola Company, it was observed that the company has high volume of output which eventually leads to repetitive processes (Giebelhaus, 1994). With high volume of output, the company encourages specialisation and systemisation which allows the company to reduce the cost per unit to great extent. Along with this, the operation management processes are capital intensive (Taylor, 2000). PEPSI Pepsi is the second largest beverage providers in the world. The company aims to provide its customers with sweeter soft-drink along with citrusy flavour to enhance the customer’s attraction. The company aims to bring fun and refreshment to customers due to which the company operates in nearly 200 countries. In addition, the company also provides the customers with variety of products in the global market (Yoffie & Slind, 2006). Regarding operation management processes, Pepsi’s volume, variety, demand variation and visibility characteristics are explained in detail below; a) Variety In order to bring fun and refreshment to customers, the company provides its customers with high variety of products. This indicates that the company has extensive product line to enhance to attract the customers in the global market. Some of the major offering of Pepsi includes Mountain Dew, Miranda, Energy drink i.e. AMP, Juices, Mineral water i.e. Aquafina and ready-to-made iced teas and coffees (Pepsi Co, 2012a). b) Demand variation Demand variation indicates the change in demand over time. Since the company operates in beverage industry, the company faces cut-throat competition from the competitors. To reduce such factor, the company always keeps itself updated regarding the change in consumer’s demand and aims to fulfil the demand by providing the customers with quality products (Yoffie & Slind, 2006). c) Visibility characteristics Visibility characteristic indicates the internal operation processes being exposed to the customers. As indicates earlier, that the company operates in cut-throat market and to keep its operation processes confidential, the company visibility characteristics are low. In addition, the company’s utilisation of staff is high as compared to others in the market which allows the company to reduce its cost of production per unit (Yoffie & Slind, 2006). d) Volume Since the company has high volume, the company has certain characteristics in terms of operations management. One of such characteristics includes high repeatability of operation processes which eventually leads to the specialisation of workforce. Along with this, the company has an advantage with high output volume i.e. low units cost (Yoffie & Slind, 2006). IMPLICATIONS FOR RESPECTIVE OPERATION STRATEGIES In order to analyse the operation strategies, performance objective outlined by Slack et al. (2010) are Cost, Quality, Dependability, Speed and Flexibility would be used. Both the companies; Coca Cola and Pepsi would be separately evaluated with respect to performance objectives. COCA COLA With the use of performance objectives outlined by Slack at el. (2010), the implications for operation strategy would be evaluated for each characteristic; Speed To effectively provide the customers with soft drinks, the company has started working with SAP to enhance its efficiency in supply chain (Thomas, 2004). To remain ahead of others in the market the company is replacing all the dated systems with modern technology to enhance its speed in providing the customers with variety of company’s brands (CSC, 2012). Cost With high volume of output, the company has gradually reduced its cost to a great extent. Since all the brands offered by the company are produced in bulk volume, the cost of the company has reduced allowing the company to earn greater profit margin (Vrontis & Sharp, 2003). Quality Quality is about providing the customers with products that could meet the demands of the customers. The term quality in operation management refers to being right. At Coca Cola, the company has always aimed to provide the customers with quality products due to which the company focuses on total quality management. In order to provide the customers with quality products, the company has embedded the quality into its mission statement (Vrontis & Sharp, 2003). Flexibility Being able to predict the demands of the customers and to provide the customers with products to meet the unending demands of the customers, the company is quite flexible (Vrontis & Sharp, 2003). Dependability The term dependability refers to being on time. In order to provide the customers with company’s product, the company has established its own supply chain network. This has reduced the dependability of the company to great extent. Along with this, the company has also established its own bottle and can manufacturing plant to reduce the dependability factor (Vrontis & Sharp, 2003). PEPSI Using five performance objectives outlined by Slack et al. (2010), Pepsi’s operation strategies would be analysed based on these characteristics. Speed In order to provide the customers with company’s variety of product, the company relies heavily on its suppliers. The company has introduced SCoC (Suppliers Code of Conduct) which allows the company to provide its customers with company’s product in effective and efficient manner (Pepsi Co, 2012b). Cost It was observed that the company aims to reduce the unnecessary cost by following chase strategy. Along with this, the company also operates in bulk quantity which eventually allows the company to reduce the cost to great extent (Yoffie & Slind, 2006). Quality Quality being the competitive priority, the company focuses on high quality products to meet the demands of the customers. Due to which, the company takes effective measure for quality control. The company also focuses on total quality management approach to enhance its quality from time to time to meet the unending needs of the customers (Yoffie & Slind, 2006). Flexibility To consistently provide the customers with a variety of product is the aim of the company. It was observed that in 2011, the company introduced a new variety of Pepsi to meet the demand of the customers in Japan (Leader Staff, 2012). Dependability The company is highly dependable on companies that provide Pepsi Company with bottles and cans. In addition, the company works extensively to provide its customers with products on the right time to remain ahead of competitors in the market (Yoffie & Slind, 2006). CONCLUSION Thus, it could be concluded that both the companies i.e. Pepsi and Coca Cola operates in cut-throat competitive market and to gain superiority over one another, the company focuses on operation management. By doing so, the company can enhance its performance by paying extra attention to quality, cost, dependability, flexibility and speed. Coca Cola being the leader in the beverage industry has great superiority over others in the market due to its extensive and successful operation management strategies. List of References Coca Cola. (2013). Brands. Available from http://www.coca-colacompany.com/brands/coca-cola [Accessed 26 February 2013] CSC. (2012). Success Story – Coca Cola Enterprises. Available from http://assets1.csc.com/application_services/downloads/CCE.pdf [Accessed 27 February 2013] Giebelhaus, F. A. W. (1994). The Pause that Refreshed the World. The Evolution of Coca Colas Global Marketing Strategy. Adding Value Brands and Marketing in Food and Drink, London, 191-214. Leader Staff. (2012). Pepsico to launch new variety of pepsi containing fat blocking fiber in Japan. Available from http://www.clevelandleader.com/node/19370 [Accessed 27 February 2013] Loader, D. (2006). Fundamentals of global operations management, 2nd ed. England: John Wiley & Sons, England. Miller, D. (1998). Coca-Cola: a black sweet drink from Trinidad1. Material cultures: Why some things matter, 169. Pepsi Co. (2012a). Pepsi-Cola brands. Available from http://www.pepsico.com/Brands/Pepsi_Cola-Brands.html [Accessed 26 February 2013] Pepsi Co. (2012b). Suppliers standards. Available from http://www.pepsico.com/purpose/responsible-sourcing/supply-chain.html [Accessed 27 February 2013] Slack, N. Chambers, S., and Johnston, R. (2010), Operations Management. Harlow: Pearson Taylor, M. (2000). Cultural variance as a challenge to global public relations: A case study of the Coca-Cola scare in Europe. Public Relations Review, vol. 26, no. 3, pp. 277-293. Thomas, D. (2004). Coca cola and SAP collaborate on managing supply chain networks. Available from http://www.computerweekly.com/feature/Coca-Cola-and-SAP-collaborate-on-managing-supply-chain-networks [Accessed 27 February 2013] Vrontis, D., & Sharp, I. (2003). The strategic positioning of Coca-Cola in their global marketing operation. The Marketing Review, vol. 3, no. 3, pp. 289-309. Wan, X., Evers, P. T., & Dresner, M. E. (2012). Too much of a good thing: The impact of product variety on operations and sales performance. Journal of Operations Management. Yoffie, D. B. (2002). Cola wars continue: Coke and Pepsi in the twenty-first century. Harvard Business School Publishing Corporation. Yoffie, D. B., & Slind, M. (2006). Cola wars continue: Coke and Pepsi in 2006. Harvard Business School Pub.. Read More