Operations Management - Report Example

Operations Management Operations management is concerned with the management of people, processes, technology and other related resources in order toproduce quality goods and services. Primarily Operations Management is concerned with the following four interrelated modules; i. Process analysis ii. Supply chain modeling; iii. World class production systems; and iv. Operations strategy ‘Spice time’ is a small scale yet specialist manufacturer of prepared Indian foods for the uk’s retail sector. The business has premise in west Birmingham and has a turnover of around £2 million. Indian delicacies are known for the spice content. Indian fast food is quite popular in UK, amongst the vast Asian community as well as amongst the British nationals. Spice Time markets a range of Indian food to intermediaries supplying the specialist retail sector and caterers within Birmingham as well the towns around. In addition Mr. Kumar, the MD has some continental customers in Italy in a small but growing export business. Now Mr. Kumar wants to fire up all cylinders and take a speedy growth route. He has already tied up with the smaller co-operative supermarket chain and second in line is Asda, the supermarket chain. If the tie up with Asda materializes then the likes of Tesco and Wal-Mart won’t be far behind. Though these hypermarket chains have their own set of menu items, yet Spice Time has the brand equity of being a specialty in Indian spices and Indian curry. This brand equity will definitely help it out in product differentiation and realizing the business goals. Spice Time basically needs to market its products and the brand equity. Traditional marketing mix concept, first proposed by McCarthy in 1960, consists of Product, Price, Place and Promotion (better known as the 4Ps). But with time more Ps have been added to this list. Some of these are Public Relations, Political power, People, Physical evidence, Process and Packaging. Product: Spice Time will have to come out with a quality product, as quality is now increasingly being used as a technique of product differentiation. Quality for a food item implies health and hygiene consciousness of highest standards as well. Price: Pricing of the product forms another source of attracting and retaining the customers. If same quality product is available for a lesser price then customer will obviously prefer the alternative option. Since Spice time is making its foray into the market on such a scale for the first time, therefore it’ll have to take care of the pricing strategy. Penetrative pricing strategy seems to be the best option for pricing the products, particularly looking at the range of options available in the market. Once the market takes note of the specialty of Spice Time products, then the company can think of some price hike. Place: Birmingham is of course the hub of activities for Spice Time, but for growing on a large scale, particularly, when Mr. Kumar envisioned the dream of 450 stores, the place of activities of the company must present a decent look. This is particularly true when we talk of a shopping experience of everything under one roof. Spice World will have to plan out strategic tie-ups with some other producers of supplementing goods and materials, like the company can offer Indian curry, along with the packaged Banan chips from Kerala (a southern state of India). This will help the company in attracting variety of customers. Promotion: Modern marketing techniques are heavily dependent upon the advertising and promotion of the product. Therefore, Spice Time will have to create awareness about its products and the specialty that the company offers to the customers. This can be done with the help of regular Television commercials, Print advertisements or Radio jingles. Internet is a very potent source of information for any product or company. Therefore Spice Time will have to design a website and try to list it with as many search Engines as possible (like Google, Yahoo etc.) As of now spice time has not registered itself on the cyberspace. Therefore, this process must start right away, as it is a time taking process and any new website on the Internet needs sufficient time to make an impression. For being successful in business, Spice Time will have to take care of the Ps, particularly because Mr. Kumar is venturing on a very ambitious path. Now Spice Time will have to cater to the new customers as well as take care of the existing customers. Mr Kumar will have to make sure that he doesn’t make too many compromises in order to be acceptable to the supermarkets. This may results in antagonizing the existing loyal customers. At the same time, Spice Time will have to make sure that its products become acceptable to the new customers. Hypermarkets have a brand identity of their own, and retail business being a fiercely competitive market with the likes of Asda, Tesco, Sainsbury etc. fighting it out in the cut-throat competition, there may not be a possibility big profit margins. From historical perspective, Operations management is known to have its utility in ‘production’ or ‘manufacturing management’. But with time the services industry has taken a lead in implementing these features. It now encompasses even the day to day processes and management. For Spice Time, the business of producing Indian food items and then retailing it forms the core business component. But it also involves aspects like managing the human resources, managing the supply chain, managing the quality, taking on the competitors etc. Spice time can set for itself performance objectives, which need to be implemented and monitored regularly. Some of the performance objectives can be; Quality: John Ruskin the English Critic said, “Quality is never an accident; it is always the result of intelligent effort. There must be the will to produce a superior thing”. This ‘will-power’ forms a key for the team of Mr. Kumar to success in this business. Mr. Kumar can set for himself standards of quality and a zero tolerance standard. This can be done with the help of a carefully selected team of chefs and cookery experts in Indian food. These people need constant encouragement and motivation to maintain the standards as well. As the term quality often conveys different meanings to different people, it calls for standards. The meaning of quality varies in different circumstances as well, for example, a car which runs smoothly on straight roads may not prove to be of top quality while running in the hilly stretches or bumpy roads. Spice Time therefore needs to prepare the food items in such a manner that it can form a part of fast-food as well as a sumptuous feast-food. Speed: Supplying food items basically forma a part of the services industry. Therefore, consumer’s demands must be taken care of while designing the ‘services’. It will a world of good for the business for Mr. Kumar if he does not treat the entire UK market as uniform in taste and food habits. He must conduct some pre-launch surveys to get a feel of the available opportunities in the UK market, consumer preferences etc. This will help Spice Time, in coming out with products at the most opportune time. Indian community in particular has preferences with regard to food habits depending upon the time of the year, festivities, seasons etc. And there is a vast Indian community in UK, which will obviously form the market segment for Spice Time. There’s also a segment which is always on the move and requires food items which can be easily consumed while on the move. Therefore, the speed of delivery and the timings are crucial for gaining access to the market. Price/Cost: Mr. Kumar must realize that he has a big competition on hand, from the established packaged food outlets. Even in the Indian food segments outlets like Patel’s form a formidable competition. Therefore in order to gain a successful entry, Spice Time will have to keep the price right and attractive. Coupled with a quality item, a right price will form the penetrative strategy for Spice Time. In fact in this competitive era, to make enough room for itself, Spice Time may well have to wait for ‘break-even’. As of now Mr. Kumar must therefore concentrate on maximizing operating revenues and not the profits. Flexibility: Spice Time has a certain set of processes for producing food items with a certain sets of compositions. It definitely helps to retain a standard composition (like different quantities of spices, rice, vegetables etc.), but at times the market forces and the consumer habits may demand some flexibility in the processes and procedures. Mr. Kumar will have to take a studied view of such market demands by keeping a close watch on the market feedback. Flexibility and/or adaptability in approach to deal with certain issues, human resources, and circumstances will help the company in making an emotional bonding with the consumers. Respecting the local’s needs and sensibilities will help Spice Time is gaining loyal customers. Dependability: Food items, health and hygiene go hand in hand. Consumers are more conscious about the health of their kids. Growing concern about junk food and the environment, has made the consumer more aware about his consumption habits, eco-friendly food items etc. Now the consumer is more demanding and doesn’t get attracted to the product just on the basis of price and packaging. Spice Time needs to take this into account as well. The process for producing food items must be eco-friendly with acceptable ingredients. There are consumers who prefer only vegetarian items. Such preferences need to be taken care of during the production process itself, with all sincerity. Implementing these performance objectives is the key for prospering in business in the food chain and retailing. Read More