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1.0.
Introduction
For a business to run well, operations management is essential (Singh, 2008). Designing and
creating systems to meet various production and service needs is what operations is all about.
They are among the foundational duties of corporate organisations, along with finance and
marketing (Stevenson, 2014). A company's total business benefits from ongoing
improvements in the efficiency of its operations and the reduction of waste in the system
(Singh, 2012). Operations management (OM) is that section of a business that is concerned
with the creation, as well as delivering of value to an organisation. Therefore, it is crucial for
businesses to implement tried-and-true OM theories.
OmegaCo, a medium-sized producer of handmade fruit juice, has enjoyed a strong brand
image within its domestic market. However, challenges such as a dated order system, reduced
market visibility, and recent market share decline have posed significant hurdles. This has
been exacerbated by external factors such as the pandemic and inflation. With ZetaCo's
recent acquisition of OmegaCo, there is a renewed vision to pivot towards global markets,
aiming to leverage the brand's strengths while rectifying its operational inefficiencies. Hence,
this study will develop the swot analysis, business model and an ERP for OmegaCo. Our analysis recommends the following strategic moves:
1. Digital Transformation: Introduce demand forecasting tools and transition from telephone
orders to an online platform. This not only streamlines the order process but enhances
customer experience and visibility into operations.
2. Supplier and Customer Relationship Management: Implement robust vendor management
systems and customer portals to automate and improve transparency in order and delivery
processes.
3. Quality and Capacity Management: While scaling operations, maintain the brand's
reputation for quality using modern technological solutions for quality control and production
forecasting.
4. ERP Integration: Research and integrate a suitable Enterprise Resource Planning (ERP)
software solution that can tie together various business processes, ensuring seamless
operations and data-backed decisions.
5. Adoption of AI: As part of Industry 4.0 technologies, the introduction of Artificial
Intelligence can drive demand forecasting, optimize supply chains, ensure consistent product
quality, and provide valuable customer insights.
By implementing these strategies, OmegaCo, with the backing of ZetaCo, has the potential to
not only regain its lost market share but expand its footprint into global markets, delivering
quality products efficiently and at competitive price points.
2.0. SWOT analysis
Strengths
●
Established brand image: ●
Loyalty among small retailers
and cafes
Weaknesses
●
Lack of visibility of future orders
●
Long lead time for deliveries
●
Dependency on a small number of local
●
Experience in producing high-
quality juice
suppliers
●
Difficulty in managing supply and demand
Opportunities
●
Entry into global markets with
ZetaCo's support
●
Potential
for
digital
transformation
●
Growing market for quality
products
Threats
●
Market size reduction by 20%
●
Economic consequences of the Covid-19
pandemic
●
Competition in global, price-sensitive markets
2.1. Effective and efficient management of capacity, quality, suppliers, and customers
Abadi & Cordon (2014) asserts that capacity planning helps organisations determine the
optimal operating level. The capacity for which the average unit cost is the lowest is referred
to as the optimal operating level. It is also the maximum capacity in which there is an
intention for some processes, therefore, it is the productivity volume in which there is a
reduction of the average unit cost. Therefore, capacity planning aids organisations in
understanding their optimal functioning levels (Aguirre, Liu, & Papageorgiou, 2018).
Through the application of the just-in-time principle, capacity planning, and quality
management also raises the level of efficiency of the organisations. According to Altiparak,
Gen, Lin, and Paksoy (2016), just-in-time (JIT) production, also known as the Toyota
production system, is a methodology that primarily aims to reduce the flow times in the
system of production and the response times from the firm’s suppliers to its clients. It can be
characterized as the inventory technique employed by producers to boost grades of
productivity. It involves placing orders and obtaining inventories only when those things are
needed to produce the items, not before. By making sure that stock levels are reduced, Just in
Time can function. It comprises placing an order for exactly what is required as soon as
possible. However, according to the SWOT analysis, a more adequate and efficient capacity
and quality management can help ZetaCo to meet its new performance objectives in the
following way.
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2.2. Efficient Capacity Management:
The current landscape at OmegaCo demonstrates a challenge with long delivery lead times,
primarily stemming from the absence of clear visibility into future orders. Efficiently
managing capacity could be the linchpin in resolving this predicament.
1.
Demand Forecasting: A reliable forecasting mechanism could provide a clearer
picture of impending orders. Employing techniques such as time series analysis or
even leveraging machine learning can predict demand more precisely. By preempting
demand surges or declines, OmegaCo could better align their production cycles,
ultimately trimming down lead times.
2.
Optimized Production Schedules: With clearer foresight through demand forecasting,
production schedules can be finely tuned. A balance between just-in-time production
and maintaining a minimal buffer will mitigate order cancellations and stockpile
issues. This synergy could significantly enhance customer satisfaction, giving them
confidence in OmegaCo's delivery capabilities.
3.
Lean Manufacturing: Adopting lean principles could lead to waste reduction,
streamlining processes, and ensuring resources are utilized optimally. With ZetaCo's
investment backing, the implementation of lean practices could dramatically
transform production efficiency.
2.3. Quality Improvement
The bedrock of OmegaCo’s brand image is its high-quality handmade fruit juice. Upholding
and amplifying this reputation are pivotal for its expansion journey under ZetaCo.
1.
Total Quality Management (TQM): By integrating TQM, OmegaCo can ensure
consistent excellence across its products. This approach emphasizes continuous
improvement, directly enhancing product quality and reducing discrepancies.
2.
Quality Checks and Audits: Regular monitoring of production processes, both
automated and manual, can help identify potential issues before they escalate. By
being proactive, OmegaCo can avert potential recalls or customer dissatisfaction.
3.
Employee Training
: Quality is not just equipment and processes; it’s about the
people. Investing in regular training sessions ensures that employees are up to date
with the latest quality standards, ensuring that every bottle produced meets the brand's
high standards.
2.4. Supplier and Customer Relationships:
OmegaCo's supply chain dynamic, characterized by a dependence on a few local suppliers,
can be precarious. Also, the customer order and feedback mechanism seem antiquated.
1.
Diversified Supplier Base: Engaging a broader supplier spectrum can not only offer
better pricing negotiations but also risk mitigation. If one supplier faces issues, others
can step in, ensuring OmegaCo's production isn't halted.
2.
Supplier Relationship Management (SRM): A robust SRM system can create
symbiotic relationships with suppliers. Regular dialogues, feedback loops, and
performance reviews can enhance the reliability and quality of supplies.
3.
Digital Platforms for Customer Interaction
: Transitioning to digital ordering and
payment systems can greatly enhance customer experience, ensuring quicker response
times and reduce manual errors. Moreover, it provides invaluable data on customer
preferences and behaviours.
4.
Feedback Mechanisms
:
Implementing channels for customer feedback provides
insights directly from the end-users. This feedback can be crucial in product
development, addressing issues, and staying attuned to market needs.
Digital Transformation
With ZetaCo's backing, a digital overhaul can be transformative for OmegaCo.
1.
Automated Production Processes: integrating automation can increase the speed of
production while reducing manual errors. It can also offer real-time insights into
production metrics, facilitating better decision-making.
2.
Integrated Supply Chain Management System: A unified digital system can enhance
visibility across the supply chain, ensuring seamless coordination between different
stakeholders, from suppliers to end customers.
3.
Data Analytics: The power of data cannot be overstated. By analyzing market trends,
customer preferences, and internal metrics, OmegaCo can make informed strategic
decisions, setting the stage for its global aspirations.
By effectively managing capacity, quality, suppliers, and customers, OmegaCo can become
more agile, responsive, and efficient, aligning with ZetaCo's performance objectives. This
will not only strengthen their position in the current market but also prepare them for
expansion into new markets.
3.0. Business Process Model (BPM) - Focusing on Supplier Management
:
Organisations presently operate in a business climate that is unstable and highly competitive
as a result of globalisation. Reducing the time needed to create the same goods and services,
improving their quality, lowering prices, and increasing profits are all necessary for an
organisation to become more competitive. Many organisations used the business process
model to achieve these competitive aims. A graphic method of presenting business
operations, events, flow controls, stakeholders, and their interactions is known as business
process modelling. varying authors have given varying definitions of the term "business
process" in their works. For example, in 1990, Davenport and Short described it as "a batch
of logically associated tasks carried out to attain a defined business result." Furthermore,
WMP Van der Aalst (2013) stated that “Business process model refers to the techniques,
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instruments, and strategies employed to examine, comprehend, and enhance the processes
employed in the organisation.
A business process model for ZetaCo’s services is required given its existing status. The
business is transitioning from managing one band to managing several bands at once. Two
business process models have been created to indicate a strategic shift in this direction. One
shows business processes in the current system, while the other mirrors a business process
following the adoption of the new modifications and reflects the management of many bands.
"Ordering of music services" is the service that has been chosen for modelling and strategy
analysis.
Current Position
Proposed Process BPM
START
OmegaCo receives orders from customers
OmegaCo manually receives orders
Is raw materials needed?
if no, return to receiving orders
if yes, move to the next step
manual purchase order is sent created
purchase order is sent to local suppliers
suppliers deliver materials
OmegaCo pays suppliers
END
By automating and integrating the supplier management process, OmegaCo can reduce lead
times, ensure a more consistent supply of raw materials, and foster stronger relationships with
suppliers. ZetaCo's experience and technological expertise can play a pivotal role in guiding
and implementing this transformation at OmegaCo.
Based on the data shown in Figures 1 and 2, it is abundantly evident that as ZetaCo promotes
more products, there will be less haggling and less waiting time for responses from
customers. This is also anticipated to improve communication across the various bands that
OmegaCo manages, resulting in the development of synergy in their business operations.
4.0. ERP Software Evaluation
: Since the middle of the 1990s, a lot of businesses have made the decision to put Enterprise
Resource Planning (ERP) systems in place in order to increase business productivity,
decrease production costs, speed up throughput, expand their services, offer more dependable
delivery dates, and better coordinate global demand, supply, and production. Due to the
complexity of these solutions and the requirement to modify business processes to
accommodate chosen software solutions, their implementation is difficult, generally time-
START
OmegaCo receives orders from customers
logged into the integrated ERP system
system auto-assesses inventory
Is raw materials needed?
if no, return to receiving orders
if yes, move to the next step
automated purchase order is created
system selects priority suppliers
suppliers view OmegaCo's supplier portal
they see real-time demand fluctuations
suppliers deliver materials based on predictive data
payments are made through the system
suppliers can view payment history forecasts
END
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consuming, and over budget. Even with substantial investments, many businesses struggle to
install ERP systems, and 70% of implementation efforts fail (Ehie and Madsen, 2005).
For OmegaCo, transitioning under ZetaCo's wing, it's essential to evaluate and implement an
ERP system that will not only suit their current needs but also scale with their growth.
Evaluation Criteria
1. Usability
2. Integration capabilities
3. Cost
4. Scalability
5. Features specific to OmegaCo's operation
6. Support & Community
Analysis:
1. Commercial Product 'FruitERP': This system offers an excellent balance of usability and
scalability. While it comes at a higher cost, the comprehensive features tailored for
OmegaCo's operation and excellent support make it a viable option.
2. Commercial Product 'JuiceFlow': Offering robust integration capabilities and scalability,
'JuiceFlow' provides a more moderate feature set at a comparable price to 'FruitERP'. Its
slightly lower usability rating might require a longer adaptation period for OmegaCo's
employees.
3. Open Source 'BlendBase: Being open source, 'BlendBase' offers cost benefits. However, its
usability and feature set are basic. While it has decent integration capabilities, the potential
support costs and time investment for customization might offset initial savings.
4. Open Source 'PureServe: This system offers moderate features and better usability than
'BlendBase'. As with most open-source options, OmegaCo would need to consider potential
customization and support costs.
Considering ZetaCo's intention to invest in OmegaCo, especially in the realm of digital
transformation, it would be prudent for OmegaCo to lean towards a commercial product that
offers comprehensive support and features, ensuring a smoother transition and integration
process (ZetaCo, 2023).
Evaluation
Characteristics
Commercial
product 1 (SAP
Commercial
product
2
Open Source 1
Open Source 2
S/4HANA)
(Microsoft
Dynamics 365)
(e.g., Odoo)
(e.g., ERPNext)
Pricing Tiered based on
modules & users
Subscription
based on users &
modules
Free base, paid
for
premium
features
Free, self-hosted
Integration with
current systems
High
compatibility
with
legacy
systems
Moderate; might
require
third
party tools
High
with
customisation Moderate with
some in-house
systems
Scalability for
Medium
Business
Highly scalable
but might be
over
comprehensive
Designed
for
SMEs
and
scalable
Highly
customisable
and scalable
Scalable
with
modules
and
extension
Core Modules
Relevant
to
OmegaCo
Finance,
production,
sales, supplier
relationship
CRM, Finance,
Supply
chain,
HR
Sales, Inventory,
Purchase,
and
CRM
CRM,
accounting,
sales,
and
inventory
Customisation
for
juice
production
High
(with
specialised
skills)
Moderate (with
extension
marketplace)
High (flexible
for
niche
industries)
Moderate (with
module
development)
Ease
of
transition (from
current
processes)
Might
be
complex due to
extensive
features
Easier
with
guided
setups
and wizards
Moderate with
community
support
Easier with user-
friendly
interfaces
Support
and
resources
Extensive global
support
and
resources
Comprehensive
training
and
resources
Active
community and
optional
paid
support
Active forums
and
premium
support options
Cloud vs on-
premises
Both available,
cloud is more
expensive
Primarily cloud-
based with on-
premises option
Both available,
cloud
is
subscription-
based
Both;
cloud
hosting available
through
third
party
Customer
management
Advanced CRM
with
AI
Integrated CRM
with
seamless
Modern CRM
with
website
CRM
with
feedback
and
enhancements
capability
finance
integration
integration
review
capabilities
5.0. Application of Industry 4.0 Technology (Artificial Intelligence (AI)) into OmegaCo
Artificial intelligence became a very common word as at 5 years back and it sent a signal to
an automated future where robots will be made available to Make life easier. However, in
recent times, the application of AI has become less than what the world had imagined but, it
still makes a lot of things easier even without giving much thought to it. Just-in-time
production, product quality, and sustainability are currently among the top issues for
businesses. These problems have been addressed using lean practices, which must be applied
consistently and with awareness if organisations are to thrive (Sanders et al., 2016). Most
lean practices have been successfully implemented by some businesses. Many organisations
are still falling behind in fully reaping its benefits, though. This is where industry 4.0, a novel
idea also referred to as the fourth industrial revolution, comes into play (Tortorella &
Fettermann, 2017). 5.1. Benefits of AI into OmegaCo
Personalisation: Artificial Intelligence is an innovative scientific discipline that is targeted
at making innovative theories, machines, as well as creating new applications that are human-
like. AI has to do with several systems that human-like characteristics, as well as systems that
also behave like humans. Furthermore, AI has to do with systems that think rationally and
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systems which are made to look like humans (Putica, 2018). The major aim of developing an
artificial intelligence system is to come up with systems that can be a substitute for humans
when it comes to the way they think and make decisions. However, asides from acting as
human substitutes, AI is focused on the decision making of organisations and analysing the
data in the organization. For OmegaCo, integrating AI into its business will help the business
grow and make decisions better.
Personalisation is a task that takes time and is quite
overwhelming if it is carried out manually however, it becomes easier if it is done using
artificial intelligence. It will reduce the number of employees needed by the organisation and
the company’s data will be properly kept avoiding third parties penetrating the company. Smarter decision-making: While developing AI, the major aim of developing the AI
technology was to ensure business decisions are smartly made. With the development of AI,
there will be speed of foresight in market trends which can be used to detect when there is a
new market trend in the industry; also, when it comes to the area of marketing, AI, can be
utilized to conduct various predictive analysis that will especially be applied when OmegaCo
is trying to create new marketing strategy. The predictive analysis will simulate the possible
trends and results gotten while the company is trying to implement their strategies and it can
as well be the basis of OmegaCo making decisions.
Artificial Intelligence Can Help Enhance Customers’ Experience: By the application of
AI, OmegaCo will experience efficient and effective reduction of lead and delivery time
which will significantly result in developing a stronger and more professional customer and
supplier relationships. However, it is important to note that with the implementation of AI,
supplies will be gotten better and smarter. Also, there are some chatbots that can assist
customers to meet their needs and attend to their complaints with ease ensuring that the
clients are happy. 24 / 7 Availability: Introducing AI into OmegaCo will give opportunity for continues
production and sales. Orders can be made at any time with the assurance of quick delivery.
Digital assistance solutions like chatbots are available to take customer inquiries and orders
no matter the time of day.
Deeper Data Analysis
: Big data, on the other hand, refers to a collection of data sets used in
industry 4.0 to make inferences about the items being produced using analytics. This method
significantly reduces decision-making time, improves output, raises goods quality, and
provides a heads-up for machine maintenance (Chen et al., 2018; Rüßmann et al., 2015).
Sensors are used to collect data at various stages along the process. These elements consist of
production equipment, production processes, business management systems, and customer
management systems (Rüßmann et al., 2015). Intelligent machinery is necessary for a smart
factory to operate constantly and produce high-quality goods. Additionally, the upkeep of the
equipment is a crucial component. The breakdown of the machinery and the need for
maintenance can be foreseen with the aid of the data provided by the sensors (Chen et al.,
2018). Regular maintenance and failure prediction can significantly lower breakdowns.
Increasing production productivity as a result. Artificial Intelligence also significantly aid in
the optimisation of product design. As diverse types of data are mined and modelled using
data mining techniques to provide desired outcomes (Chen et al., 2018; Frank et al., 2019).
6.0. Conclusion In the ever-evolving landscape of the food and beverage industry, adaptability and foresight
are paramount. OmegaCo, with its rich heritage of producing quality handmade fruit juices,
found itself at a crossroads, challenged by market reductions and operational inefficiencies.
The acquisition by ZetaCo offers a promising avenue for reinvigorating the brand and
expanding its horizons. By leveraging digital transformation, emphasizing production
efficiency, and cultivating robust customer-supplier relationships, OmegaCo is poised to
transition from a local favorite to a global contender. This strategic redirection, backed by
ZetaCo's investment and vision, holds the potential to not only recover lost ground but to
elevate OmegaCo to new heights in the global marketplace. Also, the study discussed
implementing big data and analytics as well as artificial intelligence into ZetaCo to ensure the
smooth running of the company’s operations. The journey ahead will undoubtedly present
challenges, but with collaborative effort and a renewed focus, OmegaCo's future looks bright
and promising.
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