Operation Management assignment : Unilever Organization

OPERATION
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Operation management overview...............................................................................................3
Types of operation scheduling....................................................................................................4
Operation Scheduling techniques................................................................................................4
Layout Planning and work system process.................................................................................6
Inventory management policies for controlling production costs...............................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Operation management is an area in management that concerns with controlling and
designing of production process as well as in redesigning of all the business operations in
production of services or goods. In this responsibility of ensuring efficient business operations is
involved in terms of usage of required resources in order to meet all the requirements of the
customers (Hitt, Xu and Carnes, 2016). It mainly concerns with planning, supervising,
organizing in terms of manufacturing, production and provision of services. Operation
management is important in organizations as it helps in making different types of decisions,
making operation strategy, planning, scheduling, maintaining quality, inventory control etc. This
essay will lay detail emphasis on overview about operation management, various types of
operation scheduling techniques, overall knowledge about layout planning and work system
processes and explaining importance of inventory management policies that are required to
control production cost. For this assignment Unilever Organization is taken as an example for
discussion of operation management essay.
MAIN BODY
Operation management overview
Operation management can be defined as business practice administration in order to
create high level efficiency possible within an organization. It mainly focusses on labour and
materials by converting them into efficient services and goods possible for maximizing the
overall profit of an organization like Unilever. It mainly attempts to balance revenue with cost in
order to achieve the highest possible new operational profit. It mainly involves utilization of
equipment, technology, materials and staff. Operation managers mainly acquire, develop,
maintain and deliver goods and service to clients based on their needs, requirements depending
upon the ability of the company.
Operation management mainly handles different types of strategic issues that mainly
determine the size of manufacturing plant, different methods of project management and
implementation of technology network information structure (Gerasimov and Gerasimov, 2015).
It mainly focusses on study on minimum waste techniques, correct usage of raw materials by
utilizing different formulas such as formula of economic quality order in order to determine how
and when to process large number of inventory order and how much inventory should be hold in
hand.

Operation management- Theory of production
This theory mainly focusses on all the problems related to combining of different inputs
in order to product a certain level of output. This theory is used to analyse relationship between
input and output which helps the organizations such as Unilever to determine profit maximizing
output. It helps in increasing quantity of goods, change all the raw materials in form of goods or
in temporal form of goods (Harrison and Lock, 2017). In this, inputs are all the resources used in
production of services or goods and all the input can be classified in terms of land, labour,
capital, resources and entrepreneur. All the input in this is classified as variable or fixed inputs in
which inputs are those which cannot be changed in short duration of time like organization's
equipment and plants.
Types of operation scheduling
Operation scheduling mainly focusses on assigning jobs to employees for a specific time
period for a specific task. Effective scheduling helps in achievement of complete achievement of
their supply chain. In can also be explained as scheduling helps in establishing both resources
and timing within an organization. Operation scheduling mainly focusses on use of human
activities scheduling, use of facilities and equipment and material receipts. There are various
types of Operation scheduling such as:
Forwards Operation scheduling: it is mainly classified on the basis of time. All the activities in
this are planned and scheduled on the basis of planned order release by scheduling the first task
of the plan or schedule. All the rest of the tasks are scheduled on the completion of scheduled
tasks and all the rest of the tasks are scheduled in a similar manner i.e. after completion of one
task others scheduling are done.
Backward operation scheduling: It is also classified on the basis of time and planned or
scheduled on the basis of planned receipt date or planned order. In this last activity is scheduled
first i.e. time of start of the last activity is considered as the starting time of previous activity
(Framinan, Perez-Gonzalez and Fernandez-Viagas, 2018). In Unilever Backward operation
scheduling is used to complete all their tasks or projects.
Operation scheduling techniques
Operation scheduling is important to be done or considered as wastage of time in
completion of a project can result in wastage of money as well as losing respect in front of
clients. So, for this it is important to choose or prioritize the task and time by choosing

appropriate method or technique for scheduling all the operations. There are various methods or
techniques that can be used for operation scheduling.
Johnson's two machine algorithms: it is one of the most effective method and a very simple
process of scheduling when operation sequencing involves two machines and processing time
completely depends upon the sequence in which jobs are loaded or done. It is mostly used when
the organization involves backlogs of orders (Khalilpour and Vassallo, 2016). This method is
used normally to save time and also helps in determination of sequence of optimal jobs.
Index method: This method is generally used to assign jobs on the basis of first come and first
serve method. It is used when different jobs are to be assigned to different individuals but this
method do not provide optimal loading.
Critical path analysis: it is mainly used for determining scheduling of different activities in the
project and also revels relationship between different activities of the project. It also helps in
reflecting all kinds of uncertainties in the project within the duration estimated for all the
activities.
Critical ratio scheduling: It is usually used in maintaining and establishment of priorities
among the tasks or jobs within the project.
Gantt Charts: Gantt charts are normally used for scheduling and loading of all the tasks,
activities or resources. It is generally used to organize all the tasks, activities and resources
within the time frame accurately. It helps operation managers to schedule all the resources within
time by applying trial and error method so that arrangement and management of task can be done
differently. This scheduling technique is used by Unilever organization which is done with the
help of their epicor software.
Scheduling service operations: It is mostly used to identify or encounter all the problems not
seen in manufacturing. It helps in controlling intangibility of services, inability of store services,
random demand of services as sometime random demand of services make scheduling and
gathering of resources and labour extremely difficult which can work as a hindrance in the
project or work. It helps in flexibility in building service operations by using usual labour, on-
call employees, providing cross training.
Production scheduling: It is normally used in fixing date and time of operations in a continuous
timeline. It defines both completion and starting time frame for all the processes
(Golmohammadi, 2015). All the subsequent stages of controlling and planning of production

completely depend upon the timeline that makes the production a valuable asset in the
production process.
The Shortest processing time: One of the most common technique used in operation
management and scheduling is the shortest processing time. In all the tasks or jobs that take least
or minimum amount of time are assigned first. In is difficult and easy task are done alternatively.
Layout Planning and work system process
Layout planning is to decide the best physical arrangement of all the resources that
require space within facility. Decision about the arrangements of resources within the business
can be made anytime there is slight or complete change in resources arrangement like addition of
new workers. Change in implemented procedure and movement of machines. Layout planning is
performed anytime whenever there is expansion in facility or reduction in space. Knowledge of
layout planning is important to be applied within the business process as it can affect
productivity of business, it also helps in saving wastage of energy and time (Helber and et.al.,
2016). Layout planning can be applied at various levels of business planning such as: planning
location of plant, factory or warehouse, planning location of departments, planning location of
machines as well as in identifying and planning all the problems related to department or
locations. Layout planning helps an organization in working more efficiently by minimizing
material handling costs, makes systems less crowded, reduces storage spaces, reduces product
damage. Unilever mainly focusses on four types of layouts however there are many more:
Product layout: It is generally used for systems where manufacturing of products or assembling
or products are done in large quantities.
Process layout: it is used in locating all kinds of similar machines together. This type of layout
is used bin both manufacturing and non-manufacturing organizations.
Fixed position layout: in this layout product is kept in a fixed position and all the other
materials, machines, workers etc. are arranged around it. It helps in reducing movement of
materials.
Cellular layout: it is also called group layout which helps in bringing flexibility into
manufacturing system with regards to variations in sequence of operations, variation in batch
sizes etc. it is normally used as a hybrid between process and product layout.
Work system is a way work is done and accomplished in an organization. It involves all
the partners, suppliers, collaborators, contractors and all the other components of the supply

chain which is needed to produce and deliver products, services and processes. It mainly
coordinates both internal work of an organization and required necessary resources needed to
produce, develop deliver products to the customer (Oppl, 2016). In other words it can be said
that work system is s system where all the machines and human workforce perform all of their
work using technology, resources, information in order to provide customers the desired product
or serve they need. It helps and organization in organizing and producing materials from
suppliers and producing it, coordinating work by processing information. Work system processes
are set and organized by organizations in such a way that service system, supply chain, projects,
economies etc. can be managed and maintained by them. Work system processes are not highly
structured business processes that involve sequence of steps in fact the sequence of content
depends upon experience, skills and judgement of workforce and managers.
It is important for all the business organizations to have an appropriate knowledge of
layout planning and workforce processes that can be implemented within an organizations like
Unilever. It will help those organizations in managing and maintaining their workforce,
resources, locations in such a way that productivity of business is increased to increase the
overall operational and production profit of an organization.
Inventory management policies for controlling production costs
Inventory management is a process of controlling and supervising item stocks of an
organization. Inventory management is used for ensuring that the company has all the needful
resources, products and materials in hand in order to keep and control the cost of production as
low as possible. It helps in supervising all the raw materials or components that can be used by
the organization in production of products or items (Dillon, Oliveira and Abbasi, 2017). The
main purpose of inventory management is to lay down processes and procedures for the control
over inventory and for procurement management according to the policies, regulations and
legislations as well as other directives of other departments. There are various policies of
inventory management that can be used for controlling of production costs such as:
Acquisition: Inventory item purchase if one of the most common method of acquisition. When
an item or equipment is purchased then it must be added to the inventory so that easy tracking
and identification can be done and financial records can be managed. Inventory tags must be
placed on the items or equipment.

Equipment or item transfer: Transfer of all the movable items should not be done without
approval from finance or accounts department as unnecessary transfer increase the production
cost. Approval from accounts or finance department is important as it will be needing a revival
of budget for equipment transfer.
Removal of inventory items: Selling, disposing or trading of an inventory item is one of the
main responsibility of purchase officer. There are other policies for disposing of waste, obsolete,
scrap, surplus items. So, if an item or equipment is to be removed from inventory department
then approval form accounts or financial department is important.
Physical Inventory: Complete listing of inventory item is important to be listed for the budget
department so that they can control the production cost. This list should be approved from
finance or accounts department as they are the one to approve the production cost (Caldentey,
Giloni and Hurvich, 2019).
Controlling of production cost can also help in controlling overall unit cost of an item
which can be achieved by:
Unit Cost= Variable Cost + Fixed Cost / Total unit produced.
For example: If Unilever is working on a project of production of beauty product such as soap
and needs to collect the overall production cost of 80000 soaps and the unit cost of soaps then
they need to calculate:
If variable cost is £50,000 and fixed cost is £500,000 then
Production cost will be £550,000.
Unit Cost will be calculated as 550000/ 80,000 = 6.87
All the policies are important to be as it can either disturb or control the production cost. All the
organizations have different policies for their inventory management but these are the basic
policies are required to be followed as it can completely disturb the overall production cost.
CONCLUSION
From the above essay it has been summarized that operation management in business is
extremely important as it helps in various things such as inventory management, scheduling,
maximizing overall profit of an organization etc. there are various types of operation scheduling
that helps in completion of all the tasks within the organization or projects, based on those types
there are few operation scheduling techniques that can be used to reduce wastage of time, money
and resources as well as the scheduling technique used by Unilever has also been discussed. It

has also been observed that knowledge about layout planning and work system process is
important to be implemented within an organization in order maintain and manage work force,
increase productivity etc. Lastly importance of inventory management policies should be known
and implemented by all the organizations as it helps in controlling production cost of an
organization.

REFERENCES
Books and Journals
Caldentey, R., Giloni, A. and Hurvich, C., 2019. Inventory Policies and Information Sharing: An
Efficient Frontier Approach.
Dillon, M., Oliveira, F. and Abbasi, B., 2017. A two-stage stochastic programming model for
inventory management in the blood supply chain. International Journal of Production
Economics. 187. pp.27-41.
Framinan, J.M., Perez-Gonzalez, P. and Fernandez-Viagas, V., 2018. Deterministic assembly
scheduling problems: A review and classification of concurrent-type scheduling models
and solution procedures. European Journal of Operational Research.
Gerasimov, B.N. and Gerasimov, K.B., 2015. Modeling the development of organization
management system. Asian Social Science. 11(20). p.82.
Golmohammadi, D., 2015. A study of scheduling under the theory of constraints. International
Journal of Production Economics. 165. pp.38-50.
Harrison, F. and Lock, D., 2017. Advanced project management: a structured approach.
Routledge.
Helber, S., and et.al., 2016. A hierarchical facility layout planning approach for large and
complex hospitals. Flexible Services and Manufacturing Journal. 28(1-2). pp.5-29.
Hitt, M.A., Xu, K. and Carnes, C.M., 2016. Resource based theory in operations management
research. Journal of Operations Management. 41. pp.77-94.
Khalilpour, R. and Vassallo, A., 2016. Planning and operation scheduling of PV-battery
systems: A novel methodology. Renewable and Sustainable Energy Reviews. 53.
pp.194-208.
Oppl, S., 2016. Articulation of work process models for organizational alignment and informed
information system design. Information & Management. 53(5). pp.591-608.