Operational Risk Management Analysis

This assignment focuses on analyzing complex cascading effects in Operational Risk Management using real-world examples. It examines how different sectors, such as finance, energy, and forestry, apply operational risk management strategies to minimize potential risks and optimize performance. The provided references offer insights into various techniques and approaches used in operational risk management, including scenario analysis, cost optimization, and multispecies fisheries management.

Operations
Management
and
Service Excellence

Table of Contents
INTRODUCTION...........................................................................................................................3
OVERVIEW OF OZONE COFFEE ROASTERS..........................................................................3
Location.......................................................................................................................................3
Capacity.......................................................................................................................................4
Layout ........................................................................................................................................5
Service Offered...........................................................................................................................6
OZONE COFFEE ROASTERS Shop menu...................................................................................6
OPERATIONAL MANAGEMENT PROCESS OF OZONE COFFEE ROASTERS...................7
Quality maintenance....................................................................................................................7
Waste management.....................................................................................................................8
4 V's operational model of Ozone Coffee Roasters....................................................................8
Controlling..................................................................................................................................9
Five performance objectives.....................................................................................................10
Improvements require for enhancing operational effectiveness...............................................11
SUPPLY CHAIN OF Ozone Coffee Roasters...............................................................................12
COMPARE AND CONTRAST QUALITY PROCESS OF OZONE COFFEE ROASTERS
WITH STARBUCKS.....................................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Operation management is a process by which business can focus in the manufacturing of
products (Xiaomin, Fangfang and Yinghui, 2015). By using these techniques, producer can
convert input into the finished goods. Managers will monitor each activity so that raw material
can be used efficiently. It includes making an effective plan by which manager will allocate all
the resources as per the need of the various departments and see that all the resources are
effectively utilized or not. In the present case, Ozone Coffee Roasters is taken which is a small
sized cafe which operates in London. The present report describes the overview of the cafe such
as their location, capacity layout and services which are offered by the firm. It also explains the
operational management process which are used by cafe. By using 4v's operational model and
analysing the five-performance objective help to make effective management of products.
Furthermore, it also presents the supply chain of the cafe. At last, by making comparison the
quality process, firm will identify the actual capability in the market.
OVERVIEW OF OZONE COFFEE ROASTERS
Location
Ozone Coffee Roasters is a small size coffee shop which operate its business in the
middle of London. Organisation focus on providing quality products and satisfy customer needs.
As per the present tradition, coffee shop is a best place for making interaction, fun and get-to
gather with the family in a special occasion. In order to this, cited firm operates its business in
the same way so that firm will provide effective services to the customers. In this way,
organisation will get the higher profit every day. By maintaining the quality of the products, firm
contact those suppliers who provide high quality of raw coffee beans in a lower cost. Ozone
Coffee Roasters Established in the middle of London so that it can attract higher number of
people towards the shop. It also focuses on students’ demand so that it locates itself near to the
college or university so that firm highly attract the students.
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Capacity
The main capability that the cafe has that they provide quality products to their
customers. All the raw material like coffee beans have some specific feature by which firm can
satisfy the demand of the customers easily. Ozone shop hire those persons for job who have
specific knowledge and talent to deal with the operations and customers too. In order to this, firm
also adopt effective recruitment and selection process by which manager of the cafe shop
identify the person's qualification which are described in the CV. Thought it, cited firm have
sufficient workforce which make positive impact on the financial resources of a firm. Ozone
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Coffee Roasters utilizes all the resource effectively and optimally by which there is no need to
make heavy, unnecessary expenditure. The capability of the coffee shop help in enhancing the
profits and increase the core competencies in the competitive market. Along with this, it can be
said that Ozone Coffee Roasters is having a high level of capacity in respect to customers. Once
at a time the café can serve around 30 customers. It means the business is having sustainable
opportunities but they can focus on expansion in order to advance the overall capacity.
Layout
The layout of the Ozone Coffee Roasters is well designed and very eye catching which
help to attract customers at a large level. Infrastructure is designed as per the population and
based on the need of the customers. Cafe shop provide proper sitting facility to the people. This
is for the part purpose and normal get- together or local visit purpose too. On the other hand,
shop has to face the poor door arrangement and parking problem. Cafe also try to maintain a
clean and hygienic environment in their structure. Hence, firms all over structures are attractive
but by making effective improvement, firm make changes as per the need. Hence, it can be said
that layout of a cafe shop help to attract the customers which make positive impact in their sale.
Organisation layout is also according to industrial standards which assist in gaining competitive
advantage. Overall development of measures like infrastructure is also being referred properly
which also provides a better opportunity to meet outcome.
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Service Offered
Ozone Coffee Roasters provide variety of services to the customers such as Latte,
Cappuccino, coffee, hot chocolates etc. In 2007, it launched hot chocolates for the first time. It
also offers tea, breakfast, snakes and cakes to the customers. Accordingly, cited firm always tried
to retain the customer's tastes and preferences. Firm also focus on different age- group people.
For example: Ozone Coffee Roasters mainly focus on providing hot chocolates and cold coffees
to the students. In addition to this, cited firm also provides various services like discount facility
on first visit, rewards system and lottery while playing several firm's contests etc. On special
occasions like Christmas, cafe shop supply gifts and cakes to their most visited customers. In
addition to this, shop render Wi-Fi, music and packing facility to their customers. (Sharifi, 2016).
OZONE COFFEE ROASTERS Shop menu
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OPERATIONAL MANAGEMENT PROCESS OF OZONE COFFEE
ROASTERS
The main objectives of operation management are to cover the input into finished goods.
Ozone Coffee Roasters hire all those talented and skilled people who can utilize the resources
effectively. Firm also focus to maintain the quality and try to provide high quality of products to
their customers.
Quality maintenance
Ozone Coffee Roasters follow the ISO 8402-1986 by which they can produce goods and
services as per the tastes of the customers. Managers of the cited firm monitor each and every
activity so that it will increase the sale of their products. While purchasing the raw coffee beans,
cafe shop always selects the high quality in them. Management of shop mainly focus to provide
hygienic and clean place. By using all this, firm has set their benchmark in the competitive
market in from of their competitor. Firm also maintain their audit report as per the time so that
manager can examine the quality of the products and make effective improvement as per the
need. Staff of cafe also uses the advanced techniques by which they can produce large number of
coffee in a less time.
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Waste management
In order to reduce the cost company always try to manage the wastage during the
production activity. It considers collection, purchasing of raw material, transportation etc. Ozone
Coffee Roasters also adopt the hierarchy principle of wastage by which they can focus to reduce,
reuse and recycle all the wastage material in an effective manner. Company also focuses to
determine global economic position. By using the principle cited firm can minimize the cost so
that profits will be increased effectively (Plagányi, 2014).
The seven wastes of Ozone Coffee Roasters are:
Overproduction: It may be happen when Ozone Coffee Roasters, produce sooner, faster
or greater quantities than customer demand.
Inventory: It include all those raw material which not having value added in the coffee
shop.
Waiting: It include people or parts that wait for a work cycle to be completed.
Motion: It include unnecessary movement of people, parts or machine within a process in
the workplace.
Transportation: It include transportation of goods or movement of people between
processes.
Rework: It include repetition or correction in a process which was performed by the
Ozone Coffee Roasters.
Over Processing: It include all those process in which all the activity which is related to
the coffee shop is done beyond standard required by the customers.
4 V's operational model of Ozone Coffee Roasters
Ozone Coffee Roasters follow the 4 V's model while managing the operations. It includes
volume, variety, velocity and value, by using all these elements manager can shape their shape
their business effectively.
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 In the operational process volume is the most important element which are used by the
business in an effective manner. By having a high volume, it will automatically reduce
the cost. Ozone Coffee Roasters try to increase the volume which are totally based on the
demand of the customers. It helps the firm to manage their resources effectively and
reduce the wastage (Nir, 2016).
 The element is variety which are taken as important factor in operational management
process. Ozone Coffee Roasters provide variety of products to their customers. Firm
offers discounts and many more attracting schemes so that it will attract the customers in
large scale.
 Organisation need to maintain the demand of the product in a competitive market. In this
way, Ozone Coffee Roasters always try to update themselves as per the change giving in
demand. In order to this, Cafe shop analysis the market and getting feedback to the
customers by which they can analysis the demand of a particular product.
 By monitoring the market trends, cited firm examined the variation in demand. Changes
make negative impact in business activity so that it is necessary for the firm to examined
the market and also taste of the customers. Firm also determine the competitor’s potion
and their pricing strategies so that as per their strategies, Ozone Coffee Roasters will set
up a new planning for increasing their sell (Maltamo, Næsset and Vauhkonen, 2014).
Controlling
Ozone Coffee Roasters always try to make effective control by using the advanced
techniques, they will reduce their cost by managing the wastage. Cafe shop also POS system so
manager can resolve the billing issues by which firm, can run smoothly. JIT approach is another
way of making effective control in an operational activity. By using this approach, it can handle
the complaints which are generated from the billing errors. Through online visiting and making
websites, firm will make effective communication and get feedback to them. In respect to this,
by getting the feedback firm make effective changes and try to increases the level of
performance. After using this tool, firm can resolve all these problems effectively and increase
the satisfaction level of customers (Kim, Ha and Shin, 2013).
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Five performance objectives
Company can set their target and make an appropriate plan to accomplishing
performance objectives. As per the given scenario, Ozone Coffee Roasters also set their targets
and make effort for fulfilling the need. There are various objectives of firm, which are as
follows:
Meet customer expectation: Ozone Coffee Roasters always focus to provide quality of
products by which they will satisfy the need and demand of their potential customers. Cafe shop
mainly targeted the students and provide cold coffee and hot chocolate as per their taste. Firm
also try to provide high quality products in an affordable price so that they can attract the large
number of customers towards them. For example: In London, their will be high demand of cold
coffee, in this case firm mainly focus on providing cold coffee to their customers. This process
helps to increase the performance level and core- competencies in a competitive market.
Improving quality: Ozone Coffee Roasters provide high quality products to their
customers by which they also ensure that all the raw material is quality wise or not. By
improving quality, cited firm analysis the competitor's strategy, after that make proper strategies
for accomplishing their goals. In London, cited firm face their competitor who provide their
substitutes in the markets. In order to this, cited firm not only provide their products in lower
prices but also maintaining the quality. In this way, firm make long-term relationship with their
customers (Hayes and Prodanovic, 2016).
Controlling the cost: Cited firm also try to maintain the cost by effective use of resources.
Controlling the cost help the cafe shop to minimize the wastage or recycle them in a
manufacturing process. In order to this, cafe shop also use the advanced techniques and high
skilled person so that they will perform effectively. Ozone Coffee Roasters also make strong
strategies and improving their operational activities by reducing unnecessary expenditure during
the production activities. Firm also uses various techniques of costing by which manager will
make proper control on them. It includes preparing all the details in an appropriate manner in a
register, by which manager will get net inflow and outflow of cash in a firm.
Fast delivery: It is another performance objective of Ozone Coffee Roasters to provide
high speed to delivery of their products to the customers. They use the high advanced technical
equipment which product large number of coffee products in a less time. In this way, company
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satisfies the demand of their customers by providing right product at right time. Firm also adopts
various ways like home delivery, packing facility by which they will be deliver the products.
Firm should hire large number of employees so that work will be divided. (García, 2017).
Staff Retention: As a small business, it is difficult for the business to provide high salaries
to their employees. This is the reason of high labour turnover in the business. Due to this, firm
has shortage of skilled person. Ozone Coffee Roasters try to rented the new employees who have
specific knowledge and skills so that they can perform well. Firm try to motivate their employees
by giving moral support and other facilities by which performance level of the workers will
increases.
Hence, cafe shop tries to make various kind of efforts so that it will achieve the profit by
increasing the performance level of employees. By using innovative techniques efficiency will
be achieved by the cafe shop.
Improvements require for enhancing operational effectiveness
 Ozone Coffee Roasters face the problem of insufficient workplace. This is the reason that
customers feel congested and want to go to other shop for spending time. They should
arrange the chair, tables etc. in an appropriate place so that it may not look like congested
to the customers (de la Huerga, Silvera and Turoff, 2015).
 Staff retention is the major problems which is faced by the Ozone Coffee Roasters To
resolve this problem, firm is required to provide reward and incentive schemes to their
employees. Firm should also provide hygienic environment of working so that they will
perform effectively.
 Ozone Coffee Roasters should try to increase the varieties of their products. Firm need to
analysis the demand of customers and develop new innovative taste in their food
products. This will help to attract the customers on a large scale. Firm try to maintain the
good brand image this will help to build long term relationship with the customers. All
these improvements help the cited to enhance their growth so that it can achieve their
desire profit.
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SUPPLY CHAIN OF Ozone Coffee Roasters
In an operational management, supply chain is an important part which is necessary for
every kind of organisation. By using this process, it will help to improve the quality of the
products by making improvement as per the requirement. It includes labour, material, resources
that are used by the firm to accomplishes their future goals (Cotton, 2016). Ozone Coffee
Roasters has strong chain of supplier from which company purchases raw material from different
suppliers. Firm collect the raw material in an affordable price from them. It helps the firm to
reduce the expenditure by making effective control on them. By forecasting the sales figure, raw
material will be supplied effectively. In this process, manager of a firm firstly examines the
future trends of sales after that he can order the raw material. In this way, manger can minimize
the cost and it will make positive impact in the volume. Product is passing whole the process and
at last it is converted into the finished products which is ready to serve to end users. By making
strong chain with suppliers cited firm is able to maintain the quality of the products (Chanda,
2016).
By using this process, cited firm will increase their profit and get the customer's
satisfaction level. Firm also faces some problems during the supply chain. Ozone Coffee
Roasters face that due to order the material no one was there to cross check the quality of the raw
material. In order to this, firm get poor quality of material which make negative impact in their
operational activity. In absence of proper monitoring, cited firm will not effectively utilize the
resources and it will create difficulty for an organisation. Ozone Coffee Roasters make
connection with the more than two suppliers so that in case if the quality of one supplier is not as
per the need, than firm can easily switch with another supplier's material. It helps to maintain the
cost and create value by giving high quality of drinking product to the customers. By this,
manger order the raw material as per the demand of the customers which are interested in the
quality. Cafe shop is situated near to the college by this firm will make focus on the students. By
making good brand image shop can attract the customers in a large level. As comparing to other
small size business, cited firm has good brand image and volume is will also increases in day to
day time. Organisation also follow the standard of managing the operation in its supply chain
management system. All the information will flow from one person to other is a smooth manner.
In order to thus, information will be deliver effective in different supply chain partners
effectively (Carballa, Regueiro and Lema, 2015).
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Supply chain system of Ozone Coffee Roasters is divided into three parts. In production
flow, it includes the movement of raw material from suppliers to the consumer. For example:
Cafe shop order the quality of raw material as per the need of the customers. In order to this, firm
will produce the drinking product as per the taste of the customers. In information flow, it
includes transmission of order of magnitude and sharing of information by one person to other.
For example: Cited firm share all the information such as new goods, price, quality by involving
all the employees in a shop. It is useful to the employees to understand each and every
information clearly without facing any communication gap between employers and employees.
At last in finance flow, it includes credit, title of ownership etc. By using financial flow cafe
shop examined the actual cash availability.
COMPARE AND CONTRAST QUALITY PROCESS OF OZONE COFFEE
ROASTERS WITH STARBUCKS
Quality plays an important for the success of any business. To maintain the quality in
Products Company, perform various task which is beneficial, for their growth. Firm provide
quality products or services to the customers by which firm will increase the profit by enhancing
the level of satisfaction of customers. Quality management is a process by which organisation
will manage the quality of products and make effective control in it. Manager of the cafe shop
control their operational process so that it can succeed with more agreeable quality
(Brandenburg, 2014).
Starbucks is the biggest competitor of Ozone Coffee Roasters Both the companies have
adopted different quality management process. Starbucks uses the over quality process by which
firm attracts more consumer at a larger level and provide satisfactory services to them. On the
other hand, it still making lots of improvement in their operational activity. It focuses on
different issues and make effective improvement as per the requirement. In this way, firm has
made its place a most popular firm in London (Badescu, 2015). Its factual approach of taking
effective decision- making process help the Starbucks to make decision for the welfare of the
business. Whereas, cited firm make strong relationship with the suppliers and employees. In this
reason, suppliers will send high quality of raw material to them in a right time. By making a
strong relationship with suppliers help to reducing the issues of shortage of raw material and also
give credit facility on purchase more material for the success of the business. Firm also make
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strong relationship with employees by which staff give their full potential in operational activity.
All these factor help the Starbucks to maintain the quality as well as standard in a competitive
market.
On the other hand, Ozone Coffee Roasters use very different process of managing quality
of the products. All the process includes complete involvement of employees for maintaining the
quality. It looks the external market and their requirement. As per the demand it makes necessary
changes in their manufacturing process. Firm also set their benchmark because as per the view of
people, they always visit the cafe as per the brand image and review of a firm. In order to this, by
making complete involvement of people or employees, it can attract the customers and try to
satisfy them. Customer centric approach helps the manufacturer of cafe to produce the products
as per the customer's need. Ozone Coffee Shop also focus on four components while controlling
the quality of the products. Firm make right quality planning, assurance, control and
improvement activity so that it can increase their profitability. By making a plan, firm analysis
all the factors which make great impact in their operations. Assurance stage include determining
all the planning tools to determine suitability. In order to this, Ozone Coffee Roasters conduct
meeting and inspection program by which it will test all the workings. Manager of a firm find out
the errors and mistakes so that they will make effective changes in the production activity
(Armstrong and Taylor, 2014).
CONCLUSION
As per above details, it has been concluded that operations management is an important
process for managing all the resources properly so that it can be utilized in an appropriate
manner. This report shows the operational management of Ozone Coffee Roasters in which
manager takes lot of decisions for improving their sales. It explains the complete overview of the
cafe shop which include location, layout and services which are rendered by the firm to the
customers. It also analyse the operational management process by which firm manages all the
raw material, controlling their wastage and making employee participation in the production
process. Furthermore, it also explained the five performance objectivities that shop need to fulfil.
In addition to this, it also explained the role of supply chain and its efficiency for achieving the
future profits. At last, by making comparison with Starbucks it showed the performance level
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and future growth of cited coffee shop. It will help to increasing the level of performance by earn
higher profit in future. (Abdel-Maksoud, Cheffi and Ghoudi, 2016).
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