Operations Management: A Case Study of Clarks International Ltd.

This document provides a case study on the operations management of Clarks International Ltd., a renowned shoe manufacturing company. It discusses the company's history, major operational tasks, and recommendations for improving efficiency. The document also explores the different interdependencies within the operational functions of the company.

Operations Management
1

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PROJECT TASK.............................................................................................................................3
a)......................................................................................................................................................3
b)......................................................................................................................................................4
c)......................................................................................................................................................6
d)......................................................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
2

INTRODUCTION
Operations management refers to organising all the activities of a business that are
involved in manufacturing, development and implementation of a product/service. When
efficient use of resources is involved in this designing and redesigning process of products then it
is called effective operations management. The programs that are classified in this section are
manufacturing, production, equipment maintenance, labour relations, system analysis, cost
control, etc. Productivity increases when a company uses such management technique with deep
applications in its product cycle. Clarks International Ltd. is a company that manufactures and
sells throughout the globe. It was founded by Cyrus Clark and James Clark in 1825 in England.
Technical inventions and advancements helped this company to achieve great market reputation
and brand name. In UK, it is listed as 13th largest private multinational. This report aims to
acquire better understanding for operations management through Clarks.
PROJECT TASK
a)
The organisation chosen for the report is Clarks International Ltd. As is known, the
company was founded in 1825 by brothers Cyrus and James Clark. It is a retail industry venture
that manufactures and sells shoes for men and women. Known for high quality products and
exemplary services the company has obtained a trade mark reputation after having global stores.
This organisation has been handling 1000 outlets and franchises in all parts of world. Although
84% of these stores are owned and maintained by company itself while 16% shares are amongst
employees and other businesses (About Us, 2016).
One of the most prominent products of company is Desert Boot. It is known for its
unique design and material quality. Despite of a great journey of ups and downs, Clarks has
managed to keep pace with trending changes in demands of consumers. Legal rights were
inherited through generations of Clark family. The company never experimented in letting any
outsider handle operations of businesses. Diverse structure and constant growth has made Clarks
a beautiful example for developing a vision in operations management. Authentic and original
products have been plus point for marketing strategies. Technological advancements led to
money saving policies.
3

In today’s world, the company has been selling all its products on all e-commerce portals
and has achieved a great recognition in stylish and trendy shoes. Contemporary materials and
best in class craftsmanship have gathered a different position of Clarks in hearts of consumers.
Stakeholders are people who depict interests in all activities of organisation be it products,
services, investments or involvement in social activities. The internal and external stakeholders
of organisation are described below:
Internal stakeholders: Suppliers, employees, business partners, franchisers and owners are
internal stakeholders for Clarks Ltd.
External stakeholders: Shareholders, customers, government, local retailers are external
stakeholders for company.
b)
Clarks International Ltd. has been working from about 190 years. Such a huge journey
can only be achieved through great management techniques (Corporate Services, 2016). The
operational management of this company are very strong. Following operational functions are
managed by the business globally:
1. Brand: The organisation has been working by creating, innovating and inventing
exceptional styles and trademarks in shoe industry. This technique has helped it acquire
good brand reputation amongst customers.
2. Business Improvement and Procurement: With advancements in technology through
internet, it is very important that companies must also engage their profits in spreading
roots across the globe. This function of business improvement and procurement helps in
developing and establishing centres in different parts of world with effective planning
and management of resources (Slack, 2015).
3. Customer Services: For a product manufacturing firm, customer satisfaction is the first
priority. All the queries related to company and its products from the customers are
handled by this functional department. The media used for this purpose is email, social
media, phone and post. Complaints, requests and all sorts of customer related problems
are heard and solved through these portals.
4

4. Digital: Online shopping is trending in 21st century. Internet evolution will lead to
development of more e-portals through which companies can sell their products in any
part of the world without actually setting a physical store. Once online website for
purchasing and trading is developed it has to be maintained and checked regularly.
Competitors may develop strategies for hacking and breaking into credentials of these
portals. Hence, digital department takes care of all these functions across specific region.
Although consumer felicitation is main objective but protection from threats is also taken
care in this department (Bozarth and Handfield, 2016).
5. Finance: Money is needed or conducting all operations in a company. Finance function
maintains all records and systems that are needed for supporting global framework at
every key location. It is a crucial function of operations in Clarks.
6. Human Resources: Organisations are dysfunctional if major resource that is human
resource is not available. A company won’t be called so if no labourers or work force is
present. Human resource department is necessary for maintaining peace between
employee and employer. They work for making company a better place to work for.
Issues related to internal environment of a business that affect the functioning of
labourers are resolved by human resource department.
7. Legal: Even if a company follows all rules and regulations that are led by particular
government of a region, competitors or rivals can create situations in which allegations
can be faced. Legal department is therefore necessary. This function keeps Clarks away
from judicial complications and also provides advisory help in all range of business
issues.
8. Merchandising: Practises that contribute to sales of products to retail customers is
merchandising. Apart from self-owned stores, Clarks has to maintain and build up
relations with shopkeepers and retailers who are a second option for building links with
consumers. Merchandising helps in building this relation. Demands from different
business clients and consumers are managed by this function of company (Corporate
Services, 2016).
9. Outlet: Customers always prefer authentic products. Inclination is more towards full
price channels that is company outlets than retail stores. Hence, Clarks had to develop its
physical stores for such audiences so that they can avail all products that are shipped
5

directly from factory to shop without third party intervention. Outlets can be owned and
produced through mergers or franchises.
10. Product Development and Sourcing: Fashion is a trend and these change at any
moment depending on current situation of market. Being a shoe manufacturing company,
Clarks has to develop and innovate every now and then so that it doesn’t loose its
competitive advantage. Product development and sourcing is staged because any sort of
negligence can result in declining customer share which cannot be afforded by the
company.
11. Retail Operations: Maintaining a multinational operational business, it is important that
all small and big mergers, partnerships and franchises are supported with effective
resource. Retail Operations department manages all business relations. It also provides
support for outlets across the country and continent.
12. Supply Chain: Demand and supply network has to be stable. Imbalance in any of the two
given things can destabilise the operations management of company. Information and
resources that are involved in processing product to consumers are managed in supply
chain. Evolution and improvements are important for this function of organisation
because needs and demands of customers change every moment (Krajewski, Ritzman
and Malhotra, 2013).
c)
Major operational tasks for Clarks Ltd include human resource, supply chain, product
development and sourcing, finance, marketing or merchandising and brand maintenance. It is
significant that company will develop within coming times but it is not essential that this
development can be sustainable. Customer segment that is targeted by company is people with
high income level. Products are in form of shoes available for male and female audience.
Efficiency of operations management can be increased by accommodating changes in the main
functional architecture of company (Hill and Hill, 2012).
Since, operational planning for Clarks is very well versed. Business processes are main
part of operational management. In order to cope with increasing competition, it is very
important that operations are nicely administered. Following recommendations can be
considered for increasing operational efficiency:
6

1. Although Clarks Ltd. has a very good brand reputation. Business has its own competitive
advantage that cannot be easily substituted. This advantage is acquired because of unique
products and strategies that have been developed and evolved over time.
2. Internal structure of an organisation must be strong enough to fight outer competition.
This durability will be retained only if employees are secured. It’s responsibility of
human resource function to bestow with information that is necessary for them.
Employees cannot be deserted when it comes to discussing strategies. This will decrease
their interest level in working for organisation. They will tend to turn their backs for
company which cannot be afforded. Secure, reliable and self-defendant network can be
adopted by company for giving employees information and technology for their own
development (Hendricks, Hora and Singhal, 2014).
3. Just like customers, business partners are conspicuous for Clarks. Being a large enterprise
doesn’t mean it can overpower its partners or alliances. Effective business relationships
help gather a good reputation in market and decrease rivals in competition. Business
processes must be developed according to needs and requirements of business partners.
Stable infrastructure is based on secure and reliable relations through these operations.
4. Company must concentrate on inviting more easy collaborations. Be it small, medium or
even micro enterprises, chance must be given to all for creating a link with brand. This
will help in achieving sustainable development. According to triple bottom line theory
effective business operations are sustainable only when company meets requirements of
employee, people and environment. This decision doesn’t demand a compromise in
profits but new ideas can definitely change future perceptions of company (Brown,
Bessant and Lamming, 2013).
5. Streamlining better communication channels for consumers. Although company has been
giving great services through its customer services block but this relationship has to be
managed. Automated CRM (Customer relationship management) software is available in
market. Clarks can adopt such technology for maintaining call records and customer
queries. While devising new or improvised product strategies, these records can be
accessed for innovating new methodologies. Pending orders and easy returns feature can
be facilitated for consumers. This will enhance better online shopping experience
(Foropon and McLachlin, 2013).
7

6. A major internal change Clarks can indulge in is uniqueness in working style of
employees. Productivity of human resource will only increase if core competencies are
enhanced. Every single employee working for the organisation must be unique and
competent. Duplication decreases efficiency of employees. Interaction with innovation is
necessary in employees. It is duty of human resource function to monitor discrepancy
action so that incompetent employees can be rejected while skills and talents of deserving
individuals can be polished.
7. Critical function of any business is supply chain and logistics. Inventory management is
necessary. Excess supply and no demand will lead to decreasing prices of products
(Bromiley and Rau, 2016). This situation is definitely not favourable for long term.
Profits margins will suffer and performance graph will slow down. While more demand
and less supply will ruin customer relationships. This situation can have a positive impact
also. Curiosity will arise amongst alien audiences about empty stocks. People will gather
more interests in knowing about company and its products. Clarks being a renowned
organisation can change this threat into an opportunity.
8. The only thing that customers expect from company is on time delivery and best quality
products. Clarks can develop even better products by using technologically advanced
material for shoes. Finance functions must focus on investing in research and
development (Gunasekaran and Ngai, 2012). This expenditure is an investment because
research will enhance innovation and even invention can be attributed by the company.
Hence, investment functions must be included in operations management of complete
business structure.
d)
Operation management includes effective utilisation of staff, materials and all other
resources that are needed for product development, manufacture and communicating it to market.
The complete product cycle is designed accordingly by operational department of business
organisation (Brown and et. al., 2013). Above discussed changes are essential for increasing
efficiency of business operations because changes are constant. Being a fashion influenced
company, Clarks has to maintain pace with consumer culture, thoughts, income levels and
technology.
8

Seasons, festivals, political and social reforms, technology and general agenda are certain
factors that influence manufacturing design of shoes (Drake and Spinler, 2013). Tracking these
factors is performed by operations management cell of Clarks. As mentioned before there are 12
active operational functions of company. It is important that they work together in each other’s
support. All functions are interdependent. This nature of functions can be bifurcated in three
categories (Sekar, 2014):
1. Pooled interdependence: Being the weakest structure for managing different functions in
an organisation, this dependency structure is least adaptive. Completely separate working
activities are initiated and business organisation has to invest more resources and
investments in maintaining these functions.
2. Sequential interdependence: This interdependence occurs when the product cycle is
based on sequential execution of different functions. Performance can be affected by
disruption caused in any one function. Extreme coordination is necessary for maintaining
relations. This cannot be used in multinationals because a broad variety of functions have
to be executed simultaneously which is not possible in this interdependence structure.
Operational management has to be scheduled and planned with micro thinking techniques
(Subramanian and Ramanathan, 2012).
3. Reciprocal Interdependence: Similar to sequential interdependency, all processes have to
be managed sequentially but cycles are also initiated within this structure. These models
are complex and very difficult to manage. If a process is affected then, whole functioning
is paralysed.
Operational objectives help in defining the pat for all operational activities of company. It is
very important that the functions that are characterised in the operation management have to
execute with a purpose. Aimless execution will not yield any product and in fact deplete
conditioning of product cycle (Rosemann and vom Brocke, 2015). Middle managers that handle
separate function have to work together for defining and prioritising operational objectives.
These are not developed within a day or two but involve hard work and efforts for months. The
purpose behind operational objectives is directed towards betterment of organisation but can be
improved by applying suggestions and reviews.
9

An operational objective is developed and created by going through a series of processes.
These involve specification, purpose, measurability, achievable, time management and real time
approach. The devised objectives must meet real time requirements of company as well as its
stakeholders. Hence, the proposed changes must be implemented for increasing efficiency of
operations management.
CONCLUSION
Operations management engage competent use of resources that are required in
developing a product at every stage. This was realised from the above report by considering the
operations of Clarks. The report encloses analysis of variable functions that are managed by
Clarks for accessing all its operations across Europe and Asia. The efficiency of operations
management can be increased by enhancing all business operations of the company. Human
resource, finance, sales and marketing are major functions that have to be improved and
developed so that overall result of operations management is properly achieved by Clarks.
10

REFERENCES
Books and Journals
Bozarth, C. B. and Handfield, R. B., 2016. Introduction to operations and supply chain
management. Pearson Higher Ed.
Bromiley, P. and Rau, D., 2016. Operations management and the resource based view: Another
view. Journal of Operations Management, 41, pp.95-106.
Brown, S. and et. al., 2013. Operations management: policy, practice and performance
improvement. Routledge.
Brown, S., Bessant, J. R. and Lamming, R., 2013. Strategic operations management. Routledge.
Drake, D. F. and Spinler, S., 2013. OM Forum-Sustainable Operations Management: An
Enduring Stream or a Passing Fancy?. Manufacturing & Service Operations
Management. 15(4). pp.689-700.
Foropon, C. and McLachlin, R., 2013. Metaphors in operations management theory
building. International Journal of Operations & Production Management, 33(2), pp.181-
196.
Gunasekaran, A. and Ngai, E. W., 2012. The future of operations management: an outlook and
analysis. International Journal of Production Economics, 135(2), pp.687-701.
Hendricks, K. B., Hora, M. and Singhal, V. R., 2014. An empirical investigation on the
appointments of supply chain and operations management executives. Management
Science, 61(7), pp.1562-1583.
Hill, A. and Hill, T., 2012. Operations management. Palgrave Macmillan.
Krajewski, L. J., Ritzman, L. P. and Malhotra, M. K., 2013. Operations management: processes
and supply chains. New York: Pearson.
Rosemann, M. and vom Brocke, J., 2015. The six core elements of business process
management. In Handbook on Business Process Management 1 (pp. 105-122). Springer
Berlin Heidelberg.
Sekar, K. V. ed., 2014. Manufacturing engineering and technology. Prentice Hall.
Slack, N., 2015. Operations strategy. John Wiley & Sons, Ltd.
Subramanian, N. and Ramanathan, R., 2012. A review of applications of Analytic Hierarchy
Process in operations management. International Journal of Production
Economics. 138(2). pp.215-241.
Online
About Us. 2016. [Online]. Available Through: <http://www.clarks.co.uk/information/about-us>.
[Accessed on 21st December, 2016].
11

Corporate Services. 2016. [Online]. Available Through: <https://uk.clarksjobs.com/corporate-
services/>. [Accessed on 21st December, 2016].
12

13

11