Detailed Operations Management Analysis for Furniture Supplier Company

This report provides a comprehensive analysis of operations management within a furniture supplier company. It begins by highlighting the significance of operations management and its impact on productivity, customer satisfaction, and organizational goals. The report then delves into the operational functions of the company, including production planning, control, and quality control, using a process model to evaluate these functions. The three Es—economy, efficiency, and effectiveness—are discussed in the context of resource utilization and business operations. The report further examines the interplay between cost minimization and quality maximization, emphasizing the need for balance. It explores the significance of five performance objectives—cost, dependability, speed, quality, and flexibility—and their impact on the company's success. Finally, the report addresses linear programming, critical path analysis, and network planning as tools for improving operations and achieving organizational goals, offering practical recommendations for enhancing efficiency and effectiveness.

OPERATION MANAGEMENT
1

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Significance of Operations Management.....................................................................................3
Operational functions of company...............................................................................................4
Evaluating operations management by using process model......................................................5
Three E's that are involved in the operations of organization......................................................6
Cost minimization and quality maximization..............................................................................7
Significance of five performance objectives of the organization................................................8
TASK 2............................................................................................................................................9
Linear programming and evaluation of critical path and network planning................................9
Need for operational planning and control in producing furniture..............................................9
Operational outcome plan and layout of company....................................................................10
Network plan and resultant critical path for designing process.................................................10
Approaches used for project management and quality control..................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
2

INTRODUCTION
Every organization has the operation function where the goal of producing goods and
services are achieved. Operations Management (OM) is defined as the designing, management
and improvement of systems that are related to the production and delivery functions of
company. Utilization of both financial and human resources is invested in incorporating these
functions (BooksRivard, O'Connell and Wegman, 2012). Therefore, it is the critical part of
organizational success. In this report, scenario of Furniture Supplier Company who deals with
the finished goods to leading furniture retailers is taken as the part of study. With the objective of
investigating new ideas for improving efficiency and effectiveness of their business, the
management of operations is reviewed. Along with that, the significance of operations
management with the strategic planning, production procedures and operational plan to this
Supplier Company are effectively mentioned here.
TASK 1
Significance of Operations Management
Operation management is very important for every organization. In context to the given
scenario of Furniture Supplier Company where the major function of an organization is
manufacturing of furniture managers of this enterprise consider this function to be a very
significant activity because of the following reasons: Improvement in productivity: The production activity of organization is a measure of
producing goods and services. Managers use operations management to measure the
efficiency of producing goods (Drucker, 2012). Meeting Customer's competitive priorities: With the various approaches of operation
management, the analysis of customer's need for the type of goods that are required can
be determined. Development of goods and services: The significance of OM lies in producing goods
with planning and implementation of strategies that leads to the development of
organizational services and brand image. Ensure effective and efficient production process: The OM is beneficial for the
organization as it ensures advancement in the production process. Thereby, it leads to the
effective and efficient use of production procedures.
3

 Enhance working capital utilization: The role of OM is used for enhancing the
utilization of working capital (Ringle, Sarstedt and Straub, 2012). This is inclusive of
organizational assets and resources. Achievement of organizational goals and objectives: With the implementation of OM in
business activities, the managers make efforts in designing the new ways of doing
functions. Thereby, it helps in the achievement of goals and objectives. Improvises evaluation processes: OM supports in providing the measures of monitoring
business activities. Thereby, it helps the organization to bring improvement in the
evaluation process.
 Earning profit: The significance of OM supports organizations to earn the profits. As
with the new standards for doing business activities are designed, planned and
implemented by company, the chances for earning profit is attained.
Operational functions of company
Operation function of Furniture Supplier Company is divided into three major functions.
The primary function of this manufacturing unit is to transform the resources into finished goods,
that is, furniture. Following major activities are explained like: Production planning: In this process, Furniture Supplier Company plans the goals to
determine the production of furniture, the place of manufacturing etc. are laid down
(Boyd, Hobbs and Kerr, 2003). The main objective of this Furniture Supplier Company is
to provide retailers with the finished goods. In an order to make effective production,
three basic types ofthe production method decisions which are inclusive of mass
customization, mass production and mass customization are being followed. Production control: In this process of production control, the manager of organization
continuously schedule and review the activities which are the part of processes.
Immediate actions are taken when the feedbacks are received. In context to Furniture
Supplier Company, the activities of gathering raw materials, purchasing them, handling
of inventories etc. are made in the production control method.
 Quality control: In the final process of operation management, the manager of this
Furniture Supply Company directly makes efforts to get involved in the ensuring
effective quality management of the produced furniture. As this manufacturing unit is
4

directly associated with the retailers for whom the production is made, therefore, the
standards of quality becomes essential to maintain with respect to its functions and roles.
Evaluating operations management by using process model
The evaluation of OM of Furniture Supplier Company with the use of process model is
presented. It is significant to undertake the successful working and operations of enterprise. With
the function of operation management, the Furniture Supplier Company makes use of process
model where the procedure for assessing raw material and wood processing and the output of
final furniture and its supply to the retailer take place (Walsh, 2012). Following are the three
main steps of process model where, with the help of their procedures, the raw material is
transformed into final goods.
 Input: In this first step, the Furniture Supplier Company makes use of raw material
according to its resource allocation. This company has its own supply of raw material
unit from the procedure which is undertaken. Firstly, the operation is carried out by using
5
Illustration 1: Process Model of Furniture Supplier Company
(Source: DMAIC – Often the Difference Between Mediocrity and Noteworthy Success, 2015)

the material, information and customers as a key resource (Tang and Musa, 2011).
Secondly, the resources processed are initiated for transforming processes. Output: In this second step of process model used by this Furniture Supplier Company,
two steps of functions are carried out which is inclusive of Pre-drilling and assembling of
leg products. This is carried out by the two processes where one is inclusive of grouping
of products on the basis of color, code and design. In the second process, the same is
inclusive of alignment of goods on the basis of classification.
 Transformation process: In this transformation process, the objectives lie in processing
the raw material into final goods. It is inclusive of business functions divisions which are
namely, manufacturing, transportation, supply and services.
Three E's that are involved in the operations of organization
The three E's are involved in the process of operations management of the Furniture
Supplier Company. The central idea behind the same is to plan the activities in an organization
and to carry out the same. This is actually to consider the fact that the appropriate utilization of
resources such as fund or people resources should work to achieve the organizational goals. The
three E's are classified and are explained as follows: Economy: The first E which refers to economy means effective utilization of resources of
Furniture Suppliers. The main objective of this Supplier Company lies in the effective
utilization of resources with the appropriate tools and techniques (Abdullah and et.al
2014). The use of these tools implies proper use of resources for this Furniture Supplier
Company has to carry out business operations by maintaining demand and supply balance
with the retailers (Clark, 2014). Efficiency: This is the second E which refers to smooth running of business activities to
produce the final goods and services. In Furniture Supplier Company, maintaining
relationships with the retailers is very crucial which is brought about by the efficient
working (Ravenscraft and Scherer, 2011). This is also achieved by the transformation
process which is being carried out properly by using the process model.
 Effectiveness: In the process function of an organization, the main objective of Furniture
Supplier Company lies in performing function of processing and manufacturing furniture
effectively. The work management which is inclusive of aligning the work activities of
6

woods and final goods, activity designing, scheduling and delivering are made to achieve
the proper operational activities.
Cost minimization and quality maximization
There is an interrelationship between the concept of cost minimization and quality
maximization. In respect to the current business organization and its business functions, activities
are required to be managed through effective operation management. Therefore, the factor called
fund allocation and cost element is very crucial. The retailers are provided with the final delivery
of goods and services. In return, they expect the goods and services to be cost effective and
quality upgraded (Besterfield, 2003). Therefore, the job of this Furniture Supplier Company is
more challenging in balancing both cost and quality of products and services. Following points
will state the impact of tension between minimization of cost and the maximization of quality
like:
 While producing furniture for the retailers, the most imperative thing which is required to
be taken with care is not compromising with the quality of goods (Abdullah and et.al.,
2014).
 The use of tools can be employed in reducing the cost by using planning technique.
 Selection of the best cost method that is to be used in the process activities is crucial to be
considered so that any issue may not be borne by the business, functions and clients (Foss
and Knudsen, 2013).
 The core lies in making decisions where company by using operating methods and
techniques works well to balance the cost and quality of goods.
 The approach for reducing the negative impact of quality of goods on the cost
minimization is achieved by transferring the less productive goods and services with the
more beneficial ones. In this way, company can earn more revenues and profits (Bazaraa,
Jarvis and Sherali, 2011).Another way to meliorate and maximize the quality delivery of
furniture and services, Furniture Supplier Company has to spend much time for effective
planning and designing of system.
Significance of five performance objectives of the organization
The significance of five performance objectives of this organization has been examined
in context of this Furniture Supplier Company. They are clearly explained as below:
7

 Cost- In the first objective, complete focus on the work progress is significant to attain
the economic strength. With the help of cost reduction policies and framework, the
strategy of producing projects which saves money and creates opportunity to invest more
in the field of profit is planned. Dependability- This is the objective where planning for the success of organization to
this supplier firm is made by attracting more number of retailers. They have to infuse the
efforts which can help in attracting the customers and retailers towards them. Speed- This objective is significant to the Furniture Supplier Company as it sets a way to
attract many retailers and suppliers for their furniture (Hayes, 2007). It is made by
promoting marketing activities such as promotion which plays an effective role of
handling issues that are encountered in the marketing activities. Furthermore, it is also
important to generate the sales quotes so that quick and timely delivery of goods and
services can also be made. Quality- This supplier firm works on achieving these performance objectives by
formulating plans on quality factors. For an example, in an order to deal with the retailers
the product specification format is followed where the retailer states the demand of good
required by focusing on the efficiency (Tang and Musa, 2011).
 Flexibility- The activities of business are flexible and changes from time to time. There is
the need for Furniture Supplier Company to formulate the objectives which are
negotiable as per the time and situation (Stoppato, 2012). The relationship of this
manufacturing unit with its retailer should be adjustable so that the goods and services
produced by them can be customized in respect to color, design etc.
TASK 2
Linear programming and evaluation of critical path and network planning
Linear programming is a tool that is used by this Furniture Supplier Company for
reducing the tension between minimization costs and maximizing profits. With the help of this
tool, minimum cost for the goods are calculated by meeting the issues regarding revenues and
profit. For an example, if manager ordered 3 woods pack for manufacturing 12 furniture items
(Drucker, 2012). The plan A depicts, cost of 1 pack as £3000 and plan B shows £6000 for same.
8

The application of linear programming lies in measuring the best purchase deal at minimal cost
with the issues of regular operations.
For the evaluation of critical path and network planning which is the tools for project
planning, supplier firm performs following tasks with using Critical path analysis (CPA) and
network planning as follows:
To align the operations individually to accomplish larger projects.
To plan and design the activities that is to be undertaken for carrying out the manufacturing
of furniture.
To specify the priorities of activities which are to be included.
To insure the preparation of activities in cyclical manner so that overall time taken to
achieve the project can be properly managed.
To determine the structure where resources required are provided for the project.
For an example, Supplier Company makes use of tool for cutting and providing design
for furniture as per the retailer's specification. Both CPA and Network planning are used in the
production process for making an effective use of resources.
Need for operational planning and control in producing furniture
The need for operational planning and control in producing furniture is essential at
Furniture Supplier Company. There are instances when the business has to face various issues as
the decision making process is based on short or long period (Vidler, 2001). Therefore, the
decisions are planned and scheduled as per the process and controlling of material, labor and
cost. The requirement of operational planning for this manufacturing and supplier company is
essential to meet the unexpected market changes, entry of new product and development,
demand and challenges of retailers and competitors. Another advantage lies in forecasting and
analyzing the future demand for effective operations-management.
Operational outcome plan and layout of company
Furniture Supplier Company is working in direct contact with the retailers. Therefore, the
determinants such as choice, taste and preference of the clients etc. are well taken with care. The
9

objective of this company is to design the products which are latest and exclusive. Keeping in
mind the present designers plan, an additional furniture product is planned named as wall hang
piece cupboard made up of wood. It is beneficial for saving the floor space and is provided with
multiple separations with flap doors.
The operational outcomes for this new layout planning will be facilitative in producing
high quality and flexible furniture products. It assists in reducing the cost of planned products
and services. For the system product, the planning of process layout is more executable as it
helps to manage the cost related procedures. Following is the layout for this company:
Layout Explanation
Process layout It is formed by taking quality and flexibility of production to
attain efficiency.
Product layout It is about small range of goods to high where goods are
manufactured to put standardization
Network plan and resultant critical path for designing process
Network plan is a tool in project planning to achieve effective work. Furniture Supplier
Company is implementing it for doing OM functions in the following manner:
Activities Duration Preceding
A Analysis of market 5 -
B Acquisition of raw material 3 -
C Manufacturing procedure 9 1
D Promotion plan 8 2,3
E Distribution passage 7 4
10

F Consumers support 2 5
Task Name Duration Start Finish Predecessors
Analysis of market 5 days Thu 27-08-15 Wed 02-09-15 -
Acquisition of raw
material 3 days Thu 03-09-15 Mon 07-09-15 1
Manufacturing procedure 9 days Tue 08-09-15 Fri 18-09-15 2
Promotion plan 8 days Tue 08-09-15 Thu 17-09-15 2
Distribution passage 7 days Mon 21-09-15 Tue 29-09-15 3,4
Consumers support 2 days Wed 30-09-15 Thu 01-10-15 5
On the basis of these functions, estimated time taken to achieve the objectives is planned.
In parallel, it also helps to define the way in which the activities will be undertaken. These
activities are presented in a manner of generalized network plan to show the activities and
functions which are aligned according to the operational management (Tang and Musa, 2011).
Resultant Critical Path
11

As per the Network plan, overall project will be completed in estimated 19 days, but the
critical path analysis shows that operation management project of Furniture Supplier Company
will take 15 days for the completion. Critical path shows that it is the longest path and shortest
duration for the whole project. Critical path for this project is as follows:
A-B-C-E-F = 5+3+9+7+2 =26 days
Hence, the above project shows that it will be completed in the minimum time which is
forecasted in the above network planning.
Approaches used for project management and quality control
Various approaches for project management and quality control at Furniture Supplier
Company are used for the production and designing process. Project Quality Management
(PQM) is used by the Furniture Supplier Company where the business functions are employed to
be achieved:
 Quality assurance which evaluates the working of furniture transformation at both
primary and secondary level on monthly, weekly and hourly basis with quality standards. Quality planning where identification of quality standards for sales, stock and purchase
process is defined (Ringle, Sarstedt and Straub, 2012).
 Quality control where monitoring of projects are taken specifically to identify and
eliminate the reasons of unsatisfactory performance.
CONCLUSION
OM is vital for effective planning in all organizations to achieve short and long run
objectives. According to the selected Furniture Supplier Company, working from procurement of
raw material to its delivery to retailer is processed through process model. The projects are
planned and applied with the help of the latest tools such as CPA, network planning etc. to meet
the performance objectives.
12