Operations Management Report: DBN509 Analysis of Donovan's Chocolates

This report provides a comprehensive analysis of the operations management practices at Donovan's Chocolates. It begins with an executive summary and introduction, outlining the company's success and operational strategies. The report delves into capacity management, discussing challenges related to location and logistics, and the strategies employed to overcome them. It then explores general location factors relevant to the business, plant layout, and the challenges associated with implementation. The second part of the report focuses on continuous improvement within the organization, highlighting key elements of Total Quality Management. Finally, the report examines the supply chain, inventory management, and material handling principles at Donovan's Chocolates, illustrating how these elements contribute to the company's efficient and effective performance.

Running head: OPERATIONS MANAGEMENT 1
Operations Management
Student’s Name
Institution
Date

OPERATIONS MANAGEMENT 2
LEARNING OUTCOME 1
1.0 Executive Summary
Operations in an organization play an essential role. An organization that has effective
strategies in place is in the best position to benefit in the market. Operations can affect an
organization positively or negatively, and that means that if an organization has an effective
process of managing its operations, it is in the best position to succeed. Donovans Chocolates is
an organization that has proven that it has the capacity to deal with challenges that affect its
operations and that is one of the reasons that it is successful.
2.0 Introduction
Established in New Zealand, Donovans Chocolates is an organization that has done well in
managing its operations. The company is one of the most successful chocolate organizations in
the region, and this is because it manages its capacity effectively, it has selected the most
favorable location, and its plant layout promotes efficient operations. The company has also
identified different ways of making sure that it deals with the challenges that it faces in its
operations.
3.1 Capacity Management
Capacity management is an essential component in any organization that has the plans of
thriving in the competitive markets (Reid & Sanders, 2015). Donovans Chocolates is an
organization that has been facing two capacity management challenges. The first challenge is
associated with the area of operation. When an organization chooses an area of operation, it is
likely to benefit or suffer consequences (Boyabatlı, Nguyen, & Wang, 2017). The company

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operates from Waikato, and that limits its ability to experience and benefit from other areas of
the country. The second challenge is associated with the aspect of logistics. For an organization
to maximize its full potential, it must manufacture at a location that is not far from the market.
The company has only chosen a location that is favorable when it comes to access to raw
materials and not favorable to the availability of a ready market.
Despite the fact that Donovans Chocolate has some challenges when it comes to capacity
management, the company has strategies in place that help it to deal with the challenges. The
first strategy is associated with the supply chain. Donovans has been able to reach a lot of
customers because it has an effective and efficient supply chain. The second strategy is
outsourcing some of the best professionals when it comes to the manufacturing of its products
(Yu, Chen, & Zhang, 2015). Concentrating on an organization in a rural area might limit an
organization to getting the best employees, but the company has avoided this by making sure that
its recruitment strategies are the best.
3.2 General Location Factors
(Briefly discuss FIVE general locational factors, controllable or uncontrollable,
relevant to your selected business).The five general location factors that are relevant to
Donovans are accessibility to suppliers, accessibility to customers, labor, the availability of
raw materials, and energy. Suppliers play an essential role, and therefore before selecting a
location, an organization must know if the location will encourage or frustrate the suppliers
(Johansson & Olhager, 2018). One of the reasons why a company manufactures its products is to
make sure that it sells them to the customers to make profits. In this respect, the location must be
closer to the customers. Labor is essential, and this is one of the reasons why most of the global

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organizations are flocking to China. The reason behind it is because labor is cheaper and when
the cost of labor is lower, the company benefits because it manufactures its products at a
relatively lower cost. When it comes to the case of Donovans, labor is an essential aspect, and
this is because it will dictate if the company will be able to make more profits after deducting the
cost of labor.
Availability of raw materials dictates the location of an organization, and this is because a
manufacturing organization cannot operate without the raw materials. One of the reasons why
the main manufacturing plant is in Waikato is because of the availability of raw materials. In
manufacturing, energy is an essential aspect. Organizations that are large scale manufacturers
utilize a lot of energy, and that means that during the process of selecting a location, the
organizations must consider the place that is convenient and has a continuous supply of energy.
(AND any TWO challenges faced while determining these factors) The challenges that are
faced during the process of selecting a location are the availability of all factors at once and
the financial power of a company (Ramírez-Alesón & Fleta-Asín, 2016). Sometimes it is a
challenge to find a location that provides a lower cost of labor, customers, suppliers, energy, and
raw materials at the same time. A company might also be not in the best financial position to
afford the most suitable location. When it gets to such a point, a company faces the challenge of
being in the most favorable location.
3.3 Plant Layout
Donovans Chocolates utilizes the product or line layout. The company uses a sequence to
manufacture its products. The two essential principles in this type of plant layout are enhanced
operations and promotion of specialization. When the employees work on a product in a

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sequential way, the operations are efficient because of the order that is promoted (Latifi,
Mohammadi, & Khakzad, 2017). The layout also increases efficiency because the employees get
to work on a product at every stage of value addition. The two challenges that are evident in the
implementation of the principles are the availability of skilled and experienced laborers and the
availability of efficient machines (Naik & Kallurkar, 2016). It is essential to note that in
specialization, there is the need of having qualified employees and at the same time, the
machines must be efficient enough to make sure that operations are smooth.
4.0 Conclusion
Capacity management, the general location of an organization, and plant layout are three
areas that are essential to the success of a company. Donovans Chocolates has proven to be
going through some challenges. However, what stands out is that they have strategies in place
that have been of help to the company when it comes to dealing with the issues.
LEARNING OUTCOME 2
1.0 Executive Summary
An organization that needs to be competitive in the market has no other choice but to
promote continuous improvements. The world of business transforms and evolves rapidly, and
that means that there is a dire need to move with times and to improve. An organization can
employ different strategies that are supposed to help it to improve in its operations. The
implementation of the strategies puts an organization in the best position to compete with most
of the competitors. It is for this reason that it is essential for an organization to look into the most
effective elements when it comes to improving its processes.

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2.0 Introduction
Continuous improvement makes sure that an organization advances in its operations to
increase the quality of its goods and services. The aspect is essential, and this is because it helps
an organization to be more competitive. At Donovans Chocolates, there are elements of Total
Quality Management that are promoted, and they have helped the company to attain its desired
goals.
3.4 Continuous improvement
The two elements of Total Quality Management in this respect are leadership and
teamwork. With an effective leader, an organization is able to improve the quality of its products,
and this is because the leader comes up with the best strategies (Tichnor-Wagner et al. 2018).
When it comes to the aspect of teamwork, it is essential to note that improving the quality of
goods is promoted when all stakeholders come together. Evidence that shows that Donovans
Chocolates has employed the elements is effective management and the working environment
(Boer, Berger, Chapman, & Gertsen, 2017). Donovans Chocolates could not be successful if the
leaders were not effective and if the working environment was not friendly, teamwork would not
be promoted.
3.0 Conclusion
Continuous improvements help an organization to be on the same level with other
organizations when it comes to increasing the quality of products and services. Without
continuous improvements, an organization is exposed to the risks of being left behind. An
organization should choose the strategies that best fit its goals and operations. Donovans

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Chocolates is an organization that has proven that it has what it takes to be an effective
organization when it comes to continuous improvements.
LEARNING OUTCOME 3
1.0 Executive Summary
A manufacturing organization must have ways and methods which should be used to reach
the targeted customers. It is for this reason that it becomes essential to have an effective supply
chain. Apart from an effective supply chain, it becomes essential for an organization to be able to
use its inventory to understand its current state. At the same time, there is the essentiality of
making sure that materials in an organization are handled in a better way to promote smooth
operations and efficiency.
2.0 Introduction
Donovans Chocolates is an organization that has done well in making sure that the essential
components of the supply chain are implemented. The company has also used the inventory to
understand its current position. As a result, the company has been able to understand what it
needs to do in order to increase its productivity. The way the company handles its materials has
also helped it to become an efficient organization.
3.5 Supply Chain
PLANNING

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Planning
Planning is an essential component, and this is because it helps the company to know the
type of products that it wants to release to the market (Christopher, 2016). In planning, the ability
of the company and the needs of the customers are put together to make sure that the company
manufactures goods that are in line with the expectations of the customers.
Production
Production is the implementation process of planning. It is at this point that the designs
and plans are implemented to make sure that the needs of the customers are met (Hitt, Xu, &
Carnes, 2016). The production process is essential in the supply chain, and this is because, in the
absence of production, there lack tangible goods that can be associated with the company.
Distribution
DISTRIBUTION
PRODUCTION

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Distribution is the heart of the supply chain, and this is the process that makes sure that
the products get to reach the targeted customers (Hugos, 2018). In distribution, transportation of
goods from the company to the customers takes place, and this is the final stage of an
organization that does not practice Reverse Logistics.
3.6 Inventory
At Donovans Chocolates, there are two essential functions of inventory. (Discuss TWO
functions of inventory in your organisation and how this impacts the efficient and effective
performance of your organisation.). The first function is to help the organization to know
its current situation. The wealth of an organization is seen in what it owns. When an
organization knows its worth, it is likely to react to the report (Schuijbroek, Hampshire, & Van
Hoeve, 2017). When the report indicates that the organization is losing its assets, an
organization is likely to enhance efficiency with the main aim of attracting more customers
to increase its wealth. The second function of inventory at Donovans Chocolates is to
measure the success rate of the company. Inventory record is taken after a specific time, and
that means that an organization is able to know the rate of success after a specific time (Wild,
2017). When the company gets to know about the success rates, it decides on the measures
that it should put in place to increase its success rates.
3.7 Material handling
The two essential material handling principles at Donovans Chocolates are the systems
principle and planning principle. In systems principle, an organization implements handling and
storage activities that are cost-effective (Kroemer, 2017). For example, the organization might
store its products in a self-owned warehouse as opposed to hiring one, and this is because a self-

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owned does not incur costs. In planning principle, the organization comes up with a plan which
has basic requirements and contingency measures (Wan et al. 2018). For example, an
organization might have one main method of handling its materials and a few alternative
methods. Therefore, if one plan fails, there is likely to be another method in place.
3.0 Conclusion
Supply chain, inventory, and material handling are aspects that help an organization to thrive,
and this is because of the effects that each of them has on an organization. It is essential to note
that the main reason why a company is in business is to reach its customers. When it comes to
the case of the supply chain, an organization can only reach its customers if it has an effective
supply chain and at the same time, it knows some of the best ways of managing and handling its
products.

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