Table of Contents
Executive Summary:
The current report aims at providing a clear view of operations management by looking at the case of Service Adhesives Limited. The report will critically examine and discuss in detail activities of operations management. The areas to be evaluated base on the effects they have on the companies in terms of performance and making profits. The criteria include design of products, structure of processes, planning of facilities required, location and layout of the amenities.
Problem Statement:
The problem in the operations management area identified at Service Adhesives Limited is the decrease in the profit margins despite an increase in revenues collected from sales. The cause of problem relates to the constantly increasing cost of production, and the availing of better quality products by competitors. Another problem identified is that the company experiences a decline in profits despite incorporating new ideas for production as a way of improving products and reducing costs (Slack, Chambers, & Johnston 2010, p. 259). The reason stems from the fact that employees of the company lack skills and have low motivation. The factor was the main reason for the management of the company to pay visits to other organizations. The most influential visit was to the sister company known as Happy Products. Thus, the management of Service Adheres was able to identify the reasons behind their stagnation in the market. Based on the aforementioned factors, it is important for the management of Service Adheres to focus on introducing and implementing a human resource structure that is based on team work.
Data Analysis:
According to the case, the problems Service Adheres is experiencing resulted from the methods used by the company to manufacture its products. Therefore, the issue calls for a closer review of operations. The other problem is the production of low quality goods. In order to compete in the current market, it is important for the company to analyze their competitors’ products to define the weaknesses of Service Adheres’ goods. The approach would help in improving the quality of their products, hence attracting more sales and higher levels of profits. The third problem identified is the lack of skills and motivation among the employees. The aspect requires introducing training to the employees instead of replacing them with temporary workers. Thus, the company can build employee trust and create teamwork.
Alternatives Analysis:
The decision of the management of Service Adheres on ways to increase their profits should mainly emphasize the strategies to improve their products. It would be advisable for the company to focus on reducing the costs of production by modernizing the machinery. Moreover, the management should motivate their employees to work through offering the job-related advantages such as training, housing facilities and medical services. Another way to improve profits is communicating closely with customers in order to know their needs and wants to produce for them.
Key Decision Criteria:
The decisions to be made by management of Service Adheres Limited should focus on increasing the profits realized from sales. The company should introduce the ways of efficiently lowering the costs of production. It is also important for the organization to identify new markets for its products. Finally, a crucial project, which the company is expected to come up with, is one that improves the welfare of its employees.
Recommendations:
The first suggestion is to reduce the cost of production. The goal can be achieved through improvement of technologies used at Service Adheres Limited. The improvement should address the machines or raw materials used in manufacturing. Reducing the cost of production would positively impact on sales, and hence would also reflect on the profits made by the company.
The second approach is relating with customers closely. The suggestion calls for public relations expertise. The move will help Service Adheres Limited to learn what the customers expect from them in terms of products quality and prices. Discovering the desires of the customers requires the use of questionnaires or Internet website rating questions. Another way is personally talking to the customers as they buy the company’s products, asking them of their satisfaction and suggestions for improvement.
The third recommendation is increasing the welfare of employees. When employees in a company are happy, their productivity also increases. A company can achieve the worker satisfaction through offering training to the employees as a way of improving their careers. Another way to achieve the high productivity is offering health facilities or medical insurance to ensure that the employees are always in good health when carrying out their daily activities. Finally, when a company offers housing facilities to its employees, they are relieved the stress of incurring high expenses. The strategy translates to employees showing loyalty to the company through their dedication.
Action and Implementation Plan:
A proposal for implementation of Service Adheres plan would include different phases. The step-by-step method would help in monitoring the phases separately and analyzing in detail the progress achieved. An analysis of progress should be done by recording all activities in every phase of the plan.
Answers to End of Case Questions
1. Having employees on short-term basis would affect the team work-based structure. The reason is that every new employee requires training. Therefore, the aspect increases the time spent on the manufacturing of a company’s products. Although new employees introduce new ideas in the activities, the training time negatively impacts the company. Therefore, it is advisable for Service Adheres Limited to maintain their current human resources.
Another negative impact of having short-term employees in a company is issues with morale. A constant replacement of workers results in the decreased health of employees’ attitude towards work (Hofer 2009, p. 60). The issue arises from working with other members of staff, who are permanently employed. The short-term employed personnel might feel as if they are being oppressed. They are given the same amount of work as the permanent employees but are not subject to the same benefits. Some jobs are dangerous; hence require adequate training on safety. Short-term employees may be not trained to perform some duties. In many cases, temporary employed employees are injured at a place of work. Notably, the modern laws are strict on temporary employment. Thus, it would be important for Service Adheres Limited to read carefully the law as they might end up in a court of law. The law asks for temporary staff to be treated as permanent staffs in all cases.
2. Transitioning from traditional organizational work to a team-based structure of work faces a number of barriers. First, managers and employees will feel the need to maintain their job security. The factor creates indirect resistance from employees and department managers. Therefore, it would be important to consult with employees before effecting any changes in an organization. When the idea of implementation is opposed by department managers, then it would hinder its success in the company. If employees come to a universal agreement with the managers regarding the change of the company’s structure, the employees have loyalty and commitment to the new idea (Hofer 2009, p. 30). The method will help in replacing the competition between staff members in a company to competition with rivals companies with the joint efforts. Notably, implementing a team work structure calls for changing the communication channels and removal of job titles. The approach would contribute to reducing barriers between employees and the management. The transition may be affected the employees, who rarely show their participation in the transition process. The reason may be the fact that employees know that an introduction of new technologies results in many workers being laid off.
3. Organizational difficulties at Service Adheres Limited could be reduced by the implementation of a team-work structure in the organization. Thus, the company will be able to easily respond to any changes that may arise in the market. In order to keep up with the changes in the business environment, Service Adheres Limited is expected to be innovative (Slack, Chambers, & Johnston 2010, p. 262). A team-work structure gives room for innovation and collaboration among employees. Thus, all members in the organization have a common purpose.
4. When it comes to empowering of employees, Service Adheres Limited might face a number of challenges. First, disconnect of the message might occur. Even though empowering employees intends to encourage independent thinking, the company may face chaos due to different versions of messages shared by workers. The phenomenon leads to form the fragmented messages. Another problem that might be encountered is the lack of sufficient training for employees. The management to should invest in training as a way of strengthening the employees’ skills (Slack, Chambers, & Johnston 2010 pg. 265). The lack of training results in working by intuition instead of adhering to policies held by the company. The case will result in incompatibility of solutions given to customers. Additionally, Service Adheres Limited might hire managers who are reluctant. Some of the department managers may feel that some members of the staff are not competent to handle an empowering environment. Therefore, the leaders will aim at implementing the new structure. The last problem is having a breakdown in the organizational structure of the company. Empowerment results in increased levels of confidence. It leads to employees feeling that they can make fundamental decisions in the organization by themselves.