SBM2101 Methodology and Operational Analysis-Value Stream Mapping
company, it will be suggested a SWOT analysis related to the chosen OM topic. The findings of this present study will be discussed on the next assignment.
How much do you rely on systems/technologies Did you have to do a big investment in technology How do you manage your data.
Answer:
Operations management is a core part of organisations and goes hand in hand with the supply-chain division. The following text gives an overview of the company named Woolworth in Australia and the operational strategy and management they goes by. As a retailer, sourcing the material for either goods or services for selling is a core need of an operations management. According to global power in retailing report, Wools worth stands in a good position. The text also has the developed research methodology to question the management of the organisation about their operational practises that they abide by.
This text gives the overview of the organisations lean operations management, discusses the key theories of the operational management, and practises that the company goes through in managing the operations and supply chain (Mackey & Gass, 2015). The company has been known to utilise the technology to increase the efficiency of the process. For further improvement, they have also developed excellent supply chain and replenishments across the organisation.
The text also includes the SWOT analysis of the companies’ identified management process (Singhal & Singhal, 2012). The detailed analysis is based on the key identified conceptual framework of operations management known as lean management system. The components of that system is identified and explained thoroughly. The base of the Woolworths operation management system is discussed (Martínez-Jurado & Moyano-Fuentes, 2014). The process and system management are also thoroughly discussed. A research methodology has been developed to collect data on judging the clarity of the lean operations management of Woolworths.
Research methodology
The research methodology can be further divided into quantitative, qualitative and triangulation. The most important among these three sources of research methodology is the formulation of quantitative and qualitative analysis, which incorporates, experiments, observations of the participant and the using of the secondary data (Mackey & Gass, 2015). The quantitative research methods focuses on to make classification of the features and accordingly create the model of statistics in order to test hypothesis and the explanation of the observations would be done. The qualitative methods concentrate on the detailed analysis of the observations, which include the circumstances and events (Fowler Jr, 2013).
A survey is a research methodology, which would be applied to the Woolworths organization of Australia for the process of data collection from the organization’s operations management (Cozby, 2012). It is a series of questionnaires or in the form of interview. The survey targets a particular group of population who act as a targeted audience (Brinkmann, 2014). The surveys are conducted for a particular group of people as because it is not possible to do survey research f
or the entire population. In an interview, the researchers ask questions to that group of population and record their answers (Panneerselvam, 2014; Fowler, 2013). The researches in this survey, gives freedom to the participants to give response to the answers that they wish to answer. Both the interviews and questionnaires incorporate open ended questions which allows the participants to give response freely or the close ended questions which includes the selected responses (Panneerselvam, 2014; Blumberg, Cooper & Schindler, 2014).
The purpose of the analysis is to present an elaborative overview of the Organization’s present state of the methodology based on evaluation in the development of the organization. The study would be analyzed on the basis of design of research, the methods of data collection through survey research, characteristics of the subject and dimensions of the treatment. The findings would give an overview quality of the methodology of research (Fowler Jr, 2013). Research design would be strong with a larger percentage of investigators through the usage of designs based on quasi experimental.
A lot of reliance on the data collection would exist as the approach of important collection of data (Nardi, 2015). However, a small percentage of studies by using other quantified research methodology would exist. Through the process of questionnaires, it was determined that the management of the Woolworths Organization is looking forward to make the working of the management get involved with the individual employee (Stevenson & Sum, 2015). They carry out the operations effectively as well inside and outside of the organization(Panneerselvam, 2014). Through the process of questionnaires, it became important to know the strengths and weaknesses of the organization and how the operation management carry out their effective role in managing the strength of the organization (Cozby, 2012).
While doing the questionnaire sessions, where the questions of open ended would be asked to the managers, this would lead to the analyzation of the data statistically (Nardi, 2015). The questionnaires would be asked to the managers of the organization by using online survey with email (Panneerselvam, 2014).
The company is a retailer of groceries and other products, having the 30,000 stores and 29 million customers. They source their materials from the local farmers and contractors in Australia and New- Zealand. Their strategy is to build a customer-focused team, sell the goods and services with reasonable range, and increase the sale with fresh produce. The foundation of their business is built on the highest efficiency of the business. The organisation does its business with efficiency and building a trusted partnership that works with collaboration and fairness. The suppliers have been with the company longer.
They have also built some reliable brands of their own in the recent years (Martínez-Jurado & Moyano-Fuentes,2014). He major competitor of this brand are Coles, Woolworths, Aldi, Costco, IGA, Foodland, SPAR Australia, Food works and Franklin. This retailer in the industry is especially focused on the Food and retail grocery (Mackey & Gass, 2015). They are also considered the market leader of the company. The primary structure of the operations management principles is guided by the coordinated contraction of the primary contractors.
They are given specific instruction. Woolworth does not buy its stock from the open market rather it believes in buying the stock from its suppliers who are producing products mainly for Woolworths only (Singhal & Singhal, 2012). According the revenue the company is second largest in Australian market next to Wesfarmers. Woolworths is a largest liquor takeaway retailer in the company (Martínez-Jurado & Moyano-Fuentes,2014). Woolworths holdings Limited is also a identified brands in Australia. The company announce a loss of $1.235 billion for the 2016 monetary year on 25 August 2016, the major in more than 20 years since it has been visibly listed on the ASX, mostly due towards more than $2 billion in write-downs of the failed Masters business and losses in the Big W business.
Lean operation management conceptual framework of the theory and Woolworths
Woolworth’s organisation goes by the lean operating system with their products, which follows the principles of valuing customer has needs and want while increasing the efficiency of occurring loss. This is an optimised system, which uses the twenty first century digitalised system to increase flexibility, variability and waste management (Blumberg, Cooper & Schindler, 2014). The lean operating system is a process where the quality, cost, and delivery times are main focus of the company. The building blocks of the company is JIT(just in time), jidoka (that acting abnormally), Heijunka (production levelling) and standard of working are maintained. The concept of continuous improvement by Kaizen costing and stability of the production system is maintained (Brinkmann, 2014). The tools that are used in this manufacturing system are SMED (single minute exchange time), value stream mapping and five S, Kanban (pull systems), poka-yoke (error proofing), total productivity maintenance. In addition the following single point scheduling, control charts and rank order clustering, elimination of time batching are used(Mackey & Gass, 2015).
Making the production system more system centric and simplifying the system can make the foundation of business more efficient (Brinkmann, 2014). The main principle of the system is to develop the efficiency of the operation in all parts of operation.
Just in time, approach of management is known to be originated from Japan. Where the inventory system receives goods from the supplier after they get the order. This ensures the reduction in the inventory cost making it close to zero. However, the company must have some accurate forecasted demand for their supplier. This has an effect on lowering the inventory levels production cost remains same or lower (Galindo & Batta, 2013). Though this has a disadvantage of having the a sudden order of goods that does not meets the expectation of the clients. This may also deliver the good later than the threshold.
Poka-yoke – this is a process in operations for error proofing known as a prevention step. This is a Japanese inventory to the production of lean manufacturing. The process equipments operators of a company avoid the mistakes of human error that may draw attention. This was process was formalised by Toyota Production System. This system was first developed in manufacturing system therefore; the companies are implementing the process in different operational function of other companies. There are many benefits of doing a poka-yoke implementation (Galindo & Batta, 2013). Like having less time spend in the training process of workers, eliminating some of the quality control process and expense, relieving the operations from repetitive mistakes and improving the improvement-oriented approach, decreasing the number of rejects and problems occurred from rejects and efficient waste management. The quality control also becomes fully built in the system (Heizer, 2016).
Single-Minute Exchange of Die is a part of the lean production system that has been done on Woolworths. This is also a process of reducing waste and efficient way of converting the manufacturing process of running the product to running the next product (Martínez-Jurado & Moyano-Fuentes,2014). Single minute here emphasizes the changeover time should be less than 10 minutes. The function, which has achieved less than the change over time, is considered the most efficient among the others. The effects of implementation are a setup the effects are looked at the systematic operation. The advantages of this operation are known to improve quality and leads to stockless production, that drives the less production rates. The reduction in footprint of processes frees the floor space in the company. The improved quality advances the operating conditions. Thus, the operational Excellencies achieve higher proficiency in the process. This also increases the controllability of the attitude of the new staff (Heizer, 2016). This also uses the parallel operations using multiple operators. The actual network that contains optimises task attributions.
Value stream mapping – value stream mapping is a management method that analyses the current state and designing a future state. The series and series of mapping the material and information flow and it goes by the value chain. Value stream mapping is known as the supporting method in analysing the lean environment and supporting method of design flows. It is also used in the logistics, software development, product development of Woolworths own brand. In addition it can also be used in the administrative department and related administrative processes (Martínez-Jurado & Moyano-Fuentes,2014). The standard form of this is to increase the non-value adding steps and activities to be added in the value added execution steps. Value stream mapping is the risk issue in a quality management part of the company. The main criteria of this mapping are developing the information flow analysis part.
Five S is a software is a name of the workplace organisation and is known to be the sort, set in, sustain, standardise, shine are the steps of this methodology. This explains the method of organising workspace with efficiency and effectiveness (Martínez-Jurado & Moyano-Fuentes,2014). The storage of items must be of highest efficiency and sustainable while accommodating the new order. The sixth step is to increase safety. The steps taken in implementing 5 s is eliminating obstacles reduce chances of being crowded by necessary products and remove the tool not in use, which leads to efficiency and also sorting bad and good things among the materials and waste removal in regular basis.
The set in order concludes the FIFO, smooth and easy workflow, using things in accordance with their usage (Galindo & Batta, 2013). The shine part of the assignment is known as the cleaning the materials to make it seem new and conducts inspection of materials and prevents equipment from deterioration. The standardising means the keeping and making the process standard and keeping thing in the right place. The sustainability includes the training line of goal-oriented process(Fullerton, Kennedy & Widener, 2014). The maintenance of proper order and standard implementation of improvement process.
Scheduling the process is known as arranging the work process according time, It takes into consideration about the inputs of the business and materials, labour, tooling cleaned an energy available for this. This resource allocating function is a core part of this process (Fullerton, Kennedy & Widener, 2014)
Total productivity maintenance is known as the system of work process, which maintains the integration of production quality, and manufacturing process. The main objective of this overall process is to maintain the business value of the organisation. Total quality management is part of this process (Martínez-Jurado & Moyano-Fuentes,2014).
Control charts are a process to maintain the statistical process control unit of different manufacturing process. It accommodates the study of basic tools that gives the result of the business situation that is in stable mode (Goetsch & Davis, 2014). This also emphasizes the logical comparability of data plus requires consideration.
EDLP strategy - known as the Everyday low pricing strategy that the consumer can purchase products that are low in price. This strategy was developed with respect to increase the customer loyalty. During sale people tends to buy more than needed and develops shopper loyalty. Wal-Mart the giant retailer has implemented the process to use it as a competitive advantage (Singhal & Singhal, 2012). Many retailers, including Woolworths, also adapt this. The everyday high low pricing strategy is dependent on the customer buying patterns. The lower fixed cost and less required advertisements and less labour is a process of inventory management system (Goetsch & Davis, 2014).
Lean operations system that Woolworths follows
The lean production in manufacturing the process that are done in the five steps in Woolworths
- Identifying the features by value stream mapping and creating the value stream mapping
- Make all activities flow smoothly in information flow
- Improving the activities by optimisation and cell manufacturing
- Work based on customer demand on product
- Follow continuous improvement to eliminate the non-valued products in the system. The standardising process is following the lean production and minimisation of variation. Also it considers to have a reduction in flow time.
The above points are discussed in the below in relation with the theoretical framework of lean operations discussed above .
Woolworth’s supply chain and operations follows lean operating system that is centralised distribution model that have been the key to their success all over the years. The simplification of the distribution channel has given them the cost and competitive advantage that they explore on (Nagurne, Masoumi & Yu, 2012). The capacity management of their company is focused on end-to-end optimisation of their best-practised model in supply chain. In the most challenging situation, Woolworths used its strategy of growth in lean operational Excellency (Nardi, 2015).
The company is known as to be driven by the customer focused tendency and store-led culture. Empowering the portfolio of business and becoming a lean retailer end-to-end process function and system Excellencies (Nagurne, Masoumi & Yu, 2012). Their strategy is based on developing the team, cost reduction, refresh the stores, develop cohesive brands and update the product offering (Singhal & Singhal, 2012).
They have improved their operations by the optimising supply chain management in way that is more efficient and incorporating their logistics network through building links and chains y helping the wholesalers and links in chain management (Goetsch & Davis, 2014). Applying the EDLP strategy, they also have gotten into a campaign called “More saving every day” which led Australia to growth in profit (Brown, Bessant & Lamming, 2013). They have also implemented the IT system in stock management. By scheduling and implementing the control charts and forecasting accurate demand. In addition, they have also implemented the increase in productivity and excellent chain management and replenishments across the units of business. In that organisation Woolworths is the biggest competitor in Australia that gives them a better advantage in dominating the supplier .
The goes by the operation principle of sub-contracting and the factory they owns are the controlled by the operation and logistics department and eliminate in store butcheries and waste management. The process repository and main modelling tools of the management have used ARI S management (Brown, Bessant & Lamming, 2013). The event driven process chain is known as the process modelling concept and business process management method part of value stream mapping of Woolworths. The part of this process is methodology of BPOM projects management of Woolworths and Internal consulting and training the staff, communication as part of process design, governance and process centred benchmarking (Cozby, 2012). Waste management by reusing the materials and faster execution of inbound logistics process of the projects(Stevenson & Sum, 2015).
An analysis of the role as played by Woolworths in the Australian retail industry indicates that the company has achieved significant level of dominant position in the Australian retail industry and the major reason leading to such highly efficient position of the company is mainly the strategies as pursued by the company.
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Strength · The company is primarily involved in supply chain management and therefore acts as proficiently as possible · Woolworths has imperial logistics refrigerated services and also volitions · Integrated inbound and outbound logistics and distributions · In addition, it has the Logistics Integrated Centre, which helps them in planning and increasing the inventory capacity with effectiveness (Kajanus, Leskinen, & Kangas, 2012). This also has the support to reporting mechanisms and granular visibility operations. · The efficiency in transforming data and scenario modelling and ad-hoc analysis inclusive process · Activity Based Cost and Budget system and supplier cost determination power · Woolworths is equipped with advanced routing and scheduling tool and tactical planning · Woolworths adopt most of the supplier by entering into partnership with them. The “operationalisation” incorporation is known as the tracking efficiencies, taking corrective action, integration of outbound transport and supplier adoption tends to give them good competitive advantage and sustainability all operation. |
Weakness · Holes in growth strategy, which is, and impact of external environment conditions of Australia. · Dominating market of Australian retail is competitive and other competitors are also adopting the same strategy to increase the business. · Lesser expansion in the international market reduces the supplier efficiency for Woolworths (Chen, Kim & Yamaguchi, 2014). · Collaboration with Coles shows the weakness of the business. · Government restrictive practises hinders the organisations smooth operations |
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Opportunities · The retail industry across global environment shows a trend in growth and positive outcome can be got. · The supply chain management’s must get efficiencies based on the following management solution available. The industry is primarily affected by e-retailers but including the websites in their chain of retail will ensure the adaptation of this Australian retail supermarket (Chen, Kim & Yamaguchi, 2014). · With changing need of customers, the company is also developing the databases that provide them a good growth strategy, which can be implemented. |
Threats This Australian retail is threatened by the higher competition among the industry · The customer’s needs and wants are changing in rapid pace · Supermarkets always face challenges with other local stores and wholesalers in the region. · The federal government and ACCC is known to decrease the competitive(Hollensen, 2015) · Barrier making it hard for those giant retailers and supermarkets in selling their products. · The government’s favouritism with the common people’s purchasing ability makes it difficult for the retailers in doing their business. |
Conclusion
A critical SWOT analysis of Woolworths has been done with a review to assess the importance of the strategies that have been undertaken by the corporation and the performance of whole study has indicated that Woolworths is purposeful specifically towards attaining higher level of growth in its operation. Therefore, to conclude, it can be stated that Woolworths Organization is an established organization of Australia.
In order to know about the operational management of the organization, the research methodology has been used in order to understand about the workings of the operational manager and how he carries out the work within the premise of the organization accordingly. Further the topic states about the SWOT analysis of the organization, which describes the company’s strength and weakness of the organization. The company follows the process of lean system, where the organization tries to understand the values of the customer and concentrates on the important processes in order to increase the processes continuously. The final goal is to provide a perfect creation of value whose waste is zero. Therefore, the organization follows the guidelines of this principle and accordingly implements it to make the working of the organization smooth.
Reference
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