Operations Management
Operations management involves the control, scheduling and planning of the process of transforming inputs into finished products (goods and services). A business has various resources that it has to utilize to realize maximum profits (Goethals et al. 123). The business uses various resources to provide products that customers demand it a timely manner.
Operations management forms a huge part of an organization’s strategic plan. This course work seeks to demonstrate the relationship between operations management and an organization’s strategy. The company chosen for this coursework is The Body Shop International PLC.
Company background
The Body Shop has over 2400 outlets spread over 61 countries worldwide. The company’s headquarters is in West Sussex UK. Anita Roddick founded it in 1976. The founder got the inspiration to start the company after visiting a shop in California that dealt in naturally scented soaps. The Californian shop dealt in natural products, trained, and employed immigrant women. This prompted Roddick to start her own company in the UK, and the following year bought copyrights to the product and name. The company was then taken over in 2006 by L’ Oreal for £652.3 million. The founder later passed away in 2007 and the company has continued operating under its new management.
In all the 2400 outlets worldwide, various operations corresponding to the company’s overall strategy. Below is an analysis of the key operational activities and their relationship to overall company strategy.
Product planning
Businesses aim to produce goods and services that customers can purchase (individuals or organizations). The planning of these products is one of the most important operation decisions that managers have to make. When making the decisions, the managers have to keep in mind the factors of quality and economy. Customers consider various factors when purchasing products. These have to guide managers in making decisions on production.
In The Body Shop, decisions relating to the planning of products are vital to its operability. Its product line has to be reviewed continually and updated to keep up with changing customer demands. Since it deals in cosmetics, the company has to keep up to date with current trends in the fashion industry. As researchers continue to discover various medical benefits of different plants, the company has to update its product line accordingly to ensure the clients benefit from these plants.
Capacity planning
This is the second most important decision in an organization. It involves setting the effective capacity of operations so that they can respond to what users demand of them. This may involve setting how an operation should respond to demand fluctuations. These decisions could be short, medium, and long-term decisions. Capacity planning also involves aggregating various types of output from operations into one figure.
The Body Shop’s managers have to determine the company’s capacity to produce natural skincare products. In countries affected greatly by seasons, the company needs to have the capacity to produce enough volumes of products to meet the increased demand. Part of capacity planning includes having enough stocks of ingredients to produce various products on its product line. Since it deals in natural products if one of the natural raw materials needed to produce one of the soaps or lotions is missing, production may grind to a halt.
Location planning
Body Shop has to plan its stores in such a way that they attract the maximum number of customers from the target market. Some of the most ideal locations for the business include shopping malls, supermarkets, and chain stores. Most of the company’s clientele visit such establishments regularly for various essentials. The production plants are located in easily accessible areas for easy delivery of raw materials and pick-up of finished products.
Process planning
The operations manager in The Body Shop also has to set up controls for the processes followed in the production of the company’s products. To maintain the authenticity of the company’s products, the company has to maintain its natural benefits. The manager also designs processes so that the hygiene and safety of products can be maintained. The company also has to integrate the latest technologies into the production process to enhance efficiency.
Layout design
The layout is concerned with the arrangement of items and furniture at the administrative and storage units of the company. The Body Shop’s production plant, storage facilities, and distribution centres need proper layouts to result in the best environment for doing business. Space should be utilized in the best way possible, allowing easy flow of items, activities, and people. The layout also minimizes the need for employees to be supervised at all times.
Job design
This involves the development of a comprehensive job specification document for each of the job positions in the business. This ensures that each employee is aware of what is expected of him/her, his/her responsibilities and the hierarchy of power. The Body Shop has many employees working in various departments. Job design allows the allocation of duties and responsibilities. It also determines the qualifications that each person working in each post should have.
Supply chain management
A company like The Body Shop requires different items, and it cannot supply them itself. It contracts other companies to meet their needs. These companies are responsible for the supply of raw materials used in the production of their products. The manager has to maintain good relationships with all those involved in the supply chain, L’Oreal Annual financial report (2012).
Inventory management
The Body Shop’s products are relatively non-perishable. This eliminates the need for urgency in the delivery of inventory. However, the market demand for its products means that it needs a high rate of shelf replacement. Therefore, deliveries are made almost daily to their outlets worldwide. Inventory management is an important function of operations management to ensure the profitability of the organization.
Quality management
Quality is one of the main selling points that the company relies on to make its products more appealing to customers. Quality of products is the extent to which the product is able to meet its intended use. The company’s quality management team is responsible for ensuring that its products are up to the required standards.
Maintenance
This has to do with the upkeep of items such as machines used in the organization. It is important to ensure that these items can be relied upon to complete the production process. The equipment used at the manufacturing plants stores and distribution locations has different maintenance needs.
Conclusion
As can be seen, operations management is quite important for the success of any business venture. The Body Shop has a well defined and functional operations management policy. This ties into its strategic plans in enabling it to attain its goals. One of the company’s main competitors is Nice & Lovely. Its operations management function has done quite well compared to Nice & Lovely. It is worth noting that in October 2013, L’ Oreal, which acquired The Body Shop in 2006, also acquired Nice & Lovely. The two now fall under the same conglomerate.
Works cited
Goethals, George R, Georgia J. Sorenson, and James M. G. Burns. Encyclopedia of Leadership. Thousand Oaks, Calif: Sage Publications, 2004. Print.
L’Oreal Annual financial report (2012). Retrieved from http://www.loreal- finance.com/eng/annual-report
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