Operations Management
Your Furniture Store is a 30-year old furniture manufacturing company producing medium-density fiberboard (wood composite) dining room, living room, and bedroom furniture in high volume at low cost for wholesale customers. The organization has a competitive advantage by providing high volumes at low cost while maintaining a quality product backed by excellent service. In the last 2 years, the company has slipped from #1 in its market down to #2 due to increasing customer complaints about the availability of its products (resulting in back-orders) and frustrations with the customer service provided by the company’s call center. As a result, the company’s new chief executive officer (CEO) has directed the chief operating officer (COO) and her operations management team to do the following:
Devise an operations management strategy to align with the company's competitive advantage strategy, as well as utilize some, or all of the operations functions (e.g., marketing and sales, finance, and operations), to improve the customer’s experience relative to production and service
Given the proposed operations management strategy, differentiate how the organization’s production operation and its service operation contribute to the company’s competitive advantage. Address the following
Introduce the reader to how organization and operation strategies align to drive competitive advantage. Introduce the reader to the operations functions (marketing and sales, finance, and operations) and how they collaborate to manage a business operation.
Devise an operations strategy that aligns with the company’s current competitive advantage strategy.
Examine how the proposed operations strategy enables the company to improve its competitive advantage, including explaining to the CEO how the strategy utilizes operations functions (marketing and sales, finance, and operations) to achieve competitive advantage.
Given the proposed operations management strategy, differentiate for the CEO how the organization’s production operation and its service operation contribute to the company’s competitive advantage.
The conclusion should summarize key points from the research methods and sampling analysis discussed above.
Sample Solution
Organization strategy and operation strategy are two essential components of any business. Organization strategy defines the overall goals and direction of the company, while operation strategy outlines the processes and systems used to achieve those goals. When these two strategies are aligned, businesses can create a competitive advantage by delivering products and services that are both high quality and efficient.Full Answer Section
Operations functions, such as marketing and sales, finance, and operations, play a vital role in managing a business operation. These functions must work together to ensure that the company is producing the right products and services in the right quantities and at the right time. By collaborating effectively, operations functions can help businesses to improve their efficiency and customer satisfaction. Operations Strategy for the Furniture Store Align with Competitive Advantage Strategy The furniture store's competitive advantage strategy is to provide high volumes of medium-density fiberboard (wood composite) dining room, living room, and bedroom furniture at low cost. The company's operations strategy should be aligned with this competitive advantage strategy by focusing on the following:- Efficiency: The company should strive to produce furniture as efficiently as possible in order to keep costs low. This can be achieved by using efficient manufacturing processes and technologies, as well as by optimizing the supply chain.
- Quality: The company must maintain a high level of quality in its products in order to meet customer expectations. This can be achieved by implementing quality control measures throughout the manufacturing process.
- Volume: The company must be able to produce high volumes of furniture in order to meet customer demand. This can be achieved by having a flexible and scalable manufacturing process.
- Marketing and sales: Marketing and sales can help to improve the customer experience by understanding customer needs and developing products and services that meet those needs. Marketing and sales can also help to manage customer expectations by providing clear and accurate information about product availability and delivery times.
- Finance: Finance can help to improve the customer experience by ensuring that the company has the financial resources necessary to produce and deliver products on time and at a cost that allows the company to remain competitive. Finance can also help to develop and implement customer-friendly payment options.
- Operations: Operations can help to improve the customer experience by ensuring that products are produced and delivered on time and in good condition. Operations can also help to improve the customer service experience by providing efficient and responsive customer support.
- Improve production efficiency: The company can improve production efficiency by investing in new manufacturing technologies and processes. The company can also optimize the supply chain by working closely with suppliers and reducing inventory levels.
- Implement a quality control system: The company can implement a quality control system to ensure that products meet customer expectations. This system should include measures to inspect raw materials, finished products, and manufacturing processes.
- Increase production capacity:Â The company can increase production capacity to meet customer demand by expanding its manufacturing facilities or by outsourcing some production to third-party manufacturers.
- Develop a customer demand forecasting model: The company can develop a customer demand forecasting model to better predict future demand. This will allow the company to plan production and inventory levels more effectively.
- Improve customer service: The company can improve customer service by providing training to customer service representatives and by implementing customer-friendly policies and procedures. The company can also invest in customer relationship management (CRM) software to track customer interactions and manage customer relationships.
- Marketing and sales:Â The customer demand forecasting model will help marketing and sales to better understand customer demand and develop marketing and sales strategies that are more effective at generating sales.
- Finance: The financial resources saved by improving production efficiency and reducing inventory levels can be used to invest in new manufacturing technologies and processes. This will further improve production efficiency and quality, which will lead to a better customer experience and increased sales.
- Operations: The quality control system will help operations to ensure that products meet customer expectations. This will lead to a better customer experience and reduced back-orders. The improved customer service will also lead to increased sales.