LY_ISUPC_G: Operations Management (2023/24)

Andrii Shtoda (L00186171)

16/10/2023

Reflection

The Role of Operations Management

 LY_ISUPC_G: Operations Management (2023/24)
Andrii Shtoda (L00186171)
16/10/2023

Table of Contents
1. Introduction........................................................................................................................3
2. Operations management.....................................................................................................3
3. KPI......................................................................................................................................4
4. SIPOC analysis.....................................................................................................................4
5. 4 Vs of processes.................................................................................................................5
6. Operations and strategic impact..........................................................................................6
7. The VRIO framework...........................................................................................................7
8. Conclusions.........................................................................................................................7
References:.................................................................................................................................8

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 LY_ISUPC_G: Operations Management (2023/24)
Andrii Shtoda (L00186171)
16/10/2023

1. Introduction

From 2014 to 2017 I had experience as a manager of logistics department at

the company "Sea House", Ukraine.
Without even realizing it at the time, I was exposed to many aspects of
operations management. This experience allowed me to better understand and
appreciate the role of operations management in achieving company goals.
In the beginning, the company's activities were importing and supplying food
products to cafes and restaurants, and operational management was relatively
simple. However, later the company expanded its activities and gradually began
working with supermarket chains throughout the country. This had an impact on its
operations facing a number of new challenges.

2. Operations management.

I'm convinced that operations management has an important role in ensuring

that the company operates efficiently and provides quality products and services to
customers.
An important aspect was understanding the differences between supplying to
restaurants and supermarket chains. This has led not only to an increase in the
range of products but also to demands for longer product shelf life.
Example: Previously, we could simply send a certain amount of products to
restaurants, knowing that it would be used up within a short time. To do this, it was
necessary that the shelf life of the goods meet the requirements specified in the
product certificates. But supermarkets demanded that products have a longer shelf
life of at least 2/3 of the total shelf life since the product could be sold in the store to
the end consumer for a long time. This required us to change our purchasing,
storage, and delivery processes, which impacted additional costs for storage,
collection, and delivery. We also faced the problem of choosing goods for shipment.
Warehouse employees did not always understand which batch of goods to select,
and this led to errors and the remains of goods in the warehouse with expired
expiration dates. As a result, the company suffered losses from the disposal of
expired goods and supply interruptions, which led to penalties and dissatisfied
customers.

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 LY_ISUPC_G: Operations Management (2023/24)
Andrii Shtoda (L00186171)
16/10/2023

The transition from supplying food only to the restaurant business to supplying
to the chains of supermarkets has led to the need to better understand and optimize
operational processes. I realized that effective operations management can
significantly improve a company's performance and ensure customer satisfaction.

3. KPI

By looking at key performance indicators (KPIs) of processes, I could see how

these changes in the company affected customer satisfaction and business compet-
itiveness.
Quality – given the increase in the volume of work of the company with the
same human resources, the quality of work decreased, which negatively affected the
company itself.
Speed – the speed of order fulfillment also decreased accordingly, despite the
fact that the goal was to maintain the speed of order processing.
Dependability - an increase in transport load led to additional transport costs
and untimely delivery of goods.
Flexibility – the company has become more flexible, which was one of the
advantages in the market for these products.
Cost - the company tried to maintain the cost of the goods on the market and
covered additional costs related to the changes in operational processes from the
profits of another direction of the company (supplying goods to the restaurant busi-
ness).

As can be seen from the aspects described above, the company became
more flexible, but at the same time suffered losses due to the lack of operational pro-
cesses suitable for the new direction.

4. SIPOC analysis

In order to better understand the company’s logistics processes, I could con-

duct a SIPOC analysis (Supplier, Input, Process, Output, Customer) for the logistics
management process in the Sea House company described above:

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 LY_ISUPC_G: Operations Management (2023/24)
Andrii Shtoda (L00186171)
16/10/2023

Supplier:
• Suppliers-manufacturers from Asia of finished products.
• Own production of goods.

Input:
• Orders from clients (restaurants and supermarket chains).
• Product requirements, including expiration date.
• Information about the availability of goods in the warehouse.

Process:
• Selecting goods to supply to restaurants and supermarkets.
• Optimization of production and supply planning.
• Warehouse inventory management.
• Training of employees on the rules for selecting batches of goods.

Output:
• Supply of goods to restaurants and supermarket chains.
• Reducing inventory of expired or non-compliant items.
• Improved sustainability of supply to customers.

Customer:
• Restaurants that use products as ingredients to prepare final products.
• Supermarket chains that sell products on their shelves.

SIPOC analysis helped to understand who is involved in the process, what in-
put data and requirements exist, what process within the company processes this in-
formation, and what results are expected by customers.

5. 4 Vs of processes

If I analyze the “4Vs” of processes, I will see exactly how processes should be
changed in order for the company to work more efficiently.

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 LY_ISUPC_G: Operations Management (2023/24)
Andrii Shtoda (L00186171)
16/10/2023

Volume - starting to work with supermarket chains increased the volume of

goods we worked with, which entailed additional costs. This required processes to
adapt to this increase.
Variety - Supermarkets required a greater variety of products and additional
requirements for product expiration dates, which increased the complexity of assort-
ment management and also required changes in inventory management processes.
Variation - demand for products in supermarkets had little variability, making
it easy to predict future supplies.
Visibility - working with supermarkets meant that customers had greater vis-
ibility into the results of production, unlike restaurants, where our company's
products were used only as ingredients for cooking. Therefore, we had to ensure a
high level of product quality and shelf life.

6. Operations and strategic impact

Proper decision-making to manage operations and processes has become

critical when dealing with supermarket chains. Our solutions had to meet customer
requirements and ensure stability of supply.
We realized that without a clear operational strategy, it would not be possible
to successfully work with supermarkets. This strategy included:
Setting Goals: We have determined that our goal is to provide customers with
quality products within the expiration date.
Planning the path to achieving goals: A plan was developed to achieve goals,
including the implementation of software that provides control over the storage and
selection of goods of a certain batch.
Long-term focus: Our strategy has been focused on long-term development
and customer satisfaction.
Considering the whole picture: We realized that warehouse logistics opera-
tions impact the entire company, and our strategy must take this into account.

As a result, software was developed that made it possible to automate the

process of storing and assembling goods with the shortest shelf life and meeting
customer requirements. This reduced employee errors and reduced the risks related
to expired goods. This led to a stable supply of goods that met customer require-
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 LY_ISUPC_G: Operations Management (2023/24)
Andrii Shtoda (L00186171)
16/10/2023

ments, as well as avoiding additional costs associated with remains of goods that
were expired and had to be disposed of.

7. The VRIO framework

Using the VRIO framework, the developed system for accounting and select-
ing goods with the best shelf life turned out to be a valuable resource, as it made it
possible to reduce errors and minimize losses related to expired goods. This system
was rare because most companies in our industry did not have such technology.
Other companies were not as flexible to work with different types of clients, and as a
result, they did not consider it rational to expend resources to develop such software.

8. Conclusions

I want to say that the management of operations and processes in a company

is important and must occur at different levels. From the supply chain operations
level to individual processes, each level requires attention and management. In my
case of Sea House, this meant training employees in the warehouse, developing
software and improving order-picking processes. This helped reduce errors, improve
customer service, and reduce costs for logistics and disposal of expired goods.

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 LY_ISUPC_G: Operations Management (2023/24)
Andrii Shtoda (L00186171)
16/10/2023

References:

Slack, N. and Brandon-Jones, A. (2021). Operations and process management :

principles and practice for strategic impact. 6th ed. United Kingdom: Pearson Edu-
cation Limited.