Operation Management of Ikea Essay

Executive Summary: This report is about operational aspects. We have selected Hannan Prints, the manufacturing firm to analyse the supply chain. This paper scrutinize the crucial aspects of Hannan prints supply chain network, its plans and the implementation of strategy. By putting into practice different supply chain approaches, the firm will increase the benefits of supply chain network. In this report we have focused on supply chain inventory management and technology selection practices and how it is beneficial for the firm. In the firm operations are linked with different strategies.

For example the change in supply chain has an effect on inventory management as well as technology selections. At the end we have given some recommendations and conclusion for increasing its efficiency by supply chain. In this report we have tried to focus on interesting features and strategy adopted to maximize the supply chain. With critical analysis of Hannan Print supply chain, we provide benefits and recommendation and lastly provide conclusion. Introduction: The motto of Hannan Print is “Creating Great Impressions” which is useful in conducting business.

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Hannan Print is the Australian leader in printing industry that prints broachers and advertising materials and different types of newspapers and magazines according to the demand of customers. It was founded in 1968; Hannan Print after 34 years of outsourcing printing work the company acquired its first printing press machine. Hannan print NSW houses the largest bindery in Australia and in addition to that the company is registered to ISO 9001 for quality management and ISO 14001 for Environmental Management and has been awarded at the same time in February 2007 in recognition of systems it has adopted.

Operation management aspects in Hannan Prints: Operation management is the business area concerned with production of better quality and services and to make sure that business operations are effective. Every organisation needs planning and control, which needs information on resources and demand level. There are five objectives of planning and control: Quality, Speed, Dependability, Flexibility and Cost. To fulfil all these requirements, Hannan Prints take certain actions which are as under. Quality is a constant conformance to customers’ anticipations.

It has major influence on customer satisfaction or dissatisfaction. Quality means that the product is reliable. Hannan print always believes in creating great impressions. For creating better impressions on their customers, the company mainly focus on providing the best quality then their competitors. For example, they always make sure that the quality of papers, ink and machines are good before starting any job. Once everything is checked then they start printing. Thus by providing quality the cost is reduced as there are less chance of product return.

Along with quality of product, the speed is very important aspect as its essential for any firm to give fast output in required time limit. Speed relates to time management. It is the responsiveness to the customers. By doing work speedily, the inventory is managed as there is low work in progress as work is fast and overheads are low. The speed of work will create good impression on customers and maintain them for long term. Speed reduces inventories and risk. Dependability is keeping promises to customers as provide products or services when promised.

It will give dependability advantage to its customers. It saves time as all the resources are fully utilized when needed. It gives stability as dependability builds trust among different parts of operations. It also saves money in a way that effective use of time results in reduction of extra cost. Flexibility is the ability to change in a number of ways. It means different things indifferent operations. Hannan print is flexible to introduce or modify new products or services. They also offer mix products and services that is mix flexibility.

If needed they are able to produce different quantities by changing level of outputs. Flexibility saves time, maintains dependability and it accelerate responses. The low cost is attractive as no one likes to pay more. Hannan print always tries to reduce costs by proving quality of products or services, by speedy work, dependability and flexibility. They manage inventory and use proper resources that save time and money. Theoretical Framework: First of all, Hannan Print makes sure that all the staffs are encouraged and they contribute to the process.

Secondly, it examines and improves operations practices on a regular basis. Further more, they monitor and improve service quality which they provide to customers. Not only that, but they are also working hard to replace the product as per customer’s requirements in order to save time and cost. Lastly with a view to provide faster and safer service the company working very hard to keep the premises clean and tidy all the time particularly the storage area as it is the part form where the goods are delivered.

The company has good arrangement of working departments. For example they have packing and despatching department so close that they can transfer the goods in between those department very easily. This is the time saving and cost saving approach adopted by the company. Supply chain management and inventory management are also important parts of operation management. Supply chian management is the management that assists in finding solutions, grabbing opportunities and reducing risks. Supply chain brings business groups together that share supply chain interests.

Inventory management is the technique through which the company can save big amount of money. For example ordering goods on time always save the storage cost and maintenance cost. In Hannan print the company maintains proper inventory system so that they can chase any critical situation to avoid delay in production. The company has different types of inventory, such as papers, ink, glue, labels, etc. these the entire inventory are essential for the production. Hence if one is short than the whole production may be affected. So inventory management is very crucial for Hannan Print.

Supply chain and Inventory management system: In order to get better environmental performance, lessens risk, get better productivity, minimize costs and improve reputation Hannan print work with cooperation with other businesses and customers along their supply chain. It points how the benefits can be got by businesses. The importance of supply chains has extended around the glob so that the traditional inventory management processes is no longer existed. New operational demands indicate that companies continuously manage inventory.

This is done by multiple levels of global supply chains to maximise performance against business objectives. Inventory plays vital role in balancing the differences in timing among demand and supply of resources. Inventory is the stock that is used to support manufacturing and customer service. In Hannan print there are different types of inventory such as raw materials that is used for manufacturing other items. Work in process is used in production process. Sub assembly inventory are not fully completed and stored in inventory. Finished goods are the manufactured items, ready for sale to customers.

In Hannan print, some of the purchased parts are hold because of price changes, quantity discounts and material scarcities. Some manufactured parts are also hold because of period between among production runs, variation in product demand, economies of scale and to allow flexibility in production schedule. Inventory cost comprises of set up costs that includes labour and other associated costs. Carrying costs consists of insurance, staff and capital costs, opportunity cost that is the sacrifice of best available options and stock out costs that is lost sale and stopped production.

Hannan print has some excess inventory to recover from the problems of defects, spoilage, lack of market demand, and unwillingness of managers to write down outdated stock. Problems and solutions regarding Inventory management system in Hannan print: Hannan print mainly deals in printing leaflets and broachers for their customers about their special offers and discounts. The problem is the waste of papers and ink. But it is the process for printing the papers. The main problem the company faced is the inventory system problem. This problem is based on two important aspects of inventory management system.

These are holding cost or order cost and accurate information that really do indicate the actual level of stock and stock. This is known as perpetual inventory principle. The common problems of inventory management are as under: ?Keying errors, that is entering the wrong product code ?Quality errors, which are mis count of items put into or taken from stock ? Damaged inventory suppose to be removed form the stock data, but not correctly deleted from the records when it actually destroyed ? Some time wrong items entered into the stock list and it remain in the stock record but physically it is not existed into the stock. Sometime the gap between entering the data and actually physical stock vary and the whole system get disturbed. To resolve these problems, Hannan Prints follow the following steps: ?Inventory management is associated with holding stocks against the costs associated with placing an order. This is usually related to working capital whereas costs are usually associated with transaction necessary to generate the information to place an order. ?Economic order quantity (EOQ) is the best solution and the company adopt it. Company improve its inventory quantity level system and order the inventory as per the requirements.

This reduces company’s storage cost and improves inventory distribution systems to different departments. ?To get economic order quantity, company follow just in time (JIT) approach that is delivery of goods on request, which is the permanent solution to meet demand instantaneously with perfect quality and no waste. Technology strategy and its effects: To compete with other competitors and increase company’s volume Hannan prints has to improve and update its machines and technologies all the time. This is the way a company can stay longer into the market.

Hannan Print adopts this strategy on a regular basis and as a result it is number one printing company in the Australia. Hannan print has been the leader in introducing the latest technologies into the market place and shares the benefits gained from that with other clients. The company follow the following steps to improve its technology ?Hannan print has developed [email protected]® a user friendly service that offer their clients with customised digital solutions which receive advantage of the benefits that web efficiencies bring to the modern day workplace.

With online customer facing system, clients directly link to prepress systems. ?By developing [email protected]®, the company had improved their process to assist their customers in eradicate miscommunication to get exceptional print quality with few errors and better productivity. ?This technology will benefit the company in online job submission, online file submission, remote proofing, minimising misprints and increased security and collaboration with team members online. ?The company has also implemented the run chart and data in order to increase the durability of particular job.

It assists the company to know about the causes or problems, which area is performing well and which one needs to improve. ?The company increases its production strength by purchasing more and more printing machines with latest technology. By doing this the customers get full satisfaction with selection of preferable option. ?The company implement computerised operating system so that the production gets perfect result without wasting inventory and time. ?The implementation of CAD and CAM software improves the result of production, which leads company’s overall volume of sales. The company apply the overlapping activities of product and process design which is very much beneficial to satisfy customer’s needs. Process Technology at Hannan Print: Hannan prints follow process technology that is helpful in material processing as follows: The above chart depicts that the company has computer numerical control machine tools which has computer coded instructions which perform better than human beings. Because of numerical control machines company has flexible manufacturing systems which are helpful to interlink the different departments of organisation. Conclusion:

To conclude the topic, every organisation has to follow operations management aspects which will lead the organisation to achieve its goals. Hannan print maintains its planning and controlling systems through five performance objectives. The up gradation of its technology always satisfies the needs of the customers. Change in one technique affects other techniques and needs to make some changes in its operation strategy, process strategy Inventory and improvement process technology. So, by following different aspects of the operation management any company can solve its problem relating to its operation structure.

So, it is very important for any organisation to upgrade its different techniques of the operation management to make the supply and production network smooth and easy going. References: Slack N. , Chambers S. and Johnston R. (2007). Operations Management (5th ed. ) England: Pitman Publishing Heizer J. and Render B. , (2008). Principles of Operations Management. (9th ed. ) New Jersy: Prentice Hall Inc Retrieved on 1st February, 2009 http://www. hannanprint. com. au/default. aspx Retrieved on 31st January, 2009 http://www. hannanprint. com. au/QuoteRequest/QuoteRequest. aspx

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