Case Study of Hogsmeadow Garden Centre
The aim of this assignment is concerned with the various aspects of operations management of the Hogsmeadow Garden Centre in UK. It looks at operations management as a source for gaining a competitive advantage and overcoming potential problems experienced within an organization or workplace.
Transformation process model
Hogsmeadow garden centre produce products and services by changing inputs into outputs. They do this by using the "input-transformation-output" process. The term operations embraces all the activities required to create and deliver an organization's goods or services to its customers or clients.
Transformed resources ...
Transforming resources ...
Predominant transformed resource
One set of inputs to any operation's processes are transformed resources. These are the resources that are treated, transformed or converted in the process. Among the three types of transformed resources, material was dominant in the operation of Hosmeadow garden centre. As the garden centre was focus on sales and marketing, the material of inputs provide must be enough and be able to attract consumers. It provides a wide range of products and materials to attract different target market. Most important is must sufficient the needs, demands and wants of consumers.
Output of each micro-operation and its customers
All processes exist to produce products and services, and although products and service can be different, the distinction can be subtle.
The outputs for the honeydukes are the high quality foods and good services. They used the finest ingredient of foods, and promised deliver the foods in fast, fresh and tastes. The environment of the restaurant designed with the creative and innovative look, clean environment and nice services from the staffs had encourages much more people consumes with Honeydukes.
During the week the majority of customers in Honeydukes are mothers with small children and older people. At the weekend there is more of a spread of all age ranges; with the exception of teenage children.
Indoor sales area and Outdoor sales area
Both of the sales areas produce products and services. Customer and goods 'assembled' together.
The indoor and outdoor sales area customers are focused on the people who loving flora and fauna, gardeners and elder people.
But the number of customers arriving at the garden centre varies depending on the time of year, day of the week, and time of day.
Operations processes have different characteristics
Although all micro-operations of Hogsmeadow Garden Centre are similar in that they all transform input resources into output products and services, they do different in a number of ways, four of which are volume, variety, variation and visibility dimension.
The volume dimension
It is involves the systematization of work, whereby standard processes are set out in an operations manual. The implication of such structuring is that it gives a lower unit cost, since fixed overheads such as rent are spread over a large number of products.
The Variety dimension
The variety dimension requires an organization to be flexible and match its services to customers' needs. For retailers aiming to keep up with changing fashions it is essential to have both well-established supplier contacts and skilled staff who can enact changes promptly. Different kinds of plants were supply to meet the demands of consumers.
The Variation dimension
The variation dimension considers how demand patterns and seasonality influence sales volumes. Staff may be overstretched in high season and the shops feel crowded, whereas low season gives rise to opportunity costs. Capacity planning is essential, therefore, for optimizing turnover. The centre also has up to 25 casual staff which it can call upon in busy times such as the run up to Christmas.
The Visibility dimension
The visibility dimension concerns how many of Hogsmeadow operations are exposed to the customer. For example, a retailer may decide to open a shop or to sell products online depending on the level of customer contact necessary to clinch the deal.
Inventory occurs in operations because timing of supply and the timing of demand do not always match. Inventories are needed, therefore, to smooth the differences between supply and demand.
Why is inventory control such an issue as described in the case?
Hogsmeadow garden centre faced the difficulty to decide how much of each product to order at the beginning of the season. Many of the products have to be discounted very heavily, sometimes at a loss to finish the stocks. Every year, Hogsmeadow run out or many stock left over. It can be reached as high as 20 per cent of their total revenue for the year.
The likely result of this approach to inventory control is lots of material shortages, excessive inventories, high costs and poor customer service.Some of the stocks increasing risk of damage, loss, deterioration or obsolescence due to the stock inventory were not used quickly. Inventory invariably takes up space (for example: in a warehouse) and has to be managed, stored in appropriate conditions, insured and physically handle when transactions occur. It therefore contributes to overhead costs.
Yet running out of stock is serious. It can disrupt production schedules and lead to stock-outs of finished products, affecting both sales and customer relations.
How to improve inventory control?
The most common way of doing this is by what is known as the ABC classification of stock. This uses the Pareto principle to distinguish between the different values of, or significance placed on, types of stock.
Inventory of Hogsmeadow can be managed through sophisticated computer-based information systems which have a number of functions: the updating of stock records, the generation of orders, and the generation of inventory status report and demand forecasts. These systems critically depend on maintaining accurate inventory record.
Input stocks of raw materials must be carefully managed at each micro-operation.
Operation strategy concerns the pattern of strategic decision and action which set the role, objectives, and activities of the operation. No organization can plan in detail every aspect of its current or future actions, but all organizations need some strategic direction and so can benefit from some idea of where they are heading and how they could get there.
A particularly useful way of determining the relative importance of competitive factors is to distinguish between 'order-winning' and 'qualifying' factors.
Here, the order-winning factors would have been product reliability:
- Using the finest ingredients and high quality products
- Visibility the products' information
- Provide a wide range of products
Qualifying factors for the Hogsmeadow garden centre would have been price and customer services.
Hogsmeadow garden centre need a strategy to position itself in its global, economic, political and social environment. Strategy is the total pattern of decisions and actions that position the organization in its environment and that are intended to achieve its long-term goals.
The bottom-up perspective is one which sees operations strategy emerging through a series of actions and decisions taken over time within operations. These actions and decisions might at first sight appear somewhat haphazard, as operations managers respond to customer demands, seek to solve specific problems, copy good practices in other organizations, etc. However, they can build over time to form a coherent pattern recognizable as an operations strategy. The actions taken within this kind of strategy are likely to be characterized by a continuous series of incremental improvements rather than the large one-off technologically led changes that require large capital investments in new plant and machinery. The bottom-up perspective is one in which the organization learns from its experiences, developing and enhancing its operational capabilities as operations managers try new things out in an almost experimental fashion using their workplaces as a kind of 'learning laboratory' (Leonard-Barton, 1992). The key virtues required for shaping strategy from the bottom up are an ability to learn from experience and a philosophy of continual and incremental improvement.
After analyzed the operation and management of Hogsmeadow Garden Centre, Don Dursley could understand what is important for its customers and the importance of produces and delivers its products and services is right for that its market. Furthermore, the garden centre could achieve the new development by using the suggested operation strategic and inventory control. For instance, the income and profits of Hogsmeadow garden centre will also increase expeditiousness.