Question

Develop a mini operations plan for the company described below: also look for outside scholarly sources to support your findings and conclusions. Citation of all sources, including the text, should follow APA format. Background: The Company is Allenby Home Furniture. The company has over 700 locations, most of which are in the United States and Canada. However, during the past decade, Allenby has developed a growing level of operations in Japan, Singapore, China, and in Latin America. Besides having a large, and now a global chain of furniture stores, Allenby also manufactures much of the furniture it sells. Despite the organization's growth, there are serious issues on the horizon. One is many Allenby customers while appreciating the competitive price, feel the quality of the band is somewhat lacking. A common joke among some of the sales staff is the furniture falls apart about the time the typical five year Allenby provided financing is paid off by the customer. Often a typical Allenby customer is someone, with a limited budget, setting up a first time home or apartment. Customers with more income typically seek brands perceived as higher quality. Because of Allenby’s perception as providing affordable, but not high-quality home furnishings, the company is losing out on repeat customers and failing to be competitive with higher-end brands. As a consultant, you have been asked to address in at least a four-page memo (MGT 3329), or a five-page memo (MBA 6614), what Allenby could do from an operations standpoint to improve its reputation for quality while maintaining its ability to offer furniture at a competitive price. Some considerations which you may wish to address in your memo: Selection of Production Processes: Major function of the operation management department of Allenby is the selection of an appropriate production process for producing goods for the customers of the company which satisfies their needs and requirements. Simply put, what can operations do to provide the firm’s customers with a better product which is still economically a good value? Management of inventory: For managing contingency situations Allenby keeps sufficient stock of raw material and finished furniture. Management of inventory is also one of the important function of operational management of the organization. This function includes: maintaining holding, ordering and totals cost of the inventory. Additionally, this function also includes different activities for managing safety stock, reorder level and lead time for inventory management of the company. What role can inventory play in reducing costs, while ensuring Allenby has the inventory of both materials and finished furniture it needs. Also, please discuss overall what role and steps can be taken in operations and supply chain management to help grow Allenby’s business globally and enhance profitability. Please feel free to be creative, however, please limit that creatively to well-established theories and practices related to operations and supply chain management.

Answer 1

Allenby Home Furniture is located in over 700 locations, most of which are in the United States and Canada. Allenby has developed a growing level of operations in Japan, Singapore, China, and in Latin America. Besides having a large, and now a global chain of furniture stores, Allenby also manufactures much of the furniture it sells. As like in other business concern’s, Allenby also has major issues like competitive pricing and quality of product. It is said that the quality of furniture is such that it lasts only 5 years and it’s also seen that major clientele includes customers who have limited budget and are setting up their home for the first time. Allenby is famous for providing furniture’s at lower cost, hence people with low budget prefer Allenby. As said, Allenby’s perception of affordable furnishing has given them good sales but due to lack of quality in homes furnishings they are also losing out on repeat customers and are failing to be competitive with higher-end brands. For improving the quality of their product and being competitive with higher brands, they must develop an effective operations plan that gives a clear picture to the personnel’s on what activities are to be performed and their responsibilities with a proper goal and objective.

Operational planning is a part of strategic planning. It is the form of planning that specifies what work is to be done from input to output, i.e- from getting raw material to delivering the product to the customer and even after sales service. The plan should include all resources required in each stage and skilled personnel employed at each level. The activities performed while transferring goods from one stage to another should be carefully monitored, as any loop whole may result in adverse effects to the output. Operational plan also identifies the risks involved and the measures to be taken to overcome risks. It identifies the day to day activities to be performed at each level. Some of the points Allenby must consider in their operational planning are-

• Objective- The organization should identify specific, measurable, achievable, realistic and time bound objectives. The objectives should be clear and understandable, related to quantified or qualitative performance measures with known resources linked to the business needs with a view to complete it within a specified time frame. Clear objective helps employees to understand what is the actual work to be done in a better way.
• Production workflow- It explains step by step process on how a product will be made and what resources will be used at each stage. Identification of risk at each stage is also specified with proper guidance on how to overcome or neglect them. Allenby should categorically define in a step by step manner the production process of their furnishing y identifying risk and how to overcome them.
• Selection of Production Processes: Major function of the operation management department of Allenby is the selection of an appropriate production process for producing goods for the customers of the company which satisfies their needs and requirements. Simply put, what can operations do to provide the firm’s customers with a better product which is still economically a good value?
• Modern or New Technology- Allenby should start use of more modernised and new technology that could help ease the production process and help their labours as well with easy production. The machinery should be modern which could help Allenby in producing the furniture’s within a shorter span of time and delivering more products to their customers.
• Quality control- Major drawback Allenby is getting for their production of furniture’s is about the quality. Allenby should focus on improving the quality for their furnishing from the starting point, i.e- raw material. They must buy a better quality raw materials which would result in a high quality output.
• Key targets - Allenby should specify to its team member’s specific production and sales target. Such target would help the employees know their actual goal and would boost them taking more aggressive steps towards achieving such goals. Allenby should also ensure that the delivery of product to the customers are done on time with proper mode of transportation being followed.
• Risk management plan- Allenby should take measures and built a risk management plan that could specify risk involved in each stage of operations and what parameters are to be considered for eliminating such risks. It should prepare a plan that would foresee risk at each stage, estimate the impact of those risks and response to the risk for successful delivering of product.
• Staffing- Allenby should hire persons with key skills as per the job profile. They must give benefits to their employees apart from the regular compensation, like- incentives, bonus, medical insurance, health insurance etc. Allenby should also focus on meeting the employee needs by creating a healthy and safer work environment. They must give holidays to their employee’s so that they get time to refresh themselves and be back to work with best possible energy.
• Marketing & Marketing Strategies- Allenby should engage themselves in effective advertisements. Advertisements done through social media, hoardings, televisions, radios, etc will help Allenby to create their brand image across larger group of audience and help them get more sales. It is very important to initiate promotions both offline and online to be ahead of competition. Allenby should immediately start with the promotions so that they are recognised in the market in larger scale and more people are able to build trust on their products.
• Management of inventory: For managing contingency situations Allenby keeps sufficient stock of raw material and finished furniture. Management of inventory is also one of the important function of operational management of the organization. This function includes: maintaining holding, ordering and totals cost of the inventory. Additionally, it also includes different activities for managing safety stock, reorder level and lead time for inventory management of the company. When the management of inventory is done in a proper manner such that there is a recorded stock for holding, ordering and totals inventory there will be no excess production or surplus stock in hand, which would reduce the inventory cost in hand even after Allenby has the inventory of both materials and finished furniture it needs.
• Delivery of products- Allenby should ensure that the products are delivered to the clients within specified time period. They must ensure that the transportation required for delivering goods from one place to another is chosen effectively depending on the size of the order and location it is to be delivered to.
• Effective Communication- There must be proper communication between each level of organization. Allenby should focus that each member of team is friendly with each other and are communicating effectively with each other for any work. The management at Allenby should introduce regular meetings that could help them interact with people across the company, know the problem’s and help with the desired solution. Also, in case there is no effective communication between each staff members, there would be problem while transferring the goods from one stage to another.
• After Sales Service – Allenby should introduce an after sale service department which would take calls from customers having problems with the product and solve them at shorter time period. Such department will be responsible for getting positive feedback from the client. Feedback’s from customers will help Allenby to improve in areas they do not excel. After sales service will also enable getting more references and more sales from existing customers as customers would believe in the fact that Allenby will be there even after they pay money and get the product to their home.

Such operational plans and activities will help Allenby to generate more sale with high quality product at appropriate cost of the product. The improved quality of the product will also enable them to get more repeated client and more reference customers. An effective promotional and advertisement activities will help them to get recognised among larger group of audience and be ahead in competition due to their improved quality and low competitive pricing. For increasing the customer’s trust and generating more leads, Allenby must ensure that they provide best after sales service to their customers. Any client will always prefer the organisation which provides them service even after the purchase is made. It is generally seen that organisations do not bother to provide service to the clients who have already purchased the product and service as they get their part of revenue and their focus shifts to new clients from whom they can get more revenues. Such organization forget that an existing client will help them get best review if served well and they can also help them get more leads from their reference. Hence, Allenby should focus on purchasing improved quality raw material, start advertisement of the products, set targets across all the stages, rewards its employee’s so that they are boosted up to perform more, deliver products at the specified time period and do not delay, and give an appropriate after sales service to grow their business globally and enhance profitability.