Wu Designs (WD) has been experiencing certain issues related to quality for some time. The operations at the company are inconsistent and quality is measured by individual standards, not officially established standards. This is affecting the business. Therefore, to counter this problem, the co-director has formulated a report to analyse the issue and provide a strategic plan. Wu Designs is experiencing severe losses due to return of items. As co-director of Wu Designs, I have established three primary objectives to plan a strategy:
● To increase profits by improving quality and production
● To ensure products have zero defects through quality improvement
● To gain competitive advantage over foreign companies in the market
The management of operations involves supervising, designing, production process controlling and business operations redesigning in the production of services and goods (refer to Appendix 1). In the manufacturing setting like Wu Designs from Hong Kong, operations includes creating efficient processes to develop the product, acquire the raw materials on time, insuring satisfactory numbers of appropriately trained workers, and correct equipment maintenance (Taj and Morosan, 2011).
The main operations management (OM) strategies of the Wu Designs are focused on the production of garments. In this connection, the importance of OM is very significant. The operational strategies have been very helpful for the machinists as well as the designers. In addition, these effective strategies have also improved the quality of the garments, which in turn ensured zero defects in their products. On account of these improved garments, the company also gained competitive advantage over its rivals and competitors. Moreover, the other departments also gained various advantages due to these effective operations management.
The overall strategic objective is to provide their customers with the best quality garments on a budget and minimizing wastefulness. Thus, for Wu Designs, operations management has grave importance. The company needs an effective operations management if it wants to accomplish their objective.
Evaluating existing operational management success
In Wu Designs, their objectives should relate to the four performance dimensions of cost, quality, variety and time. Under cost, the company needs to maintain efficiency without overspending their budget. When it comes to quality, their strategy should improve both their product and process quality. Since the market is very competitive, their response to demand must be timely. Their target customer base is quite heterogeneous, thus when the strategy is developed, it must fulfill the varied needs of their customers.
Additionally, the operation management process at the garment-making company has no delegation of authority as seen from how the individual machinists and their team leaders are responsible for quality management. This has led to returns of products, and since the company functions in the highly competitive clothing industry in China, it affects the overall organisation. Thus, to evaluate the overall effectiveness of operation management, benchmarking and the balanced scorecard will be used.
Benchmarking is a set of standards or a singular standard, which is used as a mark of reference for analyzing quality levels or performance. The benchmarks can be derived from the company’s own experience or from other companies in the clothing industry. The recommended benchmark for WD would be customer traffic and gross margin. This will help them to understand how many customers are buying their items versus how many are returning them. The return of items will affect their gross margin, which has been chosen as a benchmark. Together these two benchmarks will help WD measure their performance. This will allow managers to check their performances and monitor their growth.
The balanced scorecard, developed by Robert Kaplan and David Norton in 1992, is a tool of performance management that are applied by managers to monitor the execution of tasks by the employees under their control and to keep track of the results emerging from these tasks (refer to Appendix 2). It is used to identify small numbers of non-financial and financial measures and adhering targets to them, so when they are examined, it becomes possible to decide whether performance met the expectations (Biazzo and Gareng, 2012).Wu Designs can use the balanced scorecard to compare their objectives with their actual progress (refer to Appendix 3). The directors can then encourage staff to focus their attentions on determined areas, and hope that this triggers enhanced performance within the organisation (AndjelkovicPesic and Dahlgaard, 2013).
Quality is the most important factor for any organization, and for a clothing company, it is critical. If the company cannot manage their quality, it will causes issues such as high rejections and alteration of garments, requirement of additional labor for examining products and repair work and delay in completing production among others. Since the company is part of the manufacturing industry, they are responsible to develop and sell best quality goods to their customers. This ensures customers spend their money to purchase the company’s goods rather than on the goods produced by their competitors.
Quality management is a defined system that records procedures, responsibilities and processes for accomplishing quality objectives and policies. According to William Deming (Kim et al. 2012), one of the pioneers of quality management focused his approach on three essential premises: customer orientation, continuous improvement and quality as identified by the system. Joseph Juran (Bessant, 2012, p.343) proposed an approach that focused more on management commitment and responsibilities. He conjectured that 85% of quality issues can be attributed to errors in the system regulated by the management. Juran (Bessant, 2012, p.343) focused on three main processes of quality, which are usually referred to as the Juran Trilogy (Bessant, 2012, p.343): quality control, quality planning and quality improvement. Quality planning is determining the customer needs (external or internal) and then devising plans to meet those needs through a number of processes; while quality control are the processes done to make sure the goals of quality are accomplished during operations. Lastly, quality improvement is the way of materializing unprecedented performance levels (van der Wieleet al. 2011).
AndjelkovicPesic, M. and Dahlgaard, J.J., (2013). Using the Balanced Scorecard and the European Foundation for Quality Management Excellence model as a combined roadmap for diagnosing and attaining excellence. Total Quality Management & Business Excellence, 24(5-6), pp.652-663.
Baird, K., Jia Hu, K. and Reeve, R., (2011). The relationships between organizational culture, total quality management practices and operational performance. International Journal of Operations & Production Management, 31(7), pp.789-814.
Battistoni, E., Bonacelli, A., Colladon, A.F. and Schiraldi, M.M., (2013). An analysis of the effect of operations management practices on performance. International Journal of Engineering Business Management, 5, p.44.
Bessant, J., (2012). Learning and continuous improvement. From Knowledge Management to Strategic Competence: Assessing Technological, Market and Organisational Innovation, 19, p.343.
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