Capacity Planning and Control: Nestle A business organization is an entity that inputs capital and resources, processes them and gets an output – products and services. Any business invests much capital into R’n’D and marketing for studying the customers’ opinion because it is a priority for any business to satisfy its customers. The more satisfied the customers are the better off the business is. Thus both parties are well off – customers get what they pay for – quality, brand etc, company generates brand identity, high revenues and profit. The bad story in the case is that any business experiences difficulties on the way, no matter how popular the product is or how well it sells. One major concern for many businesses is seasonality. Organizations involved in bathing suit industry, ice-cream, medicine, tea and others face this problem very often. There are periods of time when the demand for a particular product is extremely high. Ice cream for example is a seasonal product that sells mainly during the summer. Ski equipment is gear that sells only during the winter season. There are exceptions of course as medicines and tea. Both can be bought and consumed at any time where as, medicines peak sales in winter and tea also. This does not mean though that the products die during the other seasons. However, it is evident that demand drops. In such cases sales drop too, so does revenue and profits, labor force becomes too much in the organization, costs for supporting depreciating machineries increase especially for the production of limited number of goods, expenses for salaries increase and as a whole the business starts going down. Many businesses face this situation nowadays. The question is how to deal with it. One main way of coping with this problem is cutting expenses. According to Slack et. al. (2001) the best mechanism for running a business is to match level of demand (goods, services that customers need) with supply of capacity (recourses, labor force that the business inputs in the production process). They also define capacity as “the maximum level of value –added activity over a period of time”. Thus three main factors come into force here – the capacity of resources and labor force, the process operation which itself leads to satisfying customers through matching demand. It is very important to plan and coordinate all 3 factors very effectively because a difference in capacity and performance easily affects: costs, revenues, working capital, flexibility, quality of goods, speed of response and others.
Operations management is essential for the survival and success of any organization. According to Heizer & Render (2011), operations management (OM) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs. Operations managers today contend with competition, globalization, inflation, consumer demand, and consistent change in technology. Managers must focus on the efficiency and effectiveness of processes such as cost, dependability, distribution, flexibility, and speed. The intent of this paper is to discuss the processes and operations management of the Kroger Company.
Kuiper Leda lacks an effective Inventory Management to handle properly the increase in demand of stock and production. An inventory management plan would be capable of forecasting errors in production, client-required service levels, total lead time in manufacturing a unit or batch of the product, and demand priorities. Inventory control is a challenge currently because of the size of Midland Motor's order. In order to meet the demand the company needs to increase the inventory which increases the inventory costs. KL have an opportunity of using the Just - In - Time method of inventory control which eliminates waste by making the resources and labor available only in the time and amount required. It will help increase productivity, product quality and work performance while saving inventory costs for the company. (Curtin, 2008). Kuiper Leda also needs to keep in mind that they will still have to fill orders from other clients that have previously placed orders or even new customers.
In order for a company to push its improvement and create a balanced plant, it is necessary to increase the throughput, while reducing inventory an operating expense. But, what is most important is to identify the bottlenecks to be able to focus on them. After focusing and solving the constraints, everything else is going to be less powerful but important at the same time.
Accommodating customer requirements in most supply chain arrangement requires a forecast to drive the process. (book page 133) When looking into the definition of forecasting which is projecting what is going to be sold (units, seats, rooms etc) it is also important to take into consideration where and when in order to reach the future goals. (book page 133) Since it is argued that effective supply chain and logistical capacity is an important competitive advantage. (Christopher 2005) Where maximizing the revenue is the key element in hospitality sector and for hotel industry there is an increased attention on effective demand management and forecasting for reservation systems. (http://www.sciencedirect.com/science/article/pii/S0169207002000110)
The Oxford dictionary defines an organization as a “…body of people with a particular purpose, especially a business, society, association, etc.” Therefore, when a body of people is connected by a specific purpose or association, the presence of leadership, good or bad, is inevitable to find. However, depending on the context of the leadership, the climate of positivity or negativity involved in the leadership, that is what will determine the distance that the organization is able to propel forward.
The purpose of this report is to evaluate Nestle Company industry based on the case study and comprehend how the company develops strategic intent for their business organizations following the strategic factors and approaches. I will analyze the strategic management process as firm used to achieve strategic competitiveness and earn above-average returns. I will critically examine the strategy formulation that includes business-level strategy and corporate-level strategy. It also aims to identify market place opportunities and threats in the external environment and to decide how to use their resources, capabilities and core competencies in the firm’s internal environment to pursue opportunities and overcome threats.
The success of any organization just as the Tesla Motor largely depends on the planning of the activities by the management team in the company. A good performance is always attributed to the planning strategy that a certain company has. The following are therefore four factors that affect the planning and performance of the company.
Sustainability of the supply chain has increasingly become a crucial aspect of corporate responsibility. Apart from being good for business, management of social, economic, and environmental effects of supply chain remains the right thing to do. Constantly changing markets have created complex landscapes that businesses must navigate to build sustainable supply chains. Sustainable supply chains aim at creating social, economic, and environmental value for all stakeholders throughout the supply chain. Building sustainable supply chains not only benefits the stakeholders but also aims at safeguarding business interests. Businesses can easily become sustainable by understanding who they are and working closely with people. Nestle is company that has been at the forefront in advocating for sustainable supply through the ‘creating shared value’ platform. The report makes recommendation on the role of supply chain management in attaining sustainability.
With seasonal production there are many problems. Overtime premiums reduced profits, seasonal expansion and contraction of the work force resulted in recruiting difficulties and high training and quality control cost, etc.
Organizations can be configured in many different ways. Their overall classifications can be summarized by characteristics of complexity within the system, the level of formalization, and the centralization of decision-making power. The structure of each organization is influenced by many factors. Such factors include; the goods and services provided, the overall individuality of the staff providing the service and producing the products. The overall beliefs and values of the individuals performing the services that are being delivered, the technology that is utilized to help deliver the services and aid in product production, as well as the needs, desires, and generalized characteristics of the consumer population that requires or demand the product or service. (Yoder-Wise, 2007, p. 145) The organization will have different operating priorities based on its ownership. The main goal behind most business is to make money. The private owned institution strives to make its shareholders money, while a non-profit institution reinvests all of its revenue back into the orga...
A service firm performance is usually measured in terms of quality. Nevertheless, these performance measurements can also be measured in terms of time, flexibility and cost, and they can also be used by a manufacturing company. In order to analyze the measures, I will divide them to the three main parts of operations, input – process – output:
Operations – To work out the right layout and work flow process in the company. The manpower resource allocation is also critical in the situation on the right balance of resource to handle the production. If possible, adopt a hybrid model to handle the flexibility in the product nature, make both the production line being able to configure standard and customized so to reduce setup and changeover time and cope with the demands.
The transnational corporation Nestle Company founded in 1886 based in Vevey, Switzerland, sells its products in 189 countries and has manufacturing plants in 89 countries around the world, boasting an unmatched geographic presence. The company started off as an alternative to breastmilk and initially looked into other countries for an increase in global opportunities. It founded its first out of country offices in London in 1868, and due to the small size and inability of Switzerland to compensate growth manufacturing plants were built in both Britain and the United states in the late nineteenth century. A large portion of Nestlé’s globalization came in the 1900s which was when it first moved into the chocolate business after
Inventory Management has developed as an important fact in organizational efforts to reduce losses. The management of capital within an organization has a significant impact towards profits where inventories are commonly an organization’s largest asset. Inventory Management behaviors impact the sales forecast, operation and sales planning, production planning, inventory rotation and material requirement planning.
University of Phoenix(Ed.).(2003) Operations management for competitive advantage[University of Phoenix custom edition e-text]. New York: McGraw-Hill. Retrieved February 01, 2005, from university of phoenix, Resource, MGT554- operations management website: https://mycampus.phoenix.edu/secure/resource/resource.asp