Operation Management

Introduction 

The business that I choose to be my project assignment is bundle business. Bundle business is the combination of several products or services into a single package. The bundle is sold to wholesale and suppliers. Some of the bundle is used clothing and some of it a new clothes that are reject clothing and old stock from any shop. There is much kind of bundles out there, local and also international. There’s clothing which consists of t-shirts and blouse, jeans, stuffed toys, shoes and even bed sheets and curtains, it still in great shape and full of stains. 

In this assignment, we have chosen one of the examples of bundle business. We chose Bolhassan Trading Company as topic example for our assignment. We explain the company overview with include when, how, where there be establish. Moreover, we also discuss on what the product there selling, where there get supplier for that product, how the production of the company after establishes until today, and who their customer. 

Furthermore, we discuss the SWOT analysis of that company that include strength, weakness, opportunity and threat of that company. We also explain what the good are or service design, capacity planning and control, and inventory control of that company. With the help of the interviewing the manager and the supervisor of that company, we gain some of the information to complete our assignment. However, during interviewing we face some difficulties where some the questions that we ask, their refuse to answer to protect their privacy. 

Company overview 

Bolhassan Trading is a family business company that established in 1977 with three branches. They are located at No. 19, Jalan Matang, Batu 2 and No. 14, Ground Floor, Jalan Khoo Hun Yang, 93000 Kuching, Sarawak. That area was the oldest Kuching City Centre, nearby to Open Air and Electra House. In 2011, they open another branch on 2011 in No. 358, 1st Floor, Jalan Satok, 93400 Kuching, Sarawak. Bolhassan is an importer and wholesaler of high quality second-hand goods from Korea, Japan, and Singapore. This company was the earliest business that introducing bundle business in Kuching. 

For the target market, Bolhassan Trading has divided the market into distinct groups of customers with different demands, and behaviour who require separate products. There cater any age people like children, adolescents, and elderly but most often their customer elderly people especially men. The location of the business is assuming an actual location. 

The Target audiences of the business are:

They have made segments of the market on the following bases on demo-graphical  and behavior  In demographics their first segment is consisted of the income factor depend on customer income. Mostly, their customers are average and low income customer. In behavioral aspect they segmented the market on the basis of quality, taste and price. The different possible segments depend on the quality conscious and combination of price and quality. 

The product their selling are bundle clothing like jeans, T-shirt, formal wear, coat, pajamas  shoes, handbag, hat, short pants, blouses, sweater, and underwear.

The worker’s Salary for 2011

SWOT Analysis 

Strength 

Good Location area 

Location planning is one of the important operations that every organisation carries. Success or failure of any organisation may well depend on the location where it is located. Therefore, Bolhassan Trading also have to plan their location in such a way so that maximum customers visit their shop. Moreover, that area are crowded place where all the Kuching people usually go there to by their things especially holidays and celebration days like Hari raya, Chinese new year and Christmas. This company also focus on the basis of several factors such as proximity to the source of raw material, cost-effectiveness, proximity to customers or suppliers, competition in the area, transportation availability and cost, availability of resources, and availability of right labor  Therefore, that company prefer locations such that it can have large customer base, transport access and availability of parking space. 

Well-known and good reputation 

The company certainly has earned a good name and reputation by its previous products and services in the market. Within 35 years there operated their business, it even more recognized by all customers in Kuching. When mention about second hand shop, there will go to Bolhassan Trading Company. 

Weakness 

No Loyalty employee 

No loyalty employee is one of the major weaknesses of Bolhassan Trading where every year there needs to look for new worker because most of their previous worker cannot stand and uncomfortable working in that company because of the work environment. From my interviewing with their previous worker, that say there cannot stand dust from clothes especially when their open a new stock. 

Not all the clothes receipt in good condition 

Sometime, some of the clothes that there receive from supplier are not in good condition. There need a longer time to differentiated the condition of the clothes. Mostly, when their get one package of bundle, only half of the product have good condition that mean it waste money. 

Opportunities 

In term of reward, it is necessary to give to employees if they have achieved better performances. Salaries will increase in help year if they are good at performances while working. During fasting season, especially for Muslim’s worker, the manager will give lunch money to the employee as a replacement of lunch pay, where in normal day, the company provide breakfast and lunch for the worker. The worker also gets commission in every celebration day. 

Threat 

In term of Competitor, there are many second hand shop in Kuching area where there sell the same types of product with cheaper price. Bolhassan have to compete with their competitor by decrease their price but they need to consider how much the price they have to put without losing profit. 

Good/ service design, capacity planning and control, and inventory control 

Good and service design 

In Bolhassan Trading, there are not producing good and service design. Usually bundle product that receipt being arrange first with different stage of quality for the arrangement of price. The quality product like T-shirt, shoes, casual wear and bag normally being wash, dry and after that the product especially T-shirt and casual wear will be iron until it look like new before it can be sell. For not quality product will be reject and sometime being selling in cheaper price. 

Job Design 

Job design consists of formal specifications and informal expectations of an employee’s work related activities. The job design should try to meet the needs of both the job holder and the organisation. Therefore each job must be practical cooperation of technical, economic, and behavioral feasibility. Santosh Jain, 2010) 

Job designing is also an important operation in Bolhassan trading. Each employee is designed a particular set of jobs. For example, some worker work in the back for opening stock, some worker assign to wash and dry the items before can be selling, some crew member work on the counter, while others look after the customers in the in front. Also there are employees who manage the entire crew worker and look after overall wellbeing of the shop. While designing these jobs the technical, economical and behavioural feasibility is taken into consideration. 

Capacity Planning 

Capacity planning is the task of setting the effective capacity of the operation so that it can respond to the demands placed upon it. Capacity planning is an important part of strategy because it establishes the overall level of productive resources. It also affects lead time, responsiveness, cost, and competitiveness; and determines when and how much to increase capacity. This normally means determining how the operation should respond to fluctuations in demand. (http://www.mas.dti.gov.uk/ Capacity planning) 

In Bolhassan Trading company, the manager have to set its capacity items in such a way that it respond quickly to the demand of those items in a day. The customer of that company mostly adults and old men, their demand on more T-shirt, Jeans and casual clothes. So the company has to make sure that items has enough stock which is very important because that if happen have a shortage of stock, then the process of demand of that items will decrease what their expected to achieve in a day.

Inventory control

The functions of inventory are to provide a stock of goods to meet anticipated customer demand and provide a “selection” of goods. It also to take advantages of quantity discounts, because purchases in larger quantities may reduce the cost of goods and delivery. The most important it helps to protect against delivery variation due to weather, supplier shortages, quality problems, or improper deliveries. (Santosh Jain, 2010) 

In Bolhassan Trading, the inventory is managed on the basis of First-In-First-Out basis. This is because most of the inventory consists of quality and not quality clothing. Therefore delivery of inventory happens two or three times a week depending on the business of the shop. Moreover inventory is stored in stock area where the worker can do the choosing of the clothing. All this activities comes under inventory management of the organisation. This because with inventory, there believe it will able to improve their customer services and reduce certain costs such as ordering cost, stock out cost, acquisition cost, and start-up quality costs. This company usually order one package bundle of each material or depends which stock is finish fast, when orders are placed outside supplier and productions departments within organization. These orders normally do it once a month or sometime two month after to order for stock. 

Layout Design 

The objective of layout strategy is to develop a cost-effective layout that will meet a firm’s competitive needs. Layout design consideration of higher utilization of space, equipment, and people; improved flow of information, materials, or people; improved employee morale and safer working conditions; improved customer/client interaction; and flexibility. Layout is the arrangement of facility to provide working, service and reception, storage and administrative areas. The layout is designed by traditional techniques using templates, scale plans, string diagrams, and travel charting as they have been proved as low-cost methods of achieving either optimal or near optimal layout plans. Poor layouts can greatly reduce the overall capacity and overall productivity. Therefore care must be taken by organisation when designing layout. (Santosh Jain, 2010) 

In Bolhassan Trading also layout designing is a very important operation. A proper layout of the area for open a new stock receives, and wash and dry place is very essential to ensure opening stock can be done in comfortable space.it also design its layout keep in mind the safety issues of their workers. It also designs layout in such a way that needs of supervision is minimised. Another factor that is considered is the cost of production which also depends on the layout. There also differentiate the women, men, and children area of clothing so that customer easy to find what there want.

First Floor

Problem or difficulties 

During interviewing, we have to face several difficulties to gain information. Firstly, we are to shy, nervous and feel awkward during interview. This is because, that was for first time ever we do interview people. We have struggled and lost out some important information because of our shyness and nervous went asking the question. Our interviews eventually get awkward at some point, even though we generally try to act casual. 

Secondly, we have difficulties to have time together doing assignment. Some our member are so busy with other assignment and class, they have all day class in days. These cause us difficulties to share information and work together. When the time we doing assignment, suddenly, some of member have to leave because has emergency problem in home. We need to considerate and tolerant about it. 

Lastly, the manager of the company refuses to answer some of our question to protect their privacy by knowing by other. We have to respect it if not their want be interviewing by us even though that question are important for our assignment. Sometimes, there not serious in answering our question, during interviewing he suddenly laughing at us and not answer the question properly, that cause us in anger but we know we has to have a patient and tolerant during interviewing. We realize this is their technique to not how we behave and handle situation like this. 

Recommendation 

Firstly, I will like to recommend to Bolhassan trading to set the standard salary level so that their can decrease the turnover in the company. The shop should consider the benefit for their employee to achieve good reputation and good performance of the workers. 

Secondly, there should expand their shop which bigger space for the comfortable of the customers and the workers. Currently, they shop to crowd with the stock of product. This is because the stores are too small it make hard for the worker to organize and do their job. Moreover, the layouts of the stores also need to change. The layout of the stores stills the same since they start up the business more 35 years ago. The layout no improvement at all, it cause the customer feels bored and they make losing current customers. 

Lastly, there should decrease the price to compete with their competitor, most of the customer prefer to go another second hand shop that offer cheaper price. It is not fair for the customer who buys second hand clothes in high price. Moreover, the price not much differentiated with the price of original product. 

Conclusion 

In conclusion, we know that to start a business, we need to considerate a lot of possibilities and need to take risk of any consequences either in financial and product quality. From researched we made about Bolhassan Trading, there are more focus on inventory control where it helps them to protect against delivery variation due to weather, supplier shortages, quality problems, or improper deliveries. 

Moreover, we conclude that operations management is very important for any organisations as they have a relationship with the overall strategy of the organisation. Operations management contributes to the strategy and therefore helps the organisation to gain competitive advantage. For instance, process planning can help the organisation reduce cost and gain cost advantages and therefore gain competitive advantage. Therefore the organisations must effectively manage the operations of the business as it has a massive effect on the strategy of the organisation. 

References 

Jay heizer & Barry Render, operation management, 5th edition, Prentice Hall 

View on 3 February 2012 

Santosh jain, 2010, Operations Management (McDonalds Case Study) 

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http://www.santoshjain.com/2010/11/operations-management-mcdonalds-case.html

Capacity planning and aggregate production planning 

View on 3 February 2012 

http://www.cbpa.ewu.edu/~pnemetzmills/OMch9/OMFAC.html

Houghton Mifflin Harcourt Publishing Company, 2010, your dictionary 

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http://business.yourdictionary.com/bundling

John Loucks, 2002, operation management 

View on 9 February 2012 

http://www.scribd.com/doc/18005451/Slides-Prepared-by-John-Loucks

Dr John Sullivan, 2012, the Most Common Interview Problems 

View on 12 February 2012 

http://www.tlnt.com/2012/02/09/20-more-of-the-most-common-and-critical-interview-problems/

Wiscons job center, 2008, Keys to Successful Interviewing 

View on 12 February 2012

http://www.wisconsinjobcenter.org/publications/6951/6951.htm

Rohit Ahuja, 2010, Marketing Strategies of PVR Cinemas 

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http://www.scribd.com/doc/25477586/KFC-Research