Power point with min 10 sides from the paper attached

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OPERATION MANAGEMENT PROCESS: SHOPSMART 10

Operation Management Process: ShopSmart

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Operation Management Process: ShopSmart

Introduction

The crucial role of operations management is to optimize output using the available resources. Operations management create optimal value in any firm irrespective of its nature— whether manufacturing or service provision. Being a retailer of a wide range of products, ShopSmart requires an efficient operations management process that takes care of virtually every activity in a differentiated but synergetic manner. 

Type of Organizational Structure

           The organizational proposal is to convert ShopSmart into a public company. This means that the company will increase its branch network, product line as well as workforce. As a newly incorporated public company, ShopSmart will hire more managers for each line and division. Therefore, the best organizational structure for the company will be the matrix model. At the top of the hierarchy will be the CEO and chairman of the Board of directors. Under the chairman will be the members of the Board, including the CEO. Below the CEO will be the company secretary, the general manager, the Finance Director, the HR manager, and the Auditor. Under the GM will be line managers responsible for leading various operational lines including purchases, sales, research and development, and marketing and services. 

Figure 1: An Illustration of the Proposed Organizational Structure

The advantage of adopting the matrix model for the organizational structure is to provide flexibility and a more balanced decision-making process. As such, a business project will be overseen by more than one business line that has the power to create more opportunities and hence more synergies. The disadvantage of this model is that it creates a complex system, and bureaucracy may result. However, its benefits are more than demerits, making it the best option for ShopSmart. 

Communication Dynamics

           One of the cultural artifacts that ShopSmart must adopt in in the new organizational structure is to initiate an open-door communication policy. The essence of having a matrix organizational structure is to ensure that communication happens in real-time and seamlessly. Errors should be noticed and corrected in time since more than one division provides oversight. One of the advantages of having a matrix organizational structure is that it makes all the usual boundaries in the organization. Skilled resources between functional units and projects can be shared; hence, realizing a more collaboration and an integrated dynamic organization. 

           Generally, communication should be a mix of both top-down and bottom-up approaches. However, most of the time, mid-level managers will act as the basis of all communication providing both top-down and bottom-up communication. In terms of policy and administration, the mid-level managers carry the most significant burden since they are the nexus between the executive management and the professional, junior and subordinate staff in the company. 

           Despite its advantages, the matrix organizational structure can cause unending conflict if an individual is meshed between two authority lines- mostly in the case where managers have equal authority. To resolve the conflicts, the HR department must be tasked with continually defining and redefining roles and responsibilities within the company. Otherwise, improper communication may result in burnout. The formal transmission means in ShopSmart will be emailed, signed letters, internal memos, and notice boards. Other communication strategies will be considered informal. 

Transformation Process

           The transformation process of ShopSmart is based on Kotter’s Change Model. Kotter’s change model has eight steps discussed below in detail (Kotter, 2012). First, the desired change must be packaged as something very urgent, without which failure is inevitable. The decision to convert ShopSmart into a public company created the urgency of expansion, and the only way is to get the resources through an IPO. The second phase is to build a guiding coalition. In essence, the current owners carry the burden (Mishra, 2013). The third step is forming strategic mission and vision. The mission and vision are already suggested in the recommendations to improve the organizational structure above. Forth is to establish a volunteer army, and this group comprises the current employees and owners before the IPO. Therefore, it is their mandate to ensure that the current aspirations to convert happen and with huge gains. 

The fifth step is to enable action by removing various business barriers. In the case of ShopSmart, the most significant obstacle is the huge capital requirement. This barrier will be eliminated by seeking preference shareholders who will initiate the desired initial visible change. The sixth step is to generate short term wins. This implies that immediately after the IPO is done, the company should strive to ensure that its ordinary shares' price does not shed off much of its value. Besides, the short term branch establishment process should be well planned for smooth and efficient execution. Thus, the strategic decision making must be visible. The seventh step is to ensure that the change process maintains its acceleration rate. The branch opening ambition must be kept alive for at least five years. Lastly, the organization's management must institutionalize the change process as part of the organization's culture (Mishra, 2013). 

Supply Chain Strategies

           Efficient management of the supply chain is one of the success secrets of a wholesaler just in the same way it is for manufacturers. One has to know precisely the market routes they will use to create value, without which they will be rendered redundant. For ShopSmart to be efficient and optimal in its operations, the company must ensure that its supply chains remain regional. Most of its inventory must be in the form of durable and finished goods. Work-in- progress must be minimized and only be subordinate to orders on dispatch. Therefore, care must be taken to ensure that ShopSmart acts as a buffer between its suppliers' upstream and downstream supply positions. This way, the company will avoid direct competition with large scale retailers in areas where it operates. As such, ShopSmart must ensure the following eight supply chain actions are afforded at all times. 

· The company must provide a demand-driven business model where customers make an order and await fulfillment. In this case, the company will avoid holding dead stock. 

· Focus on inventory optimization through research and development efforts. Optimized inventory will ensure that lead-times are well managed for better order fulfillment

· Buying merchandise when needed

· Ensuring that inbound logistics are in their optimal state

· Moving a fact-based operating culture by embracing strategies such as stochastic forecasting of demand 

· Practice long term planning actions. 

Total Quality Management

           Total quality management (TQM) is all about ensuring maximum customer satisfaction. Therefore, TQM must be nuanced towards ensuring that customers continually receive incremental happiness about the commodities served. Consequently, it must involve all employees, a planned strategy, historical data, and effectively communicate to integrate all activities (Luthra et al., 2020). As a wholesaler, ShopSmart must endeavor to act on the following eight areas:

· Ensure ethics in its business processes. 

· Ensure integrity of its workforce

· Build trust with all its stakeholders

· Ensure continual training for its staff

· Encourage teamwork through cross-functional operations

· Build teams within and without departments

· Recognize exemplary performance of groups and individuals

· Ensure that communication is open, truthful and with useful feedback at all times. 

PERT Chart

The Program Evaluation and Review (PERT) chart is a graphical representation of a project’s timeline. Its main function is to let the users of the project description to have a snippet view of how activities will be carried out based on timelines. This PERT chart represents the change process of ShopSmart from a single unit wholesale enterprise to a public company operating countrywide.

KEY

A- Initiation of the IPO process (6 months)

B- IPO (1 week)

C- Allotment of shares (1 month)

D- Final report on IPO (1 day)

E- Strategic Planning phase to complement IPO outcome (12 months)

F- Recommendations on organizational Change (6 months)

G- Designing of the operations management process including supply chains (6 months)

H- Project implementation and review (12 months).

References

Kotter, J. (2012). Leading change. Boston, Mass.: Harvard Business Review Press.

Luthra, S., Garg, D., Agarwal, A., & Mangla, S. (2020). Total quality management (TQM).

Mishra, S. (2013). Relevance of Kotter’s model for change in successfully implementing lean. IFIP Advances in Information and Communication Technology, 540-547. https://doi.org/10.1007/978-3-642-41263-9_67