Competitive Advantage Gained from Operations Management

Comprehensive Case Study Analysis
Name
Institutional Affiliation
Comprehensive Case Study Analysis
Generating Value
Application Operations Management Functions in the Providence of Products and Generation of Value to Customers
First and foremost, The Thomas Shop is located in downtown Effingham, which means that locals do not have to drive to the nearest city of St. Louis to buy these quality outfits. Kathy makes relentless efforts to delight both her best customers and regular good customers. The former receives brands and style of high-end design while the latter are offered unique clothes that match their body characteristics. Another important aspect that has guaranteed the continuity of this business is hiring and training. Employees acknowledge the importance of recognizing their clients by their names because it enhances their sense of belonging to the business. When it comes to training, both Kathy and her daughters have made efforts to advance their skills further to meet specific customer demands.
Competitive Advantage Gained from Operations Management
There is a significant competitive advantage gained from these operations. First, the mere act of bringing these high-end goods closer to the people of Effingham offers them the advantage of being the sole sellers of these people. Gauging by the socioeconomic status of the people of this town, a considerable number can afford these items, which places The Thomas Shop at a significant advantage. In the economic analysis, approximately 45% of individuals have a disposable income of more than $50,000 annually. On the other hand, the skills the mother and daughter have received are obsolete from the point of being taught, but are quite relevant and important in the current marketplace. Women who have had mastectomy are finding that this is the only place that takes their predicaments into account. This level of loyalty is bound to be a vital determinant in influencing other women, even those who have been fortunate not to undergo the process. Recognizing customers by their name guarantees that they will feel being part of the firm and thus, can come back to shop at the business.
Service and Manufacturing Operations at the Company
The Thomas Shop is an excellent example of a business where there is a blend service and manufacturing operations even though it is primarily a service-based firm. However, the mere fact that there is a significant sense of tangibility of commodities lays the case for manufacturing operations. Being a retailer, The Thomas Shop is the second-last player in the distribution channel of these brands before the final customer receives the product. This function is a manufacturing one because the commodity has to be stored in inventory. Besides, customers lack direct contact with manufacturers or else, the process of production. When it comes to service operations, the firm’s extreme focus on an exceptional customer relationship management is a great gesture. Further, this is an intangible, yet important element of operations. In this regard, the firm business model blends service and manufacturing operations.
Theories and Techniques
Gross-to-net Calculations for Material Requirements Planning (MRP)
MRP is a peculiar procedure because it is a backward process beginning with “production plan for finished goods to develop requirements for components and raw materials” (Inc., n.d.). Since The Thomas Shop is not a production company, it will use MRP to help its owners to schedule as well as place orders in respect to the prevailing demand levels. Since it is a computer-based system, Kathy will articulate inventory requirements and plan appropriately so that they can arrive in the shop on time. For this particular shop, the inventory records file will come in handy because it offers the owner with the current level of inventory. Consequently, they can calculate the amount of inventory needed. This file will offer an avid analysis of the expected amount, scheduled receipts as well as gross requirements. These aspects will enhance both service and manufacturing operations.
The Critical Path Method (CPM) and the Program Evaluation and Review Technique (PERT)
Both CPM and PERT are scheduling methods. CPM is apparent in projects that are recurrent in nature while PERT is applied in projects, which elicit much uncertainty relative to the different activities involved (Ajiboye, 2011). In this case study, CPM is the most appropriate method because the firm has concrete goals, well-defined measures to reach these objectives, resources as well as estimations of costs and durations. CPM comes in handy because the firm can incorporate singular events such as the annual downtown sidewalk sale quickly, they can make orders relative to seasonal fluctuations, and finally, they can determine the needs of their best and regular good customers. On the other hand, the case for PERT would prove fundamental when the firm is orchestrating expansion plans.
Job Sequencing
The primary rules for job sequencing outline how priority is to be articulated in processing jobs. These rules are meant to alleviate scheduling challenges that deter efficient performance. First is the first come first served rule. In this case, the firm completes tasks in order of their arrival at the premises. This process is keen on promoting orderliness as well as keeping track of all ready processes. Alternatively, response time, waiting time, and turnaround time could conjure severe consequences (Pant, 2011). This process is instrumental in serving customers to prevent any type of resentment. Earliest due dates postulates that “priority is given for the fulfillment of the most urgent orders in terms of delivery deadline” (Da Silva, E., Costa, Da Silva, M., & Pereira, 2012, p. 12). This method minimizes lateness, but then, fails to take into account the processing time. The shortest processing time (STP) considers accomplishing activities relative to their processing periods, meaning that activity with the least amount of processing time is given priority. STP minimizes job flow, but the continuous pushing back long-duration jobs would may resent many customers. The longest processing time (LTP) is the opposite of STP and “gives the priority to job with the longest processing time to be completed first” (Azila-Nadiah, Nazif, & Hafizuddin, 2012, p. 2275). This method is beneficial to manufacturers, although it besets activities that shorter processing periods.
Theory of Constraints
The theory of constraints (TOC) place significance on the most important factor that could be deterring the firm from reaching their objectives and consequently, offering systematic procedures to improving that constraint till it is no longer the limiting factor. When it comes to manufacturing circles, this element is called a bottleneck. The five steps in the TOC process begin with the identification of the weakest link in the system, which is the constraint (Rahman, 2006). Secondly, there is the decision on how to articulate or exploit the prevailing constraint is fathomed. The third step demands the subordination of everything else to ensure that all other non-constraints components align with constraint to guarantee that they will operate at optimal effectiveness. The four step advocates that for the elevation of the constraint to mean that if it still exists, then the organization should everything in their power to eliminate it. The final step calls for the management to return to step one in a continuous improvement cycle. In this case study, the company could use this formula to determine the nature of problems emerging from mastectomy customers. TOC has a clear and testable hypothesis, which is the primal benefit that it elicits.
Forecasting System
A forecasting system helps a firm make probable decisions on what is likely to happen in the future. It begins with the firm identifying the problem, which can be hinged on the desire to ascertain people’s reactions towards a new product (Zhang & Han, 2012). The Thomas Shop can concern itself with how their future sales outlook. The second step involves collecting information on the subject matter. Here, they can collect data daily to ascertain their predictions depending on the rate of stock replenishment. Next, performing a preliminary analysis will provide the owners with the most dependable pattern or trend. Once the company has collected information and determine its credibility, they will choose the best forecasting model that will offer them the best predictions. The nature of the available data and the situation will determine whether the organization goes for quantitative or qualitative forecasting. In this case study, it is apparent that Kathy and her personnel rely on customer relationship management as their primary selling point. In essence, both forecasting models will be used, although the qualitative model might have more weight than the other. The fifth step is data analysis when the company aligns the data available with the forecasting model chosen. The final step is verifying model performance where the owner makes an effort to relate their forecasts with prevailing situations (actual data).
Supply Chain Risk
A company faces significant risks emanating from the supply chain side. The strategic risk is predicated on the choice if the right supply management strategy or partner. This option aligns closely with market risk. Market risk takes into account financial and market exposure, compliance and brand. In essence, the supplier needs to have these aspects in control to ensure the entrepreneur is unlikely to face the wrath of their customers. Besides, keeping updated with the economic and business trends is a tremendous factor in this presupposition. Implementation risk comprises of performance ability, production, and lead-times. In as much as retailers would wish to have suppliers bring them commodities on time, it is important that they also reduce the lead-times to when their customers receive these commodities. Natural catastrophes are unprecedented events and cause massive supply chain disru...