Heel to heel: Operation Management Project Case Study Solution
Introduction:
A footwear company, heel to heel, brand that provides ladies, interchangeable heels with comfort and convenience as the priority of shoe manufacturing. The company has some business strategies according to which they want to achieve $30 million of annual revenue, by selling 150.000 units and average of 9,375 units. The company assumed that their revenues will be slow at the startup, but gradually, with the increasing demand of the product, they will react their desired revenue. Demand is increasing but the supplier constraints and low lot sizes affects the general operations of the company, fulfilling demand has become one of the hectic task. Costs have also increased reasonably.
Problem statement:
Due to increase in demand and restricted lot size that the supplier has contracted to provide, the company is unable to meet the set targets of achieving desired revenue and selling the pieces as per the requirements of the company, moreover, due to difficulty in communicating with the vendors, inappropriate and misaligned computer systems, the inventory fluctuation has increased which has brought difficulty for the company to meet up the demands of customers at the appropriate time. The decision of outsourcing the inventory to Malaysia did not turn out to be the best decision for the inventory management and customer satisfaction, in fact due to the inappropriate computer software the costs are increasing annually and have made the company to take few decisions regarding inventory management, supply chain of the inventory and possible reduction in cost for better performance of the company.
Operation management of the company:
Operation management basically deals with the planning, forecasting, controlling products and services of the company and making suitable coordination with the people who are responsible to bring the product to its sale able condition to the market. The activities that are required to make the operations lean and profitable. Making appropriate measures for the supply chain to be more efficient and to make sure that all the operations are being operated with full accuracy in the company. The complexity of the supply chain should be reduced and lead time should not be more than of the industry average. Analyzing the demand needs and supplier prospects and making suitable changes for making the operations of the company effective, a true operation management system is required and is discussed below:
Operational strategy:
There should be efficient changes, in the production processes, demand and supply forecasts, supply chain management and the lean operational tools to make the process of the production effective. The efficient principles of operation management should be used to plan and forecast the demand and to reduce the additional costs of the operations, so that the revenue targets can be attained.
Business strategy and pitfalls:
The company has analyzed the costs that would be incurred in manufacturing the product internally, and also outsourcing the same products to save some of the fixed costs of the company. The decision taken in this regard was to outsource to Malaysia, by which the finished products are delivered to customers by the regional distributors established in the different region, and then to the retail stores to supply to the customers................
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