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Bremananthan Jerish Neeraj
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Operational Management
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Table of Contents
Section 1- Case study analyses of IKEA Furniture Manufacturer .................................................. 6
Introduction ..................................................................................................................................... 7
1.
Operations and efficient supply chain processes of IKEA’s ................................................... 7
2.
IKEA capable to provide lower the costs of its products ........................................................ 8
3.
Suggestions to further improve IKEA’s Warehouse Facilities ............................................... 9
4.
Critically assess the importance of sustainable relationships with suppliers ........................ 11
Conclusion .................................................................................................................................... 12
Section Two .................................................................................................................................. 13
Ceylon Biscuits Limited Operational Process .............................................................................. 13
Company background ................................................................................................................... 13
1.
Operations management ........................................................................................................ 13
1.1 Applicability of the organization......................................................................................... 14
2. Critically assess the areas of operations. Weaknesses of the current system and recommend
improvements ................................................................................................................................ 15
2.1 Product Design Process ....................................................................................................... 15
2.2 Process Design Process ....................................................................................................... 17
2.3 Facility Location ................................................................................................................. 18
2.4 Layout of operations............................................................................................................ 19
2.5 Capacity Management ......................................................................................................... 19
2.6 Forecasting .......................................................................................................................... 19
3. Short notes apply to organization context ................................................................................. 20
3.2 Supply chain management for smooth operations .............................................................. 20
3.2 Quality management framework for cost reduction in operations ...................................... 21
3.3 Appropriate Total innovation management (TIM) for product and process innovations ... 22
3.4 Inventory management for continuous operations .............................................................. 22
3.5 Customer service management for customer retention ....................................................... 23
3.6 Linear programming for optimizations of resources ........................................................... 24
Conclusion .................................................................................................................................... 25
References ..................................................................................................................................... 26
List of Figures
Figure 1: CBL Operation strategy................................................................................................. 15
Figure 2: Proposed product design process for CBL .................................................................... 16
Figure 3: Manufacturing process flow chart of CBL .................................................................... 17
Figure 4: Facilities location .......................................................................................................... 18
Section 1- Case study analyses of IKEA Furniture Manufacturer
Introduction
IKEA is a world biggest furniture manufacturer and they are supplying to the products in 37
countries and the retailer stores are 298. The Forbes magazine estimated that World’s Most
Valuable Brands and the sales were noted in 35.5 million in year 2013. They have 60 years long
history in the field of furniture manufacturing. They have started the business in Sweden 1943.
They have unique supply and the well inventory management techniques. There are more than
9500 products selling in every IKEA store room.
Based on the case study of IKEA, the report is to appraise their operations and efficient supply
chain processes, how IKEA capable to provide the lower cost of the products, suggestions to
further improvement for their Warehouse Facilities and the supplier relationship.
1. Operations and efficient supply chain processes of IKEA’s
The leading method that include in seeing supply chain efficiency completely as economic
efficiency; it refers to use indicators that monitor the process of supply chain processes fails to
give the solutions to many issues; for example environmental efficiency. But operation and the
supply chain process that need to be a comprehensive approach to supply chain efficiency the
link with the goods and services flows (Bretzke, 2013).
According to the above theoretical viewpoint of supply chain process, there are various
successful factors that handled by IKEA to get the successful supply chain process. The main
success of company is used fewer material for the manufacturing and also while do the supply
chain process. They cut down the transportation cost. The reason for the less transportation cost
is, the company uses less fuel and they use the manpower to get the materials and the ship
products.
There is another success of the supply chain process that handle by operational success of IKEA.
There is best communication among the materials suppliers’ and the manufacturers; in this
aspect which make the influence to procure good prices for raw materials from the suppliers.
They are getting the materials from more than 50 countries and over 1,800 suppliers and use 42
trading service offices all over the world; those suppliers relationship is very well functioned in
IKEA.
There is a competition among the suppliers and the suppliers are giving the materials in best
prices. In this regard, IKEA trusts that create the long-term business relationships in between the
suppliers by signing long-term contracts; though mainly they agree to sign the low cost products
materials for their business operation. They maintain the minimum guidelines and rules that
support to the manufacturers to reduce the effect of their environment activities. They raise
standards by growing activities that based on the sustainable business and make the business
environment as a positive way to make the suppliers’ operation.
IKEA has well-designed operational strategy. There is clear vision that helps them to make the
competitive advantage for the company and also their product is unable to copy by the
competitors; because of the differentiation of their products. Therefore, they beat the competition
through the product differentiation. It support to make the better relationship among the
suppliers; though, they pushes to stock management and order completion, IKEA’s supply chain
strategies pushes against boundaries.
2. IKEA capable to provide lower the costs of its products
They are capable to sell the lower cost products; because they have low manufacturing cost of
the products and also they get the materials from the suppliers around the world low cost; this
main two aspects that influence to provide the lower costs products to the world-wide customers
through their retail stores.
In order to consider the further concern of their product, they are using the sustainability of their
products. They are highly concerned about the environmental sustainability while using the
quality, efficient distribution, etc. through that they make the products in the recycling process;
so this process which make the influence to give the low cost product. They are not wasting the
raw materials and they do the recycling of the wasting materials to again make the new products;
in this situation that support to them to give the low cost products to the world-wide customers.
They maintain to cut the transportation cost for the manufacturing business operation. Mainly,
they use the minimum usage of fuel and use the human resources to receive the ship products
and the materials. In this scenario, they make the low cost products to supply the products to the
customers around the world.
There is 50% of their products that received from the recycled or sustainable products. Through
that they maintain the environments viability; due to the recycles products that make the
advantage for them to produce the low cost products to the world-wide customers.
There is another capable to them to give the low cost products to the global customers. The
furniture pieces are the designed by them to assemble by the customers. The pieces that are
efficient and convenient and also the make the flat package for the low cost transport; mainly
while doing the transport, there is less room trucks enough to ship the number of products to the
world-wide customers. They make the unique package for shipment which makes the take less
space warehouse; this kind of capability of the IKEA, they are willing to supply low cost
products to the world-wide customers.
There is another idea that handles by the IKEA to manage the cost. Mainly fuel cost and the
stocking cost that are taken from the customers; it gives the capable to supply the low cost
products to the world-wide customers.
Their vision that underlined that IKEA's commitment to the 'low price; but the vision is not
highlighted that price vision; however, they are mainly focuses to deliver the low prices and the
no any expense business principle; through that their pricing strategy that make to manage the
low cost supply products to the world-wide customers.
3. Suggestions to further improve IKEA’s Warehouse Facilities
The following suggestions are suggested for further improvement for IKEA’s Warehouse
Facilities.
According to Smith and Clinton, (2009) a main operational decision is a location strategy; it is a
process of defining that an organization needs to put the facility and also it shows that the need to
determine this decision. In this decision has normally concern on the long-term inferences and is
hard to reverse. Commonly, there are comparisons between the different organizations when
selecting the location. Due to this theoretical concern, currently, they are using the warehouse
facilities not adequate for them; the furniture piece that are keep the warehouse in the small
spaces and they save the spaces with the low cost strategic concern; but they need to increase the
warehouse facilities to make the better shipment for the world-wide country distribution. In this
regard, they need to design the proper warehouse for the shipment for the products. Therefore,
they have to use the location strategy to use the warehouse development; through that they can
make the better improvement for their shipment and the overall manufacturing process.
Boost and improve all accessible space. Instead of grow the impression of the warehouse of
IKEA, they have to think about enhanced utilization of vertical space. Further, they have to make
the taller capacity units and the make the correct materials to pick and store material that support
to enhance the ware house facilities that can keep more in a similar area, as divergent to
including extension costs. Moreover, consider the variety and types of racking applied. Storing
little things on bed racks squanders space, and makes it simple to lose things. Instead of utilizing
similar racks all through stockroom, it may require different sorts of racking for various
materials. In this process that need for further improvement for IKEA
IKEA need to optimize warehouse storage through the requirement of the products from
customers. Today online shopping which implies a more prominent interest for suppliers and a
developing need to extend stock. Through the online customers are requesting more
personalization and customization alternatives in the products what they purchase. So, through
the demand of their product that gives the influence to make the better improvement for IKEA.
IKEA need concern to adopt the warehouse operation practices; they have globalized market and
they have high inventory management; they want to increase the process to flexible pick and
pack; this development is required for IKEA; to develop this concern, they can make the easy
shipment to deliver the products on time. Therefore, they have to adopt the practice of lean
warehouse operations.
4. Critically assess the importance of sustainable relationships with suppliers
Sustainable Supply Chain Management is defined that management of information, material and
capital streams just as participation among organizations along the supply chain while taking
objectives from each of the three components of sustainable development. They are economic,
environmental and social into account which is gotten from the requirement from stakeholders
and customers (Seuring and Muller 2008). Similarly as client pressures and the political factors
that pushes make the sustainability challenges; suppliers can't be tended to by one player alone.
The organizations are considered sustainable for their activities, yet in addition for the
environmentally sustainable practices of their stakeholders. This responsibility is developing in
significance as firms are accepted to re-appropriate up to 80 percent of their expenses of products
sold (Murfield and Tate 2017). According to the above research findings, it can be identified that
the sustainable relationships with the suppliers are important for the successful organization
performance. Namely, due to the pushed from the clients and the political factors, suppliers that
make the sustainable relationship within the organization environment.
Customarily, supplier and the buyer relationship that was viewed as an organization work, where
the relationship among the supply chain management that link with the players would in general
be ill-disposed, in any case, numerous organizations are presently beginning to join joint effort
draws near (Humphreys, Shiu and Chan 2001). As indicated by (Leppelt et al., 2011) supplier
relationship incorporate practices identified with supplier choice, supplier assessment, and
development. The development of supplier is otherwise called supplier joint effort has a place
with a research field dependent on buyer supplier relationship. Suppliers assume a basic part in
actualizing economical activities and in accomplishing natural, improvements. There have been
numerous positive ramifications of collective organizations among supply chain individuals, and
the positive performance of indirect stakeholder development. When look at this point of view,
environmental sustainability is important for the manufacturing organization like IKEA;
therefore sustainable relationships with suppliers is important for the successful operational
performance of the organization.
In term of corporate social responsibility need to be successful; therefore the organizations need
all individuals from the supply chain to act in a capable way, both socially and environmentally.
Despite the fact that, issues can happen when the last individual from the supply chain which
manages the end clients doesn’t have total information about the suppliers and sub-suppliers
behaviour and can’t control how they actualize their appointed work, explicitly, in a supportable
way (Wiese et al. 2013). With inadequate information, this prompts an absence of intensity and
impact over the supply chain for the development of sustainable practices (Ciliberti et al. 2011).
Besides, code of ethics is another part of sustainable supplier practices. Codes of behaviours in
supply chain supportability have been a developing interest of worldwide partnerships. The code
of behaviors and projects control supply performance. They are utilized in regions, for example,
security, pollution, basic liberty and unethical practices. In supplier connections, numerous
buyers try to check supplier capacities through reviews, documentation and supplier offices
(Jorgensen and Knudsen 2006). The exploration to date has will in general spotlight on these
supplier performance measures (Leppel et al. 2011; Sancha et al. 2015). Due to this concern,
proving the security, pollution and unethical practise that make the impact to the supply chain
management; therefore making the sustainable relationships with suppliers that important to
maintain the environmental stability within the organization environment.
Conclusion
The case study that based on the IKEA furniture manufacture and they are the world biggest
furniture manufacturer. And they are supplying to the products in 37 countries and the retailer
stores are 298. The Forbes magazine estimated that World’s Most Valuable Brands and the sales
were noted in 35.5 million in year 2013. They have 60 years long history in the field of furniture
manufacturing. The have started the business in Sweden 1943. They have unique supply and the
well inventory management techniques. There are more than 9500 products selling in every
IKEA store room.
Based on the case study of IKEA, the report was appraised that IKEA operations and efficient
supply chain processes, how IKEA capable to provide the lower cost of the products, suggestions
to further improvement for their Warehouse Facilities and the supplier relationship.
Section Two
Ceylon Biscuits Limited Operational Process
Company background
Ceylon Biscuits Limited in Sri Lanka is famous reputed private manufacturing company. They
manufacture products high quality and the innovative concern. They use marketing strategies and
the marketing strategies define that they performance well market and get the several brands
awards. The company depicted to its best performance but they face the challenge of year 2014.
Their standard brand names the products mainly KOME and SAMAPOSHA. Those brands and
the best received the Gold brand awarded.
Their past years performance shows that CBL has received best performance in 1980. The same
years they established a manufacturing plant at India. CBL has more than 40 year’s experiences
in the relevant field of manufacturing. Today they are the first best manufacturer dealers in Asia.
1. Operations management
Operations management is a process that deals with the various activities; in a process there are
various functions included in the operation management; the functions are manufacturing,
planning, production process, product design process, administration, facility management,
capacity management etc. Operations management functions that is applicable by whether
service or manufacturing organization. The manufacturing organization that be successful
because of the best function of the operation management. The manufacturing company includes
the separate department for the operation and also functions of the organization perform well
(Birdi, et.al. 2008).
1.1 Applicability of the organization
To see the organization point of view, operations management function that design with the
operational strategy which is supported to the organization business; this strategy that support to
the organization to make the performance well. The machine function of the manufacturing
operations that are all aligned with the organization better performance to reach the goals of the
organization. CBL use the operation management of their business function. And also they use
the operations strategy to the business to make the differentiation of their product.
CBL is mainly used the various mechanisms for their operational performances; through that
they make the better success of their business. When see the overall performance of CBL, they
do the better systematic direction, control and the evaluation of their business process.
There
are following two operational management concept that used by CBL. They are
1. Kaizen- Japanese term which is management philosophy (Brunet and New, 2003).; the
philosophy that use for the CBL continues process of the operational; while using this
philosophy they have won nay awards in the relevant field.
2. Optimization- This is another concept foe the operation management; which is used by
the CBL to make the best performance with cost effective manufacturing processes; for
example they manage cost of the manufacturing business operations.
The following figure shows that under the operational management, they use better operation
strategy for their manufacturing business operation performance.
Figure 1: CBL Operation strategy
Source: CBL, (2020)
The above figure shows that current strategy of CBL. Current operational strategy shows that
Ceylon biscuit limited is a large manufacturing organization and they maintain the better
operation through the best manufacturing business operation strategy. Their operation strategy
that depends on the major elements such as product different, business ethics, distributor
strength, packing and new materials, CSR activities, quality certificates and export; those
activities that support to make the successful operational performance of CBL.
2. Critically assess the areas of operations. Weaknesses of the current system and recommend
improvements
2.1 Product Design Process
Product design is used to design the process designers that use to mix with the user needs with
business goals and it supports to the brands that make constantly successful products. Product
designers need to make the optimize work according to the user experience in the solutions; it
makes their users and support to help the brands by manufacture the products sustainable for
longer-term business needs (Roozenburg and Eekels, (1995).
According to the above main concern the product design that is used by CBL to make the better
brand image of the products.
Due to the manufacturing process, they define the product design that based on their various
products; but still there are weaknesses of the product design; that has to be improved by CBL.
Therefore, they have to make the product differentiation of their products; in this regard, the
product design process that need to be aligned with the following steps.
Figure 2: Proposed product design process for CBL
Source: Author’s work, (2020)
Due to above figure, CBL when do the product design, they have to make the idea generation for
the product that which product design is going to be changed; CBL has various products; but the
differentiation is important; therefore, first they have to make the idea generation of the specific
product and conduct the feasibility that based on the market and the customer requirements of
the product. Next product feasibility needs to be reviewed by CBL, mainly durability of the
product. Based on that they CBL has to design the preliminary design the product, the prototype
of the product design that should be tested to final design and the process planning. Based on the
above checking finally, design and manufacturing specifications and the manufacturing need to
be conducted by CBL.
2.2 Process Design Process
CBL use the process design that based on their manufacturing operation process of CBL; the
following figure shows that process design process of CBL.
Figure 3: Manufacturing process flow chart of CBL
Source: CBL, (2020)
According to the above figure, production plan is a main concern for the operation; during this
stage, CBL do the specific analyses for the product; next procurement, they procure the materials
from the suppliers. In this stage CBL is focused on the inventory management. The next step is
to analyze by CBL storage facilities of CBL; after that they make the process of pre mixing and
mixing; new molding, backing, packing, quality evaluation, FG storage and the stock/ transfer
sale.
Still the above process has the problem that has to eliminate; their storage system has dual
purpose without any proper facilities; therefore, they have to make the better storage facilities
while doing the process design process.
2.3 Facility Location
Facility location may be demarcated as a place where the facility that will be set up for
producing goods or services. Facilities are a major significant for manufacturing operation
process; the reason is manufacturing operation need to be perfect without any interruption. There
are such factors that motivate the facility location. They are availability of manpower,
government policy, transportation, competition, etc.
Figure 4: Facilities location
Source: Author’s work
To see the current facilities process CBL where using the facilities process that has been
mentioned the above figure. They have well infrastructure facilities that make the influence them
to supply their products world-wide. Due to the proper facilities operation they beat the
competition locally as well as globally.
Due to their strategies there are further improvement that requires for the CBL; the transportation
is one of the factor to make the operational success; in this concern, they need to be more
concerned on the transportation facilities to deliver the products locally as well as globally. In
this regard, they have to use proper transportation and send their products to the other countries
on-time.
2.4 Layout of operations
The layout of the operation is an effective tool; that support to the manufacturing organization to
reduce the cost to enhance the better productivity. Facility layout design that includes a
systematic physical arrangement of various workstations, departments, machines, equipment,
storage areas; these are the areas included in a manufacturing industry. There are main two
methods for layout improvement. The first is the re-routing of material flow in a given facility;
the first step that can make the development to improve the efficiency of material movement.
When re-routing is not enough for the manufacturing business operation, there is another drastic
method is the re-layout. The manufacturing organization, the most of the re-layout need but it
takes more time, effort and is more expensive (Zhang, 2009).
According to the above researcher's perspectives CBL is used the re-routing the manufacturing
the business operation that are not enough for their manufacturing business operation; therefore,
they have to make the re-layout of the manufacturing business operation. When they re-layout
the manufacturing business operation they can improve the better performance through their
manufacturing business operation.
2.5 Capacity Management
Capacity management is mentioned that act of certifying a business that exploits its important
activities and the production output; they entire condition of the manufacturing that depend on
the capacity management. The capacity of the manufacturing business measures that how much
manufacturing organization can produce within the specific time period.
CBL manufacturing business operation has capacity to make the manufacturing; they maintain
their capacity for their business manufacturing operation. Still they have enough facilities to do
the capacity for their business operation; but they need to improve such operational activities
through using better capacity management. In this concern, they want to increase the manpower
strength to increase the capacity of their product and make the manufacturing process within the
specific time period.
2.6 Forecasting
In general concern for forecasting, the manufacturing environment, and the managers that should
forecast the amount of inventory that supplies needed to meet demands. Forecasting can be
elaborated that products that there was a past trend of the inventory that will continue in future
with the little variance. There are such manufacturing industries productions trends will be vary
because of the season time products what they produced.
Though, forecasting should be
effective; even trend of the change occur. There are various forecasting methods that used by
manufacturing organization (Zhang, Batta and Nagi, 2009).
According to the above concern, when look at the CBL they do forecasting and analyse the
trends of the products that based on the customer requirement; mainly they forecast the inventory
according to the trend of the products; but they have issue of their forecast due to COVD-19; so
they have more inventory in their business operation. It is not good effort for the company;
therefore they have to focus and analyse the trend according to the customer requirements of the
products.
3. Short notes apply to organization context
3.2 Supply chain management for smooth operations
Supply chain management is a process and the part of the operation management; it is served to
the cost decrease budget for the operational process of the organization. In generally the current
organization’s operation management that implies with the competitive environment and the
market and the financial process that make the competitive advantage for the organization.
Due to the theoretical perspectives of the supply chain management, it has been moved to the
various aspects for the operational process (Matthyssens and Van den Bulte, 1994; Carr, 1999),
There is an increasing trend of the supplier-evaluation tools (Carr, 1999); there is trend that
towards the supplier management; through there are various kinds of evaluations that have been
made in the supply chain management.
Today, digital era which support to the every industry successful performance; so digital era that
supports to the supply chain management functions very easy way; for example globally the
organization can supply and also the delivery time that has been reduced due to the digital era
(Kache and Seuring, 2017).
During the supply chain customers and the suppliers who are making better relationship through
the supply chain and which make the successful performance within the organization
environment.
3.2 Quality management framework for cost reduction in operations
Organizations are required to deal with the various resources to maintain the quality of the
organization. According to Kumar et al. (2009) quality management is identified as a critical
drive factors that make the impact on the successful organization performance. There are few
works and the in capability of the work that lead to the poor quality for the organization.
Therefore, well-defined quality management that need for the organization to perform better
task. As detailed by numerous authors (Huarng and Chen, 2002), cost decrease is among the
advantages gotten by quality management organizations. Though, Zhang (2000) requested that
there is no proof that organizations have effectively picked up cost reserve funds under the act of
quality management.
In addition, Kumar et al. (2009) found that 41.7% of the organizations in their examination
detailed that they neglect to make sure about cost reserve funds benefits under the act of quality
management. So, there are advocates just as rivals identified with the issue of partner quality
management with cost saving performance. Though that, this irregularity has been alive in the
writing for quite a long time, logical investigation done to explain and resolve the issue has never
been sufficient and it is as yet standing out of ongoing studies (Kumar et al., 2009; Zu, 2009).
In view of the possibility viewpoint, an issue appended to the usage of QM is that there is a
potential clarification to confirm the inconstancy in results accomplished by QM-based
organizations. Consequently, the methodology of quality management being actualized has
become the main subject for a gathering of experts in their push to explore what causes QM
organizations to accomplish various outcomes. Among specialists in this gathering are Agus
(20008), Kumar et al. (2009) and Yusof and Aspinwall (2000). Nonetheless, none of these
authors had examined the force issue of QM as a potential response for various outcomes
accomplished by open associations, leaving this issue justifying consideration for investigation.
3.3 Appropriate Total innovation management (TIM) for product and process innovations
Golestan Hashemi (2002, 2004, 2009) proposed an idea of Total Innovation Management (TIM)
and the accompanying related featured discussions:
1. Creative and exploratory investigation and recognize of client needs (value creation and
answer to dormant requests of individuals); 2.Continuous and unending imagination and
development, 3.Replace improvement – direction with development; 4. Inventiveness upgrading,
5. Information/Innovation – based works; 6. Continuous imaginative re-designing and Changes,
7. Investment of all workers as trend-setter, 8. Inventive procedures- Forecasting and Strategic
management of Innovation, 9. Systems administration; 10. Imaginative Structure and
culture;11.Creative/Inventive Problem Solving and deliberate development procedures.
Xu et al (2002,2006,2007) proposed a theoretical system of Total Innovation Management
dependent on tri-entirety in development .The first , remembers development for all mechanical
and non-innovative components, for example, technique, culture, association, establishment and
market .The second identifies with development by all people included . The third is
development at unsurpassed and in all space. The findings from the literature that help to remove
and understandable the fundamental conventional attributes and parts of development the
management towards a complete model of innovation management .The cycle is dynamic and
the entirety of the segments are agreeable to a framework wide. The space of such a model is
expansive lasted by various researchers.
3.4 Inventory management for continuous operations
Inventory management is elaborated that placement and size of stocked goods. Inventory
management needed at various locations; they supply to the network and protect the planned and
regular course of manufacturing against the disruption of running out goods or materials. There
are most of the organizations facing the challenges about inventory whether excess or
insufficient. Because of the various challenges, companies use the fundamental principle for the
inventory management. Within the organization environment inventory shows the huge
percentage of their working capital. The control of inventories involve with the organizing of
availability of the materials, material procurement. Inventory control is a activities that linked
with the right inventory right time and the right quality which make the success for inventory
(Bowersox, Closs, and Cooper, (2002).
Inventory management supports to the organization to form the suitable level of inventory
through the order of the quantity of the product. Accurate inventory controls that need an
organization to take the stocking and use suitable method to value stock (Kotabo, 2002).
Companies acquired in considerable costs in the maintenance and procurement of inventories.
The company’s inventory control cost includes the various aspects such as insurance, storage,
transportation, etc. A company unable to reach the performance outstanding without suitable
and well-organized control of materials, (Kotabo, 2002).
3.5 Customer service management for customer retention
Hobby (1999) defined that customer relationship management is a strategy of management
where not only depending on the market term but also depend on the organization performance.
Customer service management which is also creating the benefits for the customers to make the
relationship through that customer retention fulfill by any organization. The customer service
management includes the various factors such as ability of the work, customer knowledge
management policy, ability of business working, etc. The customer service management is
mainly focused on the improvement of business and maximize the profits and give the better
market performance of the organization; through the better customer service management,
customer retention are made easily by the organization. Especially improvement of the business
and the market performance that are main influential factors to make the customer retention of
the organization (Hisham and Soliman, 2011)
Customer retention is a strength tool for the customer service management and the customer
retention is mainly important for the organization; the reason is cost of getting the new customers
are high compare to retain the customers within the organization environment (Baran, and
Galka,, 2013).
Due to the organization context, there is practical example that elaborated by Al-Refaie and Bata
(2014), Banking sector that shows a significant role for the economic development of the country
where the banking position is more competitive. They are making innovation through the usage
of the new technology and also core competencies of the end users are the success factors for the
banking industry. They are successfully communicated with the customers and they are dealing
with the customers through the handling customer relationship; through that the banking
industries retain the customers and get the successful productivity (Lui, 2007).
3.6 Linear programming for optimizations of resources
Linear Programming is a mathematical pattern which was created during World War II; purpose
of created this model was reduce cost and increase the lost for enemy. Therefore the model was
secret till 1947. End of the war, there were most of the industries started to use this model for the
organization to optimize the process.
Due to the continuous development of there is a new interior point method that was introduced
by Narendra Karmarkar; this method is used for problem solving of linear programming (Hilier
and Liberman, 2003). Linear programming is applied by researchers continuously for the
purpose of the organization’s operation improvement. Babcock and Wilcox applied the linear
programming that support to the main plan of action to expand the company’s Tubular Products
Division (TPD) in Pennsylvania (Drayer and Seabury, 1975).
Linear programming has such kind of methods and technique that indirect from science and
mathematics; it can show sufficient role in management decision improvement. However, it is a
new science and the method has capable to solve the problem. The problem solve through
resource allocation, inventory control, planning of the production and advertising. Managers take
the responsibilities to care those activities within the organization environment and the outcome
is effective which is not be indifferent. Bourton, Gidley, Baker, and Reda-Wilson used linear
programming in a study to select the suitable marketing strategy. According to their study, they
optimized solutions and also optimized solutions that were defined and assessed (Mehdipoor et
al, 2006). The managers of the organization who used linear programming model to define the
major economic plan of finance and also arrange the suitable time to finish the project on time.
The proper plan of the project that reduces the net present cost of capital (Wijeratne and Harris,
1984).
Conclusion
The second part of the report analysed the operational management and its function that were
related to the CBL Pvt. Ltd. There were various operational functions that related to CBL and
there are such weaknesses on the functions which have been analysed on this report; due to the
weaknesses of their operational process, the recommendation to improve the process suggested
in the report. Finally concept of supply chain management for smooth operations, quality
management framework for cost reduction in operations, appropriate Total innovation
management (TIM) for product and process innovations, inventory management for continuous
operations, customer service management for customer retention and the linear programming for
optimizations of resources were critically analysed on this report.
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