APR-JUN 2007 Vol 3 Issue13
Cascading-Analysis of Previous Issue Case
SOLUTION OF PREVIOUS CASE STUDY
Operational management refers to the day-to-day administration of a business, and managers at this level have to make decisions about everyday processes. Through a system of accountability, each manager has to answer for his/her decisions. Walkers are a subsidiary business within PepsiCo. Even within the UK group of Walker businesses, the Leicester production facility is a distinct profit centre. As an operation, it is a multifaceted business unit. As the world's largest snack food plant, the factory is working on an enormous scale of production. Strategy is determined elsewhere, but managers on site make vital decisions on production which ultimately ensures the Walkers brand is always available to consumers for purchase.
Safety
Walkers are aware that factories are dangerous places. Figures tell us that, worldwide, there are 270 million accidents a year and one workplace death every 15 seconds. Walkers therefore take its safety responsibilities seriously. To do this Walkers' managers assess risks of operations on site and devise methods to ensure that they are carried out safely .Safety is even more important than customers, or reaching targets. Safe working practices are always a priority, even if it means a loss of production.
Quality
Quality is defined as a product that does what the consumer wants it to do. A quality Walkers crisp, therefore, is one that provides the benefits wanted by the consumer. If it fails to do this, the customers will turn to competitor products .Walkers' quality approach is called Total Quality Management (TQM). This means that quality must be monitored and maintained at every stage of the process. At one end, this involves the raw materials - potatoes - used. The company even provides the seeds from which farmers grow the potatoes. At the other end, trained laboratory technicians take samples at each stage of the production process. Quality assurance is maintained at every stage. This means that processes are built in to ensure quality.
Customer services
Walkers have to meet the needs of all of its customers, whether internal or external. Internal customers are those within the firm, such as Head Office. Head Office collects information to which the factory must respond. External customers include both retail outlets and final consumers. Walkers aim to supply supermarkets and other outlets with 98.5% of its order within 24 hours. There are 160 different variants of Walkers snacks, so it is vital that variety is available to the final consumer. This creates a need to manage stock efficiently.
Cost
Each Walkers factory is a separate profit centre. This means that it has its own budget and manages its own costs. Even a tiny saving adds up to a lot when production levels are so high, so all employees are encouraged to find ways to reduce costs. Quality assurance also keeps costs down, as there is very little waste. Walkers use a continuous flow method of production, with materials arriving as needed 'just-in-time'. Effective management of the plant depends on sequencing and balancing the four concerns outlined in this study. Each one needs attention and emphasis to differing degrees - Walkers refers to this as a 'balanced scorecard’. Each of the key concerns is inter-dependent and close attention to quality leads to increased demand for the product. Good customer service has the same effect, as people get to recognize and trust Walkers crisps. Increasing demand, fluent production processes and continuous attention to safety and quality ensures that the Leicester plant operates at optimum effectiveness, which is vital to the continued success of the Walkers business. These things are at the heart of successful management.
