Ops 571 week 4

Introduction

Operations consulting process

Improves the value chain

Creates effective client operations

Creates functional business processes

Operations consulting involves assisting clients in developing operations strategies (i.e., product leadership, operational excellence, customer intimacy, etc.) and in improving production (and service delivery) processes.

Operations consulting deals with assisting clients in developing operations strategies and improving production processes. In strategy development, the focus is on analyzing the capabilities of operations in light of the firm’s competitive strategy (Jacobs & Chase, 2014).

In addition, companies typically seek out operations consultants when they are faced with major investment decisions or when they believe that they are not getting maximum effectiveness from their productive capacity (Jacobs & Chase, 2014).

1

Operations Consulting Tool Kit

Problem Definition

Data Gathering

Data Analysis and Solution Development

Cost Impact and Payoff Analysis

Implementation

Tool Kit (Jacobs & Chase, 2014).

The operations consultant must be able to assist management in understanding these differences and be able to define the most effective combination of technology and systems to execute the strategy (Jacobs & Chase, 2014).

2

Operations Consulting Process

Proposal Development

Analyze

Design, Develop and Test

Develop

Final Report

Implement Change

Satisfaction

Assemble Learnings

Strategy (Jacobs & Chase, 2014).

Operations consulting tools can be categorized as tools for problem definition, data gathering, data analysis and solution development, cost impact and payoff analysis, and implementation.

These—along with some tools from strategic management, marketing, and information systems that are commonly used in OSCM consulting (Jacobs & Chase, 2014).

3

Company Struggling in Operations

Big Lots

Decline in sales

Competition from well known competing stores

Has resulted in closure of some stores

Customers not able to shop online

(Big Lots Posts Surprise Revenue Decline, 2016).

An example of a company that is struggling in its model of operation is Big Lots.

Big Lots - The Ohio-based company buys a range of merchandise discounted as a result of liquidations, production overruns and packaging changes and sells it at significantly lower prices than traditional discount retailers.

Decline in sales - Over the past years, several of the company’s stores have been closed down with an aim of reducing the drag that the company is experiencing in its earnings.

Competition - Big Lots faces huge competition from large online retailers such as Target and Amazon.com and they still have not been in a position to keep up with them.

Closures - For instance, in the last year, Big lots has “shut down underperforming stores… company experienced Revenue fell 0.6% to $1.58 billion, as fewer open stores offset same-store sales growth (Big Lots Posts Surprise Revenue Decline, 2016).

Shop online - Columbus-based discount and closeout retailer has a website, but people haven’t been able to buy anything from the company online.

4

Operations Planning Toolkit

Problem definition

Issue Trees, Customer Surveys, Gap Analysis, Employee Surveys, Five Forces Model

Data gathering

Plant Tours/Audits, Work Sampling, FlowCharts, Organization Charts

Operations Consulting Tools

According to (Jacobs & Chase, 2014):

In order to clearly understand the company’s problem areas, several tools are available to identify the problems areas and increase the sales and customer retention.

Problem definition- The first step should be to identify the causes of the failure or to identify the problematic areas in the organization.

Issue Trees, Customer Surveys, Gap Analysis, Employee Surveys, Five Forces Model

Data gathering - After identification of the problem, the relevant data should then be gathered from all the people involved, this being the first step in trying to come up with a solution to the problem identified.

5

Operations Consulting Tools

Data analysis and Solution development

Problem Analysis (SPC Tools), Bottleneck Analysis, Bottleneck Analysis, Computer Simulation, Statistical Tools

Cost impact and Payoff analysis

Decision Trees, Stakeholder Analysis, Balanced Scorecard, Process Dashboards

Data analysis - After collection of date, it should be then be classified and analyzed, for instance, the problems with similar cause can be grouped together.

Solution development - After all the potential problems have been identified, solution development steps should be followed to drill down into the organization to find what operational factors or opportunities need correction (Jacobs & Chase, 2014).

Cost impact - Most consulting projects impact in some way each of five types of stakeholders: customers, stockholders, employees, suppliers, and the community. The importance of considering the interest of all stakeholders is reflected in the mission statements of virtually all major corporations and, as such, provides guidance for consultants in formulating their recommendations (Jacobs & Chase, 2014).

Payoff analysis - In addition to analyzing the cost implication, an analysis should be done so as to determine whether the solutions to the problems are worth investing in. the solutions should only be implemented if the have a positive impact (Jacobs & Chase, 2014).

6

Operations Consulting Tool Kit

Implementation

Responsibility charts, Project management techniques

Evaluation of the implemented solutions

Implementation - implementation comes with a cost, therefore, the team involved should first test the identified solutions and to gauge effectiveness. Once they are found to be of use in achieving the desired results, the solutions can then be implemented fully in all the departments and sections with problems.

A team should be involved in solving the problems and evaluate the effectiveness of each resolution.

Also - Goals and expectations must be clearly established. Be rigorous about implementation. Making change happen takes a lot of work. Be rigorous and thorough. Make sure someone takes responsibility for getting the job done.

Evaluation of the implemented solutions – After correcting the root problem. Evaluate the success measures established for the solution. Discover if the solution was implemented successfully within a designated time-frame and according to plan, and if it addressed the issue without unintended side effects.

7

Resources and Data for Deployment

Communicating with customers

Motivating employees

Big Lot can benefit from:

Improving the effectiveness of communications overall, including frequency and quality - Such as informed employees of the problems that the business is experiencing as well as the solutions to be implemented. This can be done through constant communication with every stakeholder (Brittney, 2017).

Keeping individuals engaged in the initiative through open communications - Additionally, employees should be motivated, for instance, by giving employees a purpose, radiating positivity, motivate individuals rather than a team, learn who the employee is/what makes them tick, have an open-door policy, let them lead (Brittney, 2017).

Also, Get stakeholders involved in communications through enabling for more effective two-way conversations.

8

Resources and Data for Deployment

Mobile Technology

Cut down on waste

Build Synergy

Mobile Draws in More Customers and Saves Time. Operations in the business can be improved by using mobile technology. This would assist the employees to have access to the business even when one is not physically present in the organization, which is important since it keeps one informed on what is going on in the business at all times. It opens the business up to a larger customer base. Tracking the business sales through a mobile system, not only will you be collecting financial data and be able to track which items are selling well.

Reduces Errors and Waste - To add to that, the company should focus on cutting down waste. For instance, once the company starts operating online, it may not require a large number of employees, which is a great step in cutting down the cost of running its operations.

Mobile ordering is a big player when it comes to reducing errors, too. When an order is clearly defined on a screen, it’s less likely to be misinterpreted, and when a customer has to put in every addition or substitution, things are less likely to get lost in translation.

Synergy - employees and management should ensure that they are working towards the achievement of the set goals.

9

Improved efficiency

Faster responsiveness

Non-stop cost reductions.

Flexibility

Benefits of Operations Consulting (Cont..)

Improved efficiency - To help meet their operational goals much faster and improve the performance, Big Lots will need to fully rely on operations management consulting. There are various benefits the business would accrue from the same. To start with, the business would experience improved efficiency since a systematic way of carrying out all the operations will be in place ("Tam", 2018).

Faster responsiveness - In any market a company’s ability to fulfill orders tells customers how much you want their current and future business. Not only should your operations consultant be helping you shorten order lead times, they should be making it easier for the company as a whole to respond to shifts in market demand and changing customer requirements ("Tbm", 2018).

Strategic Flexibility. Reduced floorspace requirements and the ability to quickly switch production lines and work cells from one product to another are only the beginning. The additional space and enhanced flexibility needs to support the company’s growth strategy and deliver clear financial benefits ("Tbm", 2018).

In addition, the business would be in a position to get expert help. When running a business, expert advise is necessary so as to ensure that the business runs towards the right direction. The business would also experience flexibility, especially when the operations start to run on an online platform.

10

Benefits of Operations Consulting

Cost savings

Competitive advantage

Strategic priorities

Benefits of Operations Consulting (Cont..)

Non-stop cost reductions. By employing operations consulting, Big Lots would also be in a position to save costs. Cost reductions are a core focus of almost every operations consulting engagement. However, one-off labor and material cost-reductions are not enough to maintain margins over the long run. Navigating price pressures and market fluctuations requires steady cost reductions long after the “low-hanging fruit” has been realized ("Tbm", 2018).

Competitive advantage - The business would also be in a position to gain competitive advantage in the market over its competitors. By using a lean supply chain a significant Big Lots will gain competitive advantage when competing in the global marketplace. (Chase and Jacobs, 2014).

Leadership practices that will sustain your gains. Implement a disciplined process for daily management that addresses day-to-day issues, maintains previous process improvements and supports the execution of strategic priorities the business ("Tbm", 2018).

11

Benefits of Operations Consulting (Cont.)

Improved customer service

Alignment

Reduction of risks

Continuous Improvement

Improved customer service - The next benefit that the business would accrue from consultation is improvement in the customer service.

Alignment between your improvement priorities and your business strategy. A deployment process will drive strategic priorities down to all levels and functional areas of your organization. An experienced operations consulting team will align targets, improvement initiatives, and management responsibilities to deliver the anticipated returns ("Tbm", 2018).

Reduction of risks - The risks that the business experiences would also reduce and enable the organization’s ability to achieve both its strategic and operational objectives. Also, the recession still plagues the economy, it is important to have a strategy that can reduce the possibility for losses and can minimize risk. Whereas a consultant is able to dedicate the required amount of time to understand how to create such a plan, most managers are not. Not having enough time means that you are not effectively minimizing risks ("Tbm", 2018).

Continuous Improvement - Lean leaders to create an environment that fosters continuous improvement, by asking guiding questions, supporting teams as they test hypotheses, and celebrating improvements, in both performance and process.

.

12

Pros and Cons with Operations Consulting

The possible drawbacks

Expertise of the consultant

Before going ahead with the decision to employ the services of operations consulting, there are various considerations that should be made. It should be considered how to get started and whether all the necessary requirements are available.

In additional, the possible drawbacks that are likely to occur in the process of implementation of changes should also be considered so as to put the necessary preventive measures in place.

The possible drawbacks -

Limited Company Knowledge - Consultants often lack knowledge of in-house procedures. This can create work conflict, as their mode of operation may affect workflow for your regular employees.

ant should

Lack of continuity- Each time you bring in a consultant you lose time and energy getting the resource up to speed about the organization.

Employees may feel they are burdened with more work without proper compensation. They might be uninspired in the process, which is not good for business.

Expertise of the consultant - consultants focus on increasing your process quality and efficiencies. They can map out existing processes, analyze them and get suggestions/advice to improve quality, reduce steps or mistakes and increase margins and decrease costs (Grant, 2018). The critical role of any consultant is to ensure the business stays afloat in regard to business strategies, methodologies, and trends. When a consultant puts these methodologies into play, its commonplace for the company’s top management to ask for an in-depth explanation as to how they utilized them to come to their conclusions ("Upwork", 2018). Expert advise is a very powerful tool in every business

13

Conclusion

Focus on business outcomes

Support a robust business case for change

Focus on business outcomes-

Big Lots can take advantage of new skills - In order to realize the full benefits of operations consulting, focus should be directed towards the outcomes that the business looks forward to achieving.

Advantage of an outside pair of eyes - A fresh pair of eyes is needed to catch problems. Operational Consultants are endowed with hawk-like eyes that can pinpoint problems in a company quickly and recommend necessary countermeasures.

Management as well as the employees should be well informed of the part in the transition to lean. Everyone should feel empowered by having ownership in the change. Big Lots should ensure that all projects necessary for implementation of changes are implemented comprehensively, so as not to leave any loopholes for more failures.

Practicing Lean management principles requires a shift in mindset: from that of a supervisor, to that of a teacher and coach. Lean leaders must lead gently, by example, ensuring that Lean principles are being applied with the right goal in mind: To sustainably maximize the delivery of value to the customer ("What Is Lean Management?", 2017).

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