Operations Management

Operations management is a critical component for all organizations in the business world. It has direct influence on the performance of the organization in the competitive market. For this assignment, I will use Home Deport as a case organization (Armstrong, et al. 2014). Home Depot is an American retail shop that has over two thousand branches across the globe. The company is well known for its richness in variety with each retail store believed to be stocking over 40000 different items for sales. The company uses a composite approach in positioning its products: a combination of the traditional brick and motor stores and online retailing has proved to be very profitable to the company when it comes to positioning and targeting of its products. It is imperative to underscore the fact that the giant retail business also uses a variety of delivery options. For instance, there are products that are delivered to the customers’ premises whereas there are those that are bought and picked from the facility’s stores.

The company uses a sophisticated strategy focusing on market penetration and expansion into new markets. The strategy is well supported with the new supply chain approaches adopted by the company that facilitate faster delivery of goods and services. The mission statement of the company is “to be the leading service company providing the highest level of services with wider variety of choices of products at the most competitive prices”. The company has an on the job employee training that focuses on building employee competencies to assure their customers of the best services in the market always. The vision statement of Home Depot is “to create a company that would keep alive the most important values for all.” The value of the company is informed by the desire to become a one-stop shop where customers would get the experience of enjoying all the services they need under one roof. The core values that drive the giant retail shop include value for people, excellence, networking, entrepreneurial spirit, and doing the right thing.

Organizational Operational Efficiency

As we speak, the company is totally engrossed in maximizing the e-commerce wing, emerging from the establishment of interlinking retail shops. It is important to report that the e-commerce segment of Home Depot is growing rapidly. However, the return on investments from this portfolio does not match the hyped growth. As far as operational strategy for Home Depot is concerned, I have concerns with the following mutually dependent retail, customer service, and efficiency. The company has not established standalone retail shops that are not interdependent in any way with their sister companies. This scenario makes it difficult to distinguish between the online retail wing and the traditional warehousing wing that uses brick-and-motor approach. This mix up has also made it difficult when it comes to placement of staff to different outlets (Armstrong, et al. 2014). Since some employees have hands on experience in using the digital technology it is proper that there be a clear cut between the two sets for ease of placement. In terms of customer service, the company has a wider clientele base that has proven to be difficult to manage effectively and promptly. Cases of delays in delivery of consignments and orders to the customers’ premises are common with this big number of customers. Finally, efficiency of the company when it comes to service delivery is very low. Another weakness associated with this is customer dissatisfaction that has a ripple effect of lowering the level of trust and confidence that customers have on their products (Stewart & Brown, 2015).

New Operations Strategy for Home Depot

Considering the four competitive priorities namely cost, quality, time, and flexibility, the company can employ new strategies that are more efficient and highly competitive. In respect to cost, I would propose that the company should apply the concept of standing orders with its suppliers with a view of establishing long term relationships. Through this approach, the company will have the advantage of enjoying better terms of sale of supplies thereby giving it an opportunity to leverage on cost and make profits. On the same line, the company should also have lean operations to check on inventory related costs. JIT operations would be the best strategy to apply. In terms of quality and time, the company needs to invest more on research and design to enhance quality and reduce defects. Furthermore, use of modern technology should be embraced to enhance this further. Besides, having strategic locations of retail outlets would also help in saving time (Baker, 2015). Therefore, I recommend that the company should apply the decentralized approach when it comes to retail outlets. Finally, the company should have a portfolio of businesses to ensure that there is always income into the business. This will also increase level of customer satisfaction.

Enablers for the New Strategy

The three new enables for Home Depot include decentralized system, research and design, and accelerate the analysis and decision-making process. The company has a decentralized system of operation that enables it to be near the suppliers and customers. Through this arrangement, the company has significantly reduced the cost of transportation of raw materials from suppliers to the operation plant and from the operation plant to the market. Secondly, the company has invested heavily in research thereby giving it an upper hand over her competitors in terms of quality. Finally, Home Depot has an elaborate communication structure that facilitates faster and efficient decision making. These enablers have advantages and disadvantages alike. The advantages associated with the enabler are proper time management, market penetration and economic efficiency. Some of the disadvantages include but not limited to the following: the decentralized system of organization has difficulty with standardizing quality and operations (Dessler, 2017). This leads to discrepancies in quality. The other disadvantage is time consumption. Elaborate communication system requires more time for consultation thence leading to delays. Diseconomies of scale are also other disadvantages that are likely to crop in.

References

Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2014). Principles of marketing. Pearson Australia.

Baker, S. J. (2015). Exploration of equality and processes of non-hierarchical groups. Journal of Organizational Transformation & Social Change 12, (2): 138-158.

Dessler, G. (2017). Human Resource Management (15th Ed.). Upper Saddle River, NJ: Pearson.

Stewart, G. L., & Brown, K. G. (2015). Human resource management: Linking strategy to practice (3rd Ed.). Hoboken, NJ: Wiley