Mgt 307 Operations And Information Assessment Answers

Introduction

The process of planning, managing, organizing and monitoring all the operations within the business corporation is termed as operations management. This process can be in terms of manufacturing, production, or provision of services. The below executed analysis has been presented for analyzing the management of operations of Billabong International limited is an Australian clothing.

Main factors that influence the manufacturing/service process design

Billabong international limited is an Australian clothing company, which also deals with clothing related accessories, backpacks, watches and other items. Billabong primarily is a clothing retailer. The company was founded back in 1973 in the gold coast, Queensland in Australia. The founder was Gordon and Rena merchant. Billabong international limited is an retail industry it’s headquarters are situated in Burleigh Heads which is in Queensland Australia. CEO of the company is David tanner. Around 6,000 employees work under Billabong and the annual income of the company is around $25.7 billion. Billabong operates around 372 stores which are under different banners. There are several factors, which affect the manufacturing and the service process design. Those factors are discussed below.

Economical- economic factors of the country can affect the manufacturing services of the billabong in several ways (Anand and Gray, 2017). Because of the economy, aggregate investments and aggregate demands in the industry are decided. Cloth industry is so popular nowadays and everyone wants better cloth because of the growing improvements in the standards of the living in Australia. Due to a strong economy, the purchasing power has increased in the following country along with the strong position of the Australian dollar. All these factors have increased the demands for clothing, which is a great factor for billabong. Although there are some fluctuations in the currency that can be seen and they can also affect the business and therefore affect the sales too. Exchange rate fluctuations and Host County’s currency instability can affect the billabong’s manufacturing services and other services. For Billabong it is really necessary to determine, economic growth rate, interest rate, unemployment rate etcetera in order to maintain business (Anderson, Anderson and Parker, 2013). Majorly the south America and asia, these two countries encouraged the global expansion of the billabong. Both the countries helped billabong to create new markets at different places. Economy state of Australia and the operations related to it can affect the services of billabong, so it is very important for the economy to be stable.

Technology and modern advancements- Technology is a blessing in disguise, for billabong technology is very helpful in producing highest amount of exposure in the global market. Technology has allowed to company to work in a much better and advanced way to gain maximum advantage of itself (Antony, Snee and Hoerl, 2017). There are many ways to promote the organization by proper use of technology. Social Media and television gives a huge platform to the brand to express its story and attract a large customer mass. Although, technology is an advantage for billabong but it also encourages competition for the organization because billabong is not the only one to use the social platform to promote its product. Using the social media carefully can help Billabong; otherwise, there can be severe consequences that can eventually affect the sales of the company. Technology has allowed billabong to provide the online services to its customers. Since it’s a large organizational chain therefore, E- commerce has been quite beneficial method for the organization. it has also made very easy to operate organization and logistics all across the world. Advancements in technology can be both a curse and a blessing for the organization. However, mostly, technology advancements is a blessing and help manage the manufacturing and other services of the organization (Bamford, Moxham, Kauppi and Dehe, 2015).

Cultural and Social factors - Although billabong has earned its brand loyalty majorly because of the increased popularity of the clothing industry and the interest of people towards living a standard life (Battistoni, Bonacelli, Colladon and Schiraldi, 2013). Therefore, the manufacturing services of the company totally depend on the customer’s different type of cultures and social background in several ways. Most of the people prefer clothes according to their culture and traditions so it becomes important for billabong to manufacture according to their requirements. The need to manufacture clothes and other accessories according to people and their traditions, affects the manufacturing services of the billabong deeply. Most of the population in Australia prefers weather beaten and faded colors in clothes and others prefer bright cultured clothes. The company also faces other challenges due to social differences. It becomes very hard to type a contract in different language and it should be written down carefully. Any slight complication can further cause a large impact on the business in the global market, which can be a problem for the company. Since billabong has many stores in various parts which are completely different according to the cultural point of view. Therefore, it can be really challenging to work in such an intense level environment (Bianchi and Åhlström, 2014).

Political factors- Political factors can also affect the clothing industry in several ways like, political decisions against the industry, corruption, legal framework affecting the industry etcetera. While operating the business an intense environment can arise if there is even a little bit political interference. In the consumer durable and apparel sector of the market, the economy factor is highly involved and since all the economy related decision are mostly political therefore political stability is highly required in this field (Bouchery, Corbett, Fransoo and Tan, 2016). In Australia all the political factors laid out by the government are completely in the favor of the clothing industry. New tariff barriers and the charges on the import and export that are redefined recently are the evidence in the support of the previous fact. All these are mostly in support of the billabong, which is a good thing for the organization. However, sometime due to adverse condition there might be several changes in the policies that can affect the marketing behavior of billabong and eventually the manufacturing and other services of billabong in different ways. There is always a slight fear of change in political frame that can be a major downside for this industry. But currently all these laws and political factors are in the favor of this industry.

Demographical factors- Demographic factors can affect the decision making of the consumers by playing an integral role in the process (Brown, Bessant and Lamming, 2013). Billabong’s manufacturing can be affected by this factor in a major way. Queensland is a multi-diversity area with lots of differently cultured consumers and therefore billabong has to focus on each and every type of requirement. There is a positive side to the factor as well, because billabong is a large organization and has been working in this industry since a long time, therefore it makes billabong, an expert in this field. Due to high diversity, people would like to try different type of new options and no new entrants can easily handle the business. It gives billabong a huge opportunity to provide different options to the people and appeal to masses by providing a better service to the pre- existing ones. Demographical factors include person, income, age, sex, marital status and education etcetera (Brown, Blackmon, Cousins and Maylor, 2013). All these factors are very helpful in identifying the needs of the consumers and which will make it easier for the cloth and apparel organizations to manufacture products accordingly. Demographic factors plays in important role in deciding the manufacturing and production rate of the products and then launching them in the market or globally.

Environmental factors- Environment factors are highly considered in this industry. Because of increasing pollution due to industries and factories, the government is more concerned about the government (Goetsch and Davis, 2014). During the manufacturing of the products, all the pollutants coming out of the factories and industries causes a great damage to the environment and can even increase global warming too. Therefore, to protect the environment, the government is forced to take the decision that can further affect the manufacturing and production services. Other environment related factor is the huge demands of the environmental friendly products by the consumers. With the increasing education level, more and more customers are taking an interest to know about the origin, source, pruction, process and quality of the material because they want it to be eco-friendly. Eco friendly products are quite costly and can even shake the industry budget (Gupta and Starr, 2014). Billabong is really working on the eco-friendly demand of the customers. Another factor affecting the services of the industry due to environment is unpredictable weather. Due to adverse weather conditions many processes are affected like, logistics and transports. Due to this many services are further get affected and causes an inconvenience to the customers. Delays and untimely delivery can affect the customer base for the billabong organization.

Global factors- Growing popularity of apparel and clothing industry among the broader community has allowed billabong to take its business in the global market (Habib, 2014). Due to this the Australian exports are majorly affected by the increased competition between Australia and international market along with the different trends in the demands by the global market. Billabong has so many competitors at international level that gives a huge competition to billabong. It is quite difficult for a new entrant to survive in the global market easily but since billabong is quite experienced and old organization, therefore it can be easy for the billabong to survive in the global market (Millar and Rigby, 2015). Budget strategy for the international level organization is also a challenge for the bigger organizations like billabong to expand their services. Countries like China are a great manufacturer and provide the services at a very lower rate which is a huge competition for the Australian industry. Another issue is fluctuations in the currency rate of the host countries because of that the economy gets affected and eventually the sales of the billabong. There are several political influence too that can affect the business of billabong in the international market (Heizer, 2016). Other problems like, financial issues, competitive advantages, changing economy, multicultural consumer’s etcetera can also arise.

Consumer behavior- Australia is a host to many differently cultural people. Different cultures and traditions can be seen. Billabong is a clothing industry therefore it is very important for the industry to produce and manufacture the products according to the requirements of the consumers. Consumers play an integral role in the manufacturing process because all the products are eventually going to end up with the consumers. So it becomes very necessary for the organizations to work according to the needs and requirements of the buyers. Consumer’s behavior is changing according to the traditions and cultures which asks for different variety in the type of clothes and accessories (Hitt, Carnes and Xu, 2016). Billabong hosts different type of customers everyday so it is well aware of the needs of them but for the new entrants this is very difficult to manage the customers with different needs. This makes billabong an expert in the field and also gives it a competitive advantage. Other factors that affect the customer’s behavior are, age , sex, marital status, education, cultures, social backgrounds, demographic area etcetera. All these factors determines the customers behavior and what would they like to buy therefpre eventually affecting the manufacturing services and other services of the industry. As a conclusion, these factors are very important.

Benefits of implementing lean principles

Lean manufacturing can help the operations manager of billabong by reducing the manufacturing cost and reducing the operations cost efficiently (Jacobs, Chase and Lummus, 2014). Lean principles help the organization to increase the productivity and empower the employees with a better communication level. With the improvised ways of operation management, it will help the organization to become such an organization with learning platform. To implement the lean principles, the operation managers of the billabong are required to have a good knowledge of the industry in which they are working and then implement the lean wherever required. Benefits of lean implementation are as follows:

Removal of waste- The lean principles has one of the important principles known as removal of waste. In manufacturing industry, it is very important to minimize the waste and increase the production. There are several type of waste in the manufacturing industry like, over processing waste, inventory waste, transportation waste, overproduction waste, unnecessary motion waste, defect waste etcetera (Khanna, 2015). All these waste can cause a huge loss to the manufacturing industry and lean principle helps to minimize the loss. This way the operation managers will be able to reduce unnecessary physical wastage and will be able to prevent the over use of the raw materials. It will eventually help them to reduce defects, cost of production, prevent defects and any kind of items that are not according to the customer needs. The main benefit of implementing this principle will be reduced production costs and more benefit by increased outcomes.  The operation manager will also be able to prevent the organization from over production and therefore this lean principle will allow the minimum waiting time for the product. Which will be a great approach for the benefit of the industry and it’s growth. It’s a great approach for billabong.

Continuous improvisation- Continuous improvisation is another one of the critical method of the lean principles. Lean implementation is truly based on this technique (Krajewski, Ritzman and Malhotra, 2013). To increase the progress level, continuous improvement is very important because without it the performance will cease and there will be zero outcome or profit. Continuous improvisation will allow the operation manager to work towards the goal and accomplishing it in minimum time interval. Achieving the desired target will require progress and that can only be achieved by the continuous improvisation. Billabong is an apparel industry that requires lots of new strategies and plan to achieve their required goal, this technique of lean principle can help billabong to achieve its desired state before the timeline. The operation manager can help other employees to set their mind on the goal. If each and every employee feels involved in the project then it will lead to many small ideas from different minds that will eventually lead to big improvements (Mahadevan, 2015). This systemic approach will help the operation manager to eliminate and reduce the manufacturing waste by making improvements continuously and as a result, the cycle time of the process will become shorter and making the operation efficient and better for organization.

Optimizing the operation- lean production helps the organization in producing an efficient product by involving, human effort, engineering hours, tool investments and the manufacturing space for a better version of product manufacturing process. The lean principles will help the operation managers by reducing the cycle time of the process. By minimizing the time gap between  preparation time of the process and stages of processes and the time required for conversion of item or product, the time of production cycle and manufacturing time will automaticall decrease. With this approach, the operation managers at billabong will be successful in minimizing the inventory levels. All the stages of production comprises of inventory levels or specifically between the production stages the ongoing work have some inventory levels. If there is lower inventory level that means that, there will be eventually low capital investments required. This will be a great approach since it is minimizing the cycle time that means the company can deliver more product to the customers. It will also increase the efficiency in the production or manufacturing process. Low capital investment because of low inventory level will also help the organization to reduce the manufacturing cost and make the budget more efficient (Odoo 2018).
Improved Labor – Lean principle will be very beneficial for the operation managers of the billabong because it will help them to improve the productivity level of the labor (Muellercpa 2016). This approach can be used by reducing the working hours of the workers and instead of that making sure that the all the efforts put by them during those hours can increase the productivity to a greater level as possible. It will also encourage the workers to give their best during those hours and hence increase the productivity. Due to increased level of productivity, it will give the managers an opportunity to work towards the flexibility (Slack, 2015). Which means to produce different type of products or an ability to manufacture more flexible range of items? This will further allow them to minimize the manufacturing cost, changeover time and cost. This technique will be very beneficial for the billabong industry in several ways.
Increased output- due to the efficient techniques and equipment, the level of output will increase. Lean principle provides the managers with some techniques like, insofar utilization. Under different techniques of lean principles, the managers of billabong will be able to use the equipment and the techniques efficiently an dtehn increase the production rate eventually. Due to this the labor productivity level will increase and the cycle time will decrease that means more profit and less production cost.
In the apparel industry like billabong, lean is majorly used to increase the human process repetitively (Pipefy 2018). Mostly in such industry, it is very necessary to pay attention to every little detail to the workers who are operating with equipment manually or automatically. Lean principle is one of the best approaches to increase the efficiency and decrease the level of waste elimination in such processes. Lean principle also allows the operation managers to increase the work place standardization and quality of the work place.

References

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Anderson, M.A., Anderson, E.J. and Parker, G. (2013) Operations management for dummies. John Wiley & Sons.

Antony, J., Snee, R. and Hoerl, R. (2017) Lean Six Sigma: yesterday, today and tomorrow. International Journal of Quality & Reliability Management, 34(7), pp.1073-1093.

Bamford, D., Moxham, C., Kauppi, K. and Dehe, B. (2015) Going the distance: Sport operations management in the public and third sectors. Public Sector Operations Management, Routledge, pp.13-29.

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