Table of Content

1. Introduction...............................................................................

2. A total Supply network perspective..........................................

3. An efficient Customer service operation....................................

4. Inventory management system....................................................

5. Five performance objectives.......................................................

5.1 Quality..................................................................................

5.2 Speed....................................................................................

5.3 Dependability.......................................................................

5.4 Flexibility.............................................................................

5.5 Cost......................................................................................

6. Conclusion..................................................................................

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 1. Introduction:-United Biscuits was founded in 1948 following the merger of two
Scottish family businesses — McVitie & Price and MacFarlane Lang. In 1960, United
Biscuits added to its portfolio with the acquisition of Crawford's Biscuits and
MacDonald's Biscuits. In 2000 UB was bought by Final realm, a consortium of
investors, and reverted to private limited company status.

2. Given the problems identified above, identify the possible solutions and discuss
the implications of taking a total supply network perspective for a Biscuits
company.
A supply network perspective means setting an operation in the context of all the other
operations with which it interacts, some of which are its suppliers and its customers.
Materials, parts, other information, ideas and sometimes people all flow through the network
of customer–supplier relationships formed by all these operations. The suppliers and
customers who have direct contact with an operation are called its immediate supply network,
whereas all the operations which form the network of suppliers’ suppliers and customers’
customers, etc. are called the total supply network. The company operates in one of the most
challenging business sectors and is required to meet ambitious working capital targets to
control and offset rising costs and keep its prices competitive. Cost control and efficiency are
prerequisites for success. The management team realised that the traditional approach to lean
efficiency of rolling out standard kaizen events across the organisation would not be
sufficient to achieve the higher profits and reduced working capital they were aiming for.
They enlisted the support of The Manufacturing Institute to help analyse the company’s
complete supply chain process and redesign its operation to better support the needs of its
different customers and improve operational efficiency. Working with United Biscuit’s
change management team, The Manufacturing Institute practitioners used a ‘Systems
Thinking’ approach to transform H plant, where Custard Creams are made. The system was
redesigned from scratch – following a five step process of:
1. Specifying value from the standpoint of the end customer
2. Identifying the value stream for each product family
3. Making the product flow
4. Generating demand driven customer pull, rather than supply-led push
5. Employing lean tools and techniques to refine and perfect processes

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Said Carl Tomlinson, Manufacturing Institute Lead Consultant: “Many transformation
projects fail to achieve their potential because people jump straight to step five, using tools
and techniques to try to make an existing system more efficient, rather than taking the time to
evaluate and understand the business in a holistic way in order to make more far-reaching and
sustainable improvements”.

One approach to thinking about supply networks sees any business as being surrounded by
four types of players: suppliers, customers, competitors and complementors. Complementors
enable one’s products or services to be valued more by customers because they also can have
the complementor’s products or services, as opposed to when they have yours alone.
Competitors are the opposite; they make customers value your product or service less when
they can have their product or service rather than yours alone. Competitors can also be
complementary.(slack)
.
The United Biscuits transformation began with a comprehensive value stream mapping
exercise – reaching way beyond the traditional operational and functional territory - to gain a
deep and considered understanding of how the total systems interactions worked.

3. Customer service is now considered a key component of operations system,

design and discuss an efficient customer service operation of your choice for a
Biscuit firm given that you are the consultant on this project.

You can have every product that your customers could possibly want, but if you don't treat
your customers well, you can kiss your business goodbye. Numerous studies have shown that
it costs more to acquire new customers than it takes to retain existing ones. Use these six
service strategies for efficient customer service.

 Stay in Touch: - Let your customers know you value their business by reaching out
to them. Use newsletters, postcards, individual letters, or e-mails to deliver news
about products, special promotions, and store events. (Allow customers to sign up for
these missives in the store, and never send an e-mail without their express
permission.) Send a thank-you note after a major purchase, inviting the customer to
contact you with questions, feedback, or to discuss additional requests. Focus all these
communications on letting customers know that you can solve their problems and
meet their needs.
 Make Great Service a Priority: - Excellent customer service requires training your
staff and constantly reinforcing the message that customers come first. Start with the
little things, such as a standard way of politely greeting people on the phone or asking
that sales staff courteously greet anyone who enters the store.

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 Store Collective Wisdom:-One of the most important customer strategies is to set up
a system for responding to customer inquiries or complaints. The last thing you want
is for your employees to provide inaccurate information to your customers. Neither
should they fail to provide a solution to a problem or quote policies that may not
accurately address the situation. Your goal should be to resolve issues during the
initial customer contact, or, when that's not possible, within one business day.
Whenever necessary, make sure employees let customers know that they may need
some time to locate the information. Do not leave customers hanging. With that in
mind, staffers need to know exactly where to look for answers. While it's natural for
new employees to rely on the wisdom of more experienced ones, you don't want all
that wisdom to walk out the door when someone quits. Develop a "knowledge base";
that is, a store of information with answers to common questions, methods for solving
problems, and standards for resolving disputes. Your knowledge base can be as
simple as a notebook where staffers or the store manager jots notes; a searchable text
file on a computer; or a database.

 Empower Your Staff :- In some cases, where there is no policy -- and occasionally in
cases where the policy needs to be flexed -- you need to empower certain people to
make decisions, use good judgment, and bend the rules. Ask them to document these
special cases; you can provide a pad of paper forms, let them enter information into
the computer, or simply leave you a voice mail. Depending on the size of your
operation, you may want to designate one person per shift as chief problem-solver.
 Know Your Customers: - Instituting a formal way of tracking your customer
interactions will help you identify your best customers, as well as those who may not
have frequented your business in a while. You can also see if someone has needed
repairs or is due for servicing on a product. There are many software applications
designed to do this, ranging from powerful -- and expensive -- "enterprise software"
products to simple Web-based applications that cost less than $20 a month. As you
gain new customers, you enter their contact information and notes about the
transaction into the software. Later, you can sort this data or analyze it to uncover
useful information. But you don't have to use a computer to track customers. A small
shop could simply prepare an index card for each customer and file them
alphabetically. If the customer returns, sales staff can pull the card from the file,
review the history, and note the latest interaction.
 Manage Customer Relationships:-Once you have some history on your customers,
whether from written notes or via a database, you can identify your best customers
and reward them. Perhaps you'll offer a special discount to frequent customers or

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 make a follow-up call to those who have needed recent repair work. Use the
information you've gathered about your customers to make customer service a
science. Give them a quality experience and complete satisfaction, and they'll keep
coming back for more.
4. You have been requested to give the company a brief of how to manage and
control their inventory management system, prepare such a brief to be presented
to the board of directors. The brief should be written as a paper with relevant
theoretical rigor and power point presentation attached?

Inventory management is primarily about specifying the size and placement of stocked
goods. Inventory management is required at different locations within a facility or within
multiple locations of a supply network to protect the regular and planned course of
production against the random disturbance of running out of materials or goods. The scope of
inventory management also concerns the fine lines between replenishment lead time, carrying
costs of inventory, asset management, inventory forecasting, inventory valuation, inventory
visibility, future inventory price forecasting, physical inventory, available physical space for
inventory, quality management, replenishment, returns and defective goods and demand
forecasting.

• Management of the inventories, with the primary objective of determining.controlling

stock levels within the physical distribution function to balance the need for product
availability against the need for minimizing stock holding and handling costs.

Inventory Management and Inventory Control must be designed to meet the dictates of the
marketplace and support the company's strategic plan. The many changes in market demand,
new opportunities due to worldwide marketing, global sourcing of materials, and new
manufacturing technology, means many companies need to change their Inventory
Management approach and change the process for Inventory Control.Despite the many
changes that companies go through, the basic principles of Inventory Management and
Inventory Control remain the same. Some of the new approaches and techniques are wrapped
in new terminology, but the underlying principles for accomplishing good Inventory
Management and Inventory activities have not changed. The Inventory Management system
and the Inventory Control Process provides information to efficiently manage the flow of
materials, effectively utilize people and equipment, coordinate internal activities, and
communicate with customers. Inventory Management and the activities of Inventory Control
do not make decisions or manage operations; they provide the information to Managers who
make more accurate and timely decisions to manage their operations.The basic building
blocks for the Inventory Management system and Inventory Control activities are:
Sales Forecasting or Demand Management
Sales and Operations Planning

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 Production Planning
Material Requirements Planning
Inventory Reduction

The emphases on each area will vary depending on the company and how it operates, and
what requirements are placed on it due to market demands. Each of the areas above will need
to be addressed in some form or another to have a successful program of Inventory
Management and Inventory Control. Inventory control is used to show how much stock you
have at any one time, and how you keep track of it. It applies to every item you use to
produce a product or service, from raw materials to finished goods. It covers stock at every
stage of the production process, from purchase and delivery to using and re-ordering the
stock. Efficient stock control allows you to have the right amount of stock in the right place at
the right time. It ensures that capital is not tied up unnecessarily, and protects production if
problems arise with the supply chain. This guide explains different stock control methods,
shows you how to set one up and tells you where to find more information.

5. Evaluate how the five performance objectives of an operations

system apply to a company engaged in the manufacture of biscuits?

In an organisation there are 5 performance objectives: Quality, speed, dependability,

flexibility and cost. These objectives can then be broken down into order-winning¸ order-
qualifying and less-important factors. Order winning factors are

“Those things which directly and significantly contribute to winning business” (Slack
et al. 1995 p72)

So they are essentially what the business does that places it above its competitors in the
customers’ eyes. Order qualifying factors on the other hand are

“Those aspects of competitiveness where the operation’s performance has to be

above a particular level just to be considered by the customer” (Slack et al. 1995 p72)

So order qualifying factors are merely what a customer expects at the very minimum from a
company of this kind. Finally less important factors are

“Neither order winning or qualifying. They do not influence the customer in any
significant way” (Slack et al. 1995 p72)

Therefore, all other factors that do not fall under order-winning or order-qualifying factors
are less-important factors. The degree of organisation emphasis will vary from business to
business. Organisations largeand small, public, private and voluntary need to determine the
key success factors for their particular market and specifically for individual key accounts. A

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useful technique is ‘polar representation’ which is shown at figure 1.2. The example shown is
a profile comparing a busservice with that of a taxi service. In the example shown, the taxi
service is more flexible thanthe timetabled bus service. On the other hand the cost of the bus
service is lower than hiring ataxi. To become more competitive the bus service could try
looking at ways of becoming more flexible to the needs of the community while retaining a
cost advantage. Draw a profile of your own organisation by identifying the degree of
importance of each performance objective and then look at how your competitors operate. If
we look at each of the performance objectives in a little more detail we can begin to
understand the broad scope of market requirements that the organisation must respond to if it
is to remain competitive. It is worth noting that ‘nothing is for ever’ as environmental
pressures and customer preferences change over time. The organisation must ensure it
engages with the environment to determine appropriate responses.

We shall now explore the five performance objectives discussed earlier in a little more detail.

5.1 QUALITY:- Quality has many definitions and equally different customer perceptions of
what is considered a quality product or service. In its basic form, the definition of quality is
‘fitness for purpose, produced right first time’. The customer defines what is fit for purpose
and the organisation must produce the product or service to the required standard. From an
operational perspective the organisation must be effective in determining what the customer
requirements are, in other words ‘doing the right things’ and efficient by ‘doing things right’.
For many organisations, quality is no longer seen as an area in which competitive advantage
can be sought, because many customers see quality and reliability as an absolute prerequisite
of the contract. However, delighting customers, by adding value to the product and service
will – at least until the competition catch up – make the customer feel s/he has received real
value for money.

5.2 SPEED:- Again we need to be clear of what we mean by speed from a customer
perspective. How important is it to the customer that we produce the goods or deliver the
services speedily. What sort of time frame is important to them? In a fast food establishment
we would expect to be served in minutes. As a manufacturer of spare parts for the automotive
industry, speed may mean lead times from time of order to delivery of the product as a
matter of days. What is without question is that speed is the current performance objective
that many organisations strive to improve. Customers require speedy service, not necessarily
because they are inpatient, but because speed is linked to ‘lean’ processes. Customers
adopting lean processes where reduced stock is the objective will rely upon speedy
replenishment of those stocks to maintain throughput efficiencies. Alternatively, Just-in-Time
(JIT) strategies in a stockless production system demands all five performance objectives
throughout the supply chain.

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5.3 DEPENDABILITY:-An organisation that is seen by customers to be dependable is an
organisation that delivers products and services on time as promised. A bus company, whose
buses are always late, cancelled or always full, soon gets a reputation for not being
dependable. Over time the bus company is likely to loose customers who have found
alternative transport, perhaps to a rival bus company that arrives precisely on schedule.
Dependability saves time, money and generates stability.

5.4 FLEXIBILITY:-Flexibility from a customer perspective falls into for categories (Slack
2001:51).

product/service flexibility – different products and services;

o mix flexibility – a wide range or mix of products and services;
o volume flexibility – different quantities or volumes of products and services;
o delivery flexibility – different delivery times.

From an operational perspective, flexibility demands product and processes to be designed in

such a way that other performance criteria are not affected. The ability of the organisation to
design processes that are flexible and responsive offers opportunities to improve
competitiveness. This however is dependent on the relative needs of the customer, but
equally, if the organisation is able to offer greater flexibility that breaks the industry / market
norm, then competitive advantage can be secured.

5.5 COST: - The demands of the market for improved quality, speed, dependability and
flexibility are not expected to cost more. Organisations can, and do, respond to the
performance objectives outlined, but the real challenge is to offer better quality, speed,
dependability and flexibility at lower costs than the competition. Of course all things are
relative, and in some markets, flexibility may not be as important as keeping the cost of the
product or service as low as possible. However, if all organisation’s just did what everyone
else did, then how would the organisation stand out above the rest? The operations manager
and his team should be engaged in finding ways to improve the performance objectives
outlined at lower costs. This is an area that demands a strategic approach rather than an ad-
hoc quality improvement or cost cutting programme. One of the ways in which cost can be
reduced - to balance the ‘cost’ of improved performance - is to eliminate non-value adding
activities. There are also other functional strategies that can be implemented that can
radically improve organisation performance across all the five areas outlined. These will be
discussed later. However, at the heart of any functional strategy the operations manager
should be investigating ways in which productivity can be increased to produce products or

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services that exceed current performance in terms of quality, speed, dependability, flexibility
and cost.

6. CONCLISION:-