Productivity Management

Operations Management
Kartikeya Sharma- 12001113 1/10/2012

Word count - 2032

Kartikeya Sharma

12001113

Productivity Management

INDEX

Sr. No 1 1.1 2 2.1 2.2 2.2.1 2.2.2 2.2.3 2.2.4 2.2.5 3

Topic Introduction Technique or Methods or Tools Involved Productivity Enhancement Gauges- Case Study Company Profile Techniques implemented to increase productivity Supply Chain Management Quality Management Capacity Planning Forecasting Inventory Management Conclusion

Page No. 4 4 5 5 6 6 8 9 10 12 13

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Productivity Management

List of Figures

Figure Number 1 2 3 4

Description Barista Logo Supply Chain Overview Supply chain of Barista Quality management at Barista1

Page Number 5 6 7 9

Cyclic pattern showing Capacity Management2

Graphing depicting Actual sales and forecasted sales of Barista

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1 2

http://tv-consultants.com/iso.html http://technet.microsoft.com/en-us/library/bb821280.aspx

Kartikeya Sharma

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Productivity Management

Abstract

This report is focuses on the aspect of Productivity Management. Its techniques and tool sets to be used for increasing the productivity of the company. In order to explain the concept a case study of Barista Lavazza India has been taken into considerations. With respect to the company a detail discussion has been done on how does it applies these techniques. In particular the aspects which have been broadly highlighted as in what are they, how are they implemented are 1 2 3 4 5 Inventory Management Supply chain Management Capacity Planning Forecasting Quality Management

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Productivity Management

1 Introduction
Productivity Management is a quantity of the competence of a person, machine, factory, system, etc., in transfiguring inputs into useful outputs. Productivity indicates to methodologies of output from production processes, per unit of the Input. It gives the way to productions to produce a good product with apt consumption of resources. Different aspects of productivity improvements can be highlighted as follows:y Partial Productivity y Total productivity y Total Factor Productivity Partial productivity discusses to the capacity solutions which do not encounter the necessities of total productivity measurement, yet, being realistic as gauges of total productivity. In run-through, capacity in production means measures of partial productivity. In such case, the substances of measurement are constituents of total productivity, and interpreted correctly, these components are analytical of productivity development. Total Productivity can be signified as the ratio of particular resources the output aggregated together. Total Productivity =    Total Factor Productivity is the portion of output not explained by the amount of inputs used in production. As such, its level is determined by how efficiently and intensely the inputs are utilized in production.

Z=RC I
The equation illustrated signifies the total output (Z) to a function of total-factor productivity (R), capital input (C), labour input (I), and the other two inputs also are part of the output. An upsurge in R, C or I will in turn upsurge the output. Whereas the tangible inputs are capital but on the other hand total-factor productivity seems to be more intangible as it ranges from technological aspect to the acquaintance or the knowledge of worker (human capital).

1.1 Techniques or Methods or Tools Involved

y y y y y y Inventory Management Capacity Management Supply Chain Management Forecasting Aggregate Planning Quality Management

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Productivity Management

2 Productivity Enhancement Gauges Case Study

2.1 Company Profile
BARISTA LAVAZZA Coffee Company Limited was established in the year 2000 at Basant lok New Delhi India. Barista Lavazza is noted as a pioneer of Indian caf culture. The Barista Lavazza chain of espresso bars delivers a truly Italian coffee experience in warm, friendly and relaxed environment. It aims to provide a comfortable place for people to unwind over interesting conversations and a cup of coffee. Barista Lavazza consists of young adults, who are exposed to global lifestyles and appreciate the authentic flavours and tastes of coffee. At last count, the Barista Coffee Company Limited has over 200 Barista Lavazza Espresso Bars and Barista Lavazza Crmes in over 30 cities across India. Besides the Indian sub-continent, Barista Lavazza also has cafes in locations across Sri Lanka, Oman and the UAE. Barista is owned by Lavazza, Italy's largest coffee company. Lavazza, the sixth largest coffee roaster in the world, has a 46.5% share in the Italian retail market (value, source: Nielsen) and operates in over 80 countries in the Home and Awayfrom-Home sectors (Foodservice, Vending and Cafes)3.

Fig1. Barista Logo

http://www.barista.co.in/users/worldwide.aspx

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Productivity Management

2.2 Techniques implemented to increase Productivity

2.2.1 Supply Chain Management The 1980s the term Supply Chain Management (SCM) was developed, to express the need to integrate the key business processes, from end user through original suppliers. The basic idea behind the SCM is that companies and corporations involve themselves in a supply chain by exchanging information regarding market fluctuations, production capabilities. Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers (Harland, 1996). Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption (supply chain). According to the Council of Supply Chain Management Professionals (CSCMP), Supply chain management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management. It also includes the crucial components of coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.

Fig2. Supply Chain Overview

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Productivity Management

2.2.1a Stake holders in Baristas Supply Chain y y y y Coffee Suppliers- Tata Food and Beverages Taj Group of hotels Logistics Outsourced to Safex Roasting and blending Exported to Venice, Italy.

Fig3. Supply chain of Barista

2.2.1b Benefits of Supply Chain Management y y y y y y y y Reduced inventory Reduced distribution costs Reduced time to market Reduced market risks through effective co-ordination and communication Improved quality of product/service Improved inventory management Increased ability to implement just-in-time delivery Increase in on-time deliveries

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Productivity Management

2.2.2 Quality Management Quality Management Systems for example ISO 9000 etc. gives a portrayal or a framework that provides essential control for addressing threats and help in monitoring and maintaining the performance. It is more significant to all enterprises big or small government or private. This can be applied from single department to multinational company. Quality assessment or management is the prime importance that is taken care in order to serve the best quality in least amount of time. Barista has a hierarchical approach for its staff in allocating the duties to be performed. At Barista the key check points that are given prime importance are for exampley All staff should be well groomed. y Giving customers assurance that the coffee is pure and is not adulterated with harmful chemicals y Interiors are well maintained with an elegant and comfortable place to relax. y Managers are responsible to check and maintain the records of all the inventories. y On every 14 days there is quality check done on all the products at its head base at Delhi, in order to avoid poor quality being circulated.

Kartikeya Sharma

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Productivity Management

Fig4. Quality management at Barista

2.2.3 Capacity Planning A capacity planning is determining the production capacity requirement by a company to reach changing demand for its product. Capacity of an enterprise enhanced by acquainting with new equipment, tool sets, materials and man power. Capacity = (Number of shifts) (Number of worker) (efficiency) (utilization) Basic steps for capacity planning are determine the service level requirements, analyse current capacity and planning for future.

Fig5. Cyclic pattern showing Capacity Management4

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Kartikeya Sharma

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Productivity Management

Barista five techniques in order to enhance the Capacity planning which areKnowing the business very well is very crucial in order to sync the different departments of an entity. A well know how should be there with managers of what work is done where and how. Know your Infrastructure on a regular or daily basis, making report checking machinery, the stock and flow of transaction which in turn help which help in real life after forming work implementation. Shadow business processes where the work load is divided in different resource usage and utilization category supporting the growth. Validate with modelling which helps to work with the consumer without there being delays in the services given. Process and Procedures are important in order to maintain credibility of the company. Taking same data and same growth and applying it here every time should land up at same answer.

2.2.4 Forecasting It is the skill and science of prophesying forthcoming events. It may include taking historical data and projecting them into the future with some sort of mathematical model. It may be subjective or intuitive prediction. Or it may involve a combination of these. Seven steps of forecasting are illustrated as followsy Determine the use of the forecast y Select the items to be forecasted y Determine the time horizon of the forecast y Select the forecasting model(s) y Gather the data y Make the forecast y Validate and implement results

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Kartikeya Sharma

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Productivity Management

Barista makes use of the these types of forecasting techniques in order to enhance the sales or predict the life cycle of new product or introducing new product etc. Economic forecasts Barista has a Skim Pricing Policy. They started with very high and exuberant price, and skimmed the cream for the market. Due to the increase in awareness and modernisation as the coffee culture grew up so did the outlets of it spurted out suddenly in huge number, which resulted in gradual lowering of the prices. There is a constant fluctuation in the prices. And there have been noticed 3 changes (by far reductions). This shows that Barista is still able to show profits with reduced price as the benefits come from high volume of sales. Demand Forecasts Barista points itself as a brand for anyone who loves coffee. Baristas main focus is at age group from 18 to 60. With such wide spectrum of age range Barista offers an elegant atmosphere to relax over a cup of coffee. But on a large scale now days the consumer profile is of youngsters so, it is trying to make a vibrant atmosphere and bringing in new products with the coffee as well. They also come up with drinks and food items such as cakes in relation with some celebrity name, games or team in order to influence the customers.
5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 18-25 years 25-45 years 45-55 years 55-60 years Forecasted Sales Actual Sales

Fig6. Graphing depicting Actual sales and forecasted sales of Barista

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Kartikeya Sharma

12001113

Productivity Management

2.2.5 Inventory Management Inventory management, in the context of an industry, typically refers to the act of managing the material resources of an organization that can help the organization earn revenue in the future. Operations Manager is responsible for the managing part. For example, a retail store that sells multiple goods (packed food items, groceries, clothes, and electronics goods, etc.) does not usually store all the goods in the store. In other words, a part of the entire stock of goods is kept at a warehouse. The sum of the goods in the store and at the warehouse at any particular point in time is known as the inventory. Why is inventory management so important? Organizations that are specifically into the production of goods or products heavily depend on a well-managed inventory for a number of reasons. The bottom-line is that an organization heavily into goods and products cannot really survive without a good inventory management system. At Barista the inventory management follows the process of First-In-First-Out. The inventory such as milk, sugar etc. is properly kept in their respective suitable environment. As these items are perishable they are checked on every alternate day in order to minimize the loss and maximize the production. Baristas Inventory system is based on the three pillarsDemand projection: This is a specialized skill. An enterprise must be able to project demands for specific goods and products at a specific time of the year. The enterprise must design its inventory system based on the demands. Monitoring system: An inventory must have the mechanism of monitoring the amount of stock of goods at any point in time. The enterprise must be able to exactly find out the amount of inventory at any particular point in time. Quality of warehouse: The warehouse must be able to keep the stock in good condition. Wasted materials amount to lost revenue opportunities. Inventory management is therefore a challenge with most enterprises. In fact, much before an enterprise even begins its selling, the profit and loss can be partially determined by how well it is managing its entire inventory.

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Kartikeya Sharma

12001113

Productivity Management

3 Conclusions
Now days, culture is changing point of view towards making it more metrosexual and a place to socialize. A complete focus is there on the various age groups which have to be targeted majorly the youngsters. Nevertheless the other age group is also taken under considerations for its growth and sales. An updating of the technology is very important along with the technology, the toolsets used to mark the performance as well as increase the productivity it. Updating the parametric criterions provides customary way to actual expansions in the caf business and productivity. Prevalent part of the world coffee industry is that populated by small and medium enterprises. Therefore, by applying techniques they can en-cash on rising urban disposable income.

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Kartikeya Sharma

12001113

Productivity Management

References
y http://tv-consultants.com/iso.html y http://www.barista.co.in/users/worldwide.aspx y Operations management By Jay Heizer and Barry Render (6th edition)
y Transform your Supply Chain (international Thomson Business Press) by: Jon Hughes, Mark Ralf & Bill Michels y Introduction to Operations and Supply Chain Management (2nd Edition). Pearson International Edition by: Cecil C. Bozarth & Robert B. Handfield y http://technet.microsoft.com/en-us/library/bb821280.aspx

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