Paper Example on Operations and Other Key Business Functions: A Case Study

Introduction

Operations coordinate with finance department to reduce the cost of operations. For example, Walmart’s chief financial officer said that the company’s gross-margin sank by 27 points last year due to rising cost of transportation. Managing rail transport reduces intermediaries. Secondly, it coordinates with the transport department to enhance online operations. Thirdly, it coordinates with marketing department to enhance branding because of the labeling of the in-built containers.

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Operations department of Westfarmers coordinates it functions with finance department to close target stores with unsustainable cost base. The objective is to eliminate operations that do not any profit. The net profit of the group rose to $5.5 billion after divestment. Also, it coordinates its services with strategic management function to ensure the company acquires business with profitable history.

Influences

Globalization factor influences operations in the sense that it determines distribution channels to use in distributing products and services. For example, the use of middlemen is appropriate in a diverse market. Also, due to barriers to entry, e-commerce is the most appropriate method of reaching international customers. However, the cost of Walmart products will increase due to the added cost of intermediaries.

The second influence of operations is quality expectations. Besides reducing the cost of operations, Walmart seeks to get a direct contact with the customers and deliver and understand their needs and expectations. Also, Walmart will not control the quality o services intermediaries offer; thus, the need to communicate and distribute the products directly to deliver quality services to the clients. Therefore, taking charge of rail operations helps Walmart to deliver its quality targets. First, cost-based competition is one factor influencing operations of Westfarmers. The company must engage in sustainable business operations so that it can deliver value to its stakeholders. Because competition is high in the industry, the company must lower its prices so that it can sustain its profitability and market share. Therefore this strategy has led to divestment and focus on acquisitions. However, the administration must evaluate target shops with the least performance and ensure it develops alternative ways of serving its loyal customers.

Secondly, technology has influence the company’s operations. The cost of developing and maintaining a target shop, when the cost base is higher than the returns is problematic. Consequently, the company has opted to divesting in some market and focus on acquisitions to improve its performance. With the help f technology, Westfarmers continues to invest in e-commerce not only to reduce the cost of operations but reach global customers.

Operations processes

The entire operations process begins with acquisition of resources. Walmart sources its materials from different suppliers. They include raw material, labor and assets. Although the company makes some of the products it offers to the market, it monitors the quality of products it outsources to ensure quality service delivery. The second process in operations management is transforming the acquired materials into finished products. Factors the company considers in the transformation process include volume of production, variety of items, variations and visibility that involves customer contact. Other activities involved in the transformation process include sequencing on how deliver products to the target market and scheduling the transportation process to meet customer demand. The last step is the output. The process involves customer service warranties. Since Walmart wants to take charge of rail operations, it will collect first-hand information from customers regarding the quality of products. Walmart distributes its products and services to the market using various channels, including intermediaries, online stores, and physical stores. The operations process ends with feedback from the customers. The current operational strategy is effective for the company since there is a need to reduce operational costs so that it continues to offer customer discounts. Failure to do so, the retailer will not sustain it rewards; hence, it will lose some customers. The company’s operational processes begin with acquisition of raw materials and inventory. The company offers a variety of products to meet the diversified needs of the customers. It stocks its inventory in target shops some of which are not sustainable. The process of transforming its products involves packaging, and labeling. Also, the company packages and brands its products according to different sizes and prices to ensure every customer finds what they want. The output process involves transporting the finished products to various destinations. Although the company allows customers to buy items online, it has not invested in technology like its competitors. Consequently, customer demands continue pushing the company to deliver better services. The cost of operations in some of its target shops is higher than the returns; hence, the need to close the shops and acquire new businesses and stores with potential of success. The process is effective it considers the needs and interests of different stakeholders. However, it should involve all stakeholders, especially shareholders and customers to help in streamlining internal and external processes. The company’s current operations are critical so that it saves its resources and invest in profitable markets.

Operations strategies

First, effective supply chain management has responded to the influence of quality expectations. Besides reducing the cost of intermediaries, taking control of rail transport is critical for Walmart since it helps to enhance communication with the customers. The retailer cannot control quality when using middlemen since they have different cultures and business models. Therefore, effective supply chain management has responded to quality expectations by taking control of all operations, including customer relationship management.

Secondly, technology operational strategy has responded to globalization in the sense that Walmart engages in e-commerce by establishing retail stores where customers can pick their purchases. Due to globalization, competition has intensified in various sectors, including retail. With the help of technology, the retailer can effectively manage inventory and track its products taking into account needs and expectations of customers. Additionally, taking charge of rail transport improves communication between Walmart and its business partners and this helps to develop customer relationship management techniques. Walmart cannot maintain its market positions without developing strategies to attract and retain its customers. Therefore, in-built containers do not only promote the company’s brand but also enhance a competitive advantage.

The first operational strategy is cost minimization. One of the influences of the company’s operations is cost-based competition. The leadership of the company decided to close some of its target shops due to high and unsustainable cost-base. The objective is to invest in businesses that would generate required profits and ensure organizational success. Similarly, due to the cost constraint, the company cannot offer discounts to its customers and offer competitive prices; hence, it is losing customers. Therefore, cost-minimization strategy contributes to managing the company’s operational costs.

Secondly, the company’s e-commerce strategy has responded to technology influences. The application of technology in business operations has disrupted business operations. Westfarmers has responded by developing e-commerce strategy to ensure customers access products and services online. The objective is to reduce the cost of operations and offer products and services customers require. Also, competitors are advancing the placation of technology in their operations. Therefore, it is critical to consider market trends and offer superior products and services to attract and retain. Therefore e-commerce and divestment respond to existing disruptions in the industry and ensure the business remains profitable and sustainable.