Management of Strategic Operations

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Table of Contents

Product Profile
Activities Undertaken in Order to Display the Operational Characteristics
Attempts to Change the 4Vs
Conclusion
References

Management of operations in a business setting relates to the control of activities or procedures that facilitate the production and delivery of goods and services (Greasley 2007, p. 12). It is a function that is found in every organization since every organization engages in the production of some goods or services.

Operations management influences the cost of production and the quality of products. Thus businesses must focus on effective operations management strategies in order to improve their competitiveness. This paper will focuses on the concept of strategic operations management by analyzing Coca-Cola Company and its product, coca-coal soft drink.

Product Profile

Volume

Volume relates to the quantity of a product that is produced and sold by the company (Greasley 2007, p. 86). The production volume at Coca-Cola is high since millions of its products are produced and sold per day. This is based on the fact that the company serves the global market and thus it has to produce very many units in order to meet the high demand (Coca-Cola 2011).

The implications of this characteristic on production include repetition and systematization of procedures in order to improve efficiency. Besides, the firm focuses on capital intensive production in order to increase output. The high volume has resulted into low cost per unit.

Variety

Variety refers to the various types of products that are manufactured by the company (Greasley 2007, p. 89). The firm produces a wide variety of soft drinks. As at 30/12/2010, the company had a product portfolio of over 2000 different types of soft drinks. Thus it has a high level of product variety (Coca-Cola 2011).

This has impacted on the production operations in two ways. First, the company uses a flexible system in order to take the needs of the customers into consideration during product development. Second, the production process has become very complex as new products are introduced.

Variety in Demand

Coca-Cola’s products have a high variation in demand (Coca-Cola 2011). This is because the consumption of soft drinks is affected by weather or seasons. For example, the sales are usually high during summer and holiday seasons. However, the sales usually fall during the winter. The implications of this trend on production are as follows.

First, the company has adopted a flexible production capacity in order to respond appropriately to changes in demand. Second, the firm is always in touch with the market in order to understand the changes in demand (Coca-Cola 2011). Finally, it has led to an increase in costs per unit as the company adjusts its capacity in response to changes in demand.

Visibility

Visibility refers to the degree to which the customers can follow their orders from the time the orders are placed up to the time when the goods are delivered (Stevenson 2008, p. 45).

The visibility of Coca-Cola’s products is high. This is because they are usually delivered within the shortest time possible through an efficient distribution system (Coca-Cola 2011). The main impact of the high visibility is a focus on customers’ needs as the basis for evaluating satisfaction.

Activities Undertaken in Order to Display the Operational Characteristics

A high product variety has been sustained through research and development that enables the firm to develop new products. The firm has invested in modern communication and information technology in order to reduce the order processing time. This has enabled the firm to maintain high product visibility.

In order to maintain a high production volume, the company has embarked on automating most of the production and delivery activities (Coca-Cola 2011). This involves the use of machines in various stages of production in order to increase output.

The workers are also being trained regularly in order to improve their competence. This results into high productivity. During the low demand seasons, the firm usually embarks on intensive sales campaign and promotional activities. This indicates the high level of variation in the products’ demand.

Attempts to Change the 4Vs

First, the firm is implementing its expansion plan by establishing new production plants especially in the overseas markets. This is meant to increase productivity (volume) of the company. Second, the firm has launched its e-marketing website in order to strengthen its relationship with customers (Johnston 2009, vol. 29, pp. 564-587).

This enables it to increase the variety of its products by incorporating the customers’ suggestions in product development. Finally, the company is focusing on improving the quality of the drinks by controlling the calorie levels (Coca-Cola 2011). This aims at making the products a necessity that can be consumed in all seasons. This strategy aims at reducing the high level of variation in the products’ demand.

Conclusion

The above assessment shows that management of operations has a direct impact on the cost of production and profits (Stevenson 2008, p. 67). Coca-Cola has been successful in the market since it has a high product visibility, volume and variety. However, the variation in the demand for its products is high and this has a negative effect on its profits since the sales usually decline during the low demand periods.

References

Coca-Cola 2011, Products, <https://www.coca-cola.com/>.

Greasley, A 2007, Operations management, SAGE, New York.

Johnston, R 2009, ‘Establishing and developing strategic relationship: the role of operations manager’, International Journal of Operations and Product Management, vol. 29, no. 6, pp. 654-587.

Stevenson, W 2008, Operations management, McGraw-Hill, New York.

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