Operation and Productions Hawkesbury Cabinets Pty Ltd

Question: Discuss about the Operation and Productions for Hawkesbury Cabinets Pty Ltd. Answer: Introduction Operation management is important in the manufacturing sector has it determines the organisations to remain competitive. The processes involved in operation management are core in determining the cost of manufacturing, the cost of production and the pricing of the finished goods. The manufacturing sector of every economy is important as it contributes to the overall well-being of the economy. Effective operations management improves the productivity levels in the manufacturing sector and works to minimise the cost of production which leads to optimisation of profits. Manufacturing involves converting raw materials to useful finished products (Mahadevan, 2010). According to Mahadevan (2010), operation management is useful in any organisation since its effectiveness leads to the proper identification of issues affecting the production capacity of an organisation. It leads to the minimal cost of manufacturing and maximization in the profit margins of the organisation. Hawkesbury Cabinets pry Ltd is a manufacturing organisation dealing in standardised and customized furniture and this paper focuses on understanding the problems facing this organisation in the production of their products, how the introduction of new products in the line of production affects the operations and how the organisational structures affect the financial status of Hawkesbury Cabinets pry Ltd Production Systems and Processes When involved in manufacturing, an organisation has to consider the products, the costs of production, the raw materials, the manpower and the machine and equipment in producing the finished product. Hawkesbury Cabinets adopts a system which is focused on their product which is kitchen cabinetry and the processes in production revolve around the product and it is centered in one workplace. The production process is expected to be continuous; this is evident in Hawkesbury Cabinets operating one production location in Mulgrave (Rastogi, 2010). This approach to production has since incorporated other processes due to increase in demand and customisation of the products, this calls for group or cell manufacturing process whereby customization of small batches can be allocated to a certain group while keeping production continuous. This approach will increase the economies of scale, the benefits from the group or cell manufacturing is increased in the organisation's revenue (Rastogi, 2010) The system of production in Hawkesbury Cabinets is small scale diversified production. This is production meant to meet the needs of a limited number of customers and this type of production can meet local needs. The organisation relies on the consumer demand to determine the volume of production and also the cost of manufacturing (Rastogi, 2010). The production systems are a tool to the competitive advantage of an organisation involved in manufacturing. The production of the organisation maintains the organisation status and keeps the company at competing levels. The production systems of an organisation make an organisation invest in the right inventory and make products that meet the demands of the consumers (Rastogi, 2010). The traditional approach adopted by Hawkesbury Cabinets to produce a standard line of kitchen cabinetry has ensured the high-quality products and maintain the continuous productivity levels. With the growth of the organisation, there has been an increase in customer need for customisation where the organization has to meet new demand and new preferences from different customers. The development of the new range of furniture calls for innovation and understanding customer tastes and preferences. This, in turn, leads to the increase in the cost of production to the organisation (Rajput, 2008). The introduction of the new builders kitchen line to Hawkesbury Cabinets list of products does not affect its quality but its productivity levels so as to meet the demand of its customers both standardised and customised products. The organisation has experienced a limitation in the duration of production with increased work volumes. Also, there is a limitation in the manufacturing cost and extra costs to be incurred in the creating new workspace to meet the increase in manufacturing space (Rajput, 2008). Again, there is a challenge in the distribution of labour in order to meet the specialization needs. The increase in the customized orders has led to the division of the available resources in both raw materials and human labour in order to meet the diverse customer needs. This change is also a challenge in predicting seasonal changes in consumer preferences. Small scale orders are not cost effective for the organization (Miltenburg, 2005). Besides, the cost incurring in the price of manufacturing the possibility of innovation in the organization where the organization has to expand on the product inventory. A variety of products attracts new consumers and new technology which in the long run are revenue optimizing to Hawkesbury Cabinets (Miltenburg, 2005). According to Hawkesbury records, the Customized kitchens accounts for 40% of factory volume, the uncertainty in the demand levels for these customized kitchens has led to incurring of unexpected costs to the organization. Increasing products that are not in current demand is a hold up for the organisations resources and the profits (Miltenburg, 2005). The goal of operation management is the proper utilization of the available resources to achieve maximum benefits for the organization. The provision of quality products and variety of products by Hawkesbury Cabinets does not guarantee economic returns for the organization. The new line builders hadnt changed the profit margins and the organization experienced pressure in resource allocation. The company experiences a conflict in organizational objectives of whether to satisfy its costumers diverse needs for standard and customized kitchen cabinetry and the maximizing the organisations resources to achieve maximum benefits. This causes a constraint in the financial resources of the organization and in the long run the organization stagnant returns on their input (Wild, 2003) Every organization involved in manufacturing aims at minimization of the cost of production. The Hawkesbury Cabinets has not reflected any changes in their profits from the manufacturing instead holding of resources such as raw materials, finished products. This is a financial setback for the organization in terms of expansion. The expansion will affect the budgeting targets for the organisation since expansion capacity will not equal returns for Hawkesbury Cabinets (Wilson Hill, 2014). The increase in tied up raw materials and finished products has led to an increase in the storage costs and the need for more space which is an incurred cost to the Hawkesbury Cabinets. The new line of kitchen builders cabinetry is increasing but not to a sustainable level thus affecting the financial structure of the organization. The tied up raw materials and finished products do not account in the financial well-being of the organization (Galloway, Rowbotham, Azhashemi, 2012). Also, Hawkesbury experienced a constraint in the delivery times for the customers; these are the effects of high stock levels and lack of room for new production. Delay in customers orders leads to loss of goodwill among the customers and subsequent financial implications on the financial outcomes of the organization (Galloway, Rowbotham, Azhashemi, 2012). The producing of builders kitchen upon its introduction in Hawkesbury has led to an increase in the partially uncompleted standard kitchen. The standard kitchen has however recorded a steady income input to the organization. The builders kitchen is a constraint and a liability to the Hawkesbury Cabinets and its continued production will affect the revenue levels of this organization. The builders kitchen has recorded a demand that is unpredictable and continued production will lead to more inventory costs to the organization (Galloway, Rowbotham, Azhashemi, 2012). In conclusion, the introduction of builders kitchen to the product list of Hawkesbury Cabinets is a challenge to the production systems. They have proved ineffective in the maintenance of the continuous flow of products. Measures to avoid a tied up inventory and costs incurred through storage are useful in attaining financial benefits for Hawkesbury Cabinets. References Mahadevan, B. (2010). Operations management: Theory and practice. Upper Saddle River: Pearson. Rastogi,M.K. (2010). Production and operation management. S.l.: Laxmi Publications. Rajput, R. K. (2008). A textbook of manufacturing technology: (manufacturing processes). New Delhi: Laxmi. Miltenburg,J. (2005). Manufacturing strategy: How to formulate and implement a winning plan. New York: Productivity Press. Wilson,R., Hill,A.V. (2014). The operations management complete toolbok: Collection. Upper Saddle River, NJ: FTPress Delivers. Wild, R. (2003). Operations management: Text and CD-ROM. London: Thomson. Galloway,L., Rowbotham,F., Azhashemi,M. (2012). Operations Management in Context. Hoboken: Taylor and Francis.