Resource Integration Management Assignment Sample

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Resource Integration Management

Introduction

Operations management is significant to be adopted by every organization to increase the level of efficiency in business operations. Operations management is focused on the conversion of labour and material into the finished goods in the best possible efficient way. This assignment is also associated with operations management in a health care company. The report will lay emphasis on the resource integration management practices of the business and describe the 4Vs of business operations. The key elements that havean impact on the planning and development of resource integration policies will also be discussed in the report.

Company Overview

The company taken into account for the assignment is Manuka Health New Zealand Limited. Manuka Health is a company having its operations in New Zealand and was found in the year 2006. It is a limited liability company that deals in the production and sales of natural and health care products. Natural honey products are also an offering by the company. It has worldwide customer service with high-quality products (Manuka health, 2019). The company currently employs 140 employees. The health care and natural products of Manuka have unique properties as they blend of nature and science. The  majority of the equity of the company  is owned  by the Australian firm Pacific Equity Partners.

Scope and Limitations

The scope of the study is limited to the extent of the company taken for the study as all the information collected for this assignment is associated with Manuka Health New Zealand Limited. The study will be useful for the health care companies to develop their resource integrations strategies so that they can have effective operations in the business. There are certain limitations of the study which may hamper the results of the investigation. There were time constraints while completing the report. All the data used in the study is collected by secondary data sources and no primary information is used in the report.

Key models and factors of contemporary resource integration management practices

Transformation process

The term transformation process can be defined as an activity or set of activities that can be used by a business to convert the raw materials or inputs into the finished goods or the outputs. The transformation process leads to changes in the physical characteristics of the materials (Schaltegger, et. al., 2016). The key raw material used at Mauka health is honey as honey has antimicrobial properties and it has medicinal properties to heal wounds and other skin diseases. At Manuka, it is believed that raw honey is the best but the integrity of honey is preserved by the transformation of creaming. The raw honey at Manuka is undergone through a creaming process so that the crystals and texture of the honey can be evened. After short periods of time, the honey is processed by the crystallization process that smoothens the texture of the honey and also preserves the honey in its natural state. This is a type of tangible transformation of honey at Manuka's health.

Resource Integration Management

The intangible transformation process is also used in the business to provide customer services to the clients. Health care services are provided to customers. As information about the customer's health is collected as the input and the information is used to provide personalized health care services to the customers.  

The transforming resources of Manuka health services are managers, machinery, employees and othertypes of equipment used for the business operations. Talking about the transformed resources of the company, they are the bottles in which honey is packed, honey, skin care products and toothpaste (Manuka health, 2019).

There are 4 categories of transformation processes that are used at Manuka Health services. The transformation types are enumerated below:

  • Manufacturer: The Companymanufactures health care and natural products with honey as the key ingredient in the products.
  • Transport: The products are transferred to the customers by truck and other freight services.
  • Supply: The end products are supplied to the customers by the direct channel of distribution.
  • Services: Manuka health services provide personalized health care services as per the medical conditions of the customers.

4Vs of Operations management

There are generally 4Vs of operations management which are important aspects of any business. It is essential to analyze all the 4Vs to have effective business operations. The 4Vs of Manuka Health services are given below:

  • Volume dimension: As the production of raw honey is seasonal, the production of processed Manuka honey is moderate and the cost is, therefore, a bit high (Manuka Health, 2019). It is important to understand that the volume of products is analysed as per the repeatability of the operations and the systemization of the business activities. The volume of honey is crucialfor Manuka Health’s operational system as it sells its products across New Zealand. The company is working a lot in creating consumer awareness. This led to a massive demand for Manuka Honey in New Zealand (MPI, 2019).
  • Variety dimension: The variety of products by Manuka Health is lower as compared to the other competitors in the market. The products manufactured by Manuka health services are limited as to when there is a high volume of outputs, the variety of products is lower because of high production unit cost. But, this is limited to the Manuka Honey only. There are other types of health care products produced by the company, such as vitamin tablets, skin diseases treatment tablets, multi-vitamin tablets, toothpaste, honeybush, jelly, etc. In addition to this personalized services to the customers are provided by the company (Manuka Health, 2019).
  • Visibility dimension: The variations in demand for the products of Manuka health services are low. The demands are consistent and there are various factors that havean impact on the variations in the demands of the company (Guruswamy, 2019). The factors are associated with the health consciousness of the people, urge of people to use natural products and prices of the products (Helms, 2016). The prices of Manuka health products are comparatively low as compared to the other manufacturers in the market. Thus the demand changes less frequently.
  • Visibility dimension: The visibility dimension is related to all the visible processes of a company (Helms, 2016). Manuka health service is engaged in manufacturing and sales business but manufacturing is a rarelyvisible process in the business. The process that has a high degree of visibility in the business is the extraction of honey which is the main activity done in the business. The other visible process in the business is the provision of customer services at the world level.
  • Value Added: It is used to denote the difference between the cost of inputs in manufacturing a product and the price at which the consumer buys a product. It is significant in the context of Manuka because the price of products is higher than the competitors. The consumers would purchase the product, especially the honey only when they perceive other benefits to it (Helms,2016). As the honey is natural and has medicinal properties, consumers would buy it.

Evaluation of Market Requirement

Before evaluating the market requirement, it is important to understand the market of Manuka Health Service. This can be done by exploring demographics, trends, and customer preferences. For instance, in Western countries like the USA, youth and office-goers are more health-conscious than the people in the rest of the world. Hence, business strategies and product development should be made as per their preference. Apart from these, consumer habits should also be tested and recorded for setting up prices and quality measures.

There are numerous factors that affect the market requirement for a product and its price. For instance, the globalizing operations and products can result in reducing the cost per unit, innovating new methods and technology, making use of supplier partnering, etc. The market requirement of Manuka Health Services can be divided into two classifications, namely order winner and order qualifier. The former one is the characteristic that wins the target customer‘s purchase or bid in the market. Hence, for providing the order winning qualities, it is required from Manuka to beat the competition in the market at every aspect like quality or cost. On the other hand, the order qualifier comprises those characteristics of a product or service offered by the Manuka Health Service that would help the product to be considered by customers while having the intent to purchase products and services. These two criteria are part of the business strategy and end up being the necessities that keep the firm running or win customers.

In order to beat the competition and sustain the competitive position in the market, it is required from the Manuka to provide order qualifiers. For that purpose, they should be at least matching their rivals, otherwise their sales may eventually fall. Moreover, to provide order winning characteristics, Manuka Health Service has to be better than the competitors. Being a natural and health care product manufacturing firm, it is required from the Manuka to keep the focus on certain order winners, such as product quality, design, effectiveness, brand value & image, and product reliability. These are the most sought-after characteristics in the market. On the other hand, order qualifying characteristics include cost, quality, timely delivery, etc.

It is crucial to understand that Manuka's order qualifiers and winners are time-specific and market-specific factors and work better in the different mix depending upon the market and customer preference. Some customers may prefer speedy delivery over quality and cost while some may choose cost over everything. Hence, it is required by the company to develop different strategies for different combinations. Also, it is essential for Manuka Health Services that their cost of production in the market where high quality is the winning criteria should not exceed the certain level of the price (order-qualifying characteristic). Otherwise, the company may lose not only the customers but also the competitive position in the market.

Factors Affecting Planning, Policy-making, and management of Resource Integration

Analysis of the Company's Performance Objectives and Tradeoffs

The business decision-making is done while considering both internal as well as external factors. CSR, Stakeholders, and Triple Bottom Line objectives are considered to be the backdrop to the organizational decision-making process (Weraikat, et.al, 2016). However, the running operations of Manuka Health Service may require a more streamlined set of objectives. Also, the objectives should address the customer needs and the competitiveness of the firm. The first objective is associated with customer satisfaction by providing error-free and effective healthcare goods and services. This would provide a competitive advantage to the company. The second objective is related to minimizing the time between order placement and final delivery of the products. This depends on the efficiency of the inventory and logistic department of the company. Delivery of healthcare products in lesser time can help the business in improving customer satisfaction and loyalty (Stark, 2015). It is advantageous for the Manuka Health Service. The next performance objective is related to the timely completion of all the operations in order to cater to the dependability demands of one operation over another. This is a crucial objective as in business, there are numerous operations and the beginning of the one may require other operations to end. This may be due to resource scarcity. This objective may provide a dependability advantage to the firm. The fourth objective of the firm is to make the operations a bit more flexible (Tickle, et.al, 2016). This would help in producing different products with varying quality standards. This would help Manuka to cater to the varying demand of the customers. The last objective is related to the price of goods and services. The organisation sets the price of the goods as per the market trend while allowing some returns for the company's investment. When the organisation does this, it is providing itself a cost advantage (Weraikat, et.al, 2016).

Talking about the trade-offs, these are many trade-offs related to performance objectives. Manuka Health Service is facing resource scarcity. This means improving the performance of one operation of the firm may result in sacrificing the performance of others (Weigelt& Sarkar, 2012). For instance, improving the cost efficiency by cutting or limiting the resources may hamper the quality of the product and customers may not accept the reduced quality products from a company like Manuka. The company can limit the variety of products so as to curb the trade-off related to cost efficiency (Tickle, et.al, 2016). Trade-offs can be dealt with employing the concept of "efficient frontier" that helps in articulating trade-offs and improving performance. Efficient frontier suggests that operations can be scheduled at a different time but they cannot face a shortage of resources. Manuka Health Service can make use of this approach to discard trade-off (Weigelt& Sarkar, 2012).

Competitive Advantages and Sustainability of Manuka Health Service

The main competitive advantage of Manuka comes from its business model that focuses on direct and multilevel selling strategies for marketing. This approach enables the customers to market the company’s products and services by word of mouth (Han, et.al, 2019). In addition to this, the organisation has a referral program in order to increase the customer base. The company has a set budget for its referral and incentive bonuses. In addition to this, the manufacturing process and the company's R&D facilities are helping the company in gaining a competitive position. The company is now focusing on expanding its product portfolio and entering the new markets. For instance, Manuka has recently launched its natural honey "Manuka Honey" in the market. Being natural honey, it has many antibacterial and active ingredient and is used for medicinal purposes across the world.

Another competitive advantage associated with Manuka is the cost-competitive advantage that comes from the organisation's skilled workforce, high-tech machines and instrument, and controlled operations and resource management. This creates maximum value for the company and customers get healthy products at a reasonable price (Dudin, et.al, 2015). The R&D team keeps looking for methods and ways to cut costs in the manufacturing domain or in the operational domain of the company. With its research and development team, the company has revaluated all of its processes and determined the redundant ones and eliminating them from the supply chain cycle. In addition to this, the company works a lot on improving the products and their composition or design and employs cutting-edge technology and other advancements taking place in the field.

The third advantage that provides a competitive edge to Manuka is product differentiation and development. The majority of the products of the company are made up of natural ingredients and is, therefore, healthy and safe to consume like Manuka Honey. This is the major USP of the company. With its unique products in the portfolio, it would be hard for the competitor to bypass the company and acquire the leading position in the market (Dudin, et.al, 2015).

SCM Practices at Manuka Health Service

The present supply chain model used by the company is the "simulation model" that not only analyze the impact of various strategies related to the supply chain but also integrates the information throughout the SCM. The main objective of this model is to determine the strategies that more effective in dealing with the demand pattern variation (Li, et.al, 2013). Manuka Health Service deals with various personal care and health products. This requires improving the mobility of the products and materials from one place to another. This model of supply chain comprises a single factory, retailers, and distribution facilities. Every facility has housed its own inventory. The model makes use of three significant strategies after conducting a suitable simulation. These are:-

  • Elimination of distribution stage from the current SCM practices
  • Reduction of time within every stage of SCM
  • Integration of information flow and separating demands which are actual demands of the market (Vanichchinchai, 2019).

Out of the aforementioned three strategies, the most effective one is the third strategy as the flow of information can improve operational efficiency throughout the organisation (Vanichchinchai, 2019).There are many advantages to choosing the simulation model for Manuka Health Service:-

  • The management can simulate many aspects of business operation. From purchasing the raw material to distributing it to the distributors, there won’t be any shortage of resources if this system is implemented properly (Li, et.al, 2013).
  • The organisation can be able to test complex and large systems using simulation-based SCM. The system is based on computing services and has the ability to simulate incredibly large and unexpected scenarios.
  • Also, by making use of this system, Manuka can be able to handle interrelated variables. With the help of simulation modeling, the company can be able to understand how variables can impact the outcomes of the process (Weraikat, et.al, 2016).

However, there are some downsides of this SCM practices. The first and foremost is that the decision-maker should be provided with a large amount of information in order to understand the outcomes of the process (Li, et.al, 2013). It requires large analytical skills as the simulation model does not provide answers on its own. Also, the process is costlier and may take a long time to collect the input data for the simulation model. In addition to this, in some cases, this SCM may not provide optimal solutions (Schaltegger, et.al, 2016).

Conclusion

In the complete report, a thorough discussion had been done on Manuka Health Service, which is a company in New Zealand and produces health and personal care products and services to people. A discussion on the tangible and non-tangible transformation processes was also done. In addition to this, 4Vs of operation management along with the value-added process were elaborated. It was highlighted that the company has a moderate volume of raw material and hence, produces a moderate volume of products and also, it has a limited variety of products as compared to the competitors. In addition to this, the market requirements of the company were determined and highlighted in the report. Also,Performance Objectives and Tradeoffswere outlined and how to deal with them was discussed. Three competitive advantages of the company were also mentioned and elucidated in the report. It was discussed that the company should work on product development to expand more. At last, a critical analysis of the company's supply chain model was done.

References

  • Dudin, M. N., Lyasnikov, N. V. E., Leont'eva, L. S., Reshetov, K. J. E., & Sidorenko, V. N. (2015). Business model canvas as a basis for the competitive advantage of enterprise structures in industrial agriculture. Biosciences Biotechnology Research Asia,  12(1), 887-894.
  • Guruswamy, S. (2019). E&P Business Transformation: Reserves–Technology–Information {RTI} Strategy.
  • Han, L., Arokiasamy, L., & Marn, J. (2019). A Study on Ethical Customer Management and Organizational Sustainability in Pharmaceutical Industry in Malaysia.  Global Business and Management Research,  11(1), 593-606.
  • Helms, T. (2016). Asset transformation and the challenges to servitize a utility business model.  Energy Policy,  91, 98-112.
  • Li, T., Sethi, S. P., & Zhang, J. (2013). Supply diversification with responsive pricing.  Production and Operations Management,  22(2), 447-458.
  • Manuka health, (2019). About Us. [Online]. Manuka health. Retrieved from: https://www.manukahealth.co.nz/en-nz/our-story/about-us/ on 4 October 2019.
  • Schaltegger, S., Lüdeke-Freund, F., & Hansen, E. G. (2016). Business models for sustainability: A co-evolutionary analysis of sustainable entrepreneurship, innovation, and transformation.  Organization & Environment,  29(3), 264-289.
  • Stark, J. (2015). Product lifecycle management. In  Product lifecycle management (Volume 1)  (pp. 1-29). Springer, Cham.
  • Tickle, M., Mann, R., & Adebanjo, D. (2016). Deploying business excellence–success factors for high performance.  International Journal of Quality & Reliability Management,  33(2), 197-230.
  • Vanichchinchai, A. (2019). A categorization of quality management and supply chain management frameworks.  Cogent Business & Management,  6(1), Cogent Business & Management, 01 January 2019, Vol.6(1).
  • Weigelt, C., & Sarkar, M. B. (2012). Performance implications of outsourcing for technological innovations: managing the efficiency and adaptability trade‐off.  Strategic Management Journal,  33(2), 189-216.
  • Weraikat, D., Zanjani, M., & Lehoux, N. (2016). Two-echelon pharmaceutical reverse supply chain coordination with customers incentives.  International Journal of Production Economics,  176(C), 41-52.
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