Operations Management Sustainability of Manufacturing and Services

Question: Describe about the Operations Management for Sustainability of Manufacturing and Services. Answer: Introduction This essay is based on the case study of manufacturing company Hawkesbury Cabinets Pty Ltd. that incepted in the year 2008 Mulgrave, Sydney by siblings. The company manufactures custom built and standard kitchens according to their client needs. Companys sales and revenue was good but still the company faces some operational issues that impact the desire revenues of the company. This essay gives the description of issues that impact the product line. Hawkesbury had a good manufacturing set up and it has latest technological machines and equipment to produce the high-quality kitchens. The company faces the cost pressures that are associated with standard builders kitchen due to some of the reasons like focus on the one product custom built kitchen increases the overall cost of production of another product Standard built kitchens. Finally, in this case study, it can be viewed that the focus on one product sales and growth results to impact the revenue of other product. Operational aspects that impacts the Hawkesbury Cabinets Pty Ltd. As per the given case study of Company, it identifies that various operational aspect that affects the company growth and stability in the long run. There are three important elements which can find out from the current scenario of the case study is that the companys client liasoning and goodwill in the market are strong, that benefits the companys financial performance in the long run (Duflou et al. 2012). Similarly, it can be seen that the Hawkesbury cabinet is faced some production, financial and location issues. The company produces the custom base kitchens due to its high demand in the market. Companys production and manufacturing set up is good as they produce the range of products in minimum lead time (Gunasekaran and Spalanzani (2012) assert that in small manufacture business is based on expected revenue. If anything wrong with the clients or in the production process that badly hampers the business. Similarly, in the case of the Hawkesbury, the entire production setup is to maximize the volume of the products as per the requirements of the clients. The company has a strong custom built kitchen gives a remarkable growth in the past recent years. Due to high production units of custom made kitchens, which impact the current production capacity of the company. The companys cost of production increases and it affects the profitability of the company (Srirangan et al. 2012). Operational planning of the company improves the quality and daily functions of the business. Maintenance cost of equipment is high due to huge production of custom made and standardized kitchens. Also, it can find that the company focused on custom kitchens instead of standard kitchens because of high-profit margin and sales. It increased the idle cost of standard kitchen product due to the incomplete production process. It hampers the production process at various stages of assembly to final goods. As per the views of Garetti and Taisch (2012) high production cost such as cost incurred in raw materials, labor and inventory affect the demand and profitability of the company. Lower production cost higher the profits of the company. But its not mandatory that the lower production cost results always give the high profits. There are other factors that influence the profits also like high fixed cost and the cost involved in the production of less demanded material in the market. Hawkesbury cabinet produced the two products like custom base kitchens and standard kitchens. The issue that faced by the company is that the cost involved in the production of standard builder kitchens is high and that influence the operations of the company (Selnes, 2013). Expenses related to the cost of goods, the cost of inventory, work in process and finished product that affects the cash flow and revenues of the company. The main issue is facing Hawkesbury cabinets that the expected revenue which is no t generated from the high sales of this product. The company signed many small contracts with builders that associate the cost involved in the production. Sometimes the cost is high after the high sales of this product but the profit is low because of high expenses (Djelassi and Decoopman, 2013). Company cash flow is affected due to low profits and high production costs. The other factor that influences the operations of the company is that the company focused more on its old product such as the custom base kitchen. Due to high sales of the custom base kitchen that increases the cost of operations of the standard kitchen because cost incurs on work in progress, raw materials and maintenance cost of goods. The company can reduce the high cost by the use of various operations techniques like material requirement planning and FIFO and LIFO methods. Bowersox, Carter and Monczka (2013) explained that the Material requirement planning manages the scheduling and tradeoffs of the operational activities of the company. This technique is beneficial for the availability of right material on time that reduces the unnecessary cost incurred on the material. It is also beneficial for the company to reduce the lead time of production and optimal use of resources. Similarly, FIFO and LIFO methods help the company to reduce the idle operations involved in the particular product, such as demand of custom base kitchen results in the high cost incurred in process of standard kitchens (Errasti, 2016). Companys both products sales were increased and builders line was also increased. But still that the companys not earned the desired profits that affect the financial structure. Companys costs involved in the various stages of production of new builder line standardize kitchens that affect the sales of the product. Increase in operating expenses of the company due to unnecessary production activities. Companys financial structure is affected if the sales of the standardized kitchen are higher, company needs more equipment and tools to produce more products due to increased demand in the market (Acton 2013). So the company financed the fund from different sources that increase the debt ratio in the financial statements i.e. balance sheet and cash flow statements. The company needed more working capital to expand its operations. The cost of maintenance is increased that affects the expected revenues of the company that results to reduce in market share of the company. This move of comp any impacts the long and short run financial objectives in the future. High cost and profits affect the financial statements of the company. Strong balance sheet and sound working capital helps the company to broaden their scope and area of operations. Companys new product line impacts the financial strategies in future (PWC, 2016). Conclusion From the above case study, it can be concluded that the company faced the several issues regarding operations of the product. High cost is being incurred on raw materials, work in progress and suppliers results to decline in expected profits of the company. Furthermore, it can be seen that there are various operational techniques which benefits company to manage their issues respectively. Finally, it is concluded that the companys current production systems and processes impact the financial structure and impact of new product standard builder kitchen increase the cost of operations and decrease the expected revenue of the product due to more focus on other product. References Gunasekaran, A. and Spalanzani, A. (2012). Sustainability of manufacturing and services: Investigations for research and applications.International Journal of Production Economics,140(1), pp.35-47. Garetti, M. and Taisch, M., (2012). Sustainable manufacturing: trends and research challenges.Production Planning Control,23(2-3), pp.83-104. Bowersox, D.J., Carter, P.L. and Monczka, R.M., (2013). Materials logistics management.International Journal of Physical Distribution Logistics Management. Duflou, J.R., Sutherland, J.W., Dornfeld, D., Herrmann, C., Jeswiet, J., Kara, S., Hauschild, M. and Kellens, K., (2012). 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