What is good business sense and how do you develop it. Well in this paper I will be discussing and answering four questions based on developing good business sense. The four questions that are based on what we have learned in class are to choose three companies and observe how employees do their tasks. Try to identify the nature of their operating systems and are employees organized in different ways? What are the main kinds of MOM costs companies have, how does this affect their MOM operations?
Lastly how do companies design their operating systems to give them a competitive advantage? Since I have worked in retail before the three companies I have observed and have chosen to describe are Goodwill, Wall-Mart, and Target. These companies are the same but yet different In their missions and what they stand for. A nationwide thrift store as compared to two of the many retail giants have different alms to achieve their missions but yet are so similar, and that one common goal is the money. From 1 OFF programs to help people qualify for better Jobs to Wall-Mart figuring ways to slash rises down for people to save more money.
These companies have achieved success and been around for a long time because of their commitment to their goals. The differences in the operations involved in the input, operations, and an output stage of these companies varies with each one. The nature of their operating systems varies because for instance, Goodwill is a thrift store but it is still a retail store as well, their mission statement is, “Changing lives through the power of work”. What they mean by that is that they accept donation of items from anyone and that is what hey sell to fund their Job training programs and the retail store as well.
Wall-Mart’s goal is to have the lowest prices as compared to any grocery or retail competitor. They are a place that is meant for one stop shopping with a wide range of items from food, toys, toilet trees, electronics and clothing. In the case of Target, they almost sell the same things as Wall-Mart, but they are a little more less than a grocery store as Wall-Mart super center try to be. Target’s prices might not be as low as Wall-Mart because that is not completely their goal. Their Goal is to cater to the customer more instead of the wallets.
With shorter lines and more space to shop giving it a more of an intimate feel especially in the cloths section. Employees are organized in about the same in both Wall-Mart and Target but it is different in Goodwill. Target and Wall- Mart employees are organized by department’s positions, for example cashiers, cart pushers, stockers, and other normal positions needed for retail operations. With Goodwill it’s different because it is not Just a retail store. Sales from their donations keeps their operation going, so they have people working in the back called “Donation
Processors” who accept donations among other responsibilities. Positions at Goodwill mainly work in the back not on the retail floor. Goodwill has other positions such as sorter who receives only cloths from the donation processor to be sorted through for sale. Another position would be a “Hanger”, a person who hangs up the sorted clothing to be taken to the sales floor by a cashier that is not busy. Then there is an assistant manager and manager. There are five main kinds of MOM costs companies have are raw materials and components, plant, labor, inventory, and distribution.
How this may affect their MOM operations depending on what is needed. With raw materials and components parts comprise a significant percentage of companies’ total operating costs. With Plant costs, the cost of the machinery, computers, tools, buildings, and equipment needed to transform inputs into finished products. In labor costs consists of three parts which are, the number of employees needed to produce a given quantity, the amount each employee must be paid, and the health and social insurance benefits each employee is given.
Labor is the most costly expense to a company. The inventory cost is the quantity of resources, materials, supplies, and the goods a company has in stock. Input cost could be found in three different stages, input, conversion, and output stage. Distribution cost is the fifth stage in the MOM process, which are the costs of getting products to customers. Companies try to find ways to reduce these costs because high delivery and shipping costs increase the price customers have to depending on where the product is going.
Companies design their operating systems to give them a competitive advantage by sing different systems that work in the needs of their customers. One is the small batch production which is designed to make one-of-a-kind or small quantities of customized products. If a restaurant specializes in certain foods then they would use a small batch production. Another operating system would be mass productions which are operating system based on the use of automated machines and standard operating procedures to make work routine and create a large number of standardized products.