7036SSL Operations Analytics Assignment Sample
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ANALYTICS OF KEY OPERATIONS AREAS
Executive summary
Operation analytics is an effective method by organisation to do data analysis methods. Analytic of key operation areas in an organisation assist them to increase their productivity by effectively increase employee performance. This study take Unilever to analyse their key operation areas. In this study resource and demand planning operation analytic taken for analysis operations in Unilever.
Introduction
Operation analytics is a method, which is by organisation that uses data for analysis process and business intelligence to improve performance in real time every day operations. Some of the effective operation analytics tools are “data mining”, “artificial intelligence” and “machine learning”. Operation analytics assist in sync data from data warehousing to frontline tools. This process creates automation in business that provides better understanding between cross functional teams. The purpose of this study is to discuss analytics of key organisational areas in Unilever for increasing their performance. Study provides an overview of Unilever to find out scopes for organisation. Study explores key variables such as resource and demand planning and inventory management. Organisation analytics ability is highlighted in this study to understand their capabilities. At last key analytic tools and challenges are described in this study.
An overview of the organisation and the scope of that operational area
Unilever is the one of the biggest companies in the world for making consumer goods. It is a British multinational company headquarter in London, UK. Company products include food, ice creams, cleaning agents, beauty products and personal care. Company make revenue of £52.4 billion in 2021. Companies sell products worldwide that assist them to achieve a growth in sales. Company sales grow from 1.9% to 4.5% in 2021 financial year. Company has approximately 1, 48,000 employees working everyday in factories to create consumer goods (UNILEVER, 2021). Resource and demand planning is a key operation for organisations to allocate tasks to team members based on their ability, skills and best fit jobs in the organisation. This process assists in maximising efficiency by increasing employee performance in organisation by providing employee comfort zones during work. In case of Unilever resource and demand planning is a key point to increase effectiveness to reduce employee efficiency complications. Resource and demand planning implementation assist Unilever management to share tasks between 1, 48,000 employees who are working regularly in the factories. Furthermore, it affects them to increase production percentage to export their product worldwide.
The planning environment and the key variables
Resource and demand planning
Resource and demand planning is an effective way to maximise performance by including activities in organisation. As mentioned by Тryhuba et al. (2020), resources demand planning refers to matching current and future demands to business ability to deliver product and service to customers using human workforce. Resource and demand planning assist in creating strategies for organisations to effectively utilise resources between organisations to create product and services In Unilever approximately 3.4 billion people use their product every day (UNILEVER, 2021). This data show a high demand for Unilever products in global markets. Therefore, effective utilisation of resources between employees is going to assist Unilever improve their production of products to reduce shortage in global market. Resource demand planning is going to assist Unilever top level management to divide tasks between their factory employees depending on their skill levels. For instance, giving technological machine operation tasks to an employee with good technical knowledge is going to increase production.
Unilever is evolving their business process for future achievement. In recent market conditions, online shopping is in trend. Most customers prefer online shopping to consumer goods. Analysing these factors Unilever uses e-commerce websites for selling products (UNILEVER, 2021). Websites and e-commerce can be used by inclusion of good technical knowledge. Websites need to develop and maintain every day to provide better customer service for organisations. Resource and demand planning assist in understanding employee technical capabilities such as website developing and maintaining a-commoner. Using this Unilever assigns tasks according to employee’s capability that impact in providing effectiveness in e-commerce and online websites. As followed by Chofreh et al. (2020), resource and demand planning assist in providing better customer service for organisations. Through this process, organisations try to analyse demand for products. Knowing about demands assists organisations to increase productivity according to the customer demands. Therefore, companies can provide an adequate amount of product and service to customers to make them satisfied by services.
Resource and demand planning create impacts on the Human Resource Management (HRM) process in an organisation. These key operation activities assist employees to get work they are capable of doing effectively. Therefore, employees get better opportunities for their professional life and it helps HRM in managing employees in an easy way.
The organisation’s analytic capabilities in this operational area
Resource and demand planning is interconnected with each other. For instance, suppose there is a shortage in resources then demand cannot be fulfilled and if there is less demand and more resources then the company would run in loss. Resources depict availability of raw materials and other valuable resources to manufacture a product. On the other hand, demand entails the current and upcoming demand of business products. Balanced resources and demand lead to the success of the company (Bhave et al. 2018). Resource planning is easy for a company and it can be accomplished easily once demand for a product has been identified. Demand planning has several tools to analyse such as a persistent system of record, time series forecasting tools and collaboration. In terms of Unilever, it utilises all the instruments according to the situation. However, most of the time Unilever uses current order information and shipment history in order to predict demand and work accordingly.
Persistent system of record
In the process of forecasting, this tool utilised all the available historical data and contains the latest information regarding the company. This repository data provide two purposes such as storing the data feed and serving the record against current comparative evolution for performing continuous improvement. Generating accurate and consistent future forecasts binds with the right number of enterprises through data storage. Supply data, inventory, structure of cost, open orders, these all require input along with repository data in enhancing the value of this process.
Time series forecasting tools
This is a very crucial instrunet as it provides considerable increment in smoothness over spreadsheet without increasing the complexity of users. Without interaction of the user, this tool can predict by extracting the vital components such as ongoing trend, seasonality and impact of the external events on the final periodic forecasting result. In simple words, it generates scientific predictions based on historical time and stamped data. Operational and sales planning processes get impacted by time series forecasting tools due to their accurate baseline prediction.
Collaboration
This instrument refine prediction but do not create a prediction. In this collaborative demand planning, purchasers and sellers both establish a single prediction based on the shared resources on the internet. Design of exchanging dynamic data with business workflow takes place to increase the stock of customers while cutting down inventory. This process has several steps such as defining the role of partner and developing a confidentiality of shared information, commitment in resources, agreement of performance measurement and exceptional handling. Collaboration of field people would motivate them to ensure product availability. Moreover, all the responsibility lies on the forecaster so it also provides an opportunity to blame them for wrong predictions.
Capacity utilisation rate installed productive capacity for the employers. It interrelates the actual output rate with potential output. For instance, suppose the actual output produced with the installed equipment then potential output would be its full capacity to produce a product. 1.9% was the underlying growth of Unilever and volume was 1.6% whereas price was 0.3%, that means total turnover has decreased by 2.4% (UNILEVER,2020). In the context of capacity utilisation rate it indicates that Unilever failed to utilise the actual potential of capacity so potential output has decreased.
Discussion and analysis of the application of ONE key Analytics Tool or Model 800
In the context of resource and demand planning, Unilever uses various promotional tools and time series forecasting tools as a part of the promotional instrument. Mainly time series forecasting tool depends on ongoing trends with promotional events. According to Gahn (2021) external events or market promotion increased by 394% in event sponsorship and 17.45 in by one get one process. Hence, calculating the history of demand and increment in demand after promotion helps to determine future demand of the products.
Economic Order Quantity Model
Resources and demand planning has a connection with inventory management. Hence, the Economic Quantity Model (EQC) is used to analyse inventory management. Ideal order quantity is referred to by EQC to reduce or minimise the inventory cost of the company. In inventory, the company holds its resources so identifying demand for the product would lead to successful resource management as well. This model makes sure that, company orders the right amount of products for its particular product. In this, it actually minimises the loss of raw materials. The Assurance behind the right amount of product is that the company does not spend extra money by ordering the product too often. It conjectured that there is a bargain between inventory holding cost and inventory set up cost so that the total inventory cost is reduced to the minimum. In this whole process, the set up cost and holding cost get maximised (Traver, 2022).
In order to calculate EOQ for inventory, the company has to acknowledge its set up costs per order. This set up cost includes handling and shipping of the goods. Demand rate is important to identify in order to calculate the economic order quantity. Demand rate depends on the quantity of product that is sold per annum. Set Cost also refers to the entire cost that is associated with delivering, shipping and handling. This model considers the actual timing of reordering and the cost that would be generated from that order. For instance, suppose the company is ordering minimum order to maintain the inventory then it would face challenges. The reason behind the issue would be the space management problem and repetitive order would increase the total cost of the product.
Key challenges
Unilever is facing major challenges in managing its resources that have created a negative impact over its business performance. In this particular context, sustainable materials are not incorporated in manufacturing of products that have reduced quality of the product (UNILEVER, 2022). Climate change is the main factor that has reduced the quality of resources. Consumer brand preferences change due to alteration of resource quality. On the other hand, consumer demands are changing for alternation of resource quality. Apart from this, living standards of consumers are changing during a pandemic situation. Expensive products, which have no linkage with health and well-being, are avoided by consumers. The absence of demand forecasting has created an area for this organisation in managing its resources for future manufacturing of products.
This organisation has experienced a financial crisis due to alteration of consumer preferences. The lack of demand forecasting has created complications for this organisation in manufacturing products according to the requirements of the consumer. Market competition increased for Unilever due to delays in launching products in markets that promote consumer health during the pandemic period (Naidu and Kerber, 2022). On the other hand, the brand image of this organisation gets negatively affected for not choosing the right message for the consumer during COVID situation. Focusing on “body positive campaigning features”, this organisation has targeted women belonging to different cultural backgrounds. Unilever has invested on product promotion by highlighting ethnicity in 2020. However, the global pandemic situation has created a health crisis in 2022 and it has increased the demand for health care products. Huge investment has been conducted by the organisation for restructuring of its manufacturing procedure during a pandemic situation. The alternation of business plans has increased complications among labour in terms of choosing the right raw materials according to market conditions. Besides this, transportation costs will increase during 2022 due to the National lockdown that will disrupt the supply chain.
Henri Fayol’s theory
The industry management practice is influenced by this theory throughout the twentieth century. This theory was published in 1900 by Henri Fayol, the father of modern management. There are five elements in this theory that lead to successful organisational management. Planning, organising, commanding, coordinating and controlling are these aspects, by which the management of organisation runs smoothly (Ward, 2021). Planning or “plan for action” is an important aspect of management. Sketching an outline of the strategy would be helpful to manage the rest of the work successfully. Organising provides each required thing for action, command helps to fulfil the task correctly. Coordination depicts the harmony of employees while implementing an action. Lastly, control verifies the conformity of the adopted plan.
Conclusion and recommendation
This assignment has minutely evaluated the factor resource and demand planning for the UK’s FMCG giant Unilever. It has provided a vivid overview of the organisation and its scope on resource and demand planning. In the course of discussion, it has shed light on the variable environment for this organisation. This assignment has critically discussed the connection between supply and demand to identify the suitable option for Unilever. It has found that promotional tools are a successful time forecasting instrument as it has accelerated revenue. It is recommended that Unilever utilise Henry Fayol theory to smoothly run the functions of management and follow the EOQ model to minimise the inventory cost.
References
Bhave, A.G., Conway, D., Dessai, S. and Stainforth, D.A., (2018). Water resource planning under future climate and socioeconomic uncertainty in the Cauvery River Basin in Karnataka, India. Water resources research, 54(2), pp.708-728.
Chofreh, A.G., Goni, F.A., Klemeš, J.J., Malik, M.N. and Khan, H.H., (2020). Development of guidelines for the implementation of sustainable enterprise resource planning systems. Journal of Cleaner Production, 244, p.118655.
Edwards, R., (2018). An elaboration of the administrative theory of the 14 principles of management by Henri Fayol. International journal for empirical education and research, 1(1), pp.41-51.
Gahn, S.J., (2021). On the adjustment of capacity utilisation to aggregate demand: Revisiting an old Sraffian critique to the Neo-Kaleckian model. Structural Change and Economic Dynamics, 58, pp.325-360.
Hamidpour, H., Aghaei, J., Pirouzi, S., Dehghan, S. and Niknam, T., 2019. Flexible, reliable, and renewable power system resource expansion planning considering energy storage systems and demand response programs. IET Renewable Power Generation, 13(11), pp.1862-1872.
Naidu, R, and Kerber, R (2022) Unilever under pressure to show sustainability focus is good for business. Available at: https://www.reuters.com/business/retail-consumer/unilever-under-pressure-show-sustainability-focus-is-good-business-2022-02-09/ [Accessed on 25th June, 2022]
UNILEVER (2021). Annual Report 2021. Available at: https://www.unilever.com/investors/annual-report-and-accounts [Accessed on: 20th June 2022]
UNILEVER, (2021) Strong full-year results demonstrate Unilever’s resilience and agility. Available a: https://www.unilever.com/news/press-and-media/press-releases/2021/strong-full-year-results-demonstrate-unilevers-resilience-and-agility/ [Accessd on 25th June, 2022]
UNILEVER, (2022) Our material issues. Available at: https://www.unilever.com/planet-and-society/sustainability-reporting-centre/our-material-issues/
Venkatesh, V.G., Kang, K., Wang, B., Zhong, R.Y. and Zhang, A., 2020. System architecture for blockchain based transparency of supply chain social sustainability. Robotics and Computer-Integrated Manufacturing, 63, p.101896.
Ward, P, (2021) Management Theory of Henri Fayol: Summary, Examples. Available at: https://nanoglobals.com/glossary/henri-fayol-management-theory/ [Accessed on 25th June, 2022]
Тryhuba, A., Тryhuba, I., Mushenyk, I., Pashсhenko, O. and Likhter, M., (2020). Computer model of resource demand planning for dairy farms. Independent Journal of Management & Production, 11(9), pp.2235-2249.
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