1. Introduction
Operation management and supply chain, both are important aspects of a business. Operation management involves all the activities inside the organization and supply chain management includes the activities related to the supply of products to the market. This report is a detailed analysis of the operation and supply chain management of the company M&M. M&M has a rich history from the past 100+ years. The company is continuously offering new products and new segments of the business but one thing is common that all the segments act as family members(Abbady, Hessian, & Alaam, 2017). M& M plain chocolate candies were introduced by Forrest E. Mars in the United States. In 1950, the company came up with a new solution to maintain the uniqueness of their products by stamping m letter on every candy. In 1954, the company introduced M&M peanut chocolate candies. In 1960, the company introduced fruit chews. In 1984, the plain and peanut chocolate candies offered by the company became the official snack food of the Olympic Games. In 1989, in the US, the company came up with peanut butter chocolate candies. The company M&M continued its innovations by introducing caramel candies in 2017 and crunchy mint in 2018.
This report is a detailed analysis of the operation management and supply chain management of the company for its products and services. The first section of the report explains the key products offered by the company. In the second section, the report has discussed the competitive capabilities of the firm. The third section shows the comparative analyses of the company with its competitors through polar chart and dominance frontier. The fourth section of the report is about process calculation analyses. The fifth and sixth section discusses the supply chain of a product and new location of the warehouse of the company. The last section of the report explains how the firm can improve its productivity through mass customization.
2. Key products/ Services and Input-Output process
The company offers various categories of products. The products of the company can be categorized based on the occasion, personalizable products and non-personalizable products. The products of the company are available in different flavours: chocolate, peanut, chocolate peanut and peanut butter(Abbas, 2018). These chocolate and peanut products are available in different colours. In this section, the report has discussed the main products and their input-output process. The company offers different product based on different sizes, chocolates, nuts, spices and herbs, fruits, deserts and colours. Input-output process of products of the company is as follows
Inputs: The main inputs for the process of chocolate and chocolate related products making is cocoa beans, chocolate, milk, electricity, labour, machine and paper.
Process: It includes various processes to prepare the products such as sorting, mixing, grinding, winnowing and roasting.
Output: The main products produced are chocolate products and waste products.
3. Competitive Capabilities of M&M
The chocolate brand M& M offers chocolate products in different colours and sizes. M & M is the sub-company of Mars Inc. There are various competitors of M&M in this industry. But the company has gained a competitive advantage in the food and beverage industry because of its strengths. The main strengthening factors of the company are high brand recognition in all over the world, affordable products, variety of colours which attract the attention of the customers, attractive marketing and advertisement strategy and personalized gifts for birthdays and parties. Hershey is the main competitor of the company which is regularly offering new brands of the chocolates(Dubai, 2018). But M&M has kept eye on them every strategy of its competitors to gain competitive advantage. The tagline of the company “Melts in your mouth, not in your hand” helps the company to attract a large number of customers.
4. Comparison of the company with other companies using Polar chart and Dominance Frontier
In this section, the report has described the comparison of M&M with its close competitor Hershey. The comparative analyses of both these companies have shown through the following polar chart. The comparative analyses of both of these competitors describe that overall score of the company M&M according to Knoji ratings is 3.8 and the overall score of Hershey is 3.9. Hershey is highly recognized as compared to M&M. This brand is globally recognized because of discounts and offers provided by it o its customers.
Low price strategy followed by M&M Company has made it able to compete with the other competitors in the market. One positive factor which attracts more customers towards M&M as compared to Hershey is the variety of chocolate products offered by the company. The company offers chocolate products in different colours and sizes. The products of the company can be categorized based on the occasion, personalizable products and non-personalizable products. The products of the company are available in different flavours: chocolate, peanut, chocolate peanut and peanut butter. These chocolate and peanut products are available in different colours. In this section, the report has discussed the main products and their input-output process. The company offers different product based on different sizes, chocolates, nuts, spices and herbs, fruits, deserts and colours. But on the other hand, Hershey offers limited chocolate products in limited colours.
The above graph explains how the company can make the supply chain and distribution process easy by following the dominance frontier in operation management and supply chain process. This process will help the company to use specialization of skills and to increase productivity. It will also help in overcoming the challenges related to delay in delivery of products.
5. Process Analyses Calculation
Every organization uses flow rate, inventory and flow time as the main units of measure the performance of the workers as well as the overall productivity of the organization. For the process analyses calculation, the organizations use the term flow unit which represents every single activity in the firm(Landry, 1998). All the chocolate products offered by the company are known as flow units. The number of products manufactured by the company in per unit of time is known as flow rates. Flow rate term also represents the speed of delivery of products from the operation department to the supply chain department and its further processing to the customers through the distribution process.
The time taken by the supply chain department to the customers is known as the average flow rate. This stream pace of administrations conveyed to the clients is known as the normal rate. The aggregate sum of time spent by stream units in the business procedure is known as the complete time of preparing. If there should be an occurrence of more than one way, this stream time is determined through the way which is the longest(Wu & Pagell, 2011). The all outnumber of stream units took care of by the business procedure is known as stock. Stock at the organization is determined by separating the stream rate isolated by stream time. Stock can be determined to utilize the speed of conveyance of administrations to the clients and the quantity of clients handles by the office in a specific time. The chiefs for the most part centre on expanding the throughput. Accordingly, they attempt to lessen their cost and attach the speed of conveyance of items to the clients to expand the income of the organization(Zuckerman, 2002). The organization wants to get the input from the clients identified with the administrations offered by the organization to improve the administrations later on. This encourages the organization to build the speed of conveyance of administrations to the clients because the organization modifies their administrations according to the input got from the clients.
6. The supply chain of a product and risks related to supply chain
In this section of the report, we are discussing the supply chain process of M&M peanut chocolates. Supply chain process of the M&M Peanut chocolate consists of various elements for the movement of products. The supply chain of these products starts with the customers and also ends with the customers.
Customers: This chain starts when the customers start liking the products and demand for these products and finally purchase the products offered by the company through the retail store. The customers’ order for the products as per their requirement and sales department of the company receive the orders to manufacture the products(Stephenson, 2014).
Planning: The next step of the supply chain process of the company is to plan for manufacturing. The planning department is responsible for all these planning to fulfil the requirement of the customers. According to the plans, the company purchases the required raw material.
Purchase: The planning department sends the list of required raw material to the purchasing department. This department further sends the purchase orders to the different suppliers to purchase the materials.
Inventory: Afterreceiving the raw material from the suppliers, quality and accuracy of the products are checked and the material is sent to the warehouses. After supplying the material, the suppliers also send the invoices to the specific departments from where the material was ordered(Sarkis, 2006).
Production: According to the plan of the production, the raw material is transferred to the specific departments. Using this raw material, finish products are also produced as per the requirements of the customers.
Transportation: After receiving the finished products, the shipping department decides to ship the products to the customers by using efficient methods. When the goods are delivered to the customers the company also sends an invoice for those goods.
Supply chain risks: The Company also faces various challenges in the supply chain process of the products. These risks include supplier failed to deliver the raw material. Although the company gets the raw material from renowned suppliers, yet the risk of poor material or latte delivery of products always exist(Joshi & Rathore, 2013). Other risks can be outsourcing, logistic delays, loss of information, miscommunication regarding orders, risks related to political, economic and natural calamities and risks of theft and terrorism. These risks can affect the supply chain process and production and distribution capability of the organization.
7. New Location for the warehouse or service centre of the firm through the Center of Gravity method
By using the centre of gravity method, the firm can locate a new place, which can increase the productivity of the firm by reducing its cost. Through this method, the company can locate the area which is near to its distribution centres. Less distance between the distribution centres and the operational plants will help the company to reduce the cost of transportation. The following example shows how the company M&M can find a new location using the centre of gravity method.
The above numerical example proves that the company can use this center of gravity method to decide about the location which can help in minimizing the cost of transportation of the company. Center of gravity method is an approach used by organizations to find a new facility which can help in the minimization of the costs of the organization. The main input used in this method is the volume of services offered by the firm(Wu & Pagell, 2011). In this case, we are discussing the services offered by M&M chocolate company. Facility location for every organization is a one-time decision(Stephenson, 2014). This decision cannot be reversed. Overall cost pattern is based on this facility location. This facility location directly affects the sales of the organization. The main factors which influence this plant facility are its distance from the raw material centre, its distance from the market and its facilities and infrastructure
This new location explored using this centre of gravity method will help the company in increasing the speed of delivery of the products. It will increase the satisfaction of the customers of the company as well as it will increase the revenue of the company by decreasing its cost.
8. Application of Mass customization to the product
Mass customization is known as the production of unique goods on a large scale. Using this technique the firm can serve different requirements of the customers, preferences of the market by producing varied products. Through this technique, the company can easily overcome the challenges related to delayed delivery and the disappointment of the customers. Mass customization can help the company for knowing the choices of the customers so that new products can be able to meet their requirements. This strategy acts as a postponement tactic to attract a large number of customers towards the products of the company(Landry, 1998). The company can also adopt modular design and packaging for its chocolate products through this strategy. In the way, the company will be able to compete with its competitors.The Company also faces various challenges in the supply chain process of the products. These risks include supplier failed to deliver the raw material. Although the company gets the raw material from renowned suppliers, yet the risk of poor material or latte delivery of products always exist.
Other risks can be outsourcing, logistic delays, loss of information, miscommunication regarding orders, risks related to political, economic and natural calamities and risks of theft and terrorism. These risks can affect the supply chain process and production and distribution capability of the organization. As we have studied previously, the main competitors of the company are Hershey for its chocolate products and it is regularly introducing new chocolate products for its customers. Thus the company needs to adopt this mass customization technique to maintain the interest of their customers in these chocolate products and to attract new customers to gain competitive advantage.
9. Conclusion and Recommendations
The study concludes that M&M is a renowned company in the Food and Beverage sector of the United States. The company has covered a large share of the market by introducing a wide range of chocolate products to the customers of the company. Although the main competitor of the company Hershey has gained the largest share of the market in this industry the company has made its recognition through a variety of chocolate products. The report has described the comparative analyses of the company with its close competitor Hershey through Polar chart from the aspects of quality, price, taste, packaging and variety. The report has also explained the supply chain process and supply chain risks of the company. The only risk faced by the company is related to the delay in delivery of products to the customers. The new location facility explained that the company can overcome this risk by finding a new location near its distribution plants through the centre of gravity method. This new location explored using this centre of gravity method will help the company in increasing the speed of delivery of the products. It will increase the satisfaction of the customers of the company as well as it will increase the revenue of the company by decreasing its cost.
10. References
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Joshi, & Rathore. (2013). On Supply Chain Competitiveness of Indian Automotive Component Manufacturing Industry. International Journal of Production Economics, 21-35.
Landry. (1998). Supply Chain Management. Harvard Business Review.
Laudon. (2010). A New Supply Chain Project Has Nike Running for Its Life. In Essentials of Management Information Systems: Managing the digital firm. sixth edition Pearson Education.
Sarkis, J. (2006). Greening the Supply Chain. Springer Science & Business Media.
Snippet, V. (2015). Supply chain development. Global Ecology and Biogeography, 2 (1), 311-325.
Wu, & Pagell. (2011). Balancing priorities: Decision-making in sustainable supply chain management. Journal of Operations Management, 65-78.
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Operation and Supply Chain Management by Subject Academy
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