INDIVIDUAL ASSIGNMENT:

FINAL ASSESMENT

AZDZHARULNIZZAM ALWI

PBS21101107

MANAGING OPERATIONS OF BUSINESS

MGT7101

PROF. DR. DEVIKA NADARAJAH

PUTRA BUSINESS SCHOOL

8 AUGUST 2022

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Introduction

The business management functions and activities can be distinctly grouped in three major
management areas including Marketing, Finance and Operations. Almost all of the business
disciplines lie under the umbrella of these three main functions (Anupindi et al, 2006). Among
these main areas operations management is an important one that deals with managing and
assuring the efficiency and effectiveness of all the operations undertaken by the business so that
these operations can support the organization to meet its strategic goals. There is wide range of
activities and functions that are performed under the operations management like designing the
systems in a way to effectively use the raw goods or input in the production of finished and final
goods and services while maintaining the company standard. Thus it can be said that "Operations
Management is one of the major function of the businesses that is concerned with the planning,
scheduling, and controlling all the activities that transform the inputs in to the outputs" (Davis et
al, 1999). Here inputs refer to the raw material and human resources whereas output refers to the
finished goods and services being produced by the business.

Operations Management is a systematic business activity that must be undertook by an

organization by properly following the set of widely recognized as well as well-developed
concepts, tools and techniques so that the business can manage its operations while remaining
within an acceptable framework of activities and functions (Finch and Byron, 2006). In order to
successfully run the business, it is very essential for the management of the organization that it
must develop such strategies and policies that can result in adequate management of operations
so that the business can perform its operation process in satisfactorily manner. This is an
important because it involves the management of the matter related with the significant number
of employees and physical assets and ineffective operations management can take the business at
highly risky position that might become a threat to the existence and survival of the business.
(Rainbird and Mark, 2004).

All types of organizations need to be as productive as possible to best utilize their important
resources, to meet the needs and demands of their consumers, and to stay competitive with
similar business organizations. In today's fast-changing and dynamic way of life, many
organizations come up with different strategies and ideas to improve their operation. In either
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case the operations system will provide the conversion of certain inputs, such as materials and
labor, into certain outputs, either products or services. Thus, the operations function can be
distinguished from the other main functional areas of an organization, such as marketing,
finance, personnel, and accounting, which are no less vital for the firm's success but which are
less directly related to the organization's day-to-day pursuit of its main business. Of course, all
main functional areas of an organization are intricately entwined; all interact with and provide
support for the others, and the boundaries are not always clear between them.

This paper is aimed at identifying the critical issues and major problems that the FIC Supplies
Sdn Bhd, FICSSB face in the area of operational management. In this regard first of all the paper
explains the importance of operation management for an organization and then discusses and
identifies the core issues and problems related with this important discipline of business
management. The paper also proposes some suggestions with the intention to bring out the
solution to the problems and issues raised in the paper.

Company Background

FIC Supplies Sdn Bhd (“FIC Supplies” or “Company”) is established in 3rd June 2016. FIC
Supplies Sdn Bhd (FICSSB) is wholly owned by Federal Land Development Authority (FELDA)
with operations in all state of Peninsular and Sabah except for Pulau Pinang and Sarawak.

FIC Supplies expertise cover in Trading Construction Material and also Contractor for all
Engineering Works. FIC Supplies provide an attractive Contractor Credit Facility (Deed of
Assignment) that funds the project materials requirements and directly supplies the
product/services to the customers (contractors or vendors) to complete their Client’s project
successfully.

In 2020, FICSSB underwent a revised business plan and has added construction & technology,
land development and operation & maintenance in keeping up with current market demands and
as part of the company’s expansion efforts. Having identified food-based products as a valuable
commodity, FICSSB has also ventured into Agro & food-based products/ technologies with
strategic partnerships. Our products include livestock and cash crops in catering to current
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market needs and in serving the community. As a company, FICSSB strive to provide value-
added products and services to the business and the community that we serve. FICSSB managed
to increase the company's annual revenue from RM 11.2 million in 2016 to RM 38.1 million in
2020.

Issues in Operations Management of FICSSB’s

Even though, FICSSB’s has been operating successfully along with supply the good quality
products to the construction sector, there are certain issues found in the operations management
of the company that restricts its effectiveness of conducting the overall operational activities. The
operations management of the company is not based on IT system for managing the flow of
work. The company follows manual systems in conducting various operational activities. This is
one of the most critical operational issues that the company has been facing, which further
hampers the operational process within its internal environment.

The existing IT systems that operate in the company all work in a standalone manner and thus,
they are not interconnected with every department of the organization. This is a major
disadvantage that is currently faced by the operations management of the company. Every
operation process flow for all departments within the company such as Finance process,
procurement and administration still uses a manual system and it slows down the company's
operational processes such as product purchases, payment claims to clients, payment to vendors
and other company operations process. The workflow is therefore controlled with the help of
manual systems that would also create a huge difficulty. However, huge demand for the
construction or engineering products in the local market is increasing day by day and thus, it has
become essential for FICSSB’s to meet the demand for the customers. Moreover, the costs and
expenses involved in the transaction of products are also high because of the traditional method
of operations management that fails to utilize effectively the available resources.

In addition, there are certain problems that FICSSB’s is facing, which in turn tend to hamper the
normal working process of its business activates. The company does not have an Information
Technology based operations management system, as a result to which, there is a lack of
integration between various departments of the organization. If there is no integration between
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each department, it will cause many errors in the storage of data or company operation
information and also it will cause errors in company transactions that may result in losses to the
company. In today's technology world, the company's efficiency in managing transactions and
operational efficiency gives the company an advantage to give satisfaction to clients and
customers, indirectly giving new business opportunities to the company.

Proposed Solutions to the Identified Problems

The above discussion revealed that there are some important issues in operations management
that must be dealt in effective manner to assure the successful achievement of the organizational
objective and the operations manager often face problems in effectively managing these matters.
There is very crucial importance of the fact that the businesses must know that how can they
manage their operations in most effective manner and what are the steps and strategies that must
be taken for effective operations management.

However, in order to make the operations management of FICSSB’s more effective and efficient,
it is inherently necessary for the company to implement an integrated IT system that would be
interconnected with every department of the organization. From a generalized perspective, it is
arguable in this context that with rapid technology innovation in the current era, it has become
very essential for the business establishments to make efficient use of Information Technology in
the business process that would help it in developing the performance of work along with better
quality operation. Moreover, proper application of technology will also help in reducing the costs
and expenses related with the procurement and transaction processes that would further help in
maximizing the overall profit earning for the company. In context to the case scenario, FICSSB’s
would be benefited if it can implement Information and Communication Technology (ICT) in the
organization that would further contribute in making the operational management of the
company more effective.

Various modern approaches of information technology, such as cloud computing and

Management Information System (MIS) would serve beneficial for the company. Moreover, the
issues of supply chain can also be mitigated with the help of an effective ICT. It is worth
mentioning in this context that cloud computing refers to an internet based computing
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technology through which the information and resources are stored in servers even if owned by
some third parties. Thus, through cloud computing, the company can reduce its cost involved in
information management, it will not be required to purchase their own servers where huge
expenses are likely to be incurred. However, a minimal amount of rent is required to be paid to
the third party holding the possession of the cloud computing domain. Another advantage of
cloud computing for the company is that the responsible personnel of the company can easily
access the information at any point of time as and when required. It would therefore make the
operational management of FICSSB’s more effective.

Similarly, MIS would also serve beneficial to overcome the issues of operations management
and perform the business activities smoothly. MIS is generally referred to a computer based
information system that helps the employee to evaluate, manage and efficiently organize various
departments of the organization in an effective manner. Different software tool can be used in the
MIS that helps to conduct continuous operational activities effectively with lesser time
consumption. Moreover, the system also includes various databases, analyzing which, the
management can make various decisions related to the organizational developments and plan
accordingly.

Apparently, it has been mentioned in the case scenario regarding the issues related to the supply
chain of the company that negatively affects the operational process of the company. One of the
major means to overcome the issue is to implement the concept of lean management in the
administrative and operation activities of the company. The lean management involves
continuous improvement of the company, which is mainly of long term basis. Required
incremental changes are being management and operational level that helps the company in
improving the quality as well as efficiency in both managerial and operational levels.

Work Breakdown structure (WBS) is one of the most important tools in a project management
that divides every part of a project into smaller components that helps in enhancing its level of
details. It therefore helps in planning work more effectively. For any project, there is a specific
time allocated within which it has to be completed. In addition, it is also required to accomplish
the project within a stipulated cost involved. However, with the help of WBS, it can implement
the project within a fixed time frame along with the respective costs associated with it. An

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effective WBS would help in dividing the overall project into various divisions.

Organizational or company are looking for new materials and production techniques as most
global markets are contracting (Cohen, 2020). Many firms were actively deploying various
digital technology assets across their supply chains to mitigate the negative impact of the
COVID-19 pandemic on operations. Refer to Fei Ye et al. (2021), the empirical results from 175
Chinese firms that have deployed digital technology assets to varying degrees reveal that both
the breadth and the depth of digital technology asset deployment show positive relationships
with supply chain visibility. In contrast, the depth but not the breadth of digital technology asset
deployment poses a positive relationship with supply chain agility. Besides, the new supply
chain technology development can dramatically improve visibility across the end-to-end supply
chain. It also supports supply chain agility and resiliency broken down within the organization
and connected through the full supply network to enable end-to-end visibility, collaboration,
responsiveness, agility, and optimization (Jim & Lee, 2021).

As industries move into advanced information technology such as IoT, cloud computing, and
robotics making evolution to the supply chain more possible and companies learn to take on the
unexpected events. (Jim & Lee, 2021). Transforming their operations into open, flexible, and
dependable cyber–physical systems could be a feasible roadmap for achieving both goals.
Furthermore, the transition to digitalization has already begun for many business magnates
(Yaghlane & Azaiez, 2017). More on the implementation of digital technology, supply chain
stakeholders have to delicately pay adequate attention to preparation, response and recovery
activities in order to better address major supply chain disruption (Moosavi et al., 2022). He et al.
(2020) in their view stated that technologies help to reduce the severity of the COVID-19
pandemic’s impact on people, organizations and society which requires strong coordination for
connected data, people and systems to facilitate worldwide collaboration.

Conclusion

From the overall analysis, it can be concluded, the disintegration of ICT system in the operations
management is a major disadvantage of the company. With the implementation of digital
technology, it is a proactive and cutting-edge approach that eventually helps businesses
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worldwide become more productive and sustainable. The implementation of digital technology is
a crucial facilitator that can encourage FICSSB to concentrate on resolving their geographical
conditions and the varying levels of preparedness and resilience of their supply chains, which
would help them to achieve a strong performance. However, for conducting the project in an
effective manner a WBS has also been provided that will help in successful project management.

For additional information, on May 202, FICSSB’s management already purpose to the
Company Board of Director to purchase the Management Information System (MIS) which is
would serve beneficial for the company. However, because the capital expenditure of the system
is amounting RM 700,000.00 and commitment monthly RM 15,000/month, Board of Director
give advice for management to maintain the manual system for atleast One (1) year period
because before this the management are successfully maintain the manual system without give
major trouble or problem to the company. However, if the Revenue and Profit of the company
increase and show a good performance within this quarter three (3) of year (2022), BOD can
consider for management to implement the Management Information System.

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