Briefing Report Addressing Current Operations Management Process in Mech-Tool Engineering Ltd.

Introduction

According to the ECORYS (2012), a major part of about 20 million non-financial active businesses in Europe is occupied by small businesses: almost 99 percent (Schmiemann, 2008) and 99.9 percent in the UK. Additionally, small businesses are also responsible for providing employment opportunities for about 67 percent of the total 87 million employed in any industry in Europe (ECORYS, 2012). In the UK alone, private sector SMEs provide employment for 51% of employees and are accountable for 42.38% of the turnover of all companies (Kelly & Ashwin, 2013). But it is also seen that many small businesses fail due to the lack of proper financing provisions, poor or undeveloped marketing skills, and difficulties in investments for innovations and research (Schollhammer, 1982). We take a look at SME Mech-Tool Engineering Limited and investigate the issues and challenges facing it in its operations management and provide some recommendations for overcoming them.

Background Information

Established in 1969, Mech-Tool Engineering Limited is a small business that operates in the engineering sector and includes the design, supply, and installation of protective enclosures in hazardous environments.  The company is run by the managers and the company owner and employs 80 to 115 people depending on the workload. It is situated at Darlington, in County Durham, UK. It is ranked 26th in The Sunday Times Profit Track 100 in the year 2016 (MTE Ltd, 2017).

Identified Issue

Operation Management involves the efficient and effective process to provide services and products to the customers (Slack et al., 2010). In order to achieve such an ideal process, the operational functions that are responsible for producing these products and services have to be ably supported by the contributions of all the functional areas of the organisation, especially the supply chain (Stevenson & Sum, 2015). The inputs such as the infrastructure, components, finance and information undergo the transformation into products or services that are desired by the customer while maintaining labour efficiency, the levels of the inventory and the sales volume in spite of delays and loss of manpower hours (Kumar & Suresh, 2009).

Industries such as Mech-Tool Engineering Limited have to be more careful in following the various regulations regarding the prevention of contamination of the environment by hazardous pollutants such as those issued by the Health and Safety Legislation laws that pertain to the workplace (Health and Safety Executive, n.d.). Not only have the lives of the workers are at stake, but the safety and health of the environment have also to be maintained without any margin of error and provide their services to the complete satisfaction of the customers too.

Challenge(s) facing the company

The main challenges that were faced by the company in the successful operations of this enterprise lie in the very nature of the business: providing protection in hazardous environments such as onshore and offshore oil and gas wells, nuclear, renewable, chemical and petrochemical energy industries.

As their company’s operations involve working under extremely dangerous situations, the employees and stakeholders have to be convinced that the safety factors followed are of the highest standards to protect the lives and health of the workers. Additionally, the clients would also have to be ensured of the standards of the safety solutions offered to them. For these reasons, operations management has to be upgraded to create an accurate and suitable standard that could ensure such conditions.

Conclusions

The best solution for this problem would be to upgrade the company management system to follow the guidelines issued by the ISO 9001:2000. This would mean improving the safety standards of all the operations of the company and also ensuring the health and well-being of its employees. The implementation of these standards also increases the competitive advantage of the company because it gains more customer confidence, thus leading a phenomenal increase in productivity. The ISO 9001:2000 also ensures the company’s pre-qualification in its application for tenders (HSE, n.d.).

The implementation of the ISO 9001:2000 would accrue benefits to the company in many areas: The greater health and safety parameters of the employees would increase employee satisfaction (HSE, n.d.) and would not only help in retaining them but also in attracting new staff during recruitment drives. The employees would also find their work more efficient and streamlined by following the guidelines, without any ambiguity leading to disinclination and uncertainty (HSE, n.d.).

Customers would be more satisfied as the services are made more efficient (HSE, n.d.). This satisfaction would in turn, lead to repeat purchases and customer loyalty which is in itself a type of marketing promotion. 

It also becomes a part of the corporate social responsibility of the company, in that it is more conscious of the environment safety and health factors. Government environmental regulatory bodies would be satisfied with the scrupulous concern for the environment.

Some of the employees had to undergo training in safety procedures and all employees were made aware of the new standard safety measures that were to be followed. They also created as well as authorised a Quality, Audit and Safety Manager to oversee the changes in the processes.

Recommendations

Effective operation management of any company lies in providing the client with the desired products and services with the minimum cost and maximum benefits. In this case, the provision of safety in hazardous environments is, in itself, very dangerous and meticulous work. By following the ISO 9001:2000 standard guidelines, company becomes more competitive and profitable.

When a company similar to Mech-Tool Engineering Limited finds itself in the midst of parallel problems in its operations, upgrading to ISO 9001:2000 is a very effective solution. The operational procedures are simplified and standardised so that they become both easy to follow and efficient to implement successfully.

References

ECORYS, 2012. EU SMEs in 2012: at the crossroads: Annual report on small and medium-sized enterprises in the EU, 2011/12. Rotterdam: European Commission ECORYS.

Health and Safety Executive, n.d. Health and safety legislation - laws in the workplace. [Online] Available at: http://www.hse.gov.uk/legislation/ [Accessed 12 January 2017].

HSE, n.d. Mech-Tool Engineering Lts. [Online] Available at: http://www.hse.gov.uk/business/casestudy/mechtool.htm [Accessed 12 January 2017].

Kelly, P. & Ashwin, A., 2013. The Business Environment. Andover, UK: Cengage Learning EMEA.

Kumar, S.A. & Suresh, N., 2009. Operations Management. New Delhi: New Age International Publishers.

MTE Ltd, 2017. Our Solutions. Your Safety. [Online] Available at: http://www.mechtool.co.uk/ [Accessed 12 January 2017].

Schmiemann, M., 2008. Enterprises by size class - overview of SMEs in the EU. Luxembourg: European Communities Eurostat.

Schollhammer, H., 1982. Internal corporate entrepreneurship. In C.A. Kent, D.L. Sexton & K.H. Vesper, eds. Encyclopedia of entrepreneurship. Englewood Cliffs: Prentice-Hall. pp.209-23.

Slack, N., Chambers, S. & Johnston, R., 2010. Operations Management. 6th ed. Harlow, UK: Pearson Education Ltd.

Stevenson, W.J. & Sum, C.C., 2015. Operations Management. 2nd ed. New York: McGraw/Irwin.

 

 

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