Critical Analysis Hawkesbury Cabinets Pty Ltd

Question: Discuss about the Critical Analysis for Hawkesbury Cabinets Pty Ltd. Answer: Introduction This essay is based on the subject area of operations management. However, the main focus area of the study is the operation management at Hawkesbury Cabinets Pty Ltd, which is current facing some problems in its business. This particular essay identifies the major problems that the organization is currently facing and at the same time, it also emphasizes on the identification of the roots of the problems. The conclusion of the essay is derived by considering the overall findings of the study. Critical analysis of the problems at Hawkesbury Cabinets Pty Ltd As per the case study, Hawkesbury Cabinets Pty Ltd is operating a successful business since 2008. The company is specialized in manufacturing custom-built kitchen cabinets. The sales volume and the range of clients of the company is increasing day-by-day; however, the company is unable to increase the profit percentage as compared to the sales volume. This situation has made the general manager Mei Chen worried about the operations management of the company. Along with the problems in profit margin, the accountant of the company has also identified that the cost structure of the company is also at increasing stage. In the analysis of the case study, it has been identified that the main reason behind the profit and cost issues of the company is its huge inventory or work-in-progress items. As per the principles of the operations management, a company must organize the resources in such a way so that it can minimize its cost structure (Akalin, Huang Willems, 2016). At the same time, the cut flow time is another basic principle of operations management. As per the cut flow time principle, the business organizations must build such an operational flow that helps to get the finish product within the minimum possible time (Vaughen et al. 2015). However, in case of Hawkesbury Cabinets Pty Ltd, the number of items at work-in-progress stage is huge, which has blocked the manufacturing area of the company. High volume of work-in-progress items denotes that the flow time of the company is high, which indicates the company is failure to manage its operations properly. In this context, Goh and Eldridge (2015) argued that decrease in the flow time requires involvement of more people and improved machineries in the production and operational process, which is not available in all companies. At the same time, the principles of operations management also states about the continual and rapid improvement in the operating and manufacturing activities within the company (Attafar, Shahin Kheradmandnia, 2016). However, in this regard, Akalin, Huang and Willems (2016) noted that rapid improvement is not possible for all type of organization. In the organization like, Hawkesbury Cabinets, if the improvement is made in one section, then it will require change and improvements in the other sections also, which may incur huge cost. For example, if the company that is Hawkesbury Cabinets wants to improve its inventory management system, then it needs to sale its current inventory and needs to reduce it. However, selling the inventory will require investment of huge cost in the distribution and promotion of the products (Valmohammadi Roshanzamir, 2015). The root of the operational problems at Hawkesbury Cabinets is in the products prioritizing system at the company while scheduling the trade-offs made to the products. At the same time, the company has involved the same craftspeople in manufacturing the standards as well as customer kitchen cabinets. Due to the involvement of same craftspeople, the production system takes more time to produce the finished or final products (ÄŒiegis Jasinskas, 2015). On the other side, the company had focus on manufacturing the low volume but high quality standard kitchen cabinets, which required more time and cost. Due to this the cost structure of the company increased at high speed but as the volume was low, the sales and profit margins did not grow much. The Total Quality Management theory of operations management suggests that the companies must operate its business in such a way so that it can achieve the customers satisfaction for long-term by engaging its entire workforce in the improving process of operations (Attafar, Shahin Kheradmandnia, 2016). The theory also suggests controlling and reducing the waste level in order to improve the products and service quality of the company. However, in Hawkesbury Cabinets, the people are less concern about the reduction of waste during the manufacturing process, which can be identified in the trade-off scheduling process of the company. The Theory of Constraints also suggests that the company must identify the major constraints or limiting factors that create barrier in achieving the goal or aim of it (ÄŒiegis Jasinskas, 2015). At the same time, the company must try to improve the system until there is no constraint in the operations system (Akalin, Huang Willems, 2016). At Hawkesbury Cabinets, there are many constraints like, cost, time, which have not been improved by the company. However, Mahmoud et al. (2015) argued that improving and reducing the constraints within the company requires much time and cost. Therefore, at this situation, where the profit margin of Hawkesbury Cabinets is not increasing much, improving and reducing the constraints by involving more time and cost is difficult for the company. Due to several operational problems at Hawkesbury Cabinets, the current performance level is declining. High concentration on the new builders kitchen line has involved more time in the production system. Due to this the number of work-in-progress has increased in the company. At the same time, due to the movement towards the builders production and due to the high inventory, most of the capital of the company is blocked. Apart from that, as the profit margin of the company has not improved with the increasing volume of sales of standard builders the financial health of the company became weak. This will affect the future production capacity of the company (Zhang et al. 2015). If these problems continue in the organization, then in the new future, the company will not be able to produce the quantity demanded and that will affect the goodwill of it. On the other side, due to the excessive lead times in the production, the company is currently unable to receive any contract with shorte r delivery times and the manufacturing capacity of the company has also reduced than before. Conclusion In this essay, it has been identified that the company Hawkesbury Cabinets Pty Ltd is currently facing a major operational issue. The profit margin has not increased with the increased volume of sales. At the same time, the company is becoming unable to produce the products on time. The inventory level of the company is increasing day-by-day, which indicates the inefficiency of the company in managing its business operations. The cost level of Hawkesbury has also increased along with the lead time, which has affected the financial health of the company. The analysis with the help of operations management principles and theories has disclosed that the company has not maintained the principles properly. 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