Process Improvement Strategically Important

Question: Discuss about the Process Improvement Strategically Important. Answer: Introduction With the change in market environment, managing operations has changed tremendously in both manufacturing and service organisations. After the economic downturn suffered by major economies of the world, the focus of business organisations have expanded from research, development and product development to their operations and process. To lure customers, organisations are not only focusing towards their unique market offerings, but also towards their operations and processes as a source of competitive advantage and give their customers the benefit of reduced costs (Power, 2010). Price wars are now common among organisations belonging to similar industry. Hence, operations and process management has gained strategic importance for managers in current business scenario. Amazon.com, Inc. founded in 1994 as Earths biggest bookstore has expanded to become Earths biggest everything store. With the annual revenue of $136 billion, the company is focusing on expanding its product, services and market reach with the help of its low-cost and high convenience logistics operations (Morning Star, 2017). The company offers an online purchasing platform for books, movies, home furnishings, apparels and other innumerable products on a global scale. It operates through International, North America, and Amazon Web Services (AWS) segments. In addition to providing a platform to manufacturers to sell their products, it also manufactures and sells electronic items (Vault, 2017). Strategic Role of Operations Management Operations management entrails managing activities aimed towards production and delivery of products and services to the organisations end consumers. It comprises of all those activities required to fulfil customer requirements right from sourcing the raw material or other products from suppliers to transporting the finished goods to the customers. While operations management is responsible to ensure that the support activities are carried out in a manner that they help in smooth functioning of organisation, it works in harmony with the other two core organisational functions viz. marketing and finance, for achievement of broader organisational needs (Slack et al., 2013). However, with advancement in technology, decentralization of operations, globalisation of markets and increased consciousness among organisations towards environmental issues, organisations are refining and redefining their production and quality strategies thereby brining operations management at the forefront (Gunasekaran and Ngai, 2012). The changing business environment like increase in cost-based competition, large number of choices, high quality expectations, ethical sensitivity, etc. is shaping new operational goals for organisations. As such, organisations are prompting operational responses to these changes through globalisation of their operations networks, supply chain management, adopting lean process designs and integrating information-based technologies in their operations (Slack et al., 2013). This has positioned operations and process management as an area of strategic importance for organisations to gain competitive edge. As a result, organisations are adopting techn iques like supply chain management, total quality management and others to successfully link their internal functions with operations of external suppliers and supply chain members so as to enhance their product and service quality along with business performance (Agus and Hajinoor, 2012). While operations and process management has gained strategic importance from the organisation perspective through use of different process frameworks that support cost minimization and resource optimization, it is also gaining similar importance from customer perspective. Operations are now supplemented with emotional intelligent and algorithms in the form of emotional process mapping, journey mapping and experience maps that allow organisations to carve customized experience for its users (Edelman and Singer, 2015). This furthers helps organisation to become customer centric thereby leading to high customer engagement, good experience and enhanced loyalty. Operations management at Amazon.com B2C online retail store and creating a value proposition that leads to unmatchable customer experience lies at the heart of Amazon.com. As such, the company has leveraged Toyotas lean management principles, Six sigma, robotics, data analytics combined with customer insights in its operations, to deliver unprecedented online shopping experience to its customers (Wohlsen, 2014). As an online retailer, the basic activities at Amazon include stocking the items at Amazons massive warehouses known as fulfilment centers. Once an order is received, the product is located, packed and transported for delivery. However, Amazon has combined technology and principle of operations management to do this task in a manner that not only ensure minimum error but also reduced lead time. The company uses scanners and trackers to track the product location in warehouse, computer programmes are used to generate shortest route to pick the product at minimum possible time. Conveyor belts are used to move ite ms across the floor, computer-aided packing area determines optimal box size, packaging material and tape to be used to pack the products. The boxes are again packed in a manner to maximize the space used inside the cargo area. Thus, the use of technology has helped Amazon to reduce the cycle time to 15 minutes (Bixby, 2015). Amazon has adopted both the principles of lean management and six-sigma to generate customer value and provide satisfactory experience to its customers. Lean management may be defined as an approach that maximizes customer value through minimizing waste. It shifts the focus of management to optimize the flow of products or services throughout the value stream thereby creating processes that require less human and capital resources (Bamford and Forrester, 2010). At Amazon, the implementation of lean management was undertaken at its fulfilment centers through automation. As a result, the complex tasks were reserved for humans and machines acted as a support system. This allowed the company to produce defect-free packaging of products only automating the repetitive steps of the process. It also implemented Kaizen to maximize productivity and quality of its services (Onetto, 2014). Amazon has embraced Six Sigma approach in its operations and processes to ensure the quality of its service s through reduction of errors. As a part of its Six sigma initiative, it uses process mapping that indicates different process of the company with the help of flow charts and helps to identify inefficiencies the operations and processes. This further helps in achieving enhanced customer satisfaction before and after the consumption of services (Crosson and Needles, 2011). Further, Amazon.com uses an enterprise resource planning system that not only supports its operations but also its financial and management activities. The ERP uses data from multiple resources that allows the company to gain knowledge of different activities and operations like inventory management, supply chain, and others carried out at the company for continuous improvement throughout the organisation (Crosson and Needles, 2011). Though these operational management principles are largely responsible for Amazons success, the company also faced challenges in their implementation and creation of highly complex sof twares to support the lean, six-sigma and kaizen processes. The companys engineers still face problems in integrating numerous performance indicators in their systems that consumes time, efforts and other resources. Nonetheless, the combination of technology, data analytics, operations management principles and ERP contributed in increasing the companys speed of service, cost reduction and vast market offering that led to creation of competitive advantage in terms of fast deliverables, low value pricing and vast range of offering. Good Process Design: Important Factors For smooth running of an organisation, the importance of good process design cannot be undermined. A good process design reflects process objectives and ensures the achievement of organisational objectives with the help of processes. It is characterised by attributes like quality, speed, dependability, flexibility and cost. A process possessing these attributes is highly optimized process as it entails low processing cost, low resource costs, low working capital costs, on-time services, short customer waiting, less disruptions and ability to cope with unexpected changes (Slack, 2008). At Amazon, the strong logistics and supply chain processes are the major determinants of customer experience. The mix of automation and human resources in its processes ensure error-free services. On the retail front, the site design, functionality, personalisation and purchase ecosystem offer leading-class speed and ease of purchasing. Further, the company generates user engagement by enabling them to track their delivery and allowing them to decide in the delivery date, time and payment option. All these processes add up to create customer experience and outcomes that are valuable. Emotional Process Mapping and Customer Experience Map An important aspect of designing good process is mapping the process that are required to be completed in the organisation to deliver the final good to the customer. It also helps to ensure that activities that make a particular process are properly understood and managed to deliver appropriate services to its customers (Accounts Commission, 2000). Amazons process map is given as follows: However, over the years, the concept of process mapping has evolved to include emotions thereby providing them with a customer perspective. As such, customer experience maps and emotional process mapping has emerged as key components of operations management. Customer experience mapping holds critical importance for Amazon as it is instrumental in determining the organisations success. Customer experience map represents an illustration defining the steps that a customer goes through while engaging with an organisation. With increase in touchpoints between the customer and the organisation, the importance and need to map customer experience increases (Richardson, 2010). Amazon uses its intimate knowledge of customer touchpoints to create a significant and long-lasting impact on its customers. It effectively utilizes its online retail stores to interact with its customers starting from selection of product to making the purchase transaction. Its foremost touchpoint, its website uses its layout, algorithms and text to communicate knowledgeably with its customers (KPMG nunwood, 2015). As a part of its customer experience mapping, Amazon uses proactive personalization that uses information gathered from past experiences and current database to customize shopping experiences (Edelman and Singer, 20). While, it is only the first step in the process, the next step is to use the data and analyse customer behaviour for next interaction. This allows Amazon to influence their experiences and lead them to the path of loyalty loop. The next touchpoint identified by Amazon is customers address. Any default in delivery process or product may cause anger and frustration while an error-free timely delivery may trigger satisfaction and loyalty. Thus, Amazon aims in making quick delivery with control over time and date (KPMG nunwood, 2015). This customization of shopping experience not only leaves their customers satisfied but also communicates their importance and acknowledges their other important engagements in personal life. The same is true for making returns and refunds of the products. Thus, Amazons ability to customize, humanize and meeting customer expectations through tools like process mapping and customer experience mapping is the key that is making the brand most valuable. Role of Performance Measurement and Improvement Once organisational process and objectives are set and products or services are delivered, it becomes necessary to measure the performance of those processes, objectives and offerings to ensure the quality. The continuously changing business environment and growing competition has mandated a need for measurement system to remain competitive in market (Epstein, 2004). Amazon, being online retailer lacks the ability to personally interact with its customers. However, the company has adopted numerous measures to measure their customer experiences. It allows customers to rate their experiences and instituted internal mechanism to monitor third-party merchants. For example, third-party has to use company provided e-mails to communicate with their customers, which allows them to monitor conversations and identify the issues. Further, Amazon uses metrics like frequency of customer complains, order cancellations by merchants, site traffic, repeated purchases, customer feedback and others (Gr een, 2009). This helps Amazon to improve its services and provide good customer experience even through outside merchants. However, with a choice of tools and performance measurement indicators, organisations may face many issues. Along with choice of appropriate indicators or tools, organisations may lack focus. Thus, companies need to tailor their measurement approach to suit their requirements and ensure that their measures are properly recorded, analysed and provide insights to both senior and middle level managers. Conclusion It is clear that Amazon.com is a highly customer-centric organisation that emphasizes on customer experiences as its critical success factors. As a result, it is continuously leveraging its operations through use of lean, six-sigma and other principles to create highest value for its customers. Further, it is also using its internally generated data base and performance measures to provide lowest price, high convenience and unique personalization thereby creating value experiences that lead to loyal customer base and high revenue growth. Reference Accounts Commission (2000) The map to success: using process mapping to improve performance. Scotland: Audit Scotland. Agus, A. and Shukri Hajinoor, M. 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