Question

In: Operations Management

In this module, you learned about the components involved in the effective management of operations. This...

In this module, you learned about the components involved in the effective management of operations.

This video case is about Numi Organic which is the tea of choice for high-end restaurants, hotel chains, and cruise lines.

View Numi Organic Tea: The Value Chain, IT, and E-Business (Time: 6:56. This video uses the Amara Toolbar to display captions.) and answer the following questions by providing 1-2 paragraphs for each item:

How does Numi’s relationship with third parties address operations systems elements in areas related to product-mix, capacity, facilities, and layout? What is the benefit of their approach?

Describe the technologies and tools used by Numi in managing performance. Why did the tea maker eventually adopt a more complex information technology system?

Expert Solution

How does Numi’s relationship with third parties address operations systems elements in areas related to product-mix, capacity, facilities, and layout? What is the benefit of their approach?

Numi Organic tea works with 3 third parties one in california, one in Canada and one in Asia whom they have hired on contract basis.The company focuses on continous improvement. by hiring the third parties they have managed to deal with fluctuating costs. Their product mix consists of a single product, i.e Organic tea. The most important elements of an operations systme are Input, process and output.By engaging third parties the company is able to operate in a process layout method where different processes are carried out in different locations.

Their input consists of raw materials, machinary, electricity, water, equipment, office furniture, labor, capital, information, technologies used etc. They have around 50 direct employees and 300 employees who work indirectly for them. The process is the conversion of the raw material, ie tea leaves to the final product, ie organic tea. The output is final product that is sold in the market.

Describe the technologies and tools used by Numi in managing performance. Why did the tea maker eventually adopt a more complex information technology system?

Initially the company used to work on Excel sheets and they operated their business using Quickbooks which are accounting softwares primarily used by small and medium businesses. Eventually they had to introduce an ERP system where they had installed an inventory managemnt system. The company sold its products in almost 20 countries and hence they required a system where the data from these countries can be stored the languages, weights and measures and international regulations which were used in each country.Using the software has helped them manage their inventory in an efficiant manner and reduce the cost. The access to the data has incersed there by improve the visibilty. Anyone could login to the system and get a clear idea on all the details they required.

The eight dimensions of quality and given below.

1. Performance:

2. Reliabilty

3. Durability

4. Servicability

5. Aesthetics: The company is focussing on the packaging by using recycled fibre. The CEO comments that if the packaging is done using post consumer waste and use a beutiful packaging the customers wont know the difference.

6. Features

7. perceived quality:

8 Conformance of standards: The comoany takes care to maintain the standards by spending time with the managers, and the workers to make them understand what they are doing and why and to keep a check on the packaging, how they managae the waste and how the workrs are treated

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keosha answered 2 months ago

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