Introduction
Starting a company is a challenging experience. It requires conducting a thorough study of local and global markets with the aim of determining gaps to fill and products or services to upgrade. Moreover, it is impossible without an in-depth understanding of concepts and principles of operations management that is the foundation of running a business effectively. This paper will focus on identifying the product that a newly created company will produce and determining all vital details regarding the organization of future work.
Selecting a Product
Nowadays, the world community is highly concerned with the issues of environmental protection. That is why sustainability has turned into one of the most popular trends in doing business. It can be easily explained by the fact that consumers worldwide prefer purchasing environmentally friendly products – those manufactured with minimal impact on the natural environment. The concept of sustainability in manufacturing rests upon two principles – decreasing the emission of greenhouse gases into the atmosphere using recyclable resources during the very process of production and falling upon renewable sources of energy during both production and transportation stages.
Bearing in mind the fact mentioned above, the idea for creating a company is to produce eco-friendly packaging. The focus will be made on the food and beverage industry, i.e., the aim is to manufacture environmentally friendly packaging for edibles. This product was chosen because of the direct impact of the quality of food products on the health of ordinary people regardless of the region of living of country of origin. What is meant by the statement mentioned above is that it is impossible to care for the well-being of people without thinking about the natural environment?
Production of environmentally friendly packaging is a beneficial choice for starting a company. First of all, most negative aspects of choosing sustainability as the path for developing business are connected to investing in upgrading equipment and following required standards of quality. In the case of launching a new business, this challenge is possible to avoid because there is an opportunity to buy appropriate technologies at the very beginning of setting up the production process. Moreover, this decision is closely related to both the environmental and economic aspects of doing business. Environmentally, the impact on the natural environment is minimal due to using recyclable resources for production and renewable sources of energy during manufacturing. Furthermore, it is a significant contribution to solving the problem of climate change. From the economic perspective, eco-friendly packaging is more cost-effective due to spending fewer resources and materials as well as low levels of waste connected to the production process. Finally, there is a psychological aspect that should not be ignored. Because most consumers around the globe are concerned with the industry-related negative influence on the condition of the natural environment, they give preference to environmentally friendly products. Once food and beverages are sold in eco-friendly packaging, it will definitely draw their attention and win markets.
Determining Target Market
As was mentioned before, the primary focus will be made of the food and beverage industry. Eco-friendly packaging might become a perfect option for underscoring that offered products are absolutely healthy, winning the hearts of those consumers who prefer organic food. In the first place, it is planned to choose several sectors of the food and beverage industry in order to test the attractiveness of the new product. For example, producing eco-packaging for such popular products as sweets, chocolate, coffee beans, cocoa, juices, water, nuts, and even wine might become a perfect solution for entering the market. Once manufacturers get used to the idea of environmentally friendly packaging and realize its popularity, it might be possible to expand the assortment of products manufacturing packaging for cereals, fruit, and vegetables, and even semi-processed meals, not to mention organic detergents and beauty preparations. The primary objective is to persuade manufacturers of food products that
- it is more economically beneficial to cooperate with a newly created company than invest in upgrading currently exploited equipment (it might be especially reasonable in case of small manufacturers), and
- consumers prefer eco-friendly packaging, so it is better to work with a company producing one instead of using traditional packaging ordered from others companies that ignore the recently established trend toward sustainability and environmental friendliness.
Crafting Product Design
Common packaging is usually produced of foil and plastic. It means that there are several layers of hardly or nor recyclable materials used for producing it. It can be explained by the impossibility of separating these layers1. The idea for crafting the design of eco-friendly packaging manufactured by the company is to use absolutely flexible and recyclable materials such as paper and paper pulp as well as already recycled materials. There are several reasons for choosing them. First of all, these materials are safe and will highlight the healthful nature of food and beverages sold in such packaging2. Moreover, because they are flexible and mechanically strong, they can be easily adapted to suit any shape and size thus becoming a perfect choice for any product and satisfying needs of any manufacturers3. Finally, these materials are made up from already recycled materials, i.e. consumer waste, making them absolutely safe, cost-effective, and environmentally friendly4. So, the idea is to make a produced packaging totally environmentally friendly because if it is produced using both recyclable and non-recyclable materials, it cannot be considered eco-friendly and is non-recyclable.
Speaking of the design, the primary idea is to make a package bright and appealing in order to draw attention of the consumers and encourage them to buy a product packed in it. This goal can be easily achieved because paper and paper pulp are printable5. Moreover, it is planned to make a package minimalistic so that only major information is included such as the name of the product and ingredients. The idea is to print name of the product in plain, bright text so that it is easily noticed. The same is true for such words as ‘safe,’ ‘healthy,’ and ‘eco-friendly’ that will point to the characteristic of both product and packaging. As for the rest of the information, it is proposed to make it less bright in order to avoid distracting attention from the most significant details. Furthermore, it is essential to highlight that the packaging is made of recycled materials and is eco-friendly. Otherwise, there is no sense in creating a company as starting this business because it will not stand out against competitors. For this reason, recyclability will be indicated in a generally known manner – with a cycle of green arrows. To sum, this bright simplicity is believed to hint at environmental friendliness and connection with nature. Finally, it is essential to note that the companies will be offered an option of individual design in order to satisfy their needs and expectations. However, the primary details will not differ from the concept of design mentioned above.
Managing Supplies and Distribution Process
Supply management will be organized on the basis of three essential elements of effective managerial system. That said, it will necessarily involve appropriate choice of suppliers, planning and monitoring supply activities, and improving supplier capability6. Suppliers will be selected if they meet several requirements. Primary criteria are the quality of materials and flexibility of volume and delivery policies. Of course, it is imperative to take into account the price of resources and responsiveness of supplier as well as the ability to change the size of batches if necessary. Finally, it is also vital to choose suppliers from the perspective of establishing long-term business relations. Moreover, the opportunity of multi-sourcing, i.e. purchasing material from different suppliers, will not be ignored in case if it guarantees better quality of delivered material thus improving quality of an end product.
As for planning and monitoring supplies, the organization of this step will be based on several details. First of all, the needs in materials will be estimated on a timely basis keeping in mind manufacturing capacities and volumes of production. The idea is to conduct it twice a month and order material considering the necessity of creating reserves. However, it is imperative to note that the company will not order large batches of material before it becomes popular and fills particular segments of the market. As for monitoring supplies, it will involve a series of procedures such as checking the volumes of delivered materials and prices in order to avoid discrepancies and find responsible and reliable supplier to work with in the future. Finally, improving supplier capability stands for investing in supplier in order to guarantee long-term and trust-based relations. It has four dimensions – technical, operations, managerial, and financial capability. At the very beginning of bringing the project to life, it will be possible to improve managerial capability, i.e. share management talent and energy in order to set the foundation of the future cooperation7.
Here, it is also imperative to mention the concepts of lean manufacturing. It is believed that this philosophy focusing on eliminating waste will benefit the company because of reducing spending on materials as well as improve performance and serve as the foundation of success. Based on the principle of this approach to management, material will be ordered when necessary and in volumes required for production. Moreover, overproduction and over processing will be avoided in order to guarantee economic value of work and skip unnecessary losses. Finally, the emphasis will be made on constant improvement of both the product and people creating it in order to eliminate defects and boost productivity8.
As for managing distribution process, it will be based on channels of physical distribution, often seen as synonym to logistics. At first, the company will require one distribution center because of the initially small size. As for transportation, it will seek the assistance of transportation companies or delivery services. However, once it grows bigger and more powerful, the scopes of distribution and delivery departments will expand to international deliveries with distribution centers located across the country and the globe.
Making Up Cost
The cost of the proposed eco-friendly packaging will be calculated on the basis of several constituents. First of all, it will include material costs. This determinant is a combination of spending to purchase resource and deliver it as well as storing it and other premises related to resource dimension. Another constituent of cost is manufacturing process cost. This one is a complex element because it incorporates wages, storage and energy costs, handling of returned packages, amortization of machinery and equipment, etc. This item is constantly changing due to changes in the labor market or because of the necessity to change or fix equipment. Another article of expenditure included in the cost of packaging is distribution and transportation costs connected to spending on deliveries and working with consumers, i.e. promoting the product, as well as retailer costs or those caused by incidents during transportation or industrial accidents. Finally, packaging cost will incorporate miscellaneous spending not falling within the categories of expenditures mentioned above9.
Moreover, it is worthy of mentioning that the cost will be calculated with an insignificant reserve in order to guarantee sustainability of the company and design the system of discounts for regular customer. In addition, it is imperative to note that the cost is directly connected to the volume production because the higher manufacturing rates are (e.g., the bigger an order is), the lower cost it implies.
Quality Management
Quality is the foundation of success because, without guaranteeing high quality of the end product, food and beverages manufacturers will not become involved in cooperation with the company and seek other partners. That said, quality management is the critical element of running the business. The concept of quality will be viewed from several perspectives. First of all, the quality of raw materials will be estimated. Paper and paper pulp used for producing environmentally friendly packaging should be flexible and thick in order to ensure that the packaging is mechanically strong and is not damaged quickly. Except for materials, all additional resources such as ink for printing titles and product information should be of high quality so that the product is bright and the image does not wear out quickly. In addition, it is vital to promote employee involvement, i.e. improve workforce quality. The motivation for highlighting this step is the fact that better employee performance entails better quality of the end project.
Finally, the quality of the product itself should be controlled. Because the company gets involved in the production of recyclable and environmentally friendly packaging, it is essential to make sure that the end product meets these requirements. For this reason, it is recommended to design inner standards of quality and control each batch to find out whether they are kept. For example, tightness of the packaging and brightness might serve as additional determinants of quality not to mention serviceability, flexibility, and lasting properties. That said, the whole approach to quality will be based on the concept of quality gate, i.e. reporting progress and estimations at each stage of production and proceeding to the next levels of manufacturing once previous ones meet particular inner standards10. In addition, it is paramount to comply with governmental and international standards for recyclable products and manufacturing such as some ISO standards.
Hiring Employees and Dealing with HR Issues
People are the key to success. Working in the manufacturing sector will require hiring professionals with enough knowledge and skills to use offered equipment and produce eco-friendly packaging of high quality. When launching the company, it will not require many workers. Because the scope of operations is limited to several sectors of the local food and beverage industry, hiring process will begin with five people. However, in case if company succeeds, more staff will be employed. Initially, all HR functions will be carried out by senior manager, who will control both hiring process and employee performance, motivating them to increase productivity and improve quality of produced goods. Nevertheless, once the company expands to more than twenty people or nationwide scale, HR managers will be necessary in order to create an opportune atmosphere stimulating trust and openness in the working place.
Furthermore, it is imperative to have a designer. The rationale behind this statement is the fact that the project is a creative one and it will require constant upgrades of design. In addition, because the company will offer an opportunity to order individual design, it could not handle this task without a professional. That said, the number of those employed is directly connected to the scopes of operations and success of the project. However, senior manager, designer, and those running manufacturing equipment are the skeleton of the business, determining the direction of its development and the rate of growing stronger and winning market.
Scope of Operations
At the initial stages of operations, it is planned that the company will remain local. There are several reasons for making this decision. First of all, it is motivated by the desire to test the attractiveness of the proposed design and product as such. Once it becomes popular and manufacturers working in most sectors of the food and beverage industry are interested in cooperation, it might become reasonable to expand the scopes of operation. The idea is to make it nationwide and go global once there are enough resources to move production abroad or, at least, unwind manufacturing and organize transportation to all countries desiring to collaborate. It should be mentioned that the focus of the company will be made on small manufacturers because producing their own packaging is challenging because of small size.
Conclusion
To sum up, the process of creating a company and setting up its operations is time-consuming and intricate, requiring an in-depth understanding of principles and concepts of operations management. However, having a clear perception of market needs and product design are closely related to success. That said, it is planned that the company will manufacture eco-friendly packaging. Bright but, at the same time, simple, it will hint the customer of recyclability and safety attracting attention of people, who actively support the protection of the natural environment and minimization of industry-related influence on it. The business will be launched in food and beverages industry and evolve from several sectors to the whole industry as well as from the local scope to nationwide and global dimensions. The foundation of running the company is the combination of supply and lean management principles together with the recognition of the fact that people and creativity are the drivers of success.
Bibliography
Berk, Zeki. Food Process Engineering and Technology. London: Academic Press, 2013.
Muthu, Subramanian. Environmental Footprints of Packaging. Singapore: Springer Science +Business Media, 2016.
Natarajan, Palamadai, Vijay Govindarajan, and Binod Kumar. Fundamentals of Packaging Technology. Delhi: PHI Learning, 2015.
Raturi, Amitabh, and James R. Evans. Principles of Operations Management. Boston: Cengage, 2005.
Reyes, Joel. “Eco-Friendly Packaging Concepts.” Design Reviver. Web.
Paine, Frank. Modern Processing, Packaging, and Distribution Systems for Food. New York: Blackie, 2012.
Wu, Amy. “Good Product, Bad Package: Top Sustainable Packaging Mistakes.” The Guardian. Web.
Footnotes
- Amy Wu, “Good Product, Bad Package: Top Sustainable pPackaging Mistakes,” The Guardian.
- Palamadai Natarajan, Vijay Govindarajan, and Binod Kumar, Fundamentals of Packaging Technology (Delhi, India: PHI Learning, 2015), 139.
- Zeki Berk, Food Process Engineering and Technology (London, United Kingdom: Academic Press, 2013), 625.
- Subramanian Muthu, Environmental Footprints of Packaging (Singapore: Springer Science +Business Media, 2016), 110
- Joel Reyes, “Eco-Friendly Packaging Concepts,” Design Reviver.
- Amitabh Raturi and James R. Evans, Principles of Operations Management (Boston: Cengage, 2005), 228-235.
- Ibid.
- Ibid, 282-290.
- Frank Paine, Modern Processing, Packaging, and Distribution Systems for Food (New York: Blackie, 2012), 124.
- Jack Meredith and Samuel Mantel, Project Management: Managerial Approach (Hoboken, NJ: John Wiley & Sons, 2012), 485.