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Management of Operations: Supply Chain Management in Nintendo Analytical Essay

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Updated: May 28th, 2020

Executive Summary

In every organization operations management processes play a pivotal role in promoting the effectiveness of every activity in the firm. This study gives an analysis of the management operations in Nintendo. This is a company which is involved in the manufacture and sale of entertainment products all over the world.

The company’s effective operations management has significantly contributed to its success. In this case, the study will concentrate particularly on the supply chain operations involved in the company. This study begins with a brief overview of the company in question. This is followed by a critical analysis of the supply chain processes involved in the company. Finally, the study concentrates on the literature on the topic.

Introduction

Operations management refers to the management process associated with effective management of the activities which are involved in the production of goods and services in an organization. In every organization, the operations management managers play a very important role in facilitating the effectiveness of the organization.

The major roles in operations management involve management and designing business processes and activities that are involved in production of the goods and services. In addition, operations management is also involved in management of materials, information, people and all the equipments which a business needs in production and delivering of the goods and services.

One of the main operations aspects is the supply chain management. Supply chain management can be viewed as the network of the facilities and distribution options that are involved in the material procurement processes, conversion of the same to finished goods as well as distribution of these products in the market so as to reach the customers at the right time, place, and form. In every organisation, the effectiveness of the supply chain management plays a very important role in facilitating the success of an organization.

Strategic Goals and Objectives

Nintendo has several objectives on which its future success is based. One of the main objectives of the company in the chain management is to reach as many people as possible in the near future without using the middle men in these operations.

The company also intends to saturate its market with distribution centres where customers will be able to access the products without necessarily going through the middlemen. The last main objective of the company is to supply in the market price competitive products.

Company Overview

Nintendo is one of the most successful multinational companies involved in the manufacture and sale of the entertainment products. Nintendo Company was founded by Yamauchi in 1889. Since then, this company has been dealing with manufacturing and marketing of entertainment products (Cohen 2009: 57). Nintendo is the longest running company in the industry of video game market (Anonymous, not dated par 2).

The company has also dominated the market for a long period. The company covers a significant market area in the world. It plays a significant role in maintaining economic stability. This is through employment creation and philanthropic activities.

Over the past, this company has recorded a recommendable performance in terms of return. For instance, the company recorded revenue of 9.9 % increase in the year 2009 (Research Markets 2010: par 3). This was equivalent to an increase of 8.5% in profits.

Nintendo’s Supply Chain

As already noted, the supply chain is very important in any organization. Nintendo has a clear supply chain which has contributed to the company’s success. The organization of the supply chain operations plays a pivotal role in determining the success of an organization. Although the company has not exhaustively covered the global market, it has several centres in different countries which act as the centres of distribution in various countries.

In America, the distribution centre is located in the North Bend (Jeff 2010, par 2). This is one of the most successful distribution centres for the company. The facility has been installed with the modern technology equipments, which has significantly increased its efficiency. Production activities take place at Japan after which the products are passed to various distribution centres.

It is from these centres where the products are distributed to various parts to reach the customers. In the chain distribution, the company’s distribution centres have the responsibility of ensuring that there is no variation between the orders and inventories. In other words, the distribution plays a major role in prediction of demand so that there is no excess or shortage in the supply chain.

Wrong demand prediction can cause a company great losses through stock accumulation. Shortages can also lead to loss of customers. Due to the company’s modernized distribution centres, it has been awarded as the best ware house of the year (Jeff, 2010: par 5). The company was recognized as one of the best performing in terms of customer satisfaction and services.

This was characterized by high level of communication which eased the interaction between the customers and the suppliers. This ensured a clear supply chain process, which led to maximum consumer satisfaction. Over the past, the company has made several changes in the distribution process in an attempt to improve its services to the public.

The Ordering Process

The ordering process at Nintendo has improved drastically over the past. The company has adopted an automation of the ordering process. The automation of the ordering process in particular has increased the efficiency of the ordering process, which has enormously reduced the ordering costs.

Nintendo America is one of the company’s centres which have recorded a recommendable performance in this field. This ware house has been completely automated, a thing that has eliminated the paperwork in the ordering process hence increasing the level of efficiency (Jeff 2010, par 6).

Internet in Supply Chain

In the contemporary business world, the internet has played a pivotal role in promoting the effectiveness of operations. Nintendo has integrated internet technology in the distribution chain. This has significantly contributed to improvement of the supply chain.

Integration of internet in the supply chain operations has a significant implication in reducing inventory requirements. Embracing the modern technology and internet in the supply has led to improvement of the supply chain in the company through various ways.

First, the company has an opportunity to build a strong collaboration between the company and the members in the channel. We will also be able to reach our customers directly by eliminating the middlemen.

Market Analysis

Over the past, this company has been struggling to extend its services as wide as possible. One of the major steps which this company has ever taken in its efforts to diversify its market was in 1980 when it developed new markets for its products in United States. At the United States, the company launched subsidiary Nintendo of America Inc. in New York where the company recorded large sales.

Meanwhile, the company made another innovation by introducing a portable video game (Jorg: 2029, 2009). This boosted the rate of development of its new market in U.S. From this point, Nintendo Company continued to expand in the global market, the fact which encouraged the company to invent more in the entertainment industry.

Weaknesses in the Supply Chain

Although the company has recorded a recommendable performance in terms of innovativeness, it has failed to satisfy its market. For instance, people have been complaining of shortages of Wii in some parts of the world. Although it has recorded several achievements, the company has some areas of weaknesses.

These weaknesses have to some extent affected the company’s efforts to move forward. The first weakness of the company is its poor performance in handling online games where the competitors have recorded a better performance (Nick, 2010). This has undermined the reputation of the company in this field. We will try to improve our supply chain efficiency on a continuous basis.

We will collaborate with our suppliers to design new products and to reduce the time it takes to get new products into the production. One of the main threats of the company is the presence of their competitors. In 1994, Sony’s entry in the market posed a great threat to our company. Soon after its entry into the market, Sony introduced a console which was more advanced than ours. This product posed a threat to the survival of our product in this field.

Achievements of Nintendo in the Supply Chain Operations

One of the main strengths of this company is its innovativeness (Popular Science, 2004, par 3). Over the past, the company has managed to eliminate monotony through frequent introduction of new products in the market. For instance, we recorded tremendous increase in sales after introducing Wii in the market.

This high rate of innovations has been facilitated by intensive research. Our company has enjoyed various things in the video games market over the past. One of the main opportunities of our company is its ability to detecting business opportunities (Diana: 56, 2010). For instance, rather than production of video games only, the company once attempted to conduct a taxi business and a hotel.

The company pays much attention on new opportunities. This has contributed significantly to the success of the company. We as a company has realized the necessity of paying more attention to the part of the population which does not use pour games. This opportunity has helped the company to increase the total sales significantly.

Many companies have been making the mistake of overemphasizing on the maintenance of existing customers but paying little attention in the efforts to find new customers. In other words, our company has done enormously well in terms of market expansion. This attribute has played a major role in defeating our competitors.

Literature Review

The supply chain can be seen as a series of cycles which involves communication between the buyer and the seller (Chopra & Meindl, not dated: par 7). The supply chain can be viewed in terms of their main processes. These include the Customer order cycle, Replenishment cycle, and the Manufacturing cycle.

In the contemporary business world, the supply chain operations have undergone significant changes through technological developments. However, several companies have dipped into problems by adopting the new technology without making necessary arrangements, the fact which has made them to incur huge losses (Epiq, 2010: par 2).

For instance, several companies have ended up spending more buy adoption of some of the procurement software due to ignorance (Epiq, 2010: par 2). However, these negative impacts can be overcome by adoption of these new methods slowly rather than just abruptly. This will enable an organization to make the necessary changes.

A cycle view is very important while viewing the company’s supply chain operations. The cycle view of the company’s supply chain helps an organization to define the processes involved in production and the owners of each process (Anonymous, 2011: par 9). The processes involved in the customer order cycle engrosses the customer arrival among others.

Customer arrival implies that the customer reaches the location where they can access the choices available. In this case, the customer makes the necessary choice of the products they want. For Nintendo, this step involves selection of the entertainment product which is available from the distribution centres.

In the customer order entry process, the customer informs the seller of the goods they want to purchase. This process also involves allocation of the products to the consumers. In case of the Nintendo Company, the customers receive the entertainment products from the distribution centres depending on what they have ordered and their location.

The last step in this process is customer order receiving. It involves the delivery of the product to the customer. The cycle view of the company’s supply chain is very important especially when making decisions concerning the operations of an organization.

However, this process may need some changes depending on the changes in the supply chain. For instance, the company is supposed to make appropriate changes in case the level of demand increases in order to satisfy new demand.

Overview of the Models of Supply Chain Management

Level one of the Supply Chain Operations Reference (SCOR) model, involves the planning and management of demand and supply. At this level, this company establishes the relationship between the resources and what is required. This aims at finding whether the two are equal. This helps in planning the demand and supply chain.

This also includes management of the business rules. For instance, the increase in the demand in this company will disturb the equilibrium between the resources and demand. Demand will exceed the resources. In some cases, the company may be required to make changes in terms of its product design and sales and support.

For instance, more efficient ways may be employed in the sales support. This increases the ability of the organization to deliver more products within a short time. This will help in meeting the increased level of demand. The SCOR framework focuses on the implementation of the cross-sectional processes in the supply chain management (Lambert, 2008: 313).

DCOR model on the other hand involves research, design, integrate and amend. DCOR concentrates on the organization of the operational steps for the product development (Lambert, 2008: 313). This contributes towards the provision of quality competitive goods in the market.

Supply Chain and the Company’s Competitive Advantage

The supply chain operations have significantly helped Nintendo in developing its competitiveness. Through the use of the modern technology, the company has managed to reduce the expenses involved in the ordering process. When paperwork is reduced in the transaction, this saves a lot of time and financial cost reduces.

This has significantly helped the company in reducing the overall operational expenses. Through clear supply management operations, the company has also managed to satisfy its customers. This has developed a competitive advantage over the other companies which has not adopted the necessary technology on their operations.

Nintendo has also maintained a high level of innovation in its production operations. This has helped the company in maintaining a high level of performance.

Conclusion

From the above discussion, it can clearly be seen that the operations management plays a pivotal role in every organization. The success of every activity in an organization depends on the effectiveness of the operations involved. The success of any organization will largely be determined by the effectiveness of the operations management involved.

As already seen, one of the most important operations management operations in an organization is the supply chain management. However, the company still has some room for improvement on its operations involved in its supply chain operations. The company can improve its level of technology in various fields.

For instance, it can also embrace the recent technological developments to improve production as well as the supply operations. These include reduction of the paperwork by computerizing the process of sending orders. This can significantly contribute to maintaining high level of performance in its operations.

Reference List

Anonymous. Not dated. Nintendo: Company Profile. Web.

Anonymous, 2011. . Web.

Chopra, S. and Meindl, P. Not dated. Supply Chain Management. Web.

Cohen, D. 2009. Classic Video Games Blog. Web.

Diana, D. 2010. The Right Sensory Mix: Targeting Consumer Product Development Scientifically. Netherlands: Springer.

Epiq. 2010. . Web.

Jeff, H. 2010. Supply chain update: state-of-the-art direct distribution at Nintendo of America. Web.

Jörg, Z. 2009. Wii Innovate – How Nintendo Created a New Market Through the Strategic Innovation Wii. Germany: GRIN Verlag.

Lambert, D. 2008. Supply chain management: processes, partnerships, performance. USA: Supply Chain Management Inst.

Nick, S. 2010. Nintendo’s Online Weakness Is a Big Turn-Off for Developers. Web.

, 2004. Top 100 tech innovations 2004, Vol. 265, No. 6, ISSN 0161-7370, Bonnier Corporation. Web.

Research and Markets, 2010. Nintendo co., ltd. -SWOT analysis. Web.

Slack, N. 2004. Operations Management. (U.K.): Pearson Education, Limited.

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