A Case Study of Midas
Operations refer to the processes and resources used by a business to efficiently produce high quality goods and services (Slack, Chambers & Johnston, 2010). They aim at transforming resources and other inputs into desired products that deliver value to the customers.
In this paper, the author analyzes the importance of operations to businesses of all types and sizes. The case study of Midas, an automotive repair company, is used in analyzing the various aspects of this concept.
Overview
To remain competitive, a business should boost its operational efficiency (Slack et al., 2010). Companies with limited resources need to operate efficiently to compete with their larger counterparts. Operational efficiency is achieved by streamlining the firm’s core processes to respond to changing market forces in a cost effective manner (Hsu, 2014).
Midas can improve its efficiency by either reducing or increasing the cost of business with the aim of acquiring a large customer base (Kumar & Harms, 2004). For instance, the company may set up a new shop to carry out specialized engine repairs for loyal customers, improving their experiences in this field.
Consequently, the firm will attract and retain customers who want their engines to be serviced (Duh, Chen, Lin & Kuo, 2011). Alternatively, Midas may opt to reduce its personnel by automating most of its operations (Vonderembse & White 2013).
Effects of Increased Efficiency
Enhanced efficiency may lead to increased profits for Midas. In addition, it may result in a motivated workforce. In spite of these strengths, the strategy has a number of weaknesses (Duh et al., 2011). For example, Midas may be caught up in the ‘thrill’ of reducing processes and the number of employees.
Consequently, the company may lose sight of its real drivers (Slack et al., 2010). For instance, the management may lay off some employees to reduce operational costs. Doing so may increase efficiency. However, the management would have overlooked such important factors as time taken to complete repairs and overall customer satisfaction.
Midas can overcome these challenges by getting rid of only those workers whose duties can be automated. Increased efficiency through expansion of business operations may also affect the business negatively.
Midas’ competitive edge over Genoa Ford arises from the former’s ability to quickly deliver services at low costs (Vonderembse & White, 2013). Adverse operational changes may affect this. Midas can overcome this problem by maintaining its area of specialty in all its shops.
Changing Operating Practices at Midas to Accommodate the Tune-Ups
Operating practices should not be changed to accommodate the new developments. Altering the practices to increase efficiency would lead to losses. The main reason for this is the fragile environment within which the company operates. Midas is already operating efficiently since most of its resources are directed towards tailor-made products.
Increased efficiency would further reduce the processes a particular worker is involved in (Hsu, 2014). The move may ultimately speed up the process. However, it may limit the learning experience and skills of workers. Consequently, future expansions would require retraining of the workforce.
Change in operations may also make it hard for employees at Midas to accommodate special requests from the customers. As such, the company would lose its competitive advantage over Genoa Ford (Vonderembse & White, 2013).
Some operational changes would also expose the company to competition that did not exist previously. The reason is that its operations will no longer be tailored for a particular market (Vonderembse & White, 2013)
Reasons why Input Should be Sought from Shop Owners
Decisions involving change of operations are critical to the success of a given business. They affect a wide range of employees and require assimilation of huge amounts of data touching on different ideas and numerous strands of experience (Hsu, 2014).
It is for this particular reason that administrators at Midas should seek input from the various shop owners and managers before implementing any changes. The consequences of the decisions made would affect all the shops and the organization as a whole. Input should especially be sought to establish areas where changes can be made to increase efficiency (Slack et al., 2010).
A case in point is when Midas decides to increase efficiency by firing some of the workers and replacing them with automated machines. Under such circumstances, it would be logical to establish the processes that can be automated without reducing the quality of the services offered to clients. Such information can only be attained through consultations.
Launching the New Program
Companies should follow elaborate procedures in launching a new program. The aim is to maximize the benefits of the plan. In the case of Midas, the company should begin by assessing how existing operations can be redesigned or adjusted to accommodate the new program (Vonderembse & White, 2013).
The next step involves allocation of resources. The management should decide how the available resources can be boosted through additional capital expenditure to fully fund the new program. Once the new program is launched, the stakeholders should monitor it to ensure that the objective of strengthening the company and enhancing its competitive advantage in the market is achieved (Vonderembse & White, 2013).
Conclusion
For a company to succeed, it must analyze the market within which it is operating. Such issues as competition, legislation, and capital should be taken into consideration when making operational decisions. It is also evident that increasing efficiency has both positive and negative impacts on a given firm. Consequently, it is important to monitor the process to ensure that the costs do not outweigh the gains.
References
Duh, R., Chen, K., Lin, R., & Kuo, L. (2011). Do internal controls improve operating efficiency of universities? Annals of Operations Research, 221(1), 173-195.
Hsu, L. (2014). Using a decision-making process to evaluate efficiency and operating performance for listed semiconductor companies. Technological and Economic Development of Economy, 2(1), 1-31.
Kumar, S., & Harms, R. (2004). Improving business processes for increased operational efficiency: A case study. Journal of Manufacturing Technology Management, 15(7), 662-674.
Slack, N., Chambers, S., & Johnston, R. (2010). Operations management. Harlow, England: Financial Times Prentice Hall.
Vonderembse, M., & White, G. (2013). Operations management. San Diego, CA: Bridgepoint Education, Inc.