Management of Lean and Agile Organisations
Report on the Management and Operations of ‘Rubbish is Us’ Rubbish Collection Company
Table of Contents
Operations and Management……………………………………………………………..3
‘Rubbish is Us’ has been sanctioned to offer rubbish collection services under a new government initiative aimed at procurement of the most efficient rubbish collection services at the lowest costs possible. The management of the company is seeking to base the pursuit of its daily tasks and operations on the principles of lean and agile organisations. As such, ‘Rubbish is Us’ must streamline its overall operations in order to achieve a range of set target and objectives. Therefore, the objectives of this report are:
To analyse the prevailing environment in the rubbish collection sector and propose the appropriate entry strategies for ‘Rubbish is Us’;
To analyse the use and application of control in the management of organisational processes;
To provide a suggested structure for the management team and make recommendations appropriate motivators and control measures;
To make recommendations on the best management practises for operations of the organisation.
These objectives have been framed with full reference to the principles spelt out by the concept of management of lean organisations. Christopher, Peck & Towill (2006) acknowledge organisations can effectively optimise operations through employment of lean and agile management strategies.
Operations and Management
The success of ‘Rubbish is Us’ will depend on the company’s ability to maximise resource utility at the most affordable costs possible. Therefore, as the company takes up the responsibility of collecting rubbish on behalf of the Derby County, there are many operational and management challenges that will require the management team to adopt pragmatic approach. Such pragmatic approach must include the application of lean and agile organisational management strategies.
For example, management and operational concepts such as continuous improvement (Kaizen), and enterprise resource planning (ERP) will facilitate efficiency in the acquisition and maintenance of equipment and machinery. ‘Rubbish is US’ will definitely require a fleet of Lorries and vans to meet the responsibility of collecting rubbish in the entire Derby County. The company can cut down the costs of capital acquisition as well as equipment maintenance costs by leasing Lorries and other heavy equipments such as caterpillar and loaders.
Machinery and equipment leasing is a cost reduction strategy that can be traced in the concept of lean organisations advocates for ‘reducing and where possible, totally eliminating waste from business processes as evidenced by the Toyota Production System (TPS) which places emphasis on the efficient resource utility achieved through scheduled limits’ (Christopher, Peck & Towill, 2006, p. 281). Christopher (2000, in Christopher, Peck & Towill, 2006) further asserts the concept of lean organisational practises have proven effective in businesses with stable thus predictable demand and yet, with limited alternatives. This assumption completely suits the prevailing conditions in the rubbish collection business which portrays stable demand as well as minimal competition.
The aspect of agility in operations management focuses on organisation’s ability to respond to constant demand fluctuations. Agility enables organisations to meet different levels of demand in different types, particularly when it is difficult to derive or ascertain demand forecasts. However, as Christopher, Peck & Towill (2006) point out, an organisation can achieve agility only if its entire operational and logistical structures have been tailored to appropriate flexibility standards capable of initiating responsiveness particularly when the market experiences turbulent conditions.
Therefore, by combining the lean and agile organisational management concepts in the day to day activities of ‘Rubbish id Us’ is a strategic approach that will facilitate the convenient integration of different input and output mechanisms in company’s entire supply chain management processes. This will call for close knit relationship between the internal and external environments of the organisation.
The environment, whether external or internal, occupies a pivotal role in the management of organisations. The significance of the environment is best captured by the contingency theory which states that organisational activities are interrelated. As such, an organisation can achieve effectiveness only if it designs a flexible structure that takes account of the organisation’s coordination with its internal and external environments. Daft (2004) points out that the contingency factors of an organization are subject to its design characteristics which include culture, technology, size, environment and strategy.
Therefore, for the company to be successful, the management and operational structures of ‘Rubbish is Us’ must be founded on the organisational principles of open systems which recognise the significance of environmental interaction and adaptation. This will ensure that the organisation derives optimum utility of resource endowments of the environment but also contribute resources to the environment. This is as opposed to closed systems which place emphasis on autonomy, comely locking out important factors of the external environment.
Therefore, this report will assume a three-pronged approach namely; personnel recruitment, key motivational factors as well as planning and control to analyse and recommend the best management practises suitable for the successful and profitable operations of ‘Rubbish is Us’.
Given that ‘Rubbish is Us’ is a new firm, employee recruitment and training as well as setting up of new employee management structures will be some of the most demanding activities. Nonetheless, the management team of ‘Rubbish is Us’ must exercise all the powers within their limits to ensure that they craft the most effective team of employees capable of executing the responsibility bestowed upon the company. This assertion is fully supported by Taylor (1911) who notes management team of any organization is charged with the ultimate responsibilities of developing and maintaining clear procedural standards for executing work programs as well as establishing the criteria for employing, training, compensating and motivating workers. ‘Managers must develop the functional models and set the foundation for achieving efficiency, flexibility, and stability’ (Taylor, 1911, p 39). Therefore, ‘Rubbish is Us’ will have a management team of 9 executives who will be charged with supervisory and coordination responsibilities of the entire project. The management team will subcontract the labour intensive work in order to reduce employee recruitment, training costs. The subcontracting of work will also enable the company to apply and benefit from much economic advantage associated with scalable workforce.
Just as illustrated by figure 01 (refer to appendix) the management team will be set out as follows. The Managing Director (MD) who will be responsible for supervising and coordinating the overall activities of the company. The MD will be deputised by the Fleet Director, Director of Personnel and Director of Finance. Fleet Director will be charged with the responsibility of managing all operations related to fleet acquisition and hiring. The Director of Personnel will manage internal human resources and contracted workforce in addition to overseeing employee recruitment and training. The Director of Finance will be responsible for financial planning, spending controls and financial reporting of the companies activities. The three directors will further be supported by a string of managers who will link the company’s operations to employees, contractors and the community.
Key Motivational Factors
The management of the entire management and operational process will have to take into account customer and employee motivation so as to improve customer relations as well as boost employee performance. The recognition of the performance of employees will be very important in shaping positive organisation culture which will integrate diversities and acknowledge experience and innovation.
The organisation evidently hierarchical structure is owed to the need for new company to establish rules and guidelines required to assert authoritative order. Daft (2004) recognises that this particular aspect is fully supported by Henri Fayol’s (1841 to 1925) argument of organisational theory where he asserts that organisational bureaucracy owes its existence to the consistent application of rules and principles. However, a shift towards flexible management styles should be initiated progressively to ensure the adoption of pragmatic management styles that blur the hierarchical framework and encourage greater interaction across all carders of employees in the company. Daft (2006) identifies the case of Hawthorne studies which provide concrete evidence that management approaches which recognise the significance of the behavioural and psychological aspects of the work stand to achieve optimized productivity resulting from motivated employees.
Moreover, the establishment of relevant organisational culture will be important as it will encourage creativity, innovation and motivated performance among employees. This can be achieved through the enforcement of a management cultural order that leans towards the principles of contemporary and learning organisations. Daft (2004) acknowledges that learning organisations facilitate both team and individual efforts in the identification and solutions of problems by eliminating hierarchy and inducing collaboration, shared experiences and adaptation. ‘For an organization to adopt a contemporary cultural orientation, it must exhibit the following characteristics: promote sustained transition from vertical hierarchy to horizontal structures; assume empowerment of workers as opposed to observing responsibilities as routine activities; observe decentralised flow of data and information; and pursue competitive strategies’ (Daft, 2004). For ‘Rubbish is Us’ to successfully apply such progressive management styles in its overall organisation structures, the managers can
Management by walking around (MBWA) is one such example of appropriate management techniques for pragmatic learning organisations. Chris Vidler (2001) acknowledges that MBWA technique provides managers with the opportunity of interacting with employees and getting to learn of the challenges or initiatives that employees experience in their day to day activities. MBWA effectively eliminates hierarchy in the communication structure of the organisation, a fete that enables managers to initiate prompt responses to the organisation’s operational demands.
Planning and Control
The successful management of the operations of ‘Rubbish is Us’ will tightly be pegged on the company’s capacity to develop and implement strict planning and control measures. Planning and control are key aspects of organisational management that ensure optimised utility of resources by ensuring the striking of rational balance between inputs and outputs of operations. Planning will enable the management team to assume an anticipatory approach to the future operations of ‘Rubbish is Us’ while the aspect of control will facilitate the implementation of cost reduction policies through checks and balances in all activities of the company. The main control and planning strategies that can be adopted by ‘Rubbish is Us’ include sequencing, loading and scheduling.
Sequencing strategy will enable the management team of the company to make appropriate decisions regarding the order of executing tasks. This will involve setting the right priorities, with direct reference to the residents of Derby County who are the eventual beneficiaries of the company’s activities. Vidler (2001) reckons customers must always be accorded the priority in the processes of service provision. The aspect of loading will come in handy when making decisions concerning the volumes of rubbish which can be transported per hour, per day, per week or per month. Such decisions will relate to the amount of resources such as Lorries, pick-up vans and workers which will be employed to meet the loading targets set by the management. Scheduling will be instrumental in deciding the time table for specific daily activities and tasks of the company. Optimum results can be achieved through appropriate combination of these planning and control strategies.
So far, it is evident that the establishment of the initial operational and management structures for ‘Rubbish is Us’ is an extensive process that must incorporate key management concepts and principles. The significance of adopting pragmatic yet cautious approach to organisational management as proposed by the concept of management of lean and agile organisations is best illustrated by the McKinsey 7S Framework. Consisting of the key elements of strategy, strategy, structures, systems, skills, staff, style, and shared values, the framework provides the most vivid summary for implementing realistic strategies that are both short-term and long-term in nature. The management of ‘Rubbish is Us’ can Succeed in initiating growth and development in the new business entity by observing the strategies proposed by the McKinsey 7S Framework which emphasizes on teamwork approach in the management and operational aspects of organisations. This demonstrates just how important it is to guide activities, motivate employees and monitor processes through transparent management channels that bestow collective responsibility to all members of the team regardless of position held by an individual.
Detailed analysis of the current situation and the expected outcomes of the Derby County rubbish collection program granted to ‘Rubbish is Us’ reveals the prevalence of demanding tasks which will require high levels organisation and huge amounts of capital resources to launch the business successfully. In lie of these findings, this report makes the following recommendations:
The management team of ‘Rubbish is Us’ should hire lorries and pick-up vans to cut don on capital expenditures associated with transportation.
Extensive and detailed training should be offered to all employees to ensure clear understanding of individual responsibilities, departmental responsibilities, company policies and operational standards.
‘Rubbish is Us’ should cut down on employee costs by subcontracting labour intensive tasks.
The company should pursue efficiency through the acquisition of automated systems that have real-time tracking capabilities for field and office operations of the company.
The management team of ‘Rubbish is Us’ should always motivate employees through recognition of both individual and team efforts.
The managers of Rubbish is Us’ should observe flexible and accommodative cultural orientations to ensure that diversity is converted to an asset rather than liability for the organisation
The implementations of the recommendations of this report will go a long way in contributing to long-term success profitable business for ‘Rubbish is Us’.
Christopher, M., Peck, H. & Towill, D. (2006), ‘A taxonomy of selecting global supply strategies’, The International Journal of Logistics Management, vol. 17, no. 2, pp. 279-285.
Daft, R.L. (2004), Organization theory and design, 8th edn, Thomson: South-Western.
Taylor, F.W. (1911), Principles of scientific management, Elibron Classics.
Vidler, C. (2001), Operations management, Heinemann Publishers.
Figure 01: Illustration of the Management Team for ‘Rubbish is US’.
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