Operations Management Essay Example | Topics and Well Written Essays - 500 words - 7

Operations Management - Essay Example f operations, the realities brought about by globalization demand that the company adopt by integrating vertically in order to gain from economies of scale. Considering emerging issues, the main problem with Benetton is dealing with so many actors in its supply chain. These actors include specialized shops, distribution chains, and agents and all except the latter have no direct relationship with the company. in addition, the company to contend with competing with aggressive players in casual wear market and retaining its reputation in sports market. In order to overcome some of these problems, the company developed high tech production pole. This production unit consolidated production in order to realize economies of scale. Here, production of various product under the company has been brought together in order to benefit from the benefits of many units together. This strategy eliminated the problem of dealing with small production units scattered all over. Logistics of bringing raw materials and taking finished product to the market became easier. In order to benefit from the low cost of production in foreign countries, the company has take some of production work overseas just like competitors are doing. The cost of production on china and other countries on south, and south East Asia is low. Labor cost is an important cost driver in textile as they heavily use human labor. Labor in Europe is expensive and therefore relocating some of the most labor consuming aspect in the garment production is a smart move by the company. Another supply chain strategy adopted by the company is the move to integrate vertically. By doing this, the company now has substantial control of supply. Integrating vertically is a good move because ensures that supply of raw materials is guaranteed. In addition, the company has direct control on quality. This was not possible under the old system through which the company operated under. Traditionally, the company relied on direct