The Royal Mail Group is one of the UKâ€™s largest companies responsible for the universal mail collection and delivery service in the UK, handling on average 82 million letters, cards and packages every day, rising to 135 million on peak days. After over 360 years of providing service at a sustainable level, there must be efficient management of the operationâ€™s functions to improve profitability with annual sales revenues in 2003 of 8.3 billion. Royal Mail, hereafter referred to as (RM) boasts to have utilized centuries of innovation making their business what it is today. One can only wonder how RM sustains this level of competence over its competitors.
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In order to do these entire tasks the operations manager breaks down the total task into subsystems to be able to control the whole, this would be the transformation process, as mentioned in question 1 which involves taking inputs and converting them into outputs. Moreover operations managers should be concerned with both the technology of the transformation process and the methodology of managing the process (Monks, 1982). In the case of RM the inputs are: finance, information, staff (FT, PT, temporary), equipments, buildings (post offices), transport and mail itself. If we discuss the transformation process, it includes activities like managing, planning, budgeting, controlling, continuous improvement, quality control, packaging and delivering or distribution. Despite this difficult process, RMâ€™s operations manager is responsible for providing the service of delivering mail. Moreover RM delivers a great amount of letters, packages and cards everyday, on average 82 million, and 135 million on peak days.
In every company the operations manager should be able to make the right decision at the right time, this can only be done if the operations manager is involved in the day by day or weekly planning to meet RM objectives. RM operations managers made such a decision in 1999, when the company invested Â£200 million in a high-tech sorting process, which means that now enables 90% of mail to be handled automatically. It helps RMâ€™s operations mangers to coordinate, control and implement the relevant activities in order to meet budgeted output, for example, their next-day delivery targets for first and second-class mail as well as handling volumes at peak times such as Christmas. According to the case study, in 2002 the next-day delivery for first class mail was 92.3% while second-class mail targets were achieved at 92.3% of time. We can see that the operations manager is not only the manager of technology but of product and process as Harrison (1996) mentions. On the other hand Hill (2000) states that the operations manager needs not to understand the technology itself as the level of technology involved and, more importantly the business trade-offs that can be delivered by the technology in use or being purposed.
Furthermore the operations manager is responsible for managing the cost centre, both the work flow and money flow, for instance from the mid-1970s until the end of the last century, the RM operated profitably and contributed over Â£2.5 billion to the UK government funds in that period. But according to the case study it incurred pre-tax losses in the last two years, thus in order to increase profitability operations mangers at RM would have had to make sure that the operations budgets and output levels are met to sustain their cost structure.
2. b. The features within Royal Mail which best reflect the operation management
The task of the operations manager canâ€™t be emphasized enough, it is...