RUNNING HEAD: MODULE 04 COURSE PROJECT 1 Buckle Store Operations Management Christina Torreano Rasmussen College Authors Note: This paper is being submitted on 03/11/2017 to Jan Hoffman. MODULE 04 COURSE PROJECT 2 Buckle Store Operations Management Several studies have been done on how concepts of operations management apply to different industries. This particular research takes a different route and investigates how key concepts within operations management apply to the clothing industry with an exclusive analysis of Buckle Store Company. This paper will draw its application of concepts from qualitative articles from the journal of operations and production management and other sources to explore how effective operations management can be the pillar of success within a company. The paper will also evaluate the operations concerns in the global market as well as the issue of corporate social responsibility. The clothing industry is broad, and it is a complex chain of production starting with textile processing to the sale of the final product to the consumer. The clothing industry began centuries ago, but it has evolved with time and the ready to wear market has grown with time. The clothing industry generates a lot of revenues which is estimated to be over $500 billion annually according to Franchise help (Franchise help Inc., 2014). The industry is growing fast, and that is why it has attracted companies such as Buckle store. Buckle store is an American owned chain store that specializes in selling clothing, accessories, and footwear for both men and women. The company sells its private label together with other popular brands to its customers across continental U.S and a few stores overseas. The company owns 463 as per 2016 under the name The Buckle and Buckle. The company’s brand name appears in clothing such as denim, shirts, active wears, and footwear. The company was founded in 1948 by Kearney in Nebraska since then the company continued to expand through acquiring stores across the country before going to the international market. It was in 1991 that the company started trading on the New York Stock Exchange and it currently trades as BKE("About Buckle | Buckle Corporate", 2017). MODULE 04 COURSE PROJECT 3 The company has an annual net income of $100 million with profits ranging between 6% and 10% on average ("About Buckle | Buckle Corporate", 2017). For a company this big, that has grown over time and controls a considerable amount of the clothing market share it illustrates how intensive operations management is crucial to the enterprise. This paper will be analyzing the applicable concepts of operations management to Buckle store. Operations management is one of the primary drivers of a company because it transforms raw materials and labor into outputs. One of the central concepts of operations management is converting the input into output in the most efficient way to ensure maximum profits for the organization (Barratt,Choi, &Li, 2011). In Buckle store, this means using the raw materials combined with skilled labor to produce unique clothing wears that will match the target market and counter the market’s competitiveness. Buckle store is a brand company that is popular with the younger generation, and that is why they produce unique designs every time that matches this particular market. The company has a supply chain that can deliver 1000 clothing every day throughout its stores. The company sources its textile material from reliable companies such as American Textiles which meet the set standards. Most of the design and making of the clothing is automated in the company’s production unit. Given the massive production scale and sales in the company’s store, it illustrates how the company can take advantage of economies of large scale to optimize its production and distribution and make healthy profit margins. The key concepts applicable to the enterprise are operations strategy, process modeling, predicting the future, product development, supply chain management, planning and control, corporate social responsibility and risk management. For Buckle store is uses specific strategies that are aimed at optimizing its operations which include the facilitation of layout and design, MODULE 04 COURSE PROJECT 4 management of the materials used in design, quality management and the use of technology in all its operations. The company relies on productivity to improve its business and handle the competitive market. Buckle Company divides its operations into two categories that are service operation and manufacturing operations. Because the company has two broad divisions which are manufacturing and the other being the distribution of the finished products in its stores it manages all the activities in on a central location to ensuring synchronization across the board and the delivery of quality goods and services to their customers. At Buckle stores, they understand that operations is an integral part of their business framework and they do this by producing distributing more than 1000,000 clothes each year through their stores. To ensure that the supply chain is moving as expected the company has partnered with other businesses in the industry such as Miss Me, Luck Brand, American Fighter and Silver Jeans to ensure a constant supply of raw materials and the finished products. Buckle Company differentiates itself in the market from other competitors through brand name and its stores. The company over time has perfected the use of popular brands to sell itself to its customers particularly the younger generation. The company has acquired a reputation for its denim where its accounts for 45% of the total company sales over the recent ten years. The company differentiates itself through offering finishes, brands and affordable prices to the target customers. To ensure that the stores remain fully operational and making use of the labor force from 2,800 employees it provides that each employee gives a personalized customer service. Some of the customer services that Buckle provides in its stores include gift wrapping, shopper programs, and free hemming. The company continues to be committed to improving the MODULE 04 COURSE PROJECT 5 skill levels of its workforce, and that is why management continues to expand the leadership and training within the enterprise (Stone, 2012). Buckle over the years has continued to report impressive returns especially in a market that is very tight. Over the past decade, the company has been leading among its competitor companies, and the reason for this is that the firm has a lean inventory system, customer focused experiences and premier locations of their stores. Buckle Company has an effective and efficient inventory system that is run by the store and from a central place to ensure that operations are synchronized on a daily basis. Each store receives one of each size of a product every day and then assesses what has sold on a daily basis to be able to track the inventory in the future. The daily list ensures that customers continue to flood the stores to view the latest products. To make sure that the stock is moving, the company runs a product that is not selling in one store to another where it has received a high demand. In the clothing industry products are more volatile because of the nature of the fashion industry which changes drastically within a short time and Buckle has identified this threat and has created plans to control the business. The company has premier store locations in malls to ensure consistent traffic of their customers. The management believes that the cost of occupying this prime location does not outweigh the cost of operation and sustainability within the store and the company in whole. As previously discussed the company does what the competitors in the market are not willing to invest their time and money in which is customer personalized experience. The company’ stores have real-time systems that manage the labor force and detect the demand and supply to ensure maximum customer satisfaction (Holsapple & Lee-Post, 2010). To create such an experience that the client will not forget the company also uses a client tracker system that keeps records of customer size and previous purchasing history to help the attendants pinpoint MODULE 04 COURSE PROJECT 6 exactly what the customer is looking for. When new clothing arrives in the store, the employees use customer records to call the clients and inform them of the new product. Buckle store has identified a huge market in the global market which will open new opportunities to the company. Even for a company that has acquired control of its operations within the country operating in the global market possess a greater challenge to the enterprise. In the increasingly volatile global market, it is wise to consider the challenges ahead and address them. In a typical day the day to day operations of the company are managed more efficiently to ensure peak performance to ensure maximum profits are registered, and on the other hand, the risks are minimized and losses avoided. For Buckle, it keeps its company’s operations within its limit through constant tradeoffs in risky situations that may threaten the continuity of its operations. To ensure that the management continues to operate and steer the big ship the company develops performance metrics to guide it in its operations. The global market is more volatile, and this requires a company that can respond promptly to the changing conditions in the markets and this has become a challenge to Buckle Company. For Buckle, over the past decade, it has been able to deliver impressive benefits each year through reducing its operational waste and becoming more flexible. In assessing the global market Buckle has had challenges meeting the set operational standards in this big market. One thing that can be pointed out is that the company has limited management team which restricts the development of leader who can identify the areas to improve, aligning the company’s visions with the daily activities of the stores and the demonstration of strong technical and interpersonal skills that will create an operational culture of excellence. MODULE 04 COURSE PROJECT 7 The creation of an agile operations management is a great challenge to the company’s efforts to enter the global market. In the world market, it becomes difficult to identify the wastes and inefficiencies in operations which are a major area of concern. The company can operate in the local market more efficiently because most of the markets are similar but with the global market, it is an entirely different ground that requires time to understand. Failing to understand the market well and how operations are being carried out is fatal to the company. Buckle Company is actively involved in corporate social responsibility efforts as part of its corporate function. The company is dedicated to conducting its business in a way that is abiding and supports the ethics of the customer, staff members and that of the shareholders. The management team upholds all the agreed policies that define the company’s business and quality and industry standards. The company’s code of ethics acts as the guide when making judgments on controversial issues. All the team members within the enterprise are expected to acknowledge the code of ethics by signing it which will apply to the way the conduct their operations within the company. To ensure that the company is directly responsible for the delivery of quality products that meet the industry standards the company provides an integrated reporting. Combined reporting has become part of the company’s way of ensuring sustainability within its core business strategies. The company understands that shareholders judge it’s based on the value it creates to the society and the environment. The company conducts a quality assessment when receiving its products and ensures that the source of this product is trusted and reliable in term of quality and meeting the industry set standards. Buckle provides that its employees are acutely aware of the code of conduct that they are expected to abide at all times. The code of ethics is supposed to address all the possible situations MODULE 04 COURSE PROJECT 8 within the company that may require critical judgment. The code of ethics helps in aligning the company’s policies with the industry set standards of quality. The manager is in charge of all operations in the store, and if a policy is not very clear, he or she provides the way forward. The code of ethics is continually updated according to the Supply Chain industry standards. The company also continues to comply with the industry standards of having the necessary content of polyesters in their products to ensure the environment is not polluted by these non-biodegrade products once they have reached their shelf life. Buckle believes that customer needs the ultimate satisfaction that they desire to give them value for their money. The company believes that the clients need to go home with a happy look and when they reach home with the product they get the assurance of a product that was sourced responsibly. Because the company strives to ensure that high standards are adhered to at all time the company draws its strategies from its business ethics. The company has guidelines that help them in identifying the potential supplier of quality products who have the collective commitment to not only quality products but also quality in human right protection and healthy relationships. In the pursuit of free and fair policies, the company discloses all its operations as required by the supply chain act in the California state. To ensure the protection of human rights the company is verified by a third party who monitors the supply chain for instances of labor abuse. The company is audited independently. To ensure that the suppliers are accountable for quality at all times Buckle inspected its supplier's facilities unannounced and announced which eliminates instances of company profile staging which can significantly affect the quality of products. The company also requires their suppliers to be certified and that they adhere to the code of ethics in textile manufacturing and supply. MODULE 04 COURSE PROJECT 9 The company also conducts internal audits of its employees to ensure they are independent when working for the enterprise. The company instills a culture of accountability by continually training staff to be responsible for the supply chain and in mitigating risk factors that may compromise the quality of products and industry set standards. Retailing is the final stage in the distribution process, and this is what makes business for Buckle Company. The company takes full responsibility for ensuring that the products meet the industry standards by conducting few value additions that improve the quality. Straight from the suppliers, the company ensures that the product suppliers are compliant with the maximum tolerable content of environmental toxic substances such as polyester ("About Buckle | Buckle Corporate", 2017). On the other hand, Buckle Company takes the full responsibility of disposing of the products once they reach the end life in the consumer cycle. As required by the retail clothing industry standards the retailer should keep track of the final product and dispose of it in an environmentally friendly manner. To ensure that its employees are more willing to work for the company and uphold its values the company provides equal opportunities to the most qualified individuals. One of the primary requirements in the recruitment process is that applicants must have knowledge in cloth technology which helps them in assessing the quality of a product against the company internally set standards. MODULE 04 COURSE PROJECT 10 References About Buckle | Buckle Corporate. (2017). Corporate.buckle.com. Retrieved 12 March 2017, from http://corporate.buckle.com/about Barratt, M., Choi, T. Y., & Li, M. (2011). Qualitative case studies in operations management: Trends, research outcomes, and future research implications.Journal of Operations Management, 29(4), 329-342. Holsapple, C. W., & Lee-Post, A. (2010). Behavior-based analysis of knowledge dissemination channels in operations management. Omega,38(3), 167-178. Linderman, K., & Chandrasekaran, A. (2010). The scholarly exchange of knowledge in operations management. Journal of Operations Management,28(4), 357-366. Stone, K. B. (2012). Four decades of lean: a systematic literature review.International Journal of Lean Six Sigma, 3(2), 112-132.