Operational Management Analysis Essay Example

Sara's has a strategic competitive advantage in the production cycle with its internal manufacture of pattern design and cutting using heavily automated machinery at its factories around the headquarters.Benton consolidates key production activities by grouping them into production poles in various regions, while also investing heavily in controlling production activities. Sara's distribution is centralized at one main distribution center, with a satellite center being built in Madrid. On the other hand, H builds a distribution center in each country of distribution despite sourcing all of its production. However, their lead times are still relatively short. Ezra adopts a just-in-time production process with no warehouse or distribution center that holds inventory for longer than 3 days to reduce stock holding costs. This approach is integrated into Sara's marketing strategy of "scarcity," which aims to produce collections in small batches to reduce the potential of the bullwhip effect. The company's store managers are incentivized to detect unpopular items and send them back to the distribution center to be sent to close-out stores nearby, resulting in a failure rate of only 1%.

Ezra achieves 15-20% of its sales at discounted prices, but uses empty shelves to display full-priced popular items. The key to Sara's success is the freshness of their offerings due to high turnover, scarcity resulting from small shipments, and the strategic location of their stores. Ezra changes its merchandise constantly, with 75% being replaced every three to four weeks. Benton struggles and narrows its product line while Sara rapidly updates and refreshes their stores, resulting in customers visiting an average of 17 times a year compared to competitors' three to four. Both Ezra and competitors establish

partnerships, such as joint ventures and licensing, in other countries. Benton is known for licensing retail to small third-party stores globally while Ezra uses franchising in smaller, riskier countries and joint ventures in larger markets with barriers to direct entry.

Regardless of the approach utilized, Ezra will maintain management control and retain the ability to establish "own stores" in the mentioned markets. The standout feature of Ezra lies in its significant degree of vertical integration, which, along with the company's vigilant product quality monitoring and meticulous analysis of International markets, contributes to its ten percent net margin. However, as production capacity and International distribution channels expand, Ezra may need to scrutinize its centralization-oriented process to identify any potential bottlenecks.