Carlos Gutierrez’s Operation Management and Its Positive Effect on the Kellogg Company

In order to look into Carlos Gutierrez's operation management‘s applications, we should elaborate what are the aims of operation management focuses on in global terms. Operation management has for goal to maximise profit. In order to do so, it looks on ways to maximise efficiency all along the production system; from when the Input is acquired to when it has been changed into output and displayed. Efficrency looks at how delivering a low cost made, high quality product Within the frame of mind that it reposes on profit making. Carlos Gutierrez is quoted to e a man of creativeness in which he keep a constant look on how the future trends: consumer influence are evolving; p636 "He stays in tune with pop culture by poring over such magazines as Time Creativeness in product development as well as responsiveness to the consumer are keys to operational management.

The article stated that within the time Carlos Gutierrez came to be a CEO, Kellogg was setrback from Its main competitor General Mills by not having a wide range of products that suited the newAmerican lifestyle, Kellogg flowered in many aspects on what it is stated on how the customer's choice is based upon. From the lmprovrng Responsiveness to Customer's paragraph, we see that customers needs are based upon: Low price, high quality, quick sen/ices & and quick after sales servrces, broad range of features and customized products. For once, Carlos Gutierrez had to take steps to improve Kellogg‘s quality to restore Kellogg's image to the Mexican market when he was set to be head of the Mexicans region dept he applied TQM that centres improving the quality of an organization‘s products and services and stresses that all organization's functional activities should be directed towards this goal.

This involved a short term no productivny financial risks that were to become beneficial on the long term as the company‘s image of quality product was recovered. Another point unmentioned in the article could be that restoration of the Mexican factories from those sanitary problem. might have led to better working conditions to accelerate labour efficiency. I believe that the concept of quality is an arbitrary notion in which many attributes are involved including the price of the product on the shelves. Kellogg is a world wide name for quality breakfast cereals and I would personally say that lowering its prices would have a psychological effect on consumers that would lead to a slump ll'l profit as Kellogg‘s cereals are the most expensive in the market. Customers‘ would assume that Kellogg's would have become a marginal brand that could only compete With an class brands such as Sainsbury‘s.

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This is reflected by the Toyota/Lexus firm that maintain high quality standard to keep prices of their cars high. therefore to maintain a solid image. Despite quality development to the product. Carlos Gutierrez had to cut cost and improve efficiency. Efficiency in production terms looks at how maximising output with a minimum of inputs, ln operational management, it looks at 3 sectors: Labour productivrty, material consumption efficiency and energy efficiency. internally Carlos Gutierrez restructured the communication system as quotes in the articles by erasing its hierarchic system to allow a new flow of thoughts and ideas from all the different levels of the company to be communicated to the higher management panels Therefore a direct link between R&D and Carlos Gutierrez was then created leading to faster product planning and decrsion making.

One doesn't need to be reminded that unproductive section of a company has to be either reassessed or cut off from the company even after considering its social value. as it might results in a financial handicap. Cutting down the old Corn Flakes plant flagship of the company was one of his decisions, However the fundamental aim being in any market economies is to be competitive, Kellogg's major draw back was a lack of product diversity that was engaged by General Mills in response to new American eating habits. Kellogg's would not have had the financial flow to start to introduce new product on a different market as Kellogg would have had no expertise and it would had to finance new machinery and train or employ a new workforce that would had been slow and very expensive without proper certainty that the final result would have been successful.

Acquiring Keebler was a major step as Kellogg could instantly present the customers a larger product variety. It was also an incentive to delete a provrsional competitor if Kellogg had to start Within this market of snack food. On the practical angle, Kellogg saved R&D time (therefore money) as Keebler had all the expertise and many products already established. All the machineries were ready to use and all the work force was trained and running. This saved a huge amount of money on the Labour and machinery investment costs Keebler had of course all their suppliers and contractors set so Kellogg‘s saved time investigating new suppliers and creating new contracts to develop not yet born product.

Moreover, Kellogg saved money surveying new location or maybe on building new premises to setup factories. This has led to the free use of an already established distribution system to develop Kellogg's now popular Eggo waffles and Poprtarts. Therefore Kellogg was to become more sensitive to customer's needs It also allows Kellogg‘s to be very sensitive to new competitive product as an ersatz could be developed in a short amount of time. In other words the acquisition of Keebler led Kellogg to be more competitive, more customer's responsive and finally it saved it time in marketing new products and the setting up of the latter.

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