Importance Of Operations Function In Japan Tobacco International Inc.

1118 words - 4 pages

Japan Tobacco International Inc. (JTI), being a member of Japan Tobacco Inc. and world's third largest international tobacco company, operates 95 offices, 25 factories, 6 R&D centers and 5 tobacco processing facilities in more than 120 countries. All sites are linked by complex and highly efficient networks supported and directed in a 24/7 mode. More than 10’000 out of total 27’000 company’s employees are engaged in Manufacturing and Global Supply Chain (GSC).
JTI’s operations include sourcing materials, managing product making and packing, directing international distribution, as well as systems and processes support. Such a wide geographical and functional spread provides great challenges to its operations as well as unlimited range of opportunities. “Current competitive arena, which includes lean production, mass customization and agile manufacturing, places huge demands upon operations capabilities” (Brown, Squire, & Lewis, 2010, p.4192).
In general, activities which transform input organization’s own and attracted resources into goods and services outcome supplied by the organization to the external environment are understood as operations. Besides transformation itself, they include also systematic direction, control, and evaluation of the entire range of processes (Slack, Chambers, & Johnston 2007). In JTI decisions regarding the design of the system, e.g. number of products, breadth of product structure, and number of operations in the routing are made globally. However, sometimes local legislation requirements regarding ingredients and packaging differ, time zones, peculiar conditions in carriers’ contracts, as well as road network maintenance has to be considered (Gabriel, 2013).
The XXI century’s distinguishing feature is an increased consumer demand to product customization (Keillor, Kohut, Walsh, & Hauskenecht, 2011). Pack and brand design adaptations increase the complexity of manufacturing. Today’s JTI strategy aimed to balance variety with volume efficiency and its investments into the latest technological advances allows the firm to adjust production with a minimum loss of productivity. JTI identifies fast response to changes in the marketplace (like change in particular product volume, new blend introduction, innovative packaging development, etc.) as its strategic key to obtain competitive advantage and sustain the company’s steady growth. About 500 changes to blends and 6’000 to packaging are implemented annually . “The modern conception of the operations management is to interpret a company as an open system which is highly dependent on its environment. Organizations have to be open enough to allow their strategies to be affected by customer requirements” (Schmuck, 2012, p. 135).
A complex of relationships exists between the operating function and other functions of the organization. To optimize the operational activities of the organization and to maximize their outcomes it is necessary to ensure effective management of...

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