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Xiaomi's Case Study: Three Decision Areas Of Operations Management

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Xiaomi's Case Study: Three Decision Areas Of Operations Management
INTRODUCTION
Operations management has been defined as a set of activities that transforms inputs to outputs creating goods and services. It is made up of the following decision areas; service and product design, quality management, location strategy, process and capacity design, layout design, supply chain management, human resources and job design, inventory management, scheduling, and maintenance (Thompson, 2017).
This paper will discuss three operation decision areas, Service and product design, Location, and Human resources and job design, using Xiaomi as the case study. It will look at the current activities in the mobile company based on the three decision areas of operations management and put forward recommendations on ways the company
…show more content…
Their product line includes phones, tablets, smart TV's, and wearables. Xiaomi's first product was the MIUI operating system. When they, later on, decided to manufacture smartphones, the company made a conscious choice to continue building & supporting custom MIUI operating system that can be installed in smartphones from other manufacturers. For example, a customer using a Samsung phone can download custom MIUI system and install it on his phone. This lets users experience Xiaomi's products even without buying a Xiaomi smartphone. In doing so, Xiaomi lets potential customers experience, use and even advocate their product even before buying …show more content…
At Xiaomi, inventory decisions are based on operations management principles which put emphasis on the quality of its products.
Xiaomi operations management approach involves just-in-time inventory management and lean production. Materials needed for the production of a phone are ordered and delivered when the manufacturing process starts and they are purchased based on the pre-orders. This approach helps minimize Xiaomi's inventory costs.
Xiaomi puts out only a limited quantity of phones for sale. New phone models produced are sold in limited volumes as "batch sales". This heightens the desire created already for the phones. This also helps reduce the number of inventory held by the company hence reducing inventory holding costs.
Having pre-orders and batch quantities enable Xiaomi to manufacture its phones through an outsourced partner at the lowest possible cost, further enhancing its ability to keep prices

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