SESSION 2025/26 ASSESSMENT: DIET 1 – REPORT Assignment Task You have been employed as an OM (Operations Management) consultant to the ‘TEA DROPPER’ and you are requested to: – Analyse and evaluate the current operating practices, approach to quality & production planning, inventory management, capacity planning, and customer fulfilment. Provide a set of practical Read More
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SESSION 2025/26
ASSESSMENT: DIET 1 – REPORT
Assignment Task
You have been employed as an OM (Operations Management) consultant to the ‘TEA DROPPER’ and you are requested to: –
To complete this study, you will be provided with:
It is important to note that for this assignment, OM principles that engage with both the Word and Excel files must be applied, in helping to answer the assignment question. (Data analysis must be part of your answer.)
Your assignment must be written in a report format and should specifically contain the following four sections.
In this assignment marks, for overall quality of presentation, communication and use of sources will be applied in the above categories.
An effective answer should consider the following:
This report should be presented in an appropriate style with a coherent structure, logic and connected line of analysis, evaluation, and reasoning. The structure and indicative content of the report should be based upon the following main sections:
| Title Page: | Matriculation number, title of report, date, and word count. |
| Table of Contents | List of section headings, sub-headings, and page numbers. |
| Section1
Executive Summary & Introduction |
The subject Executive summary should provide an overview of key insights and recommendations and be no more than 300 words. The word count for the executive summary is not included in the full word count for this submission. The introduction should outline the contexts, the direction of the study and provide a general overview of the report to come. |
| Section 2 | This section should focus on the current design, location, layout, and flow of TEA DROPPER’s operations and how it is managed and executed at present in comparison to best practice.
Use data to highlight operational and performance raised, and link data to arguments. Consider options and impacts Highlight changes and benefits to operations and the organisation
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| Section 3 | Consider past / and calculate predicted future sales forecasts, and evaluate plant capacity capability against this, considering the impact and implications this has on the business. Has calculated Inventory position costs and controls for all SKU’s. Links capacity and inventory issues to prioritisation and spend. Uses Excel in developing analysis, broad use of Graphs, Excel tables and explores critical KPI’s |
| Section 4
Conclusions |
Consider how what you have found in the previous three sections relate to the current situation, what conclusions would you make, highlighting priority issues /actions |
| Sources | A full listing of all academic citations and other sources of information, presented in the Harvard system of referencing. |
| Appendices | Any appendices that support the analysis. |
Full reference details must be included in respect to the academic literature and all other sources of information used (reference to and use of material from such sites as ESSAY.com, Google, YouTube or Wikipedia is NOT acceptable).
This assignment is based on the context of a small but growing company which has, to this point, had limited formal application of OM approaches.
The TEA DROPPER was founded in 2022 by four friends from Edinburgh, who create and sell crafted tea products. They began trading in January 2023, selling only two products directly to hotels and restaurants. They have quickly built their business and now have 29 staff and sell through a further three routes to market (online shop, retail, and wholly owned tea shops).
The ‘TEA DROPPER’ has experienced significant growth in sales, believing that through its core strengths: Super Premium Quality products & Strong branding / Customer Brand awareness that it has real potential to further penetrate the market. However, during this period of growth, the founders have become increasingly aware of internal mistakes, external complaints, and a strong feeling of frustration from their staff about the level of planning and organisation in their wholly owned operating plant.
The TEA DROPPER grew from a micro business that was characterised by informality, which meant that any OM issues and needs were dealt with primarily as they emerged. One of the founders has some limited OM experience and has so far been taking the lead on decision-making. OM principles and practices have not been formally built into ‘what they do and how they do it’.
The owners now realise that this is a crucial point in the company’s development and have decided to seek assistance in understanding how the design and planning of their operations can help in arresting the difficulties they have already experienced and position themselves to be in a much better condition to grasp the market opportunities for growth, that they passionately believe exist for the company in the current and future market.
The manufacturing plant where TEA DROPPER has been based since launch is in the Business Park in Leith area (around 2 miles from Edinburgh city centre). The manufacturing plant is owned by TEA DROPPER.
Diagram 1 (not drawn to scale) highlights the following:
The site is around 10 miles from Hermiston Gate (start of the M8), 6 miles from the Millerhill Junction of the A1, and 10 miles from Edinburgh Airport.
General traffic and parking (especially customers visiting) in the Business Park can have an impact on accessibility at peak times during the day.
Surrounding the property is a two-meter-high perimeter wall, with residential properties beyond.
Security on site has been challenging, as it is situated in a busy, urban area. The Business Park does not have a front gate to restrict/control access. The only security provision is locked access to the site, including the front door, back door, and rear fire exit. TEA DROPPER has basic CCTV coverage. As it is apparently easy to access the flat roof of the property from the back wall, unfortunately, several break-ins have already occurred.
Materials/product marshalling is carried out in the Warehouse area highlighted on Diagram 1. Marshalling refers to preparing all the components for production to begin. Marshalling takes place in one location for ease. A relatively small area (to the right of the lines) is where all goods are sent for selection, repacking, and distribution to customer order fulfilment. There are 2 warehouses noted on the factory footprint in Diagram 1. It is up to you to determine which one TEA DROPPER would use for marshalling and which one to store finished products.
On the diagram, Goods in and Goods out share the same docking area, with zones clearly marked for each. General traffic and parking (especially customers visiting the Business Park) can have an impact on accessibility.
In Diagram 1, there are 3 production lines at the TEA DROPPER site. From start-up, when they had a single line, which ran in a ‘U’ shape from the inbound door and swept around and finished at the outbound door. This layout was changed when a second line was added (2024). Lines 1 and 2 were repositioned to create space between them, moving to the ‘L’ shape design they still have. To increase production capacity, a third line was added (2025). This was squeezed into the gap between lines 1 and 2. (The U shape highlighted) on Diagram 1.
Management highlighted that the site layout, direction of flows, and relationship between production line flow and inbound and outbound goods are crucial factors for which they would like advice. This has become a particular priority as preliminary data (in the Excel file) indicates particular problems with the KPI’s in production. Informal insights from line operators suggest that they are being repeatedly asked to carry out production line changeovers.
Operators are unsure whether these are special orders, rush orders, promotions, or oversights in supply planning that must all be accommodated, but they all have a significant impact on efficiencies and plant effectiveness. Operators have also expressed ongoing concerns about the increasing levels of waste and common mistakes. Space is at a premium because the plant floor area is littered with boxes, sub-assembly parts, Work in Progress (WIP) and unused machinery. This generates a perception of congestion, cramped facilities, an unnecessarily busy production floor, and indeed an “out of control mess” almost daily.
The current plant and equipment at the premises produce based on one 8-hour shift. Some data on capacity usage and output is included in the Excel file. Output varies and does not necessarily reflect what can be produced. An estimate of the design capacity of the plant and lines is, however, estimated in the Excel file.
The current on-site warehouse offers extremely limited storage space, storing approximately 3,000 boxes in total. If this is utilised to its maximum, it impacts on the space available for incoming materials and packaging to less than 3 days’ supply (at optimum output levels).
The inbound and outbound bays are clearly marked at the front of the property. However, feedback from production indicates that the situation is worse than management realises. The prime example of these daily problems is caused by parked cars. Cars frequently encroach on one or both bays (making access for HGVs difficult/impossible). Blocking these bays results in delays on the delivery/dispatch of Lorries gaining access to the raised loading platforms. This results in loading slots being missed. When loading is not carried out effectively, this has a serious knock-on effect throughout the entire Operations (Inbound goods, production, warehousing, and outbound goods to customers).
TEA DROPPER’s management suspects that these challenges are one of the main reasons leading to increased lead times and rising customer complaints. Recent customer insights state that lead-time variability is a factor that they find particularly disturbing and disruptive to their business.
Sales are a clear success story at TEA DROPPER; however, success can bring operational problems. The company’s aggregate sales have increased month over month and quarter over quarter for most of the last three years. Sales volumes have more than tripled, and while there is variability between brands in terms of success/failure, overall trends are positive and suggest real potential for future growth.
Clearly, there is also a degree of seasonality demand for the products; however, the owners have not quite captured the subtlety of demand patterns or how these can be especially useful information for planning production and planning capacity.
This inherent lack of a formal operations management approach and clearly defined Operational roles does appear to be a factor in their current Operations position. Historic focus has been on creating, making, and shipping products, solving problems, and working around (rather than confronting) the day-to-day challenges. Disturbingly, where sales will be in 3 years’ time is not a factor that has been considered in any great depth.
Following on from this fundamental question, the real issue is whether Tea Dropper would have the required capacity to match the confident sales projections. This is a question that must be analysed and considered as a matter of priority.
Finished goods inventory is held in the warehousing and distribution areas. The target inventory level for all product lines is 2.5 months of total demand. The rationale is based on observations of the owners and the need to balance the costs, risks of stockholding, with customer service and the increasingly limited space for on-site warehousing and storage. The warehouse space is currently ‘on the floor’, with some stored on pallets and some in boxes.
The impact this tactic has on customer service is (surprisingly) unclear. The availability of Finished Goods inventory for key brands has at times been low, which has seriously impacted the ability to respond to new, special, or promotional orders (or indeed react to Customer returns).
As a result, the owners are keen that Inventory Management is a core area of your analysis. This may be how they currently execute this crucial part of the business, considering other best practices or in looking at inventory models. They are aware that inventory calculations are typically more refined (than their average method), and request that your assessment of the inventory policy incorporate these into your analysis, study, and advice. Increasingly, more flexibility of finished goods inventory is required to be able to meet new customer demands and to eliminate the current issues with lead times.
The TEA DROPPER prides itself on having the highest quality in its range of products. This is the prime reason that drives sales and marketing when trying to get a (new) product into a hotel, online Customer, restaurant, or retailer. The outer packaging will be of the highest standard and fully complement the brand’s position at the premium end of the market.
The plan for the Tea Dropper is that product and packaging quality is managed by a strict set of quality controls and guidelines created by Annie Stacey, the Operations Director.
However, it is worrying that the Sales & Marketing Director has, over the last year, been taking calls about Customer returns at a much higher level than ever before. The Director was distracted by the day-to-day role and assumed that “more sales will naturally equal more Customer returns.” The rate of Customer returns is currently unclear and not properly recorded or acted upon.
As noted earlier, recent customer insights state that lead-time variability is a factor that they find particularly disturbing and disruptive to their business. As such a key question that you are specifically asked to consider:
The company has provided Customer relations data (satisfaction, complaints, time to reply, etc.) in the belief that this will help bring a realistic and factual perspective to the situation. You should analyse the data provided and summarise the key lessons, making recommendations in the final report.
The TEA DROPPER was founded in 2020 by four friends from Edinburgh. Over time, each of the founders assumed one of the four director roles in the organisation, not necessarily because of their individual expertise, but with the need to divide the growing tasks and gain control over the company.
The four founder owners’ current roles are:
Total staff at TEA DROPPER is currently 29 (4 owners, and 25 staff) working broadly under the 4 areas of Operations (14), Marketing (6), Accounts (3) and HRM (2). Operations has the largest staff pool, which covers warehousing, distribution, logistics and supply chain management. Annie has indicated that her lack of formal training in core operations areas is a real concern. This is particularly relevant in the technical, production and supply chain knowledge base of the staff.
Staff turnover at the TEA DROPPER is relatively low. They are a living wage employer and have (as part of their ‘Values and Standards’) clear commitments to work-life balance, staff wellbeing and morale. However, recent frustrations over production challenges, quality returns, and both inbound and outbound transportation have started to creep into meetings. The partners are concerned about the potential negative impact this could have on the working environment, staff motivation, and ultimately, turnover.
Operational Health and Safety (OH&S) reporting to the Operations Director has only been established in the last 3 quarters of the financial year. Previously, OH&S reporting was not a routine item on any meeting agenda, and data were not collected or recorded. In response to growing reports of accidents (and near accidents) in the workplace, OH&S reports per monthly period are now collated.
The instigation of the OH&S reporting was commissioned due to an informal opinion that the addition of line 3 has had a significant impact on the ease of working on site. Whether design or protocols, there is a legal requirement (and duty of care) to address the OH&S of employees in the workplace.
The owners have requested that you thoroughly investigate this issue and advise on the necessary steps to address and improve the situation.
Relationships with key supply chain partners has until now been very good. A major concern has been raised by the main Distributor (transportation). The growth in Sales volumes is pushing them to the limit of their current operating capacity. As a partner they would appreciate being actively involved in the TEA DROPPERS growth strategy.
The owners have indicated that with the increasing and various supply routes to market, it is an appropriate time to “Stop & Think” more strategically about our Distribution partnerships.
Diagram 1: View of TEA DROPPER Current Premises
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B2083 – Assignment 1 – Tea Dropper Pack-2 B2083 – Assignment 1 – Diet 1-3 B2083 – Operations 2022 – Student Data-2 (1)
Evan John