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Operation Management – Dilmah Ceylon Tea Company PLC


Operation Management – Dilmah Ceylon Tea Company PLC

Word Count 3088


  • Describe the importance of operations management to the organization. Justify your answer with adequate evidences from the organization.( 12 marks)


  • Critically assess the following critical areas of operations. Highlight weaknesses of the current system and recommend improvements. (18 marks)
    1. Product Design Process
    2. Process Design Process
    3. Facility Location
    4. Layout of operations
    5. Capacity Management
    6. Forecasting


  • Write short notes to the following with appropriate examples (30 marks)
    1. Cohesiveness of supply chain management for smooth operations
    2. Sound quality management framework for cost reduction in operations
    3. Appropriate Total innovation management (TIM) for product and process innovations
    4. Effective Inventory management for uninterrupted operations
    5. Sound Customer service management for customer retention
    6. Linear programming for optimizations of resources

Additional information

Table of Contents

01) Importance of operations management to the Dilmah

02) Critical areas of operation of Dilmah Tea
a) Product design process
b) Process design process
c) Facility location
d) Layout of operation
e) Capacity management
d) Forecasting

3) Operational Management systems of Dilmah Tea
a) Supply chain management
b) Quality management framework
c) Total innovation management
d) Inventory management
e) Customer service management
f) Linear programing



In this section, it is focused on operation management of Dilmah Ceylon Tea Company PLC. Dilmah is one of leading Ceylon tea brand which operates more than 100 countries. Dilmah is the pioneer of the concept of “single origin tea”. In this section of report comprehensively analyze the operation management processes of Dilmah Ceylon Tea Company.

01) Importance of operations management to the Dilmah

Operation management can be defined as transformation process that transforms inputs into finished goods and services (Russell & Taylor, 2014).
Operation management is highly important to Dimah since Dilmah has an extended value chain. Dilmah group is the world’s only vertically fully integrated tea brand (Dilmah Tea, 2021). Therefore, company has presence of every part of value chain form tea plant to tea cup including tea gardens, manufacturing plants, packaging and distribution companies, warehouse facilities and retail shops. To control fully integrated operation, there need to be very strong operations management processes. Further, company has huge operation which have extended over more than 100 countries. Thus, there need to be very efficient and effective operation management process to distribute and sale product such a wide geographical area.
Dilmah’s key pillars are “Taste, Goodness and Purpose” (Dilmah Tea, 2021). Its business strategy also focus on offering differentiated high quality products to customers (Dilmah Tea, 2021). Therefore, company highly consider on quality aspect. One of main objectives of operation management is ensure the quality of the products and services. Effective operation management process ensure the quality of the products in different dimensions such as features, reliability, aesthetics etc. (Russell & Taylor, 2014). As a vertically fully integrated operation, Dilmah need to have sound quality management system in each business units.
Dilmah operates in highly competitive market. Dilmah competes with other tea brands and also key substitutes such as coffee. Therefore, Dilmah need to face intense competition I global marketplace. Thus, company should have higher productively to be competitive in the global market. Productivity can be defined as the ratio of inputs to outputs (Slack & Lewis, 2015). Effective operation management process leads to improve the competitiveness of the company in the market place.
Customer satisfaction is highly important factor for human consumption products. Customer preferences are changing rapidly due to different social, cultural, ecological factors. Thus, highly sophisticated customers demand different variety of products, health conscious products etc. Therefore, company should have innovative skills to develop new products and product variants continuously. Effective operation management is essential for new product development process. Currently, Dilmah has more than 300 tea standards and more than 3000 products (Dilmah Tea, 2021). Company have introduced 48 new products in 2020.
Considering above factors, sound operation management is essential for the development of organization. Instead of that, effective operation management is important to increase revenue, reduce operating cost, improve compliance framework.