Data-Driven Solutions: Analyzing and Addressing Operations Management Issues in Ijmal Al-tahlia Co

Abstract

Operations management is a critical aspect of any organizations success and makes up a significant aspect of the organizations day to day activities. Through adequate operations management, organizations will not only enhance their working productivity but will also be able to satisfy their consumer needs and enhance their brand and reputation. This report adequately delves into evaluating the operations management problems and challenges faced by Ijmal Al-tahlia co one of the main real estate development and investment companies in Riyadh, Saudi Arabia, and especially with a special focus on their Midtown projects in AlSulimaniyah District in Riyadh and how their management impacts on the residents and the company’s potential customers. The report includes an evaluation of the problems and challenges faced by the company’s operations management sector and offers adequate recommendations to be able to deal with these problems and challenges to further enhance the company’s success and profitability. The report will also include the data collection methodology and how the data was used to identify the operation management problems within the company.

Introduction

The organization evaluated is the Ijmal Al-tahil co. a real estate development and investment company that provides high quality residential solutions at affordable prices within the Saudi Arabian Urban market. The company also engages the real estate industry by investing in small real estate developments like individualized bungalows and single unit apartments for a select clientele group in Saudi Arabia. The company along with other investors and parties such as Arweqah constructions engage in development of residential estates in the urban areas in Saudi such as the Midtown project in AlSulimaniyah District in Riyadh to provide clients for high quality residential estates that has all the amenities and services they would require. However despite the adequately established organization, it still has multiple problems both in the internal and external environment especially when it comes to its operations that will be adequately evaluated in this report. While the company engages in providing affordable and high quality units it still faces stiff competition when it comes to product effectiveness and also fails in certain instances to satisfy the consumer needs. For instance, while the company’s residential units range from 3.3 million to 4 million Saudi Riyals, its competitors such as the Khouzama Villa projects cost as low as 2.7 Saudi Riyals thereby providing significant competition. The villas and residential homes from the company’s competitors further provide amenities such as swimming pools and much larger floor spaces compared to the midtown project further indicating significant competition. The company also has internal operations problems including delays in handover of the villas and projects as a result of certification issues as well as inadequate repairs and maintenance contracts to the clients making a guarantee for adequate services to the clients quite challenging and therefore impacting the organizations operations and management.

Methodology

The determination of the various problems and challenges faced by Ijmal Al-tahil co. operations management was conducted through direct interviews with different employees of the company. Interviews are structured conversations between two individuals; often where one person asks the questions which are then answered by the other person regarding a particular topic of interest (McLeod, 2014) it includes a one on one conversation between an interviewer and an interviewee. According to Jamshed (2014), an interview is a qualitative research technique involving the asking of open ended questions to respondents which then sparks a conversation in which the interviewer can collect significant data and information regarding the topic that they are studying. Researchers can either adopt a structured, semi structured or unstructured type of interview depending on what they are studying and the level of detail of information that they are looking to collect.

Structured interviews also referred to as Standardized interviews are inherently quantitative in approach and include pre-decided questions based on the level of detail required in the information collected (Statistics Solutions, 2020). As a result they are often used in survey studies to enhance the uniformity of information collected from all participants. QuestionPro (2021) further advances that the questions in the structured interviews can be both open and closed ended questions. Semi-structured interviews, despite being significantly structured, offers the interviewer an opening to further probe the interviewee on any arising issue that they think relevant to the study. While maintaining the structure of the interview in mind guided by the general points the study looks to capture, the researcher has the creative freedom to follow through any idea they think critical to the ultimate outcome of the study. Unstructured interviews on the other hand also known as in-depth interviews generally include free flowing conversations between the interviewer and interviewee regarding a particular topic of interest that the researcher is studying (Statistical Solutions, 2020). They generally include minimal questions and a generally exploratory tone and direction in which the researcher gets to discover information relevant to their study.

The study undertook a semi-structured interview design to individually interview the project manager, engineer, architect and marketing officer for the Midtown project in AlSulimaniyah District in Riyadh. The interview was significantly structured to uncover details about the projects operations including its design, construction and maintenance, its sales and marketing strategies and techniques, customer engagements and management as well as the services provided to the customers in relation to the industrial standards. The structured questions were often followed with clarification questions to pull out any strings of information that may be significant in understanding the company’s operations and the challenges that they go through to deliver quality and affordable housing for the residents in Riyadh. In addition the study also engaged in secondary research of other competing companies and projects to uncover the differences in operations management within the various above mentioned sectors in the midtown project. The study also involved a tour andobservation of the projects in comparison to the Midtown project to identify any differences inmaterials and designs used, amenities, space and services provided to the customers

Problems and Challenges

The interviews revealed multiple problems not only within the company’s operations management but also with the business model adopted by the organization for its trading in the real estate industry. In fact, a majority of the problems and challenges identified in multiple departments including operations management are as a result of the way the organization is set up to run its business.

Design of the houses

One of the key problems includes the designs of the houses and the type of services and amenities they provide especially in comparison to other competitors. While the studies indicate that the customers are overly quite happy and satisfied, there are minor negative comments after living in it. Customers site the small size of the master bedrooms, which makes them have to dispense with another room to make the master bedroom larger. The customers also cite the unavailability of key services and amenities in the building’s design such as a swimming pool and direct internet services. The rooms within the buildings in the Midtown Project are also generally smaller than the units provided by other projects such as the KhouzamaVillasProject and the Reva Villas Project. This limitation in space as well as services is as a result of the company’s business model and aim which is to provide affordable high quality housing within the cities in Saudi Arabia. Riyadh is a big city and many customers are looking for a home with quality, modern design and a suitable location close to their workplaces.As such the Midtown projects provide such housing which impacts their ultimate sizes and the type of services and amenities they have.

Payment and Handover strategies

Another problem identified is with regards to the payment and hand over strategies for the finished units to prospective customers. Customers are satisfied in general, except in the matter of handovers delay due to the delay in completingthe water and sewage network due to problems in the public sewage network. This ultimately comes down to the project management deficiencies of being able to secure adequate and timely delivery of the project. The organization engages in marketing and admitting customers into the units before they are finished leading to delays for the customers.This ultimately impacts the company’s reputation and ability to deliver. Customers are also required to pay 10% of the villa price to reserve it, which hinders some of them because they want to buy through the bank and have no cash. This limits the number and scope of customers that the organization can interact with thereby ultimately impacting its profitability and success. These problems in operation are brought about as a result of the organizations business models which significantly alienates a significant portion of potential customers and clients.

Project operations management

The organization also experiences problems with the projects operations management, especially when it comes to adequate maintenance and repair strategies and structures. The company has no adequate and reliable repairs and maintenance contract to see to the different maintenance and repair needs by the customers within the midtown villas. Often customers have to contract repair companies directly and then cover the repair and maintenance costs. In addition some of the finishing materials are imported from abroad and it is difficult for the customer to quickly get them. This leads to the use of locally available material which may not only be of lower quality but also ends up impacting the buildings aesthetics and façade. This is a significant operations management problem that is as a result of improper planning and management of the organization as well as their model of business which includes importation of parts that are not locally available.

Recommendations

In light of the identified problems and the differences that the midtown project has with its potential competitors as well as the internal operation issues that impact the organization, the following recommendations are made to help remedy the problems and challenges and enhance the organizations performance and ultimate success.

Better payment options

A wide range of potential customers are currently impeded by the payment structures available for the residential estates which include a 10% initial cash payment for reservations. And the limited options for other payment alternatives and packages. By allowing off-plan sale option as one of the selling options the organization can see an increase sales and involvement by the general public. Individuals can then be able to adopt mortgage plans and bank loan options to be able to pay for the houses and enjoy the services and amenities. Introducing new payment structures and techniques will also make it easier for new customers to pay in multiple payments depending on the project’s stages and costs. Introducing installment payment options would also ensure that the project and organization penetrate a new market segment and thereby adequately increase sales. Generally, allowing the customers better payment options also goes a long way in marketing the product and attracting multiple customers which will then effectively transfer the power back to the organization in terms of setting process for the next development projects.

Maintenance contracts

The organization is also significantly challenged when it comes to operations management and maintenance of their residential units to keep the customers satisfied and thereby retain them for longer. Given the lack of a maintenance and repairs plans and budget considering a majority of the finishing materials are imported and are not locally available in Saudi Arabia, customers are having to spend significantly to be able to effect adequate changes, repairs and maintenance to the housing units for their ultimate satisfaction. Providing maintenance contracts, for example, annual or monthly services can help to effectively achieve customer satisfaction. Maintenance contracts also ensures that a single company that is effectively qualified and experienced handles all the maintenance issues within the residential units and in so doing helps to maintain the buildings’ integrity and originality.

Provide more design models

The designing of the house as well as the space, amenities and services provided is the other problem significantly impactingIjmalAl-tahliaco. operations and ultimate success. Customers despite being satisfied are having to re modify the houses to meet their needs, for instance, dispensing with other rooms within the houses to expand the size of the master bedroom and any other small spaces. Providing more design models to reduce modification for existing designs provides customers with multiple options and alternatives to choose from and therefore enhance their satisfaction with the housing units just as they are. Allowing customers the option when it comes to the design of a house also serves to increase purchase opportunities and potential which ultimately enhances the profitability of the company.

Enhancing the marketing of the housing Units

The company can also solve its problem of limited customers who are satisfied with their units by expanding the scope and aspect of their marketing. Through allocating a portion of the profits to increase the promotion of the project especially on digital marketing, the company can expand the scope if its potential customers to far beyond Riyadh to other cities in Saudi Arabia such as Jeddah and Medina. The company can also expand their reach to continuously find different suppliers to provide higher quality materials, but at the same price of the current materials, or at lower priceswith the same current quality, in order to implement the project's vision in providing highquality housing.

Critical Analysis

Better payment options

The organization’s payment and hand over strategies are not adequately aligned with the needs of their target customers and clients. According to Huges (2021) consumers often demand experiences that are much simple, swifter and seamless with no complications or setback. For this reason offering consumers multiple payment options enables them to easily access to buy the housing units offered by midtown projects thereby enhancing the organizations potential sales and success. Offering multiple options will also enable a wider range of customers to be able to access the property which effectively widens the organizations customer base and market.

Maintenance Contracts

When it comes to real estate management and operations,maintenance and repairs of structures are a significant aspect that impacts both company and customer interests. Upcounsel (2020) describes a maintenance contract as acontract between two parties that create an agreement in which one party will see to the upkeep of a possession of another party in exchange for agreed upon compensation. Given the level of quality of the residential units provided by Midtown projects the organization should be able to effectively take up the responsibility for their maintenance and repairs not only to ensure effective client services and assistance but also to ensure that the housing units remain in good condition for any future clients or customers that may require to buy or rent them. Introducing maintenance contracts also ensures clients can access the finishing materials that are not available locally to be able to maintain and enhance the façade and aesthetics of their housing units’ overtime

Providing more design models and options

The general design and model of the housing units speaks volumes about the organizations design endeavors and department not only to the direct clients but also to the prospective clients who are looking for customizable designs to suit their needs. Providing more design options and models will not only allow the customers alternatives when it comes to which residential housing units to purchase, but it will also allow acompetitive advantage for the development company due to the variety of options available within their portfolio. Ijmal Al-tahlia co. will be able to attract a much wider scope of market as a result of the wide portfolio of residential housing designs that they can offer a wider range of different clients.

Enhancing the Marketing of the Units

Compared to their competitors who have much larger housing units at much more affordable prices Ijmal Al-tahlia co remains disadvantaged especially when it comes to being able to adequately attract customers. Smith (2020) asserts that the real estate market goes through many ups and downs and is largely dependent on multiple economic factors. However regardless of how the market behaves adequate marketing of one’s property can significantly impact its sales and enhance profitability to the company. According to Nguyen (2021) four key factors drive the real estate market including demographics, interest rates, the performance of the economy as well as government policies and subsidies. Taking these factors into account while developing adequate marketing strategies for ones’ real estate property enables not only an increase in the organizations market reach and subsequent sales, but also a penetration of a wider market to enhance the growth and profitability of the company.

Market Analysis

In the city of Riyadh along with other cities across Saudi Arabia such as Jeddah there is an increasing need for residential houses for the increasing urban migration as citizens secure jobs in the cities and look to live close to their workplaces. As a result a significant number of residential estates such as the Midtown project are emerging all across the city as a result of the increasing market for the residential estates. The midtown project is just among the major projects that are setting the standards for adequate and efficient residential estates within the city of Riyadh

Competitive Analysis

Despite the Midtown project developed by IjmalAl-tahliaco being among the flagship projects for planned residential houses in the city of Riyadh, the company faces significant competition from specifically three real estate companies and investment groups including Khouzama Villas Project, which is located in the west of Riyadh, Bab Al Hada Project, which is located in the south of Riyadh and the Reva Villas Project, which is located in the north of Riyadh. All these residential houses are located within the city of Riyadh and provide significant competition for the Midtown project especially considering some of them have low priced villas with better and more diverse designs. For instance the Khouzama Villas Project offers residential units with larger spaces and in quiet and luxurious a neighborhood away from the traffic congestion of Riyadh, further these projects are approximately 1.9 million Saudi Riyals compared to midtowns projects which are as expensive as 4 million Saudi riyals.

Human Resource

The human resources of IjmalAl-tahliaco are a significant aspect of the company and how it operates. The company adopted a hierarchical structure of operations where employees and all necessary personnel for the development of the project are classified in four tiers. The first tier includes the projects general manager who is charged with overseeing all the necessary aspects of the project from its construction to completion and management. The second tire includes departmental managers such as the accounting manager, planning manager and the project manager all of which answer to the general manager regarding the occurrences and projects in their various departments in the entire course of the project. The third tier include professional managers who are in charge of different professional divisions of the projects including the technical sector manager, civil engineer, architectural engineer, electrical engineers and others. And below them are the fourth and final tier of employees who include the various workers in each division of the projects construction. Below is a diagram indicating the companies human resource structuring

Structure of Human Resource at IjmalAl-tahliaco

Supplier Analysis

The company only operates with adequate and effective suppliers who ensure the delivery of all required parts and raw materials on time. While a wide range of the materials used in the projects development are imported, the company has contracts with local suppliers who supply the already imported materials thereby saving the company additional costs in importing fees. The company also develops an adequate rapport with its suppliers by providing up to 20-25% discounts and guarantees of up to two year contracts to ensure fast supplies

Conclusion

Operations management is a significant aspect of an organization regardless of the field in which the organization operates. Operations management is often defined by the way in which the organization is set up and how it intends to interact with its customers and other stakeholder. Often companies will experience direct operational problems and challenges such as the case in Ijmal Al-tahlia co due the way the company is set up and what is considered adequate for a given price. Despite having high quality and affordable housing units that are within the city center and enables employees adequate housing close to their work places, the operations of the midtown housing units project is below per as a result of limited consideration to client needs. The housing units are generally small and the designs are limited which leads prospective clients to have to alter the units to suit their needs. The houses also lack sufficient services which are necessary for modern housing such as swimming pools and fiber internet access which in turn limits the number of potential customers that they can have. Further the payment strategies are limited and thereby effectively limit the scope of potential customers who would invest in buying the housing units. However through the adoption of the recommendation such as enhancing more payment alternatives, introducing maintenance contracts, providing multiple design options and enhancing the marketing techniques, Ijmal Al-tahlia co. can effectively enhance their productivity and profitability.

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