5.1 Introduction to operations management questions for IB Business Management

Mvule Logistics

[1] Mvule Logistics (ML) is a privately held company that runs two large warehouses on the outskirts of Nairobi, Kenya. It stores and distributes goods for supermarkets, pharmaceutical wholesalers and online retailers across East Africa. ML employs 310 people. Most of the 240 warehouse operatives have worked for ML for more than six years and were trained by the same shift supervisors.

[2] Demand for ML’s services has grown quickly because of the rise of online shopping. Its largest client, an online retailer, now expects orders received before 22:00 to be dispatched the same night. To meet this, the chief executive, Wanjiru Mwangi, plans to install an automated warehouse management system in 2026. Hand-held scanners and conveyor sorting would replace most paper-based picking, and some tasks would be carried out by robots.

[3] Wanjiru estimates that the new system will reduce the number of warehouse operatives needed by about 20 %. She also wants the remaining operatives to work flexible shifts, some starting at 16:00 and finishing at 01:00. Several younger operatives have already left to work as self-employed delivery riders through mobile apps, which pay per delivery and let them choose their own hours.

[4] When rumours of the new system spread, absenteeism rose. Joseph Otieno, a shift supervisor for 14 years, told Wanjiru: “My team know nothing about computers, and nobody has told us who will keep their job. They think the robots are coming for them.” Many supervisors also worry that the system will report each picker’s speed directly to head office, so they will no longer be needed to check their team’s work.

[5] ML’s HR manager, Peter Kamau, has proposed two possible approaches. Option 1 is to introduce the system in one warehouse first, involve operatives in testing it and offer retraining to all staff who want it. Option 2 is to install the system in both warehouses at the same time over a four-week shutdown, so that ML can meet the client’s deadline quickly, and to offer a cash bonus to operatives who accept the new shift patterns.

Hanamizuki Care

Hanamizuki Care (HC) operates 12 residential care homes for elderly people in Osaka, Japan. Government rules require care homes to employ at least one full-time equivalent (FTE) care worker for every three residents. HC’s homes are full, and there is a long waiting list.

Japan’s population is ageing and the number of people of working age is falling. HC finds it increasingly difficult to recruit care workers. In 2025 HC began recruiting trained care workers from Vietnam and Indonesia under a government scheme, and it is trialling lifting robots and night-time monitoring sensors in two homes.

Table 1: Selected data for Hanamizuki Care

Note: to cover holidays, sickness and training, HC employs 10 % more FTE care workers than the minimum required by the rule (1.1 FTE care workers for every care worker required).

Vembanad Hospital

[1] Vembanad Hospital (Vembanad) is a privately held company that runs a 180-bed hospital in Kochi, India. It was founded in 2011 by two doctors, Anjali Menon and Ravi Pillai. Vembanad’s mission is “to give every patient the care we would want for our own families”. It offers general surgery, maternity care and a 24-hour emergency department, and employs 410 staff, including 95 nurses.

[2] Vembanad’s operations manager, Suresh Nair, is responsible for turning the hospital’s resources (staff time, medicines, equipment, beds and energy) into patient care. In 2025 patient numbers rose by 14 %, but the average waiting time in the emergency department rose from 40 minutes to 95 minutes. Online reviews began to complain about delays, and two senior nurses resigned, saying that their workload had become “unsafe”.

[3] Suresh believes that part of the problem lies in the hospital’s support services. The laundry and the kitchen are run in-house by 48 employees and use old equipment that consumes large amounts of electricity and water. Suresh has received an offer from CleanServe, a large national company, to take over both functions. CleanServe would cut Vembanad’s annual laundry and catering costs by 22 %, and the laundry building could be turned into a new outpatient clinic.

[4] Anjali is unsure. Several of the laundry and kitchen staff have worked at Vembanad since it opened, and patients often praise the hospital’s food, which is cooked to meet each patient’s dietary needs. CleanServe would deliver meals prepared in a central kitchen 60 km away. Vembanad’s finance director points out that the money saved could pay for 12 additional nurses.

Valle Verde Dairy

Valle Verde Dairy (VVD) is a public limited company in Uruguay that processes milk into cheese, butter and milk powder. In 2023 its board set the objective of making its operations “environmentally sustainable by 2030”. It installed water-recycling equipment in 2024 and started sending food waste to a local biogas plant instead of landfill. Table 1 shows data from VVD’s sustainability report.

Table 1: Selected operations data for VVD, 2023 and 2025

Asante Cocoa Growers’ Cooperative

[1] Asante Cocoa Growers’ Cooperative (ACGC) is owned by its 1 200 member farmers in the Ashanti region of Ghana. Since 2019 it has run a small processing plant that ferments, dries and roasts members’ cocoa beans and grinds them into cocoa nibs and cocoa powder. ACGC sells these to chocolate makers in Europe, and profits are shared among the members.

[2] The plant’s dryers burn firewood collected from nearby forest. Fuel is cheap, but the area of forest around the villages has shrunk, and some European buyers now ask for proof that ACGC’s cocoa does not contribute to deforestation. One buyer, which takes 30 % of ACGC’s output, has warned that it will stop buying in 2027 without that proof.

[3] ACGC’s manager, Kwabena Osei, wants to replace the wood-fired dryers with solar dryers, costing GHS 900 000, financed by a five-year bank loan. Solar dryers would end firewood use, but drying would take longer on cloudy days. Many members would prefer ACGC to use its surplus to raise the price it pays them for beans this year, as their incomes have been hit by poor harvests.

[4] ACGC already runs a training programme for young farmers and has a strict policy against child labour, which is checked by independent auditors every year.

Sunbird Laundromats is a chain of nine self-service laundries in Durban, South Africa, owned by Thandiwe Mkhize. Electricity is Sunbird’s largest cost after rent, and power cuts force the laundries to close for several hours a week. Thandiwe plans to install solar panels and batteries at all nine sites for R1 200 000. She expects electricity savings of R320 000 a year, and the panels have a life of 15 years.