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Operation Management chapter 1
Evolutions of operations management
Evolutions of operations management
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Recommended: Operation Management chapter 1
1. Introduction
In this ever-changing and hyper-competitive business world which we live in today, businesses are faced with stiffer competitions and bear higher risks on negative consequences as compared to businesses years before. For an organization to survive in this era, not only do they need to produce innovative and state-of-the-art products, intense competition on factors like product quality/efficiency and also, customer-business relationship are inevitable. The popularization of Operations and process Management (OM) in recent years is largely attributed to its functionality on helping the companies achieve their desired objectives. Business leaders have realized the importance and the effectiveness that operations management can
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For the process perspective at the level of the supply network, it can be complex due to the large numbers of suppliers and customers. The boundaries of the operation’s supply chain can be very wide ranging from procurement of the raw materials to the disposal of products. It is also always changing as suppliers may change from time to time while in some operations, some new customers may be won over but may result in the loss of some existing customers.
For the level of operation, the operations segment of business is an input-transformation-output system which transforms different inputs to a range of products through an arrangement of processes. Products can be in the form of tangible (physical) or intangible (services) or a hybrid of both. This is important as customers nowadays, demand for both elements to be present in a product.
For the level of individual process, they are considered as non-operations functions but they too, have their own sets of customers and suppliers just like whole operations. It can be viewed as an internal network of individual processes which interact with each
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Operation Strategy
The pattern of decisions and action that shape the long-term vision, objectives and capabilities of the operations and its contribution to the overall strategy of a business is known as the operation strategy (Slack, N/ Brandon-Jones,A/ Johnston,R/ Betts, A (2015)). Operation strategy can determine the success or failure of a business and is sceptical to being heavily influenced by poor operational implementation.
Operation management objectives can be either broad which encompasses objectives like society, customers, employees, shareholders and suppliers or specific, which would include quality, delivery, flexibility, cost, innovation and sustainability. There is also the trade-off model which suggests for manager to look into the need to prioritize and make a choice between competitive priorities (Boyer and Lewis, 2002).
5. Challenges for OM in today’s competitive business environment
As the global business competitions intensify, coupled with the quantum leap in technological advancement, many companies have its operation management function impacted. With the increased use of information technology, the new trend for customers is to seek for operations management to produce high-quality products at a lower cost and producing environmentally friendly products through green-manufacturing due to the depleting of our natural
Operations refers to the transformation of raw materials(inputs) into finished products(outputs). The operations process is one of the key business functions and is a crucial component to business success. Like every business, Qantas is affected by many internal and external influences requiring it to have effective strategies to respond to these influences. Businesses that are able to adopt and utilise effective operational strategies are able to quickly adapt and either reduce or take advantage of these influences that impact the business. The effectiveness of these strategies can measured by Qantas’ performance and whether or not it is able to hold it’s competitive advantage. How well these strategies respond to the influences on operations will determine the level of success that Qantas achieves.
Operations management is essential for the survival and success of any organization. According to Heizer & Render (2011), operations management (OM) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs. Operations managers today contend with competition, globalization, inflation, consumer demand, and consistent change in technology. Managers must focus on the efficiency and effectiveness of processes such as cost, dependability, distribution, flexibility, and speed. The intent of this paper is to discuss the processes and operations management of the Kroger Company.
The method that an organization selects, develops, and executes projects is based on the goals, vision, and mission of the company. Goals or objectives are developed to support the mission and vision of a business, and provide staff members a means to conduct business and utilize resources (Vaidyanathan, 2013). Organizational strategy is the plan or approach that a company exercises to achieve the goals, objectives, vision, and mission of the company (Vaidyanathan, 2013). All of these elements provide staff members guidance and direction on how business should be conducted within the organization and furnish objectives for performance.
Operations are all the processes in transforming inputs into desired outputs. These processes must be efficiently and effectively coordinated by managers and eventually they must accomplish specific organizational goals. All operations, despite how well managed they are, are capable of improvement. In order for the operations to be improved however, weaknesses should be identified first. Therefore operations need some kind of performance measurement as a prerequisite for improvement.
Operations management focuses on carefully managing the processes to reduce and distribute products and services. Related activities include managing purchases, inventory control, quality control, storages, logistics and evaluations. A great deal of focus is on efficiency and effectiveness of processes. Therefore, operations management often includes substantial measurement and analysis of internal processes. Ultimately, the nature of how the operations management is carried out in an organisation depends very much on the nature of products or services in the organisation, for example, retail, manufacturing, wholesale and etcetera.
An objective is a specific step, a milestone, which enables you to accomplish a goal. Setting objectives involves a continuous process of research and decision-making. Knowledge of yourself and your unit is a vital starting point in setting objectives. Strategic planning takes place at the highest levels; other managers are involved with operational planning. The first step in operational planning is defining objectives - the result expected by the end of the budget (or other designated) cycle. Setting right objectives is critical for effective performance management. Such objectives as higher profits, shareholder value, and customer satisfaction may be admirable, but they don't tell managers what to do. They fail to specify priorities and focus. Such objectives don't map the journey ahead - the discovery of better value and solutions for the customer. The objectives must be focused on a result, not an activity, be consistent, be specific, be measurable, be related to time, be attainable.
Operations management strategies play an important role in any organization to achieve organizational goals. An organization uses these operations strategies to maintain and control all its operations...
Supply chain management has been defined as that process that involves the management of information, materials, and all the finances that are handled within and across the entire supply chain process (Christopher, 2016). The management is usually done through out the entire supply chain management from that moment when the suppliers are involved through all the manufacturing activities, different distribution activities, and the way that the products are served to the final product consumer (Turban, et al., 2002). The process also includes all the activities that different organizations offers to their customers as after sale services for purposes perfecting their services and products towards their highly valued customers (Christopher,
Goods are produced en-masse in a factory or warehouse-type environment. One finished product is generally the same as the next. Service operations, by contrast, have more opportunities to customize the services they provide.” (Schieltz, n.d.)
In every organization, different operational functions exist to ensure the smooth learning of the organization. In order for an individual to have the knowhow on how to operate the functions delegated to them they must have implicit knowledge on the functionalities themselves. Understanding markets, customers and the company goals has always proven to be a core starting point for individuals who ply their trade in the organization. The essence of the skills is evident in globalization, cooperate social responsibility and risk management issues. In operations management, the basic principles of operations should be followed to ensure that the profitability of the organization ensures the operation of the organization is
Once plans have been developed, an organization must address how management will be accomplishing be those plans. This involves operational plans that must flow from strategy; specify resource, time issues, and commitment of human resources. Operational plans at the lower - levels of the organization, have a shorter time horizon, and are narrower in scope (Bateman, Snell 2003 p.113). A good example of this is Wal-Mart's main strategic goal. It is to provide quality merchandise at an affordable low cost to consumers. Its operational goals focus on efficient logistics requiring technology and inventory management systems to help reduce costs so it can be passed on to the customer. Operational plans are derived from a tactical plan and are aimed at achieving one or more operational goals (Bateman, Snell 2003 p.113).
The mission, vision and operating principles are keys in guiding, directing, and leading an organization. Organizations have changed throughout history; however, since the introduction of global markets, competition to reach and retain consumers increases daily. Therefore, management must breakdown those guiding principles into tangible, realistic and measurable goals and objectives. Managers must then orchestrate all areas within the organization to ensure its success. Managers must rapidly change (improve) and utilize functional tools to give the organization a competitive advantage or edge. Management must become adept to changing markets, consumer requirements, and concepts used to effectively and efficiently manage an organization.
According to Aquilano, Chase, and Jacobs (2005), "Operations management (OM) is defined as the design, operation, and improvement of the systems that create and deliver the firm's primary products and services" (p.19).
University of Phoenix(Ed.).(2003) Operations management for competitive advantage[University of Phoenix custom edition e-text]. New York: McGraw-Hill. Retrieved February 01, 2005, from university of phoenix, Resource, MGT554- operations management website: https://mycampus.phoenix.edu/secure/resource/resource.asp
BPR is a management technique and tool emerged in the early 1990s. Some researchers debated that it has been evolved following the United States financial crisis and recession as a result of the need of the organisations to revamp its processes looking to improve its efficiency and reduce its cost. Professor Hammer is considered one of the leaders who introduce the concept of Business Process Reengineering. Hammer (1990) argued that companies that aim for dramatic improvements through boosting the performance of its processes should be reengineering them rather than directly automating them with their existing deficiencies. Since that time, BPR started to be a popular improvement tool that organisations are keen to implement to become more efficient and hence increase its competitiveness.