Sample Essay on the Nature and Importance of Operations Management

Operations Management

Task 1

LO1. Understanding the Nature and Importance of Operations Management

Every organization has an operations function, whether or not it is called ‘operations’. Goals or rationale of most organizations involves the creation commodities and services. To achieve this, there is need to procure resources, converting them into the required commodities and distributing them to the target market. This term operations embrace all actions involved in the creation of and delivery of the organization’s commodities (Pilkington 16). Within large and complex organizations operations is usually a major functional area, with people specifically designated to take responsibility for managing all or part of the organization’s operations processes (Kumar 22). It is a vital functional area that promotes the functionality of the business and customers’ satisfaction. In the case of private sector companies such as Eden Furniture, the mission of the operations function is usually expressed in terms of profits, growth and competitiveness; in public and voluntary organizations, it is often expressed in terms of providing value for money (Drejer 45). Hence, operations management is an administrative of systems that creates goods and/or provides services (Flynn 672).

 

LO1. 1. Importance of Operations Management in Organizations

Operations management is a crucial aspect of the organizations as it is the sole determinant of the profitability and growth of the business. It is important in the organizing and designing of the best practices in meeting organization goals of producing First class commodities as well as highly effective services (Kumar 22). Operations Management is vital in the assessment of the business potentials and laying ground for strategic implementations for increased profitability of the business (Hanke 74). The entire Operations management process encompasses various sectors of the business thus promoting holistic growth and development of the business operations. In addition, operations management plays important roles in the employment of qualified personnel by promoting effective human resource management, taking accounts of stocks such as the organization assets and in cost management approaches, enhancing competitive advantage of the business in the industry. The furniture enterprise entirely depends on operations management in developing strategic plans for the production and supply of furniture. In general, the fundamental elements of Operations Management comprises Inputs, Processes and Outputs, all merged together to achieve the goals of the organization (Pilkington 16).

LO1. 2. Analyze Operations Functions for Eden Furniture

While the operations function is responsible for producing products and/or delivering services, it needs the support and input from other areas of the organization (Flynn 672). Enterprises comprise three indispensable functional areas namely financial sectors, marketing, and operations. It does not matter whether the business is a retail store, a hospital, a manufacturing firm, a car wash, or other type of business; all business organizations have these three basic functions (Everett n.p.). In a typical example, Eden Furniture Limited, a leading Furniture supplies agency in the United Kingdom Consists of three vital sectors in its operations, the financial department, Marketing and Operations. The Financial department helps in acquisition of resources at affordable prices and allocation of the acquired resources to relevant sections of the organization. It is essential in budgeting, Investment Proposals analysis and funds allocation for various operations. The financial sector is fully committed to supporting the business in its effort to strengthen the business’s competitive position. It focuses on safety, superiority, worth and the entire possession price, rather than the cost alone.

Marketing is responsible for assessing consumer needs, and sales and promotion of the products. Creation of synergies with the help of Finance department is one essential marketing strategy especially in the global market. In its marketing strategies, Eden furniture encompasses its customers in every detail of its strategies, prioritizing and personalizing its relations with the customers, thus developing human contact. Its innovative approaches such as online marketing, e-business as well as consumer forums in its internet platform enhance feedback and Quality improvement on products and services. The marketing department also provides special offers and consumer giveaways to promote its actual sales and customer retention (Bowie 37).

Operations are crucial for production of commodities as well as services. Ideally, Operations act as the engine of every business activities in an organization. Just as the engine is the core of what a car does, in a business organization, operations is the core of what the organization does (Drejer 45). Operations functions the Eden Furniture entails various interconnected implementations including demand forecasts, capacity planning, management of  inventories, Quality Assurance, Employee motivation and Location decisions among other strategies. The operations sector at the Eden Furniture takes into consideration the existing policies especially on environmental degradation thus encourage the use of timber from sustainable sources through certified plantations. There exist operation systems such as the airplanes, airport assets and maintenance facilities. In its Forecasts it considers seasonal provisions such as school and university requirements, hospitality needs among other prospective customers as to provide the right furniture for specified customers. Capacity Planning entails the essentials of cash flow as a means of maximizing on returns among other operations functions that enhance the smooth running of the company (Kumar 22).

The company’s Operations and supply chains are naturally linked (Kumar 22). In essence, the creativity formulated within the supply chain would be a sure way of improving on the business competitive advantage in the larger market. Efficient supply chains provide ease of globalization of business, impacting positively on the wider scope of the business environment (Stadtler n.p). The supply chain is important in determination of market demands, prediction of quantities and timing of customer demands, evaluation of supply and demand trends within the market, enhancing reliable supplies of right products to the right customers in the exact conditions and quantities. In addition, supply chains promote the assessment, monitoring and improvement of the quality of products in a continuous basis (Drejer 45).

LO1. 3. Evaluate, By a Process Model, the Operations Management of Eden Furniture

Processes in organizations consist of diverse approaches essential in transformation of raw materials into the required commodities. Essentially, the primary purposes of all administrative practices are dependent on process management. The processes in organizations use raw materials and transform them through manufacturing among other service levels into outputs of the required products or services (Wisner 67). These levels are generally categorized into the upper management process, which governs the entire organization, the operational process responsible for the creation of value stream, i.e. purchasing, production, marketing and sales, and the Supporting processes incorporating accounting, human resource and information technology among other supporting aspects (Kumar 22).

Effective business processes entails crucial features that enhance business profitability by promoting high volume and low cost production. It takes into account the cost control methods and engages the new technology in the cost control processes, providing standard pricing of varied products, and finally, through effective processes, the business promotes product and service visibility by providing delivery services as part of its marketing strategies and convenience of the service delivery. Lean management techniques are vital in maximizing on business production potentials while reducing costs, increasing the business profitability (Pannersel 437).

The Process Model at Eden Furniture can be displayed in a Flow Chart as Follows;

Business Environment

Competitors    Suppliers

Policies           Economy         Technology

EDEN FURNITURE
Transformation

Customized production

New Technology

Varied materials and designs

Consumer involvement in decisions

Customer forums for feedback

 

Inputs

Timber

Other raw Materials

Staff

Time

Output

First Class Furniture and Products

 

 

 

 

 

 

 

 

 

 

 

Customers

 

Continuous Quality Assurance and Quality Control

                                                                                                  FEEDBACK

LO2. Understanding the Link between Operations Management and Strategic Planning

As discussed in Task 1, Operations management is an administrative process that deals with the production of goods and services in organization. Strategic planning on the other hand, is an organizational management approach used in priority settings for businesses, focusing of energy and resources, strengthening business operations, focusing employees and other stakeholders towards a common goal, monitoring, and adjusting the organization potentials. Just like with the supply chain, the Operations management and Strategic Planning are intrinsically connected in regard to the budgeting and resource allocations (Joseph 111).

LO2. 1. Value for Money/ The 3Es

The Value for money, commonly abbreviated as VFM is often described and assessed in terms of “the three Es” of economy, efficiency and effectiveness; and sometimes a fourth E (for equity) is included. Economy refers to the careful utilization of the resources, Efficiency entails delivering of the same level of services for lesser costs, time and effort while Effectiveness is considered as the delivery of better services or getting better returns for equal amounts of expenditure, time and or efforts (Kumar 22). Certain aspects of the VFM may be biased, immeasurable, intangible and possibly misinterpreted. Stringent evaluation is therefore essential in establishing the results of the 3Es (Kumar 22).

Operational Efficiency and Strategic Operations

Apart from the Value for Money, operational efficiency and strategic operations are largely concerned with establishment of realistic business schemes. It takes into account the timing, which considers the durations between service operations, resources required as well as those available, budgeting and accountability of the respective operations as well as conducting of business analyses. This establishes the predisposing factors of the business environment (Kumar 22). Operations management is essential in establishing job duties and proper utilization of the company resource while strategic planning determines the kind of resources are required in order to achieve the goals of the organization. In both strategic planning and operations management, the Value for money is a key factor to consider when planning policies, programs and projects. It is also important in formulation of decisions that involve the use of public resources (Kumar 22). As part of its implementation strategies, Eden furniture incorporates an all-inclusive system of planning that covers both internal and external ideas in formulating its decisions on production. This enhances realistic budgeting, reduction on production costs while improving on quality within effective time frames.

LO2. 2. Impact of the Tension between Cost Minimization and Quality maximization.

Often minimizing costs in the short run results in additional expenses over the long term. One would spend more in buying cheaper items of low quality then replace them with a relatively expensive item of higher quality than just buying the high quality item at once. It is interesting to note that, organizations strive to provide high quality products and service at the lowest costs possible. In achieving this, Eden Furniture engages in the paradox of thrifts idea in which money is invested and transferred into the business, which in turn spends it to improve on the quality of service. No money in the businesses is left idle (Ghalayini 76).

LO2. 3. Operation Performance Objectives

Quality

The Furniture Corporation strives to provide goods and services that meet and exceed the needs and satisfaction of their respective customers. Various operation functions are geared towards monitoring and improvement of the quality of their productions on continuous basis. The external aspect has an effect on the products quality in such a way that the consumers do not criticize the finished commodities. If they have nothing to complain about, they will (presumably) be happy with their products and services and are more likely to consume them again (Pilkington 1269). This brings in more revenue for the company (or client’s satisfaction in a not-for-profit organization. Internally on the other hand, compliance to high quality production behavior leads to none or very minimal mistakes within the production process. This is because, if an operation is continually correcting mistakes, it finds it difficult to respond quickly to customers requests (Ghalayini 76).

Cost

Cost control operations enhance the competitive advantage of various organizations by providing high standard goods and services at the lowest costs possible. From the external view, customers would most likely prefer high value and low cost products thus the external business environment would favor the business. Internally, cost controls would help reduce minimizes the production costs while maximizing on the productivity and profits (Neely 1141).

Dependability

Through effective operations management, organizations are capable of meeting the customer needs at the right time. Customers are therefore able to receive the required goods and services conveniently. Reliability of the organization enhances customer retention hence promote sustainability and increased profitability of the business. In the external, customer retention is enhanced while in the internal perspective advancement of the production methods is motivated. High dependability improves on the speed performance hence improved customer satisfaction and general business operations (Neely 1141). By allowing customization of products, Eden Furniture enhances its relations with the customers thus creates high dependability.

Flexibility

The important point to remember is that flexibility always means ‘being able to change the operation in some way. Mix flexibility allows an operation to produce a wide variety of products and services for its customers to choose from. Product/service flexibility enables development of novel commodities and services, more advanced ideas hence promoting competitive advantage in the market. Volume and delivery flexibility allows the Eden Furniture Enterprise to adjust its output levels and its delivery procedures in order to cope with unexpected changes in how many products and services customers want, or when they want them, or where they want them (Neely 1141).

Speed

Speed refers o the duration taken between the customer request and delivery time of the products. Effective operations management should be able to deliver the consumer product requests as fast as possible. This is important in the sense that it helps in building consumer trust as well as promotion of market control. Speed also to some extent reduces on the production costs in the internal perspective while promotes client retention on the external (Weber 74).

LO3. Understanding How to organize a Typical Production Process

The production processes in organizations entail the transformation of a wide range of inputs into outputs taking into account the unmet needs of specific markets. All productions involve series of connected production chains whereby value of the intended products are increased with increasing levels. In order to add value to its products, Eden furniture uses various materials in producing a wide range of commodities thus making the products more desirable to consumers so that they will pay more for it. It is very important for the business to identify the processes that add value, so that they can enhance these processes to the ongoing benefit of the business (Fitzsimmons 268).

LO3. 1. Assess How Linear Programming Adds Value to a Given Production Process

Value addition strategies involve various techniques including linear programming, which entails the use of accounting, and mathematical techniques in the maximization of the potentials of production in the business. This method helps in the allocation of scarce or limited resources for broader operations.

LO3. 2. Evaluate Critical Path Analysis and Network Planning

The use of management tools that aligns the activities in an organization in a systematic manner the shows the actual process of activities at each stage; this tool is referred to as the Critical Path Analysis (Fitzsimmons 268). In the value addition, production processes are allocated various skills and responsibilities easily represented in flow charts that show the steps and order of operations at each stage of production as well as the responsible individuals in every process. Ideally, flow charts are representations of solution settings for specified issues. The process also entails the network planning bit, which refers to the formulation of communication designs that enhance smooth information flow through the entire system. Communication is a vital component of the production process and should therefore be well deigned to avoid conflicts of misinterpretations and miscommunication during the critical processes in operations (Colvin F6).

LO3. 3. Justify the Need for Operational Planning and Control in a Selected Production Process

These processes are capped under the operations planning and control which helps in monitoring and regulation of the processes. Operational planning and control are dependent on needs assessment and forecasting for the output of the system. Each operation process involves evaluation and analysis of both internal and external business environments to determine the business capacities in various production processes. This involves taking of stocks on the available assets and liabilities of the business, the resource capacities as well as the requirements of the specified processes, a process referred to as inventory planning.

The planning and control process also entails monitoring and reviewing the quality of goods and services provided by the business, and putting in place strategic measures to improve the quality on a continuous basis (Crainer n.p).

LO4. Relevant Techniques to the Production of an Operational Plan for an Organization

LO4. 1 Operational Outcome in Eden Furniture

With consideration to the Eden Furniture Company, their operations planning involves forecasting on the anticipated problems such as regulative policies and competition  while working towards minimizing Production costs and maximizing on the profitability of the Furniture company. In its planning techniques, Eden Furniture aligns its operations in shifts, well stipulated in flow charts and seasonal production schedules. These are geared towards ensuring safety, economic benefits and customer satisfaction. Computer applications are involved in the planning process to conduct the physical Path Analyses. Thus, in its operations planning, Eden Furniture ensures strong network planning for efficient communication within the company as well as between the company and its customers (Fitzsimmons 268). Generally, the operational outcomes at the company have exhibited high end benefits to the company operators, the customer and the entire stakeholders of the Furniture Corporation.

LO4. 2.  Network Plan Indicating the Resultant Critical Path

By determining these factors, Eden Furniture is able to achieve the performance objectives such as Flexibility, dependability and Speed as a result of the operational planning techniques. The Production schedules, flow charts provide ease of monitoring customer demands thus enhance the improvement of the quality of products and service provision. The company essentially plans its projects by calculating the duration each production section would take which helps in establishing the beginning periods of the activities hence systematically completes each stage after another. Within the planning process, each stage of production is inherently connected to the other in a flowing diagram to provide guidance and prevent conflicts of loss of sight of the company goals. Once all activities are worked out and listed in the flow chart, the Critical Path Analysis is arrived at to determine the optimal methods of completion of the tasks.

LO4. 3. Justify How Quality Management Techniques Are Applied To Improve Operations in a Selected Organization

Operational management at Eden Furniture has enhanced the establishment of new organized forms of airline operation, marketing and promotion of customer comfort and satisfaction in a wider spectrum of furniture production. Eden Furniture has effective implementation strategies such as incorporation of mergers; state of the art furniture products and a wide range of supplies to various organizations their service systems. Also, operations management has helped improve on the planning and structuring of the Company’s operations essentially maximizing on returns while reducing on the production costs.

The success is largely attributed to the continuous Monitoring and Control aspects of the operations management. Eden Furniture has a system of feedback such as exit interviews and questionnaire used in establishing the quality of service provision from the customers’ point of view, enhancing the development of quality assurance cycles, which includes aspects such as collection of customer opinions, analysis of strengths and weaknesses and improving on the services on a continuous basis. The company determines its failures and successes using Cause-Effect analyses, self-assessment strategies involving self-assessment evaluation forms for its employees, variance analysis to control the budgetary and resource allocations as well as the improvement and adjustments of the company goals on continuous basis (Pilkington 16).

Conclusion

The operations function in business organizations is responsible for producing goods and providing services. It is a fundamental function in all businesses. Operations management enhances efficiency and profitability of the business enterprises. Empirical evidences show that operations management actually minimizes the production costs of organizations as it maximizes on profitability. Operations management being the key player in production of goods and services, no business can possibly succeed without proper management of its operations.

 

 

 

 

 

 

 

 

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