Concepts, Systems, and Strategies Relevant to Operations Management
In business, operations management includes organizing, supervising and planning practices which make needed enhancements and company’s profitability. The modifications of daily operations ought to back the firm’s planned objectives, heralded through stronger scrutiny and quantifying present practices. The operations management formerly known as production management, clearly originated from manufacturing. Traditionally, it started by splitting up production, beginning in the prehistoric time of craftsmanship. However, it spread broadly by increasing the concept of interchanging parts in eighteenth century, initially igniting industrial revolution (Anastasia 2016).
On the other hand operations, management is the business exercise trend that relate to production of services and goods. Which encompasses the duty of guaranteeing business actions which are efficient by using of limited resources and meeting the customer necessities in a well-organized manner. The foremost use of operations management is the management of the procedures that transform inputs into outputs.
Concepts Relevant To Operations Management
Recently some concepts have proofed to be important tools for operation managers and the most common ones are; Kaizen, Customer care, Total Quality Management (TQM) and Just-in-time (JIT).
For one to comprehend the above four concepts they must understand operations management and its working in relation to this concepts. All four concepts are fundamental in the output of the organization and its whole accomplishment in the business arena.
Systems Relevant To Operations Management
Operating system changes inputs to provide outputs which are needed by a customer. It changes physical resources into outputs, the utility of which is to satisfy the client’s wants.
Operation management systems (OMS) objectives are to cover all stages of the firm business action and its lifecycle. Corporations ought to mold their OMS implementation and development to cater for diversity in risk and complexity all though their scopes of activities. OMS varies amongst companies dependent on factors such as the location of assets and types of activities. OMS applies wherever the firm has direct administrative control of undertakings.
There are four most significant operation management systems namely, Leadership, Risk Management, Continuous Improvement and Implementation (OGP 2014).
Strategies Relevant To Operations Management
Operation management strategies refer to the techniques companies use to arrive at their goals. After the establishment of the operation strategy, the company may analyze and carryout production procedures. The service offering businesses mostly utilize simple operative strategy to connect short-term and long-term corporate resolutions and establish an efficient management team (Richards 2019).
In the modern days, operation managers are extremely involved in strategy along their day to day production task and the numerous main strategy and technics are;
Use of Data; the analytics are important for robust planning, modification and decision making whereby the two collective types are effective metrics and efficiency metrics.
Inventory Analysis; managing inventory in the supply chain, Pareto analysis also known as ABC analysis that sub-divide inventory into three sets A, B, and C whereby A has greatest and tightest control while C has the lowest.
Data challenges; the data is mostly siloed making it hard to compare. However, newer setups and systems are enabling managers and analysts to examine data afresh.
Process Design; forecasting, researching and development of sound procedures takes energy and expertise but the end results are lasting.
Goal settings and Forecasting; the best forecast regularly merges a look at traditional data with analysis of shifting conditions.
Collaboration between Departments; with proper communication and collaboration, operations management can work efficiently with sales, finance, human resources, marketing, and other departments.
Being green; ecological reliability is now strategic and a legal requirement especially for manufacturing companies.
Managing people; with the development in technology and machinery, people are always critical to the equation in their diverse types of jobs (Smartsheet 2019).
The strategy is the company’s plan of activities in order to achieve its mission. Each functional zone has its own strategy on how to perform its part and assist the whole firm to accomplish its mission. Those strategies considers SWOT (strength, weakness, opportunities, and threats) analysis and the best way to benefit from them.
Operational Environments
The operational environment represents social, political, economy, culture and the environment aspects which considerably touch on carrying out of some collaboration. The dynamics require to be deliberated while in preparation to make certain collaboration fits the operational environment on the basis of present local conditions. Cooperation is fruitful only when the operational environment is considered by doing the right things, in the right way and with the right group.
Besides when taking the operational environment into consideration, it is important for the corporation to note any potential initiatives and opportunities. After a need for change comes up from real working environment that meets values and interest of organizations actual project may commence (Kepa 2019).
Application of Concepts in Operational Environments
Kaizen concept purposes are for improvements in production, safety, effectiveness, and waste minimization. The whole approach gives more in return in the areas of Minimizing waste as inventories are used in a more efficient manner. Moreover there is satisfaction of more people as there is a direct influence on the performance and improved commitment as the team members got a greater stake in their work while being motivated to do a better job. Kaizen concept also improves retention of job hence when staff are satisfied and engaged there is a possibility of staying in the job. There is enhanced competitiveness due to upsurge of efficiency which lowers expenses and improve the quality of products. Consumer satisfaction is improved as a result of high standard items having less mistakes. And finally there are happy teams doing their job collectively and solving issues brings cohesion which fortify the prevailing teams (Mindtools 2019).
Customer care concept
Customer care service intently refers to the support offered to clients after using company’s manufactured goods and servicing of equipment bought from the firm. Customer care also referred after sale service offers a warranty to items and equipment’s sold. Customer care role ought to be a central part of the organization’s service policy. Customer care is significant to every corporation and in order to obtain clients endorsement. The company should strive not only to the excellence of the services or products but also on the customer service. Proper assistance must be offered when the customer is in the buying procedure and aftercare period of the product. Three factors compels customer care namely; purchase price, clients cost of failure and consistency index.
Just-in-Time
JIT, as is commonly known, is a ploy manufacturers utilize in order to intensify efficiency and reduce waste by receiving raw materials only when required in the manufacturing procedure. This decreases the cost of inventory and averts the waste linked to overproduction, material waiting and holding up of excess inventory. Companies that use the just-in-time inventory ideal are able to decrease the number of warehouses they need or even abolish those warehouses altogether.
By using the Just-In-Time model, a manufacturer has a better level of controlling its entire manufacturing procedure, thereby, making it easy to respond faster when the needs of clients change. To enable JIT to work smoothly, the company should rethink the full workflow of the firm, from the intake of materials to the final finished goods. Whereas, supply-chain relationships might need multiple suppliers, nearer locations, and suppliers who can provide materials within short notice as possible.
Total Quality Management (TQM)
This system, enable companies to be client focused as it involves the employee’s continuous improvement. It rely on strategy, data and effective communication in integrating best self-control actions and norms of a company. The customer eventually defines the level of quality of goods and services while the employees join in working towards common objective. There is also a process-centered approach as TQM is focuses changing inputs into outputs. The biggest characteristic of TQM is continual process improvement that drives the company’s to be both creative and analytical in becoming competitive.
Application of systems in Operational Environments
Operations management of systems is a procedure that transforms or convert resources into goods and services. In other words, its core responsibility is for managing the major procedures used to manufacture any items and services. This procedure prudently focuses on managing growth to manufacture and deliver products and services. Operations Management systems are very important to any company as it simply deals with the design and management of goods, supply chains, procedures, and services that it offers. It consults the establishment, utilization, and acquisition of resources that the firms needs for distribution of the goods and services which client’s demand. Ultimately, the nature on how operation management are executed in a company is contingent with the nature of goods and services in which the firm is all about, for example, manufacturing, retail and wholesale.
Production systems can be categorized by technical features such as tools and machines, and organizational behavior such as division of labor, information flow, and people. They can also be classified by process production vs. parts production, the process means products go through physical-chemical conversion whereas parts mean they are manufactured and assembled into products. And the final category is by the lead time, the classification comprises purchase to order, manufacture to order, assembling to order and make to stock.
Application of strategies in Operational Environments
Operations management has three stages: strategic, operations, and tactical. In order to achieve the company’s objectives, operations managers establish strategies. Under those wide-ranging strategies are tactics, or definite tasks and phases to implement the strategies. The third level, operations, denotes the everyday control of production, such as, monitoring, adjusting and scheduling. Strategic planning enables the company to look into the future and identify issues and trends against which to align its priorities
Solving Problems Associated With the Design of Goods and Services
Customer Fulfilment starts with product and service design. Moreover, choices are made in this area that influences operations and the organization’s overall achievement. Procedure selection and capability planning affect the ability of the production system to deform and to satisfy clients.
The design’s chief threat is lack of employee’s diversity, there is a commitment to enhancing diversity between, developers, designers, and other tech personnel are over the years but the numbers still remain low. Individuals who are already in this field have to be more proactive at the personal level and blaming the “pipeline” over having no sufficient applicants from people of color and women will not help the situation.
The good design ought to begin and finish with users however realistically most of the work needs approval from fellow designers prior to users hearing about it, particularly during the times of tight deadlines. (Schaden 2016). The problem cannot be solved by using the same kind of thinking used when creating them. Additionally, with the speedy changes in society, the approaches previously used to solve many of the problems faced are no longer effective. Design thinking comes in with a courageous newly systematized and non-linear human-centered methods. This helps in radically changing how to explore problems and generating solutions to the problems.
The problems designers, engineers, and business owner’s encounters in recent times are of different dimension in comparison to difficulties confronted decades earlier. With basically universal interaction, economic and resources limitation are prevalent all over the world. These problems are continuously being entangled by the structures which joins us. For solving the new wave of difficulties we face now and the future, we require a new kind of thinking, a new approach technique towards innovation.
When tackling a design problem, the designer must always avoid where a risk might occur, however, if this is not possible, mitigation actions should be taken. One of the best options is to transfer the risk to another person commonly known as buying an insurance policy.
Demand and supply law should also apply when solving the design problem, the designers should not produce goods if demand and supply are not conducive.
Solving Problems Associated with the planning of Goods and Services
Every company functions through the use of business plans. When bad habits are developed in the process of business planning, there will be a drop in productivity and a loss of profits. To engage in well-organized planning, the company need to know the largest problems it can come across in the planning process and how to avert those issues.
The main problems faced when planning the production of goods and services are; lack of focus, impractical expectations, insufficient input and lack of buffer in case of procedural and accident. In order to capitalize on productivity, each company requires a strong planning on production. Nonetheless, operational plan is a composite procedure which tackles a broad variation of actions for ensuring raw materials, human resources, and equipment are ready whenever needed. Production of goods and services planning is a framework which assist companies recognize where they are headed and the anticipated time to reach there. (BDC 2019).
The benefits of an efficient production planning are the decrease in employment expenses by eradicating unexploited time and enhancing process flowing. Reducing catalogue costs by subsiding the need for reserve stocks and unnecessary work-in progress inventories. There is also enhanced use of equipment’s and improved capability. Another benefit is upgrading on time delivery for goods and services.
Solving Problems Associated With the Control of Goods and Services
Production control is a procedure of planning production ahead of operations by establishing the precise route of every individual good, part of the assembly, setting and final dates for each significant item. In addition assembling of the finished products, and releasing the essential orders as well as introducing the required follow-up to effective the smooth running of the enterprises.
According to Shikha (2019), irregular distribution of natural resources, deficiency of human specialization and technological progression, hampers the production of goods and services in an economy. All economies face the problems of what to produce, how to produce and for whom to produce. Therefore more or less, the economies should use two important approaches to solve these typical problems free price mechanism and State intervention or controlled price system.
Basics of Demand and Supply
The common source of demand information is the forecast that is provided by the marketing department in an organization. On the other hand, supply information is provided by manpower forecast originating from the human resource department. The equipment forecast comes from the engineering department whereas material forecast information can be sourced supply or material department. The forecast mentioned is based on two vital methods namely intuitive approach that consists of guesses, experience and finding on coming events. The other one is statistical modeling whereby traditional data is used to estimation of likely future outlines of supply and demand.
The forecast is needed since demand has uncertainty and also there is still some uncertainties in some supply resources.
Uncertainty can be classified into the following categories;
State uncertainty; which shows the real quantity of supply and demand.
Timing Uncertainty; Demand may be the same in two consequent years however it may not occur in the same period. Therefore it is unpredictable.
Effect Uncertainty; in most instances forecast is constructed on the basis of indirect data instead of direct data.
Response Uncertainty; this where decisions are made on the capacity provision, nonetheless competitors, customers, and governments may not respond to the same.
There are two types of demand, dependent and independent whereby market demand is independent whereas predictable demand is dependent.
Demand and supply basics should be at the heart of planning for the production of goods and services. Demand is on the basis of what people need and at the same time their wants thereby client may are capable of differentiating wants and needs, however in the economist’s standpoint, they are alike. Demand also looks at the capability of paying. When the consumer is unable to pay, then effectiveness of demand is not there. If the economists discourse on supply, they portrays quantity of items or service a manufacturer is ready to supply at given price. Higher price almost always pointers to an increase of the amount supplied of that good or service, while a decrease in price will minimize the amount supplied.
The company’s executives should have insight and market knowledge to know the proper times of controlling the production of goods and services by being guided by the basic law of demand and supply.
Project and Risk Management
Risk in an organization may be divided into, health, safety, security and environmental. The corporate strategy on risk should be wary of three types of risks namely; operational, tactical and strategic risks. The risks which have positive benefits are known as opportunities while the ones with negative consequences are called threats. The motives of risk management are to enhance business opportunity and value, to optimize investments and goals. And allow business endurance and resilience. The deprived risk narrative is a major cause of risk inaction while good risk narrative can be divided into three segments namely event, cause and consequences.
Project risk management is a procedure of identification, analyzing, and response to any risk that may occur over the project lifecycle. Risk management is not responsive only but it must be part of the planning procedure to anticipate the risk that may transpire in the project and how to control it. Risk management is different from diverse kinds of ventures. On big projects, managing risk strategy may comprise far-reaching thorough forecasting for every risk to guarantee modification strategy are put in place if any issues occur. On the other hand for lesser projects, managing risk may be modest, importance which prioritize from of low, medium and high risks (Ray 2017).
Risk factors
Evaluation should be done by gathering chronological information on comparable production practices, specifying the real time, raw materials and failures handled. When the risks are substantial, there ought to be conducted a FMEA (failure mode effect analysis) approach and guarantee controls are utilized to minimize and eliminate risk. This process enables studying and determination of means to diminish potential complications within the company’s operations. This type of analysis is more common in assembly and manufacturing businesses.
Risk Management in Control of Goods and Services Production
The effect of risk may be measured by the possibility of an unwanted event happening and the consequences if it does occur. Therefore mitigations should be put in place to take care of any risk that may occur during the production of goods and services.
How to Manage Risk
There should be a well written and exhaustive project agreement, consisting of project vision, goals, opportunity and deliverable. By these means, risks may be recognized at each project phase whereby teams should be engaged promptly to identify incoming risks. For proper management of the company and business, the managers should be ready to avoid and mitigate any risk if it occurs.
Risk response strategy
For the threats the responding approaches are, avoiding, transferring, mitigating and accepting.
On the other hand the best response to opportunities are exploiting, enhancing, sharing and accepting/ ignoring.
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