Operations Management - Essay Example

? Operations Management Tokundu Airport Case Operations Management “Operations Management is the study of organizational processes that transform inputs into finished goods and services. The primary goals of this course are (1) To gain insight as to the nature of operational issues and problems; (2) To create guidelines for sound tactical and strategic operational decisions; (3) To provide a framework necessary for managing the operations of an organization; (4) To build good critical-thinking skills” (Eldersveld, 2006). The basic issue that operations management addresses is about the common way of identifying the procedure in which any business operation is carried out within an organization and if a business operation has any flaws, they are analysed and rectified in order to make the business process more efficient and effective. This efficient and effective manner of doing any business process helps in improving the quality of any product or service offered to the customer. Quality is a major aspect in any product or service that is highly admired by a customer; hence every sane organization strives to keep up their product or service to the highest possible quality in order to be in the good books of their respective customers. According to Peter Drucker “Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for” (Drucker, 1985). Hence it can be said that quality is a major issue that should be given utmost attention within any organization. There are two systems that assure the quality aspect within a company, quality control and quality assurance. The Tokundu airport faces major quality issues and it is because of these issues that the service of the airport is getting highly affected. If Tokundu is to deliver better service of reasonable quality and standard, it must focus on all the factors that may have an impact on the quality of the airport. As each and every aspect has certain influence upon quality, an efficient and effective Quality Management System should be introduced at the airport enhance the quality of the service offered by the airport. “Quality Management System is the organizational structure of responsibilities, activities, resources and events that together provide procedures and methods of implementation to ensure the capability of an organization to meet quality standards”(Tricker et al, 2005). Quality assurance and Quality control are two main parts of Quality Management System (QMS). Quality control satisfies quality requirements while quality assurance gives assurance that quality obligations would be satisfied. Quality control is considered pre active whilst quality assurance is considered to be pro active. Quality control involves the use of activities that ensure the quality of the outputs in any organization, it involves the activities such as supervising; checking and inspecting at all levels within the organization. Quality assurance on the other hand provides a promise that all the relevant activities being performed during the Quality control aspect are working properly and that the relevant quality standard is being achieved. To increase the confidence of customers, organizations tend to obtain Quality certification that give a proof to the customers that the organization is performing reasonably as the quality certification gives a proof to that. Quality certification is not easily attainable as it requires many formalities to be met within an organization and these certifications are provided by recognized quality certification bodies. One of the most important series of certification issued by the International Organization for Standardization is the ISO 9000 standard. ISO 9000 is a set of quality standards that deal with the issues of Quality management Systems within an organization. These standards were amended in the year 2000 and were then know as the ISO 9000:2000 series of standards. The ISO 9000:2000 has three main components which relate to 1) defining the concepts and terminologies used within the standards; 2) the important characteristics of the quality management system and 3) the ways to improve performance within an organization. Such quality certifications help in improving the brand name of a company as the company gets associated with such a quality certification and it further helps in improving quality within an organization. Besides the ISO quality standards being applied within an organization, companies use other techniques as well which have become more popular these days. One of the highest regarded quality standards being applied within companies is the Six Sigma technique. The basic concept of the Six Sigma technique is to eradicate wastages and defects within the final product or service being offered by an organization. The main feature of Six Sigma is to reduce the variation in process output such that there should be no more defects than 3.4 in a million. Such approach of the Six Sigma concepts makes it a very reputable quality standard but practically it has been criticized for being time consuming and its high implementation costs. One function of quality management is to handle the cost of failure, inspection and presentation. This helps in reducing the overall costs which are attributed to the quality of a product or service. The inspection costs are tolerated in order to assure that the quality standards are being met within an organization whilst the prevention costs are tolerated to ensure maintenance of quality. In totality, these two features add up together to build the costs of operating a QMS. If these costs are not incurred in advance, they would lead to increased costs being endured in the future. These future costs of not abiding by the quality management would include costs of internal and external failure. Internal failure costs are those costs that are found before the delivery of a product/service is being delivered to its final consumer, whilst the external failure costs are those costs which are discovered after the delivery of the product to the final consumer and those products/service are to be recalled/redone. This sort of external failure costs leads a company to bear extra transportation costs and commuting costs and besides that it also dents the image of a company in a very negative manner. Hence it seems better and appropriate to incur costs in the beginning and abide by quality standards rather than incurring failure costs in the future. This also helps in improving the image of an organization. The major benefits of implementing a QMS are that it improves the organization’s ability to provide high quality product/service in a very efficient manager and besides that it also helps in improving the morale of the staff working within an organization. The Tokundu airport faces many issues that have lowered the quality of their service provided to their customer and this as a result has put a negative effect on the airport’s goodwill and reputation. The incompetent staff at the Tokundu airport is a major concern that needs to be resolved. According to the management team’s survey, the number of incompetent staff being reported at the airport is 133 and these personnel should either improve their performance or they should be fired so that competent staff members should be hired in order to improve the performance of the staff at the airport. Staff is an influential factor in a service industry as they are the one who interact with the customers. Hence a pleasant interaction would lead to a better image of the airport and the service offered by the Tokundu airport. The implementation of a suitable Quality Management System can also help in improving the staff morale and consequentially the performance of the staff members concerned. The improvement in the staff performance would also reduce or finish off other issues shown in the customer survey. Besides working on the staff performance, Tokundu airport authority should also try to improve their performance by offering better quality services to their clients. The airport and the air travel industry is a fast moving industry that changes radically and is prone to technological changes. Hence it would be advisable for the Tokundu airport to implement advanced technological systems at the airport that can make their customer environment more pleasant. The final benefit that is usually extracted from the implementation of a Quality Management System is improved customer relationship with reduced complaints and increased turnover. If the flight cancellation issues as shown in the customer survey are because of the airport authority issues than it needs to be sorted out at the earliest because it would affect the image of Tokundu airport in a harmful manner resulting in reduced passenger travelling through the Tokundu airport. Hence it seems quite feasible and really important for Tokundu airport authority to quickly and properly implement Quality Management Systems at the airport in order to reduce all these customer complaints and ensuring better future for the Tokundu airport. A Pareto Analysis can be done to investigate the position at the Tokundu airport. Pareto Analysis is a statistical technique used to help in decision making. This technique helps in deciding to select few tasks that have a huge overall impact. This technique uses the Pareto analysis i.e. 80% of the problems in any given situation are linked to 20% causes which means that if those causes are addressed and resolved, a company can improve the quality of its service. Pareto analysis hence helps in improving the quality standard within any organization by pointing out the low volume of causes that cause major problems in any organization (Pareto Analysis, 2009). A Pareto analysis of the Tokundu Airport is as follows: Problem Cause Incidence Lost Bags Administration issues/Lack of Training 18 Flight Delays Weather and Congestion issues 151 Incompetent Staff Administration issues/Lack of Training 131 Lack of Information Administration issues/Lack of Training 25 Dirty lounges Administration issues/Lack of Training 17 Slow check-in Administration issues/Lack of Training 114 Stolen luggage Administration issues/Lack of Training 11 Security concern Administration issues/Lack of Training 8 The total complaints as per the problems reported are: Administration issues/ Lack of Training – (18+25+17+114+11+131+8) = 324 Weather and congestion issues = 151 According to the Pareto analysis, the major issue that needs attention is poor administration, this is because of the staff is incompetent and needs proper training in their respective field. The Tokundu Airport has been facing many negative publicity and that is vastly because of the poor administration of the staff members, hence this is the vital problem that needs to be addressed first and once this problem is resolved, all other problem would get resolved because of the strong linkage between high motivation of staff members with the quality of service offered in every service industry. References Top of Form (2009). Pareto Analysis. Quality Progress. 42, 22. Bottom of Form Top of Form DRUCKER, P. F. (1985). Innovation and entrepreneurship: practice and principles. New York, Harper & Row. Bottom of Form Eldersveld, S. (2006) Principles of Operations Management OM301(C&D). http://courses.washington.edu/samcrs/OM301Syl.pdf Top of Form TRICKER, R., & SHERRING-LUCAS, B. (2005). ISO 9001:2000 in brief. Oxford, Elsevier/Butterworth-Heinemann. http://www.netlibrary.com/urlapi.asp?action=summary&v=1&bookid=130243. Bottom of Form Read More