Operations Management - Essay Example

?Running head: Operation management Operation management Introduction Looking at operation management, itis one of the areas of management in any organization with the responsibility of overseeing, designing, as well as redesigning business operations during the production of goods and services. It ensures that business operations are efficient in using few resources as needed as well as meeting customer demands. It ensures that proper processes have been used in converting inputs in to outputs. In any business operation whether service or manufacturing operation, operation management should be effective in driving the organization to achieving its set goals and objectives. Below are some of the operation systems which have been applied by the manufacturing and service organizations as well as the differences between the two. Managing the Supply chain It is believed that service and manufacturing supply chains share a lot more in common than the way they differ. The inherent particularities of the service industries showing how they differ with the manufacturing operations are summarized as follows: Labor intensive: In the process of delivering service products, manual processes that require human beings is involved. So, the solutions that use standardization and automation in improving operation efficiency in the service industry are less applicable. In addition to this, the labor intensive industries require more advanced scheduling systems so that they can coordinate effectively the prefaces of commonalities (Andrew & Michael 2005). Customer involvement and service heterogeneity: The customers in the service industry play a great role in the delivery of services during the delivery process or even the service initiation process unlike in the manufacturing business. A good example is the electronic repair service. The involvement of customer delivery has an impact in service heterogeneity and impacts the service quality. The distinctive needs by the customers do change the content of each service product offered. As a result, it makes the service quality hard to measure and also monitor (Andrew & Michael 2005). Intangibility: The service which is provided by the service industries is often intangible for instance; education is one of the services. Intangibility leads to three issues: First, it’s difficult to score, secondly, it’s difficult to account for and thirdly, it’s difficult to identify suppliers. An intangible good as many believes can only be stored in books. This characteristic then shifts the focus of management from buffering by inventory to ensuring capacity flexibility and also managing capacity. One of the ways in which service procurement can better be controlled is by implementing a two-way match of the service receiving process. Here, the purchasing documents as well as the invoices are matched upon receiving and this process includes matching of the invoice, purchase order and shipping document in manufacturing. Unfortunately, in the service receiving process, counting of physical goods is a missing link. It becomes difficult in the start of the procurement process to identify the suppliers. The service buyer is not always sure of the specification of the service been procured. In addition to this, due to the intangibility of the service, you find that the service quality is very hard to measure (Andrew & Michael 2005). Simultaneity of production and consumption: Unlike in the case of the manufactured good, the services are created and consumed at the same time. You find that once the service has been created, there is no lead time in the middle to buffer against uncertainties. Combined with difficulties in storing these services, it isn’t surprising seen that a flexible capacity is vital to the success of a service supply chain (Andrew & Michael 2005). Customer supplier duality: A good example to explain duality is the electronic repair service. Here, you find that a customer supplies the malfunctioning electronics and in return, he/she receives the service of fixing it. Andrew & Michael (2005) summarized four duality implications as follows. The service has to be labor intensive The service can not start until the customers supply the inputs. For example an electronic machine has to be supplied for fixing The service tends to be heterogeneous and lastly The service location is always closer to the customers In this case, there is no time of distribution and warehousing in the service industry as it applies in the case of the manufacturing, as it has to prepare for the final consumption. According to Andrew & Michael (2005), these structural characteristics influence the strategies to manage a service supply chain Business strategy and operation management In every organization, whether it service or even manufacturing, its objective it to furnish customers with quality goods and services. Operation management consists of all the activities which are involved in transforming a product idea in to a finished product. In other words, transforming inputs in to outputs. The service operations by nature are often labor intensive and also complex to manage. Most of these organizations find it hard to keep the service costs in check especially the labor costs. The recent technologies for example the self-service kiosks which are located in airports, and hotels improve their overall productivity (Andrew & Michael 2005). There are so many differences in business managements and operation management in both the service and manufacturing operation. First, in the manufacturing operations, you find that there is no front office. This is unlike in the case of the service operations whereby there is continuous interaction with the customers and the service providers. In manufacturing operations, you only focus on the mechanics. It is only at the sales end of the system when the customer becomes involved. The services which are provided here depend much more heavily on the physical evidence but this is absent in the manufacturing operation (Andrew & Michael 2005). Lean operations Lean operations are seen as business practices and use as little time, inventory, supplies and work as little as possible in order to produce a quality good and service. They are tactics that try to make profit from the other end of the business where these goods and services are created. The lesser the tactics are used, the less waste can occur in the business and the more money the business can save. In application, the manufacturing operations use the more commonly lean operation known as the lean manufacturing and it is highly popularized by the Six Sigma practices which make the companies more effective. In the service operations, it uses the lean operations to help communicate more effectively than before. It also uses less office space, physical materials, as well as the computer space in completing a transaction. Despite the benefits the lean operations do have in these operations, sometimes it becomes very much difficult to apply in some of the business like in the service operations. This is due to the changing of practices which may be too expensive and not fit well in the firms budget. Some service industries cannot apply many lean operations tactics hence they have to be more effective when eliminating wastes (Paton, et al. 2011). Resource planning and control Everything that a customer pays for is the result of a process. Whether you are building cars for sale or whether you are a barber, there is a certain process that is required, that is from start to finish. Resource planning can be seen as a discipline that makes sure that all the necessary inputs are present at the right time. A good start requires a certain chart, SIPOC (supplier, input, processing, output, and customer). Both the manufacturing and the service manufacturing have different resource planning and control. For example, the manufacturing operations must plan to have personnel, materials, facilities and equipments all ready at the right time in order to produce finished goods for sale. Most of the manufacturing companies use a version of resource planning, manufacturing resource planning (MRP-11) software. This is a software that helps these companies to schedule all the required resources at the right time. The key difference that makes the manufacturing planning different from the service planning is the addition of materials and also physical processing. Most of the physical processes have a fixed space and also time required that can’t be compressed. In the case of the service operations, they still require some equipments and supplies but its key planning decision surround the processing time. The primary input in the service operations is labor. Whether an insurance agent preparing an application for coverage or even a mechanic starting an engine, the key constraint is time. The bottleneck process is often a department which has limited personnel or even limited resources. So, it requires less investment in trying to add capacity to a service business in order to satisfy more customer demand than in the case of the manufacturing operation (Andrew & Michael 2005). Designing operations Both organizations here use the designing operations. For example, the IT operations are one of the key strategies which companies have used in trying to realize its competitive advantage. The key difference in the outsourcing of IT in both the manufacturing and the service operations is its impact and the type of IT used. Most of the manufacturing organizations require more equipments and resources. As a result, more capital to invest in this new technology then is high as compared to service organizations which require less equipment and resources. This is because most of the customers are in direct contact with the service providers and the services are intangible. Less technology will be required in this case (Meredith & Mantel 2010). Designing the system In designing the system, it first begins with the product development which involves determining the features and the characteristics of either the good or the service. It first asses the customer needs then eventually grows in to a detailed product design. Manufacturing processes decisions are more vital to a systems ultimate success or even failure. It requires a good technology choice than in the case of the service business which will require less technology. The product design is one of the critical tasks since it has to determine the features and the characteristic of this product and if it will satisfy its customers more effectively. The product design also determines the cost and the quality of the product since these are some of the factors which customers make when purchasing products. This becomes more expensive as when compared to the service design since the customer is in close contact with the service provider hence can assess the performance of the product from the customers. For example, a shoe repair can assess the quality and the cost of his service from the direct responds from his customers unlike in the manufacturing operation whereby the customers are not in close contact with the company so the product has to be designed, produced then taken to the market for the customers to approve its quality (Meredith & Mantel 2010). The following are some of the ways in which service organizations can benefit from implementing the manufacturing approaches and systems. Meredith. & Mantel (2010) described how the service managers could design their operation in order to achieve the economics of production. He called the design and conversion processes as technical cores. Here, he meant insulating the technical core so that the customer has no personal contact with the service providers hence this would make the business to operate more effectively than when the service provider is in close contact with the service provider. The technical core here can be insulated by restricting the offerings (e.g. fast foods restaurants with limited menus): customizing at delivery ( e.g. use computers); by restricting the service in such a way that the customer has to go where the service is offered but not direct to the service provider ( e.g. like banks do); trying to incorporate self service by use of computers so the the customers can shop at their own pace; and also separating services that lent themselves to automation ( e.g. venting machines and ATMs). The service operation can adopt what the manufacturing operations call standardization and mass delivery in trying to insulate this technical core. A good example to explain how a service operation can benefit from the manufacturing operation is the example of a McDonalds in providing a picture of a service that has utilized the manufacturing techniques to the end products he terms as the “technocratic hamburger”. McDonalds here make use of a limited menu, a standardized product, division of labor (e.g. the food prepared at McDonalds have no discretion when it comes to making this particular product), task grouping in order to allow specialized skills and also an assembly line of approach, all applied to the technical core that is insulated (i.e. away from the seating as well as the ordering area) from the consumer (Meredith & Mantel 2010). Conclusion Operation management is one of the key strategies in any organization. Whether service or even manufacturing business, this strategy has to be put in to consideration. With the increasing technology, the manufacturing and the service business have to integrate in order to ensure that they have worked effectively. The service industry should implement the manufacturing approaches which are more technical and effective in order to realize a competitive advantage. References Andrew, D. & Michael, H. 2005. The business of projects: managing innovation in complex products and systems. Cambridge, Cambridge University Press Meredith J. R. & Mantel, S. J. 2010. Project Management: A Managerial Approach, 7th Edition. NY, John Wiley & sons. Read More