Operation Mangement (forcasting) - Research Paper Example

FORCASTING Operation management has played a big role in the current business industry and as a result, it is important to provide people with more information about it. Operation management mainly deals with design and the management of services, processes, products and the supply chains. Operation management also considers the development, acquisition and utilization of the available resources that most firms need to deliver to their clients such as services and goods. Forecasting assists the managers and various businesses to develop plans that are much more meaningful and to reduce uncertainty in future events. Due to the fact that many managers are always eager to match the supply of commodities with their demands, it is therefore very important for them to forecast on the amount of space required for the supply to the demands. Chapter three explains several methods of forecasting that helps managers to make future predictions for the purpose of improving the operations of the company. In this context, we are going to focus on six issues that include; managing, finance, strategy, operations statistics and data. OPERATION MANAGEMENT (FORECASTING) AND FUTURE RESEARCH Introduction Under the topic of operation management, I chose two articles that relates to the main topic. These articles are; ` the Competing analytics` that belong to the Harvard business review and `Supply Chain Management review`. Both articles are very interesting to read as they try to share some common features though some are different. The articles also provide the clients with basic business information in relation to operation management. The competing analytics reflects on various subtopics such as strategies and quantitative forecasts, exemplars of analytics, the analytics and financial performance and finally, the distinctive capability. The article of Supply and Chain Management has the following subtopics: the selection of articles, the inter-rater reliability and review process, the classification framework and the strategy used, research methods and statistics, result and the data, industry sector, definitional issues, framing of SMC and discipline bases. Since there are two main forecasting methods; the qualitative and quantitative forecasting method, this paper mainly reflects on the qualitative forecasting method. This method consists of human judgment, subjective, opinions and it is non mathematical. At the end, the similarities and differences between the two articles, lessons learnt and conclusion. Harvard Business Review The main goal that Harvard Business Review intends to achieve is to be the best source of ideas that are very new in the market to enable different personalities to lead, create, lead and transform businesses. Judgmental forecasting method that involves the sales-force opinions, executive opinions and consumer survey was used. The HBR was founded in the year 1992 and has managed to become the world`s preeminent magazine in terms of management, publishing cutting-edge and authoritative thinking on important issues that face the executives. The HBR articles cover several topics that are relevant to different industries, geographical locations and management functions. All the HBR articles focus on areas such as management, finance, operations, strategy, negotiation, leadership and organizational change. This enables the HBR articles to relate to the operation management (forecasting) that also deals with management, operations and organizational change. In addition to that, the articles share common characteristics such that all of them are written for senior managers. The writing is done by the experts who have experience in the field of writing and their work has already been studied and analyzed. The ideas that are presented in the article can be put in to action due to the fact that they have already been tested in the business world and have successfully worked. When evaluating a given idea from the article, the editors always focus on the things that might benefit the managers when put in to practice (Bennis, and Nanus 36). In this context, we are going to focus on the “Competing on analytical by Thomas H. Davenport” since it is one of the Harvard Business Review articles. COMPETING ON ANALYTICS BY THOMAS H. DAVENPORT Discussion The article “Competing on analytics”, by Thomas H. Davenport explains in details how to use the data technology of data-collection and the analysis so as to determine what the customers want, the amount of goods that they are willing to pay for at a given time and what makes them to become loyal. Thomas argues further that the habit of using data to make important decisions concerning the businesses has shifted dramatically. Some of the enterprises that record high level of performance have embarked on coming up with strategies that are more competitive in terms of data collection thus leading to impressive results in business. Their secret weapon being statistical analysis, predictive modeling and sophisticated quantitative. There are various organizations that illuminate how the power of analytics can be leveraged, some of them include: Capital One, Procter & Gamble, Boston Red Sox, Amazon, Harrah`s, Barclay`s and Wachovia. The analytics play a very important role on above companies due to the fact that they help in identifying the customers who are most profitable (Davenport 23). Strategies, qualitative forecast and the data Operation management relates with the strategies used in the Harvard Business review in that both of them reflects on the management processes and products. Most companies and industries tend to offer products that are almost similar and use the same technology. Therefore what matters most is the strategy put in to use by the company to enable it compete favorably. The previous competition bases such as protective regulation and geographical advantage have been affected by globalization since they have been eroded (Davenport 24). As a result, the proprietary technologies are being copied rapidly at resent times even though the break through innovations among the products and services has not been very easy. The basis of competition is created in various ways such as; high level of creativity in terms of decision making, an effective and efficient execution and the ability of wringing almost every last drop in value from the business processes that can be gained through using the sophisticated analytics. Many companies have invested in millions of dollars on systems which have the ability of snatching data from sources that are conceivable. Exemplars of analytics This article presents several exemplars of analytics as follows; using tool that are brand new for the purpose of identifying customers that are most profitable so as to provide them with right prices of products. The next exemplar of analytics is to accelerate the aspect of innovating products. The third one is the act of optimizing the supply chains and finally, identifying true drivers on matters to do with financial performance. Therefore, the exemplars of analytics relates to the operational management because both of them play a big role on the product management. The analytics and financial performance The operational management reflects on various issues to do with finance under the management services. In this article, the author presents the relationship between the low performance and high performance in terms of finance. Low performance is described using the analytics and financial underperformance while the high performance is presented using the analytics and financial over performance. The ratings of financial performance and analytics are mainly based on self-evaluations instead of the objective measures. As the more productive companies get more encouraged by their business performance, companies that are profitable blame themselves for their failure. This situation is termed as “Hallo effect”. Moreover, the companies from both groups make an aggregate of 29% of the sample. In analytics, the high performance correlates in good terms with the mediocre financial performance. It is necessary to distinguish the financial outcomes from the analytical initiative to assist in measuring the business success. In case the business has a sufficient management support and an outcome which is more understanding and desirable, analytical orientation and proper decision making processes, then the next step that is most appropriate is to start by defining the priorities (Davenport 23). Distinctive capability The aspect of having a distinct capability enables an organization to view itself as if the distinction has enabled it to apart from the numerous competitors. The companies which are most successful and analytically sophisticated normally use the inter alia and analytics to support firmly the distinctive strategic capability. However, the research shows that not all business organizations practice the distinctive capability because some of them do not show up anything different from other competitors. Some of them include: GM, US Airway and the Kmart. SUPPLY CHAIN MANAGEMENT REVIEW BY KEVIN BURGESS, PRAKASH J. SINGH AND RANA KOROGLU Introduction Supply Chain Management (SCM) has become very popular in the recent years due to the fact that its appearance has increased in the academic publication, programs of professional development, university courses in the surrounding area and in practitioner. This enables it to relate to the operational management because both of them reflect on the management products and services. Much information about the SCM mainly revolves around marketing, IT, purchasing power and the logistics. The presence of gaps in the knowledge that is based on this field has been contributed to by the little consensus on conceptual and the result methodology with concern to the SCM. The paper comes to an end by making a summary the key findings of the review, describing all the contributions that the study has made to the SCM and notifying the implications caused by the findings for both researchers and practitioners. Review Methodology The selection of articles (3) The selection of articles in the SCM has a close relationship with operational management because it focuses on the supply chain and the production of products. The main objective of this review was to ensure that a snapshot of the research being conducted on the SCM has been well captured. There were several articles present on the database that needed to be reviewed whereby the key word that was on search was “supply chain management”. In order to achieve the control over quality production, the search was limited to peer-reviewed publications alone. The book reviews, interviews, editorial notes, prefaces, the articles from industry publications and the articles from the magazines were excluded from the review thus reducing the number of articles to be reviewed. The statistical methods were also applied so as to generate representative random sample (Prakash, et al 3). The inter-rater reliability and review process (3) Key dimensions that amount to eleven and relate to both the methodological issues and SCM conceptualization were first defined before the articles are classified within the dimensions (Bennis, and Biederman 87). Three authors with academic and practical experience in that area presented themselves as reviewers and then made a classification of the allotted portions of sample articles (Prakash, et al 3). The authors were observant so as to ensure that high level of inter-rater reliability was achieved. Preliminary measures were also taken by the reviewers such as classifying the articles and doing comparison for the purpose of consensus. After the process of classification was through, several individuals among the reviewers had to conduct a discussion on the articles that had been reviewed by one individual until an agreement is made (Prakash, et al 3). The main purpose of the discussions made was to ensure that the final articles presented to the clients were of high quality with no error. This enables the inter-rater reliability and review process to relate with operation management because it encourages managers to provide goods and services of high quality to their consumers. Classification frame work and the strategy used Operational management indicates the strategies put in place that the manager has to follow in order to achieve the set objective. In this context, proper strategies were used so that better outcome is recorded. Due to the fact that the articles had been classified in eleven dimensions, they were put in to framework that broke in to distinct of four. The framework of classification was structured so as to enable both conceptual that is holistic and research methodological analysis of that field. Moreover, according to the groupings, group 1 provided analysis of the sample articles that were used and it also examines closely the trends that were used in literature. Group 2 covered the territory in which the SCM covered ranging from perspectives by use of either the classification scheme that is in existence or the purpose-built. The third group provides a classification of the literature that deals with issues revolving mainly around the theoretical bases. The last group which is group 4 examines closely the issues that are associated with the research methodology (Prakash, et al 4).Since any classification system can easily get challenged for the level of comprehensiveness, it was therefore felt that the perspectives` breath that was covered by the 11 dimensions could be adequate in the development of a sound understanding the supply chain management (Prakash, et al 4). In addition to that, the categories of classification in some of the dimensions were rendered to be a source of potential connection. However, to avoid this situation, the taxonomical frameworks and the existing conceptual that had been used extensively in research of the same kind were reused. However, for the dimensions whereby there were no existing frameworks available, the researchers made their own. Theses 11 framework elements were mainly designed for the purpose of providing assistance in the establishment of a clear line of sight that originated from information sources to the definition matters through the already used research approaches and theoretical concerns. Since it covers the research methodological concerns and conceptual, the framework provides necessary methods of checking on the connections and logical links that verify consistency among many different activities revolving around the SCM. Research methods and statistics Through the examination of the specific methodologies used in the field of research, greater epistemological insights are gained. The researchers have various options to select from depending on nature of the knowledge and the certainty in which the knowledge is presented. The importance of such a classification is to detect the potential systematic pattern in research literature. Wacker, who was among the researchers, suggested that research methods can as well be subdivided in to two groups. These groups are: empirical and analytical. The analytical method is further subdivided in to mathematical, conceptual and statistical. The empirical method is further divided as follows: the case study, statistical sampling and experimental design (Prakash, et al 12). The research results and the data Descriptive features of the supply chain management literature (group 1) Operation management demonstrates on the importance of utilizing the available resources in order to produce products of high quality to the final consumers as it is observed in this context. In time distribution of the publication of articles, an analysis that illustrates the period in which 100 articles were picked randomly and published in different years shows that the very first article was published in the year 1985 (Prakash, et al 4). There has been an exponential increase over the last 18 years due to the fact that 77 articles out of the 100 articles were published between 199 and 2003. In order to identify the journals and the number of articles that were published in every journal, the 100 articles were reviewed. According to this article, around 31 journals that cover a wide area under different disciplines were reviewed (pg4). The Journal of Supply Chain Management (21) and the Supply Chain Management Journal (27) were the two journals that covered the 48% of the total publication while the remaining percentage was shared among the 29 journals (Prakash, et al 4). Industry sector The literature of SCM seems to have put more concentration towards the industrial sector thus sharing the same objective with operation management in the need to produce goods and services to the customers. To support this point further, various examples that illustrate the concept of SCM are at many times chosen from industries such as automobile manufacturing industry, computer assembling and the consumer goods retailing industry. For the purpose of improving the personal understanding on matters to do with SCM, the classification of sample articles was done basing on their industrial sectors (Prakash, et al 5). An example is the Australian and New Zealand Standard Industry Classification (ANZSIC) that was well used for this purpose. When the information was presented on a given table, it was noticed that 35% of the total articles mainly based on the sector of manufacturing industry. When further research was done on the same, it latter emerged that most of the articles that had been classified under the manufacturing industry mainly dealt with the selling of consumer products in the consumer markets. In addition to that, the multiple industry sectors emerged to be the second largest group of articles with a percentage of 16%. Under this group, the articles we mainly based on the survey of many firms operating on the large industry sectors (Prakash, et al 5). Definitional issues, statistics and the data collected. (Grouping 2) There is a little consensus on the definition of Supply Chain Management. In over 58% of the articles, there was no appropriate definition used. As a result, either the SCM was taken on a broad view to where the real discussion had been focused somewhere else thus SCM becoming irrelevant to by the topic or a much specific aspect of the SCM was being discussed (Prakash, et al 6). The second largest group used the definitions that were in existence in about 21% of the articles whereby very little consistency was noticed in specific definitions that were used. From the 21 articles, only three of them used the definitions that had been proposed by Nicholas and Handfield (Prakash, et al 6). The articles that belonged to the category of `developed own definition` often belonged to the group of articles that had made proposals on given definitions but failed to make references. A close analysis of both the differences and similarities further revealed that almost a half of the total articles emerged to have embedded within the information across the organizations, the definitions and the core concepts with concern to the flow of goods (Prakash, et al 6). The framing of SCM This is a scheme that consists of four categories used to classify the way in which the SCM is framed conceptually as developed by the authors. These categories are as follows: the activity that includes the instances in which the SCM was defined as individual function in a given process. The second category is the process which involves the related activities in a chain. The third one is the system that incorporates a series of processes that are related, the concepts that are loosely connected, frameworks and networks. Finally, the forth category is an analysis of a deeper level that mostly dealt with sociological; inter alia, philosophical and psychological concepts (Prakash, et al 6). These four categories could be observed on a scale ranging from `macro` to` micro` perspectives. These categories were mainly chosen for the reasons below: The conceptual framing that was being utilized in demonstrating the absence of consensus in the definitions. The manner in which the SCM is represented conceptually incurs a larger bearing on the proposed definition. The second reason is that the conceptual framing had the capability of explaining in to details the organizational expectations on SCM (Mishra 63). To illustrate this point further, the aspect of taking the SCM to be like an activity would easily enable it to be observed as an operational function that is very minor. On the other hand, the SCM would be suggested by a system perspective to be a framework of all-embracing management. Finally the last reason is that the used conceptual framing would help in revealing constructs that seated behind the SCM. This review shows further that most of the researchers tend to make a description of the SCM in terms of chains of activities and processes. As a result, it reflects on the historical development of SCM. The SCM has further been linked to various techniques and management philosophies that were very popular in 1980s and 1990s (Prakash, et al 14). Some of them include the Japanese methods of, management, just-in-time-management, total quality management, lean manufacturing and business process reengineering. These techniques and philosophies take predominantly a process view of the operations. Since the SCM came from the operations management approaches, it is therefore the predominance of its process view is understandable. Research shows that many researchers used the chain metaphor rather loosely. Most of them used the metaphor when describing the supply chains that interacted. Discipline bases The dominance of the operation logistics, operation management and purchasing disciplines mainly reflects on the field`s historical origin and the expectations (Greasley 53). However, the presence of low article representation that focused on the psych-sociological research was never expected. Since CMS allows the engagement of individuals from different occupational groupings, cultures, backgrounds and geographical locations, a stronger coverage of the social issues is therefore expected (Prakash, et al 15). Some of the researchers include the logistics and purchasing under the operations management. Under this category that seems to be broader, the operations, management and logistics management are said to be the SCM`s dominant disciplines. However, as it is suggested in diversity of the Journals publishing articles in that area, it seems as if the dominance disciplines that informed the SCM previously may automatically give way to other disciplines that are ever- increasing their range as they seek to contribute to the knowledge of SCM (Prakash, et al 15). Similarities between the Supply Chain Management Review and the Competing Analytics under The Harvard Business Review Both of them relate to the operation management in various ways in terms of management service, production and processes. Both of them are reviewed for the purpose of obtaining a given objective. The last similarity is that they all have strategies that need to be followed for the purpose of recording better outcome. Differences between the Supply Chain Management and the Competing Analytics under the Harvard Business Review The first difference is that different strategies have been used in order to obtain the objective set. The second difference between them is that they had different target groups and consumers. THE LESSONS LEARNED There are several lessons that can be learnt from the two article reviews. The first lesson is that it is very important to put down a strategy for any planned business so as to enable the mangers to focus on the future development of their businesses. The second lesson is that the factors of operation management such as the management of services, products, supply chain and processes should be of high quality so as to compete favorably in the market. CONCLUSION In conclusion, the Supply Chain Management Review and the competing analytics under the Harvard business review share certain common characteristics though there are certain issues in which they differ. In both article reviews, there is an illustration of how the subtopics under discussion relate to the main topic of operation management as per the instructions. This paper has also presented how the structured and systematic review of the literature provides research methodological and conceptualization insights basing on the field of SCM and the competing analytics. Works cited Bennis, Warren and Bert Nanus. Leaders: Strategies for Taking Charge. Harper Business, February 1997. Print. Bennis, Warren and Biederman Ward. Organizing Genius: The Secrets of Creative Collaboration. Perseus Press, 1998. Print. Bettley, Alison. Operations Management: A Strategic Approach. London : SAGE, 2005. Print. Block, Peter. The Empowered Manager: Positive Political Skills at Work. San Francisco: Jossey-Bass, 2009. Print. Drucker, Peter F. Innovation and Entrepreneurship: Practice and Principles. Harper Business, May 1993. Galloway, R L. Operations Management: The Basics. London: International Thomson Business Press, 1996. Print. Greasley, Andrew. Operations Management. Los Angeles [u.a.: Sage, 2008. Print. Jones, Peter, and Peter Robinson. Operations Management. Oxford: Oxford University Press, 2012. Print. Mahadevan, B. Operations Management: Theory and Practice. New Delhi: Published by Dorling Kindersley (India), licensees of Pearson Education in South Asia, 2009. Print. Mishra, D K. Operations Management: Critical Perspectives on Business. New Delhi: Global India Publications, 2009. Print. Prakash j. Singh, Rana Koroglu and Kevin Burges. Supply Chain Management Review. Emerald Group Publishing Limited, 1985. Shim, Jae K, and Joel G. Siegel. Operations Management. Hauppauge, NY: Barron's Educational Series, 1999. Print. Thomas H. Davenport, “Competing on Analytics.” Harvard business review, January 2006 Vidler, Chris. Operational Management. Oxford : Heinemann Educational, 2002. Print. Wild, Ray. Operations Management: Text and Cd-Rom. London: Thomson, 2003. Print. Read More