Operation management - Essay Example

?OPERATIONS MANAGEMENT al Affiliation) Operations management is key element in any organization. Because it is an ever-evolving aspect, many companies are putting in place measures to ensure that they are able to keep with the change. As an integral element in the overall management of an organization, operations management works together with other factors like production and therefore facilitates the overall successful running of any corporation. In this paper, I will explore, dissect and discuss operations management as an independent function in organizations. In two sections, I will explain its importance and how it relates with other functions, and also examine the difference in the application of operations management in both service and manufacturing operations. Key Words operations management, functions QUESTION 1 Definition of Operations Management and the Responsibilities of an Operations Manager In most manufacturing systems, the Operations Manager is tasked with the duty of managing the process of converting required inputs into expected outputs; that is the key responsibility of any operations manager. Other tasks and duties may depend on the type of organization and how it is structured. As a result, we can define operations management as the management of the process of conversion (Bicheno & Elliot 1997, pg. 12). This process turns labor, capital, land, and management inputs into required outputs (goods and services). Operations management is also involved in the operation and design of systems for production, transport, service or supply. The Nature of the Relationship between Operations Management and other Functions in an Organization a) Production Function Production can be defined as a scientific process that involves the conversion of raw materials (desired inputs) into the expected service or product (desired output) through the addition of economic value (Greasley 2008, pg. 16). It can also be defined as a systematic activity which transforms raw materials into finished products; it is considered to be an intentional process which results in useful outputs. There are different input resources in production systems; these are converted in a sequence of operations. The type of operations (chemical, mechanical, assembly, electrical, transportation, assembly, inspection, etc), number, and sequence are usually specified for each and every input. In this case, the output will be chemicals, complete parts/products etc. the production function illustrates the relationship between an organization’s inputs and outputs. The maximum output which can be realized with specific inputs or resources can be determined by studying the production function; this is dependent on factors like the available technology among others. Relationship between Production Function and Operations Management Both operations management and production are essential in achieving an organization’s desired goals and objectives (Heizer and Render 2001, pg. 26). The core essence of any organization/business is to satisfy the needs of its customers through the provision of goods and services, and consequently solve their problems and create value for them. Production function and operations management are about applying management and business organization concepts in the creation of goods and services. When applied together, the production function and operations are very essential and influential in realizing an organization’s goals and meeting objectives. In order to create and supply value for customers in services and products, it is imperative that a company identifies customers’ preferences and then convert them into specific products or services (quantity of products needed for a known period of time). An organization must also conduct backdating (backward working) so as to know the raw material needs; this is based on the requirements of a particular product. Finally, using operations management, it is necessary to involve internal and external retailers with the purpose of creating a supply chain for finished products and raw materials between vendors, customers and the production facility (Stevenson 2005, pg. 33). b) Marketing Function Marketing involves the creation of demand for customers. On the other hand, operations management entails the fulfillment and supply of that demand. As a result, it is not surprising that in many organizations, operations management and marketing are closely connected. Whenever these two aspects are in conflict, there is usually a mismatch in supply and demand, leading to inefficiencies in production and disgruntled customers. However, whenever they are in synch, we see a consistent competitiveness and profitability in an improved company. This is often referred to as intra-firm coordination, which in turn can be generalized to inter-firm coordination (Hill 1993, pg. 47). Inter-firm coordination involves the close co-operation of different organizations (for instance, retailers and manufacturers) with the purpose of maximizing the overall performance of the supply chain. Operations management facilitates collaboration among operation management professionals and other executives and managers in order to establish how operational planning can improve and sustain an organization’s long-term marketing strategy. Operations management provides the functional element of an organization’s marketing strategy by planning activities that are directed towards the realization of its marketing goals and strategy. This planning may include identifying policies and goals for marketing management, support services planning and budget management. In a nutshell, operations management ensures that the marketing department/function is on the same page with other functions with regards to the direction the organization is heading. Operations management is also responsible for providing direction to the marketing manager and other personnel under his watch (Slack et.al 2001, pg. 81). Operations management (with the assistance of the operations manager) ensures that the marketing department is fulfilling its expected responsibilities within the company by meeting budgetary guidelines and productivity goals. The operations manager can make modifications or corrections when marketing goals and objectives are not being carried out or met in a way that is consistent with organizational policy (DeHoratius et.al 2011, pg. 457). Operations managers are also influential in the achievement of organizational marketing strategies by coordinating and facilitating the processes between various departments at all levels within their firms. They improve the focus and efficiency of marketing personnel by improving and facilitating relations between departments. This is especially important in companies where the marketing department operates independently of other departments. We can view the role of operations managers to be like that of orchestra conductors, who direct and coordinate the activities of group of musicians (departments) as it plays its role in the production of a piece. Finally, the operations function is crucial to the long-term vision and marketing strategy of an organization (Waters 1991, pg. 34). This is aided by the operations manager’s responsibility as a resource manager. Operations management allows for the evaluation and assessment of an organization’s resources, regardless of their nature (monetary or others), and ensures that available resources are utilized in the most efficient manner possible. A competent operations manager is able to evaluate whether or not resources are utilized well, and use his/her evaluation to increase profitability. Profitability leads to the achievement of long-term marketing strategies and goals through the provision of more resources for the marketing department/ function. QUESTION 2 Nestle (Manufacturing) Vs Heathrow (Service) Operations According to DeHoratius et.al (2011, pg. 375), any conversion process that involves production (or manufacturing) results in a physical/tangible output (a product). On the other hand, any conversion process that involves service results in a virtual/intangible output (a performance, a deed, an effort). In this case, Nestle is the company associated with manufacturing operations, while Heathrow Airport is associated with service operations. Distinguishing between Nestle (Manufacturing) and Heathrow (Service) Operations When comparing and contrasting manufacturing and service operations, the following characteristics can be employed: a) Tangible and Intangible Nature of Output Nestle produces food and beverage products. These are physical/tangible products that can be felt, seen, smelt and used. On the other hand, Heathrow Airport offers a product/service that is intangible. It cannot be felt, but it can be experienced and used. b) Consumption of Output In contrast to Heathrow’s service which can only be used once at a time, Nestle produces goods which are used by consumers over a period time. For instance, if I want to board a flight from London to Paris, I may be able to use Heathrow’s cargo handling and check-in/out services for on that day only. On the other hand, if I buy Nestle’s Nescafe instant coffee, I may use it for a couple of months before it runs out. This is what is meant by manufacturing operations producing goods that consumers use over time and service operations offering services that are consumed on the spot/immediately. c) Nature of Work (jobs) Manufacturing operations like Nestle’s are normally characterized by jobs that make use of more equipment and less labour. On the other hand, Heathrow’s employees execute duties that involve less equipment and more labour (exactly the opposite of Nestle). For instance, it may not come as a surprise to find that Heathrow’s employees run/move around more each day they are work compared to Nestle’s employees. d) Degree of Customer Contact At Nestle, there is little to no direct customer contact. The company simply outputs the finished product, passes it along the supply chain to distributors who in turn release it into the market. The only time it can come into direct contact with its customers is when marketing the product, but even this can only possible in the event that road shows and fairs are used. Otherwise, internet and television ads deny it the opportunity of interacting directing with its customer base. This is directly opposite to the situation at Heathrow, where normal operations are not possible without directly interacting with customers. e) Customer Participation in Conversion In service operations like Heathrow’s, customers frequently participate in the conversion process. They are served directly, and therefore they are active participants in the process of conversion. In contrast, at Nestle, customers do not participate in the manufacturing process whatsoever. They only receive the finished product. f) Measurement of Performance Manufacturing operations like Nestle’s employ very sophisticated and complex techniques for gauging resource consumption and production activities during the conversion process. The reason for this is that it is important to know how much of what is being used and what can be done in case any improvements or changes need to made. On the other hand, Heathrow generally employs elementary techniques for gauging resource consumption and conversion activities. This is because it is impossible to actually measure service, only customer satisfaction can be measured Customization vs. Standardization In general, Nestle has a standardized method of manufacturing its products. Goods are manufactured en masse in its factories or warehouse-type work environment. In addition to this, one final product is usually similar to the next item in line. Heathrow airport, on the other hand, has many opportunities to modify the services it provides. For instance, it can build a new cargo terminal in order to make handling of customers’ baggage easier and prevent loss or damage of cargo during transportation and retrieval. It is important to note that even in service operations which may offer tangible products, the service one receives from workers may not always be uniform/constant. Production Environment, Layout and Flow and Workplace Ergonomics Nestle and Heathrow both plan the environment in which work occurs, but the difference is that they concentrate on different aspects. Nestle’s operations, for example, take into consideration the manufacturing layout. For instance, the manufacturing layout can be process-focused, fixed, or product-focused, such as that in an assembly-line factory. These factors often have an impact on Nestle’s total output and workforce performance. Heathrow’s operations, on the other hand, involve a planned environment depending on the effect it will have on its customers. For instance, the airport’s operations may be concerned with how the atmosphere looks to customers. Aspects of a service environment like Heathrow’s include the arrangement of tangible cues like sounds and colours meant to improve customer experience, and other factors like the arrangement of furnishings. Operations Management In Nestle’s manufacturing environment, operations managers are in charge of the processes required to convert raw materials into finished products. Managers in this kind of environment face a myriad of issues, including the quality of output, management of storage space for raw materials, what quantity of the product should be produced and the way materials flow through the process of manufacturing. In Heathrow’s service operations, operations managers delegate duties to workers in order to make the handling of customer demand easier. They have to train and coach employees on how to offer optimal services to patrons. In addition to this, service operations double up by selling physical goods come across face issues related to inventory control, such as when to order and how much to stock. Similar Aspects Manufacturing and service organizations usually face many similar challenges that affect the eventual result of their operations. For instance, both Heathrow and Nestle face cost control issues. Nestle should engage suppliers of who will bring in raw materials at the lowest possible cost, and highest possible quality. Likewise, service Heathrow’s indirect cost of offering services should be kept low so that it can offer customers competitive prices but still manage to achieve and maintain profitability. Other issues both companies face include remaining competitive in the marketplace as well as predicting demand for services and products. References Bicheno, J., & Elliot, B. 1997, Operations management: an active learning approach, Oxford, U.K.: Blackwell Publishers. DeHoratius, N., Rabinovich, E. & & Raman A. 2011, Special Issue on Field Research in Operations and Supply Chain Management, Journal of Operations Management, 29 (5), 371-548. Greasley, A. 2008, Operations management, Los Angeles: SAGE Publications. Heizer, J. H., & Render, B. 2001, Operations management (6th ed.), Upper Saddle River, N.J.: Prentice Hall. Hill, T. 1993, The essence of operations management, New York: Prentice Hall. Slack, N., Chambers, S., & Johnston, R. 2001, Operations management (3rd ed.), Harlow: Financial Times Prentice Hall. Stevenson, W. J. 2005, Operations management (8th ed.), Boston: McGraw-Hill/Irwin. Waters, C. D. 1991, An introduction to operations management, Workingham: Addison Wesley. Read More