Approaches to Production and Operations Management - Case Study Example

APPROACHES TO PRODUCTION AND OPERATIONS MANAGEMENT By The contemporary arena is robust in the fields of trade and commerce, with industry contributing significantly to the growth and development of different nations. Fundamentally, these are essential variables to a given nation’s overall GDP, contributing though different avenues such as job creation; foreign and local direct investments; taxes and revenues, in addition to the import and export of goods and services. Production, as a critical component of this cycle, pertains to the organized process of converting procured raw materials into sellable finished products. Its core function is focused on value edition, aiding in the production of tangible goods and/ or services that are useful in the contemporary arena. Production is organized into different systems, all of which entail diverse resources as vital input. These inputs, processed through a series of operational procedures, are specific in nature for each given production venture. From the number, type and sequence of operations i.e. chemical, mechanical, electrical, inspection, assembly and transportation, each provide specific value addition to a given input, thereby enhancing product and service variation. Operations management on its part pertains to the field of management, concerned with the design, control and overseeing of the production process (Mintzberg, 1988:24, 32). In addition is its role-play in the redesign of existing business operations, with regard to the production of various goods and services. Inclusive in this filed, is the involvement of management responsibility, with regard to ensuring that existing business operations run both efficiently and effectively. This is in terms of resource utility, as well as the enhancement of quality assurance, so that products meet the standards and requirements of consumers. Overall, it is concerned with the management of the process of converting inputs into viable outputs. Inputs are usually in the form of energy, labor and materials, with outputs gained being in the form of tangible goods and/ or services. Through this paper, I will endeavor to display why major economies generate varying approaches to production and operation management, thereby significantly influencing the existing competitive advantages (MacCarthy & Fernandes, 2000:488). Global Industry and Commerce: The Effects of Industrialization Due to the globalization process, which continues to enhance inter-state dependence and interactivity, trade and commerce have affected majorly on various state-entities. There is thus a direct link, between production and operations management to modern-day economic growth, state industrialization and the subsequent setup of the factory system of production. According to Adam Smith, human civilization is encompassed around the continued management and coordination of production. This is by way of sub-division of labor through specialization, and the enhancement of existing production techniques; with the aim of enhancing the growth of markets. Max Weber alludes to the fact that Capitalism as the dominant ideology, revolves around the invention and subsequent application of systemic and scientific methodology, in a ration manner. This is about the overall conduct of trade and commerce, where the thinking and working methodology, over-arches the motive of profit making. The advent of the European Industrial Revolution brought about enhanced production of goods en masse, especially by way of the assembly line (Hill, 2000:67). Critical to this growth are two concepts of production i.e. Fordism and Taylorism. Henry Ford, as a great American industrialist, is credited with the successful introduction and implementation of the assembly line concept, where production of goods was enhanced many times over. Fordism thus regards to the notion of a contemporary socio-economic system, which is based on both the standardized and industrial process of mass production. Its utility of varying management studies and social theories provides a better understanding of prevailing production methods, as well as related socio-economic trends. This is related to the notion of global mass consumption trends, as well as the dynamics of overall employee working conditions with time. Taylorism (scientific management) on its part pertains to the management approach, as well as the organizational and industrial psychology, initiated through Frederick W. Taylor’s contribution. In his monograph The Principles of Scientific Management (1911), he formulated varying principles with regard to labor, production and input (Carmo-Silva, Alves & Moreira, 2007:49). Fordism and Taylorism: Influences and Contributions The two concepts are often regarded in the same breath, because of their close association to the concept of mass production methodologies in the manufacturing sector. Both delve on issues regarding work-force capacity, efficiency and effectiveness, in addition to the existing production methods, input and standards. In the contemporary arena, industrial nations, led by Japan and the USA, rely heavily on the two aforementioned concepts’ contributions. The two entities are leading parties in global production of goods and services, with their success being based on successful implementation of fundamentals related to production. Concerning the U.S., its successes rest on continuous output that is targeted at enhancing mass production. The aim is that of satisfying the growing global demand for goods and services. This is achieved through enhanced product standardization, managerial entrepreneurship, as well as first-mover advantages (De Grazia, 2005:47). Japan on the other hand, bases its industrial development on manufacturing techniques focused on product quality. To be noted, is that the Second World War impacted fundamentally on the nation’s future growth and development, especially in regard to science and technology, trade and commerce, as well as production methodology. Uniquely though, is the nation’s focus on quality assurance, by way of enhancing existing quality output. Core to this has been the vital contribution of total quality management. Japan: Approach Methodology The Japanese are a highly cultured population, regarding cultural approach as core to their daily lives and interaction. As a result, the corporate world present is fundamentally influenced by the prevailing socio-cultural identity and respect for the environment. Thus, its industrial productivity is founded on core principles, which differentiate it from other industrial nations. As mentioned, the Japanese manufacturing sector is primarily focused on product quality standards. Beginning in the 1960s, quality standardization entailed the group meetings of individuals, with the aim of identifying, analyzing and subsequently resolving existing work-based issues. This led to the formulation and implementation of total quality management techniques. These were fundamentally focused on not only employee output, but also contribution and participation. In these efforts, eight principles were formulated, with the aim of attaining long-term success (Fera, et al., 2013). These include Just in Time (JIT), Kaizen, Gemba, Jidoka and the five S’s. JIT pertains to the Japanese inventory-based strategy, driven by signals known as Kanban. This strategy is enhanced by Kaizen, which regards the continuous small-step improvements achieved. The five S’ come next, where Seiri regards tidiness; Seiton with order; Seiso with cleanliness; Seiketsu with standardized clean up procedures and Shitsuke which refers to the standard measure of discipline. Gemba pertains to the process of going to the assembly place and/ or shop floor (outlets) to identify existing or potential consumer problems and issues. The manufacturing process is enhanced through Jidoka, which pertains to the process of automation with a human touch. This enables the early detection, stop and fixing/correction of product faults and immediate problems. Furtherance is the aspect of finding and resolving the root causes of such errors through automatic detection measures. The aforementioned, in tandem with the prevailing respect, observation and adherence to their cultural identity and environmental preservation, has enabled the Japanese corporate sector has become a leading global player. This is influential on the existing success rate of the Japanese manufacturing sector, which makes it amongst the top five global industrial nations. The prevailing corporate culture, cultivated over generations, is critical to all the successes achieved by the nation (Carmo-Silva, Alves & Moreira, 2007:67). The USA: Approach Methodology The United States of America, as a former European colony, is more inclined to mass production based on the assembly-line model. As a former colonial supplier of raw materials, it gradually grew into the industrial leader it is today. A core factor contributing to this remarkable dynamism has been its continued application of the mass production concept. This entails the manufacture of products en masse, through the efficient and effective utility of three core concepts. These are: - standardization measures, enhanced mechanization, and specialization of labor; by way of Ford’s assembly-line concept. The result of such production is the availability of large product quantities, enabled through efficient production. These products are later on marketed at considerably lower prices, due to the low production expenses accrued. Specialization is critical to this form of production, where input is subdivided into simpler tasks of a complementary nature (Taylor, 1911:35). This is aimed at enabling workers concentrate on their specific tasks. Taylorism is influential in this approach, in the aim of enhancing industrial efficiency, by way of simplifying and reducing overall workloads. In addition are contributions by Frank B. Gilbreth, who championed enhanced focus on the concept of time-and-motion unit monitoring. Through conduct of time-and-motion studies, firms are able to significantly increase worker productivity levels. This helps in determining the optimal rate of performing a given task/job. This is through the most efficient number and sequence of motions needed, in order to accomplish such a task. Mechanization comes after the separation of tasks into simpler, repetitive duties where quality is enhanced as well as product output ratios. Enhanced mechanization enabled faster and better production capacity, with this necessitating standardization measures. These further enhanced the production of inter-changeable goods and parts in a uniform manner, thereby enabling easier replacement and a reduction in overall production costs and expenditure (De Grazia, 2005:39). The USA and Japan: A Comparative Analysis The assembly line concept revolutionized production to a completely new level, enabling mass production of goods and affiliate interchangeable parts. Due to enhanced worker specialization, product standardization and overall mechanization, Henry Ford was able to revolutionize factory production. Through this, he was able to produce en masse the different models of the Ford vehicle, with the Ts model proving a success story. This technique involves the placement of product parts upon a conveyor belt system, which travels past various workstations, where workers at hand, perform specialized tasks. The concept continues to be a constant variable in many of America’s manufacturing operations. However, the trend towards worker specialization has gradually been reversed. This is about the repetitive performance of pertinent small tasks. Accordingly, as the Industrial Revolution taught, mental functions ought to be separated from physical work, with the additionally quality of fragmenting and de-skilling these functions (Chase, Jacobs & Aquilano, 2007:78). Automakers such as Ford and General Motors have and continue experiencing tremendous growth, in addition to enacting the aforementioned reversal aspect. Through creation of a better attitude towards assembly-line workers, it has and continues to develop a working environment, which considers the worth and dignity of each worker. The development of the craft station concept is the result of such thinking, focused on worker contribution and output. This is aimed at reducing overall workforce turnover rates, in addition to enhancing overall quality assurance of products made. Through this form of specialization, product assembly is enhanced as each station involved must be satisfied to give the green light for the process to continue. Japanese manufacturers such as Toyota also utilize the assembly-line concept, enabling the entity’s enhanced production of quality vehicles. These entities, all of which are national prides in their respective home-arenas, utilize the synthetic system of production (Shiomi, Wada, 1995:54). This pertains to the system, which combines raw materials/ parts assembly, into either finished products or changes them into completely diverse products. Critical to this process, are the analytic system and continuous process production techniques. The former, pertains to the system of production where raw materials are reduced into component parts/ segments. The latter regards the process of long production runs being sustained over long periods. There is also the intermittent production process, which enables short production run operations to exist for short periods, with complete shutdown being present. This is to enable the change, development or fixing of different products and affiliate parts. GM, unlike its Ford counterpart, through utility of the craft station concept, aligns itself more to the way of thinking and model of a majority of Japanese companies. Japanese corporations, as earlier aforementioned, are more inclined to employee participation and contribution to the overall production processes involved (Hounshell, 1984: 87). Through such contributions, the entities are able to reduce overall employee turnover rates. In addition is their ability to further enhance productivity, as well as ensuring quality assurance of their different products. Both nations, have embraced the automation of their production processes, with differences emerging mainly in the operations management aspect. Both nations, through their corporations have embraced specialization in addition to the utility of robots in the assembly line processes. The importance of both robots and automation, within the modern production sector, has been accompanied by the vital input of new computer technologies’ integration. Computers have enabled American companies gain a competitive advantage over other corporations. This has been through their utility of computer-aided design (CAD) and flexible manufacturing systems (FMS), founded on computer-aided manufacturing (CAM) processes (Fera, et al., 2013). The PRC- People’s Republic of China The PRC (China), has not been left behind, as showcased by its emergence as a global leader in the manufacturing sector. However, new challenges exist such as the economic slowdown; a rise of wages and other factor costs; the continued complexity of value chains, as well as the increased sophistication and demands/ tastes of consumers. These are however redeemable, abate gradually, through continued government support and investment. In addition to this is the focus of the manufacturing sector on three core imperatives. These include enhancing their capacity through the Lean and Six Sigma concept, to achieve manufacturing excellence. In addition has been the focus on looking upstream, in terms of innovation and overall risk reduction. This is critical if the nation is to maintain its tremendous growth pattern. This is through erasing product-development roadblocks, which continue affecting negatively on overall productivity. Issues with innovation, cultural differences, inter-departmental mistrust and quality assurance are some of the impeding factors present. The last one is the need to tame the existing supply-chain complexity. This is brought about by the nation’s continued basis on low-labor-cost environments, which are shrinking at a very fast rate. The prevailing supply chains are also affected, as they respond slowly to the dynamism portrayed by a majority of Chinese and global consumers. the differing approaches to not only production procedures, but also operations management are fundamental to the way in which countries compete globally. The USA, Japan and the PRC, as major economies, share some aspects such as the assembly line concept, but differ in other core factors vital in enhancing overall productivity and quality assurance (Eloot, Huang & Lehnich, 2013). In conclusion, Japanese corporations, continue to perform extremely well in this regard. This is because of enhanced corporate culture, worker inclusion and development, as well as continuous innovation of products, in line with prevailing consumer needs. The USA, while buoyed by the Ford concept, as well as Taylor’s eight principles, is however lagging behind, in terms of employee inclusion, contribution and overall development. The PRC, while currently the leading global manufacturer, is more inclined towards the low-labor-cost concept. This to some extent has been responsible for the continued increase of sub-standard products from the nation, which finds their way to various markets globally. Reference List Carmo-Silva, S., Alves, A. C. & Moreira, F 2007, Linking Production Paradigms and Organizational Approaches to Production Systems. Braga, Portugal: Centre for Production Systems Engineering, University of Minho. Chase, RB, Jacobs, FR & Aquilano, NJ 2007, Operations Management for Competitive Advantage, (11th Ed.). McGraw-Hill. De Grazia, V, 2005, Irresistible Empire: Americas Advance through 20th Century Europe. Cambridge: Belknap Press of Harvard University Press. Eloot, K, Huang, A & Lehnich, M 2013, A New Era for Manufacturing in China. McKinsey Quarterly: Insights & Publications. Retrieved from: http://www.mckinsey.com/insights/manufacturing/a_new_era_for_manufacturing_in_china Fera, M, Fruggiero, F, Lambaise, A, Martino, G & Nenni, ME, 2013, Production Scheduling Approaches for Operations Management. InTech [Open Science/ Open Minds]. Hill, T 2000, Manufacturing Strategy-Text and Cases, (3rd Ed.). McGraw Hill. Hounshell, DA 1984, From the American System to Mass Production, 1800-1932: The Development of Manufacturing Technology in the United States. Baltimore, Maryland: Johns Hopkins University Press. MacCarthy BL & Fernandes FCF 2000 A Multidimensional Classification of Production Systems for the Design and Selection of Production Planning and Control Systems. Production Planning and Control, 11(5): 481-496. Mintzberg, H. (1988). Generic Strategies: Towards a comprehensive framework. Advances in Strategic Management, 5: 1-67. Shiomi, H. & Wada, K. (1995). Fordism Transformed: The Development of Production Methods in the Automobile Industry. Oxford University Press. Taylor, F. W. (1911). The Principles of Scientific Management. New York, NY, US and London, UK: Harper & Brothers. Read More