The Way Operation Management Institutes the Organization Structure - Essay Example

Operations Management Introduction My organization is a motor vehicle selling company that deals in parts and assembled vehicles; most of the vehicles are personal vehicles and for that reason, it has opened outlets in most parts of the world to penetrate the market. The marketing department is central to the business that this company is undertaking in the sense that every new product ought to have a ready and stable market otherwise, the mere fact that the production department has something new out in the line is not a guarantee that there is market for that product. The department that is judged with this role is the marketing department; for a motor vehicle industry, marketing has be strategic and eye catching since there are so many motor vehicle dealers who are willing to employ every tactic to win more clients in the market. The major challenge however, is convincing clients to invest their money in new vehicles however expensive it maybe as opposed to having them go for cheap old and refurbished vehicles. The other challenge is that, most of the target market is full of other long serving players whose brand of vehicles in the market have been known for sometimes now. The team that I work is therefore expected to deliver the marketing strategy that can win more customers for the company and increase sales. For the last two years, raising sales even by a mere 1% has been milking the team dry in the brain. The task requires injection of fresh ideas for that matter every outlet will be capitalizing on the online marketing portal that will ensure that the agencies are familiar with the people. Similarly, images of the company’s products will be available on the same portal for the benefit of the consumer who might want to see and even purchase them online. In light of operation management the mandate of the marketing team is what puts the company top in the motor vehicle market. Operation management will play a crucial role in ensuring that marketing delivers the desired result for business to be running. Perhaps the key indicators that help marketers to understand the market better than anyone can be spelt out with the help of operation management. The reason for adopting the use of operation management is the fact that, as a company that is serious with its business, it is important to focus in a market that has the potential to grow before committing enormous resources in terms of setting up an assembly outlet. The fact that other companies have ventured into overseas markets like in the American market where domestic consumption of motor vehicles is even more than external consumption and still manage to compete is just an insight into how much potential is out there. However, the right structures and facts about the business environment in those countries must be established as a requisite for decision making. Information gathering is very crucial when making such a big decision in which the company will be using to evaluate the market 9 MAHADEVAN, s2010). To deliver the services of motor industry in a market that is entirely new to this business, the company will have to adopt a series of check and balances in its own system so that for every input, data relating to the output is recorded and later evaluated, to get a clear impression of how the market is responding to the inputs the company is injecting. The most crucial aspect of operational management is the organization structure and this comes in handy when it comes to reporting progress and seeking information. The way operation management institutes the organization structure is in such a way that allows for back and forth communication with little or no setbacks at all. In this case, every market will be set to have a management structure that has a group manager that is responsible for all the operations that will see the company grow. All the affiliated companies will have a central team to report to and this will ensure that each company is working with targets which in this case will be to sell a particular number of vehicles per year which represents the major source of revenue to the company. Every manager in the various group companies will be tasked with ensuring that the employees are able to access every resource they need to cover their target region. The economic implication of this approach towards running business is that every aspect of the business will come out in terms of the role it plays. For instance, how are the leaders in the marketing department utilizing the information from policy making and information processing department to the benefit of the business. For instance the necessary input that can change the way the employees have responded to the market and work terms changes. According to operation management, every business venture comes with a fair share of it challenges however, the way a company handles each of these challenges determines the extent of its growth in the sense that, every challenge always shapes the way operations are conducted. For instance, in the event that most of the targets customers want to acquire the services and the vehicles in credit terms, this has an implication in managing the growth of the company. a) The company has established a desire to expand its boundaries to the African market since over the years, it has been operating in the overseas markets of Europe, Asia, and America continents and according to the marketing team, there is little that can be done to gain more depth in these areas. It is apparent that Africa is an emerging economy and for that reason, it is crucial to establish a dealership early in time so that the brand of vehicles that the company is dealing in gets to be recognized by the customers for all the qualities it is associated with. Most of the companies are setting their sights in the African market and for that reason, the need to motor vehicles will keep growing and considering the fact that in Africa, very few countries have a car manufacturing industry, in fact, most of the countries are known for assembling. In order to take control of the market, it will be paramount to supply high quality vehicles that meet the desires of the customer at relatively fair prices. Among the customers that the company is targeting includes, government institutions, the local markets in those countries, and banks where vehicles are usually bought in relatively large numbers. Such markets make it easy for the company to establish extensive contracts with the customers to supply the vehicles for as long as they can agree. This approach gives the company dominance and a good public image when it gains the trust of the government. The governments in this case will be the biggest of all the customers, and for that reason, they will be the main market considering that they will create a market for the spare parts too. In the past, most companies have not been keen on delivering a full package that is the vehicle and the spare parts and for that reason, most governments have been pulling out a company’s license to sell their vehicles in that country to safeguard the interests of the customers. Fortunately, this has been our strategy in approaching every market and for that reason it will be quite easy to set up outlets in most of the African countries where motor vehicle market is blossoming (MAHADEVAN, 2010). The fact that all businesses have a profit margin to achieve in the course of a given period will force the company to decide on whether the course of action which is to establish extensive contract will be in the interest of business or just but a misplaced priority. A trade off will indicate that and the other consideration being joining other players in the open market and selling the motor vehicles to all the other customers just like any other cars vendor. The marketing team will also use operation management to establish the taste of most of the clients in the market, for instance, a Toyota dominated market will be a difficult one to break considering that Toyota is a big company with enormous resources and expertise. How such a market will be approached will be in such a way that, one is dealing in its own brand and partly in what the market has for this matter Toyota brands. By dealing with the customers directly, will give the companies employees a leverage on executing their program which is to grow the company’s sales. The other group of customers is the existing motor vehicle industry that keeps utilizing spare parts in huge demands. Perhaps it will be a creative step for the company to increase sales by selling engine parts and engines in pieces to ensure that their products get to the customers. Domestic customers may be interested in purchasing engines to replace on their old body vehicles and that is a niche that a fortune can be made out of. Due to the complex nature of the technology the company is using, the customers will have to source for the services from this company and that is where a service station will come in handy in every country where a market is set. In order to meet these ambitions in the minds of the team, a lot of ideas and thoughts must be brought to table and the right decisions arrived at within a short time. The reason why all the operations ought to be commenced early in time is to establish all the inadequacies the target market contains. For instance, a target market could be new and open for everyone but on the contrary, there could be a myriad of challenges that hold back the progress of the business. For instance, a longer time in the clearance and forwarding process would end up raising the cost of selling the vehicles in order to make up for the overhead cost. The other window of opportunity that the company has s to utilize the readily available labor force; there are skilled labor that is able to conduct assembling and that will be an added advantage in trying to manage the cost implications of assembling as opposed to importing a readymade vehicle that will take a little longer to be cleared at the dock and still cost high tax in form of duty levy (MAHADEVAN, s2010). b) The primary agenda of approaching the market in such a manner is to ensure that, while it is important for the company to ensure that there is continuous and steady growth in the market, the urge to emerge as the best player in the market must be not overlooked. Perhaps, marketing must be intensive at the initial stages to ensure that at the least, customers are even able to purchase and secure most of the services from the company amidst the existing competition for clients most of the time, a client may secure a service in part and then have a vehicle imported by another dealer which does not give the company the full leverage to dominate the market. Cognizant of the fact that there are other players in the market who are able to give the same services at a throw away price, operation management will enable the company to know which markets are not saturated and are suitable for one to venture in. The course of establishing a brand name is part of the objectives of this business and in that respect, organization management will be very helpful in a great deal. All the facts about the market ought to be relevant; the purchasing power of the people in that market and the nature of businesses that will call for private means of transport. The objective of the company is to expand its base beyond boundaries and venture into new markets and for that to take course, a sufficient survey of the target market will be an eye opener in estimating the potential of the market. The transition that is required to make the market vibrant and competitive can never be limited to efforts that the company and in that regard, the tax and revenue system in each market will have to be accessed and evaluated to ascertain the suitability of that market. Some markets have punitive tax systems that tend to diminish the turn over and eventually kill the market. Foreign investors will always want to work in an environment that gives them the opportunity to comply with the tax system and pay their staff competitively and grow eventually. However, in some situations, the tax system is too punitive to the investors to the extent that the cost of doing business becomes untenable in view of the business owners. For instance a situation where duty levied on commodities that are being imported is unnecessarily high so that, raising the prize of all the items to make up for the The other operation objective is to build a reputation in the market; currently the market has ran out of hand so that, producing the best products is not enough to sustain a market instead, a little injection of exceptional services makes it easy to navigate it. In this regard, a motor vehicle industry will require of the service providers an extension of courtesy perhaps, something that will make it easy for the customers to feel that the company is doing more than what other players in the same market are doing for the same cost. Operation management enables the partners to establish a trade off in what they consider a courtesy they pay to their customers and what ought to be done to stay competitive in the market. For instance, if a company that has been dominating the market is not able to provide a free after sale service for one year, the cost implication of that approach ought to be evaluated and laid down as part of the strategy to deliver a desired product. In such a situation, the customer’s desires a caring partner who will shoulder some of the unanticipated mishappenings. For instance, selling vehicles that are already insured for the first one year will be an attractive incentive for customers allied to this company. c) Recommendations Considering the fact that the market will continue to become competitive, the company will have to invest in skilled manpower that are able to understand the market, and commit their resources in helping the company penetrate the market. Consultants are the group of people who are hardly utilized since their services are sought after by a few companies who knows the value they add to the growth of a company. The fact that the target market is still open to other players too, will require of the company a sensitive approach that will set the right pace for which the market will be benchmarked on. Perhaps, the competence that the company hopes to set out of its employees will be put to test and that should speak volumes out of what the company is achieving in the market (MAHADEVAN, 2010). All the information that either make the business to grow or derails the running of operations should be established as part of the feasibility study. This will enable the company to either pull out or commit their resources after evaluating the information relating to the market. For instance, if the company decides to run an online platform where clients can purchase vehicles, the risks involved in that approach must be brought to light for the management to stay informed. Information coming from the market keeps mutating however, as a market research and marketing team, a consistent message can be constructed out of the information that is available from the immediate market. For example if the customers want the latest model of vehicles, they will keep asking about the latest model of vehicles with the same price. A competent and quick acting market research team will work with the marketing team to establish a compromise regarding the handling of this to paint the right image of the market. There are so many operations that may not take place at once however, with operation management the use of software has enabled other firms to analyze the behavior of the markets for months that are yet to come. The other strategy that would be recommended for the company is to outsource other services that would occasionally take a longer time to train and establish to the level that guarantees competent service delivery. With operation management the company should be able to establish whether a merger of certain services is possible and how that will be able to help the company to grow progressively. Some of the services that can be outsourced include warehouse and storage services for instance, go downs and assembly services which include manpower and working area can be sought from established companies at a cost and or from others people willing to lease. The platform that will be used to conduct advertisements is best acquired by means of leasing as well. Having recognized the fact that all the operations are reliant on investment in a good team to lead the marketing and value addition process to suit the target market, the company will have to commit sufficient resources to these areas. This approach will enable the company to pick up very quickly without encountering a high starting cost. The essence of reducing starting cost is to ensure the business is secure in the sense that should the business become unsuitable for that location, not so much resources will have been committed that cannot be recovered (MAHADEVAN, 2010). The other recommendation based on operation management is the merging operations with established companies running the same business, for instance, companies that transport their consignment should host the company as a minor trading partner. This approach will see the company avoid certain costs that are unnecessary when then the company is still running a small fleet of operations. Once the company has established its own ability to handle such level of operations as importing vehicles with ready market, it can then run on its own. Merging is an approach that has been tried by other service offering companies where infrastructures are co –owned to reduce unnecessary cost that could be incurred in trying to make something independent. The other recommendation is to use a performance based system in appraising employees as opposed to a generalized approach of granting everyone what the company has decided and has been using in the past. Operation management will always give a lee way into giving the market the best out of what can be accessed. For instance, with the available skilled labor, the company will have sufficient staff to conduct marketing and assembling according to the required standards and in that manner it will be creating jobs to the local communities as well as growing business for the company. All these small details about the market can never be overlooked for the course they define in building a brand name that will last for generations. This technique have seen some banks grow from millions to trillions by opening up their services to small money owners and the same can be said of communication companies which have reduced their calling rates to match with what the small customers want and can afford. In conclusion, the marketing department will always remain a powerhouse in the realization of the ambitions of the company at all times and that is irreplaceable. The engineers might design the best engines of all centuries but without marketers, it will not get the right value it deserves in the market. Perhaps the best that can be made out of the market will be attributed to the marketing team that is proven to be articulate and vibrant. Work Cited MAHADEVAN, B. (2010). Operations management: theory and practice. Upper Saddle River, Pearson. Read More