Operations Management in Business - Report Example

Operations Management in Business Unit 34: Made by: Yanita Kumanova 09/10 Table of Content Introduction…………………………………………………………………………3 LO1 Understand the nature and importance of the operation management 1.1 Explain why operation management is important of organizations………………………………..3 1.2 Analyse a the operations functions of a selected organisation…………………………………..…5 1.3 Evaluate, by using a process model, the operations management of selected organisation…………………………………………………………………………………… LO2 Understand the link between operations management and strategic planning 2.1 Appraise the importance of the ‘Three Es’ to organisation …......................... 2.2 Assess the impact of the tension between cost minimisation and quality maximisation in organisations……………………………………………………………………………. 2.3 Evaluate the significance of the five performance objectives that underpin operations management to organisations LO3 Understand how to organise a typical production process 3.1 Asses how linear programming adds value to a given production process…… 3.2 Evaluate critical path analysis and network planning…………………………………… 3.3 Justify the need for operational planning and control in a selected production process……………………………………………………………………………………………. LO4 Be able to apply relevant techniques to the production of an operational plan for an organisation. 4.1 Produce a set of clearly defined operational outcomes for a selected organisation………………………………………………………………………………………………………. 4.2 Produce a network plan indicating the resultant critical path ……………………… 4.3 Justify how quality management techniques are applied to improve operations in a selected organisation………………………………………………………………… Introduction ‘’There can be no economy where is no efficiency’’ Benjamin Disraeli (1808- 1881) Operations Management is an important functional area, because it plays a crucial role in determining how well an organization meets its customers. OM engaged in the design, management and improvement of the systems that create goods and services of the organization. The majority of financial and human resources, most organizations, have invested in the generation of products or services for consumption. The role that OM plays in organization invvles the streamlining of teh business to ensure that teh goals and objectives of teh business are met. The team is vital for through it timely, oderly efficient and economical operations leading to better results for the business. Operations managers guide the daily operations of the business and ensure that they consist of the values that the business considers core. By definition, operations management is simply defined as the administration of the different business practices with the aim of ensuring the highest level of efficiency. Through OM, resources ranging from raw materials and human resources work together to ensure goods and services yield to the needs and wants of the customers. These will eventually maximize the profits that the organization enjoys. Blending of different operations techniques will yield better operational results (Plenert, 2002, p.15). The purpose of this assignment is to develop a report that explains the nature and the essence of operations management in an organization. It also explains the link between the operations management and strategic planning for a furniture supplier that provides their furniture products to retailers. The company intends to review their operations management and adopt new ideas that will help them implement improved management means for improved efficiency and effectiveness in the business. These all are discussed below in the two tasks task I and task II. LO1 Understand the nature and importance of the operation management 1.1 Explain why operation management is important of organizations Operations management is much about the management of the different resources in an organization to yield towards better results and more efficiency. Operations management also provides the ability to control flow of responsibilities at the work place. The operational management is focused on the way to combine resources and activities to produce results and effects which can then be monitored, evaluated and compared from the operational manager with indicators set for implementation. Therefore, it can be said that the role of the OM is essential, as a guarantee for: ensuring efficiency in business in view of the customer requirements They organize work and ensure all fields or departments of the organization operate in order. Efficient execution of teh strategic plans of teh organization follows the OM. Operations team guarantees control of disputes among the employees. Proactive means develop through which the organization operates to control disputes. Operations management helps prevent waste of resources through the proper planning aspect and ensuring that the plans both strategic and operational are followed strictly. underlying business operations are efficient enough efficient use of resources without compromising product quality control and builds communications between units Fig 1 http://www.qualityintegration.biz/process_management.html Furthermore, the operational manager is involved in budgeting and controlling costs in the management of the supply chain. Their job is to maximize the results. The operations manager has a transformational role as responsible for this; one raw material to become a good or service as a commodity can be inclusive of human resources, machines, buildings, technology and other resources. Operations management is responsible for managing the system of what the organisation does. OM task is to add value in the process of transformation. This is the difference between the cost of raw materials and the value of the final product. As higher added value and effectiveness of operations is greater. The scope of operation management: Design services and product Process selection Management technology Selection technology Improvement organisation products and services Facilities planning The important functions of OM: Capacity planning Forecasting Scheduling Motivating employees Managing inventories Quality assurance Fig 2 / functions of the operations manager/ http://www.expertsmind.com/CMSImages/2190_Operations%20Management%20Activities%20-%20Responsibilities%20of%20Operations%20Managers.png 1.2 Analyse a the operations functions of a selected organisation Each furniture factory produces furniture to make the customer to feel comfortable that is, they sell convenience and comfort. OM actively participate in this process by performing certain functions. Considering the furniture supply business, there is need to consider all the departments involved for a proper understanding of the operations functions of the company. Understanding the different functions of each department and their activities will guide one to understanding the impacts that they have on the Furniture Supplier. The company deals with supply of furniture products to furniture retailers. The operations function will span from ensuring the whole process is effective, efficient and economical. OM are the people who are responsible for some or all operations are carried out furniture company. Every organization has several main functions. Management of these functions keeps teh organization in order through the effective, efficient and economical approach to development of procedures and means of managing operation. These functions applied from the development of orders to the supply of the products help in improving the performance of teh organization. These followed with the production process through which raw materials developed are employed in the management of operations. These all summarise the functions of the OM that are as below: Trade - provide the products or services of, their markets meet customer requests. Function product / service development - creation and development of products or services to future requests satisfied customers. Function operations - responsible for meeting the demands of customers. Accounting - they form the balance sheet and provide information that helps in making decisions of a financial nature Human Resources - recruiting the necessary staff and care are necessary level of knowledge and both take care of their welfare. Furniture manufacturing is a complex process, so the management of the supply chain is an important and responsible work as it has to meet the needs of customers. The consideration of operations managers at teh different levels of the organization will lead to better results and resource management. Forecasting - performed based on online surveys, existing information and the basis of the capacity of the company. Planning capacity of the company - OM must comply with the type of furniture production, capacity of the art warehouse. Equipment and layout - OM must comply withhold production in order to be carried out in the most efficient way. Graphics - you can be consistent with the type of production, applications, workers skills by providing and any repairs Management of inventories - from inventories depends on the production. OM is required to ensure adequate types of materials with the necessary quality needed for the production of furniture. The quality assurance - quality of the product should be in accordance with customer requirements and standards that are set by the company. This is achieved when the staff and employees of the company are well trained and motivated. Motivation and training of staff - need to achieve the required results in terms of quality and quantity. Staff motivation can achieve by the brief where they discuss the requirements, objectives and results or billboards praise or material additional consideration or vouchers. Staff training improves the quality and security also allow staff as needed to be flexible. Locating facilities - OM must be involved in specifying the location of buildings and plant and warehouse so that, to be effective in terms of suppliers and customers. How it will be presented the finished product to potential customers (showroom, catalogs, brochures) How will it be sold finished products (wholesale or retail) Will there be a company store Improving customer service and shipping method. The supply chain involves people, systems, different activities, information consumption and the different resources that allow the movement of a product from the suppliers to the retailers who then sale to the final consumers. Finally, it focuses on all activities carried out to obtain ready with product, service and to provide the potential customer. Operational functions summarize all activities necessary for the production of goods and services. Operational functions exist in all sectors that are goods - oriented as transport, health, food handling and retailing which are service- oriented. A primary function of an operations manager is to guide the system by decision making. The OM is the key figure in the system, because OM has ultimate responsibility for the creation of provision of services. Fig.4 / operational, functional http://www.pnemetzmills.com/2009opsm330/OMCh1/OMfac.html 1.3Evaluate, by using a process model, the management of selected organisation Organizational assessment is a systematic processor the creation by which information obtained about the work of the organization and the factors that affect its performance. That is why the evaluation focusing on the entire b as the business unit. In developing organizational assessment, the consideration of the wholse stage from raw materials collection to its development leads to a complete production system. The production system also engages the products transformation from raw materials to final products delivered to final consumers. This links value chains and hence the need for effective supply chain operations management. In understanding the operations of a furniture supplier, their is need to understand the operations of the business. The company deals with the development of furniture products and their sale to different retailers to sell to the final consumers. The consideration of the transformational model will guide one in understanding the contribution of the operations management teams in ensuring that the production of final products is made possible ultimately. The transformational model features for the production of both goods and services through the process of transformation. The process covers from the input stage to the environment through which the transformation occurs to yield outputs inform of goods and services. Transformation refers to the changing of the state of something from its raw state to the final products able to satisfy the needs of the customers. They involve the transformational process and engage the transformation of the raw materials to final products. In the input level, the operations team involves a number of aspects. These include the input resources transformed, information from customers on the materials and staff facilities. The consideration of the information that the customers provide in developing the products will also aid in leading to products that match customer’s demands. The products developed will cover the different needs solicited through information from the customers. Also considering the staff facilities and their skills in handling the inputs is considered. These all cover the transformational process. The environment aspects cover the needs that the environment holds in favoring the development of the goods and services. These lead to the final products at the output stage, which involves the products that are then supplied to the retailers for sale to the final consumers (Pycraft, Singh, Phihlela, Slack, Chambers, Harland & Harrison, 2000, p.10). Fig. 5 / http://betterevaluation.org/theme/organizational_performance LO 2: Understand the link between operations management and strategic planning 2.1 Three Es (Economy, Efficiency and Effectiveness): The three Es mark the major aims of the operations teams and the development of the strategic plans that any business considers. The three Es economy, Efficiency and Effectiveness all mark the efforts of the production process. The supply aspects and the considerations that ensure proper allocation and utilization of resources all cover the three Es. The economy aspect deals with the reduction of the costs of operations and ensuring that the company produces the best products at the lowest cost possible. The economy aspect is what determines the product quality in relation to the cost incurred in developing it (Cannock Chase Council, 2014). The economy is measured through the much saved in production as the cost saved. The efficiency aspect covers the performance of tasks the right way as supervised by the operations team leaders. Applying reasonable efforts in operations to ensure that the process yields products that match the standards. The effectiveness aspect deals with how well or the ability of the objectives of the company to be met. Effectiveness is measured through the results in relation to the objectives developed prior. Considering all these aspects, one learns that all products developed cover these aspects. These are represnetd as below: 2.2 Cost minimization and quality maximization In the quest to ensure that the costs of the products are reduced to the minimum most level, possibilities of compromised quality of products, arise. The lower the costs the higher the chances are that the product resulting would prove less compared in quality compared to the standards and the needs of the market. Quality maximization might require the application of classic raw materials and the best skills that will lead to better results. In guiding the production process, the materials produced may prove of higher quality as a result of the nature of inputs. Minimization of costs may not necessarily compromise the resulting product quality. 2.3 Significance of five performance objectives In operations management, the following five items are covered that guide all management teams in leading to their results. Cost: The cost item covers the costs incurred in developing the product and the final cost allocated to the product. The cost of the product needs covering with regard to the economic aspect of the three Es. The operations teams need to ensure that the minimal most of costs are incurred in developing the products. The lower the costs, the better the quality these result to higher effect on the market and hence the higher the sales that the company commands. Higher sales means better returns for the company. Dependability: The dependability aspect seeks to answer questions on how the processes, the raw materials, the management teams and the resources that the company sets aside for the production process will cover the whole process and produce products that cover the objectives of the company. The more dependable the aspects of skills hired, raw materials applied, the operations management teams the ease with which the company achieves its objectives through sales. If the teams are dependable, then the organization is guaranteed of success in their product development. Flexibility: Flexibility affects eh ability of the different processes to easily adjust when need arises without affecting the production process. These provide the teams with ease in the production process and make the process continuous. Quality: The quality item covers the quality of raw materials applied, the skills hired by the company and the actual quality of the products developed. In many situations, high quality raw materials, high quality skills and management approach leads to high quality products for the market. Speed: The speed applied in the process of product development should not affect the demand aspect. For better results, gathering information at the right time and applying it to the right product and at the right time will yield to better advantages in the market compared to applying the information late. The effectiveness of information is as a result of its timely application. Task II LO3 Understand how to organise a typical production process 3.1 linear programming and evaluation of the critical path: Linear programming refers to the process that aims at leading to the best results for a company. These may relate to achieving the maximum most of profits for a company at the lowest of costs incurred in developing it. The method applies mathematical considerations that aid in reflecting the different linear relationships that may be adjusted to lead to positive results for the company. It is also referred to as mathematical optimization for the optimization effect it has on production processes. 3.2 Critical path analysis and network planning: Critical path analysis considers the analysis of the furniture production involves the processes and activities of a project aligned to aid in the production of given goods or services. The path analysis covers the steps and activities involved in leading to the final products. Understanding these and involving the networks in guiding the process leads to better planning that will yield results that are more positive. The networking aspect will enable the process collectively have all teams connected and dealing with the production effectively hence saving resources and developing proper coordination in the process. These majorly affect the scheduling of the production activities (Thornley, 2013, p.141). 3.3 Operational planning and control of production furniture: The need for operational planning and control in producing furniture is developed on the need to ensure that the three Es are met and achieved in the furniture development process. Furniture development requires the application of the different techniques in operations management for managing the allocation of resources. The application of these means also covers the need to consider all resource allocation means in dealing with the process. Planning will help save costs in line with the economy objective. It will help involve efficiency and effectiveness in the furniture development process. LO4 Be able to apply relevant techniques to the production of an operational plan for an organisation. 4.1 Possible layout in production: Quality assurance is obtained through the consideration of the product quality that results. Quality control is attained through the ensurance of the procedures of the production process. The difference between the two relates to the fact that one aims at maintaining the quality while the other considers the quality control through the processes that the company involves in developing the products. There exist a number of layouts for the production of furniture. Considering the layout for the development of a sofa set chair, the back cushion, the seat cushion arms, seat and back cover the layout (Wilsten & Shayan, 2007, p.85). These provide a better way of developing the product through guiding the producers in the process. These identify the steps taken and the parts to be developed with the sequence to follow attached. Following these, the production outcomes will yield a better product that will attract market effects. The product will meet the customer needs hence improving the standards that the company meets in product development. The layouts may change based on the different operational teams and the management. These all choose the layout based on their product needs and their standards that govern their product development aspect. 4.2 Network plan and the resulting critical path The different design processes for the company results into different product designs. The design process involves the models that range from the processes that identify the needs of the customers to those that develop designs that incorporate those needs. The network covers the marketing team that collects information from the field to the design teams that develop the product designs. The designs are then applied in the development of the final products through the control of the operations teams. This creates a network that keeps alive the customers’ demands in the product development. 4.3 The critical path will appear as below The marketing team that collects the needs of the customers covers the collection of data from the field customers. The cleaning of the data to eliminate unwanted material, classification of the data and development of a final report for consumption in the field all are in the critical path for developing the product. The product design team that develops a design based on the needs of the customer, which is led to the production units to develop the final product, follows these. Different approaches can yield results in managing projects and quality controls in sales, the management of stocks and the purchase process. For project management, the planning process matters most and the teams employed in the whole process. For control of the quality of sales, stock and purchases, there is need to engage proper management means. For control of sales, there is need to control the process from product development to the final control of the market prices to effect sales. The stock will eventually gain control from the sales made. The quality of purchases will depend heavily on the quality and cost of the materials used in developing the final products. References Cannock Chase Council, 2014. Value for Money: Economy, Efficiency, Effectiveness. Retrieved from http://www.cannockchasedc.gov.uk/info/100004/council_and_democracy/720/value_for_money Plenert, G. J. 2002. International Operations Management. CBS Press. Pycraft, M., Singh, H., Phihlela, K., Slack, N., Chambers, S., Harland, C. & Harrison, A. 2000. Operations Management. Pearson South Africa. Thornley, G. 2013. Critical Path Analysis in Practice: Collected Papers on Project Control. Routledge. Wilsten, P. J. & Shayan, E. 2001. Layout Design of a Furniture Production Line Using Formal Methods. Journal of Industrial and Systems Engineering. Spring. Read More