Principles of Operation Management - Coursework Example

Contents Contents 2 Abstract 3 Introduction 3 Research 4 Core competencies: Strategic Management 4 Value delivery 4 Design, facilities management 5 Logistics 6 Stakeholders in operations management 6 Product life cycle 7 Life cycle costing 8 Team management: Responsibility delegation 8 OM and technology 9 Conclusion 10 Reference: 11 Abstract An operation can be defined as a process, method or series of acts especially of a practical nature. This definition covers virtually all human activity of an organized and productive nature; consequentially it could be argue that all organizational functions are operations and tat al management activities involve operations management. The terms production and operations are frequently used interchangeably and there is a widespread view in the industry, commerce and non-profit organizations that production management is a separate and discrete field. The more traditional model of operations management is that it is concerned primarily with manufacturing or the change of state of physical goods. Operations management consists of those activities which are concerned with the acquisition of raw materials, their conversion into finished product and the supply of that product to the customer.  The following report will analyze the principles of operations management while analyzing the need for growth and innovation in the process of production that these afford in the contemporary era. Introduction To date there has been a certain amount of confusion on the things that do and do not constitute and operations strategy.  There have been those that have tried to identify the generic building blocks of this strategy-but even they assume that these could also be part of a tactical, operational management approach.   One of the more oft repeated and accepted definitions come from Slack and Lewis. They suggest that there are four basic operations strategy perspectives (Lewis and Slack, 2003): 1.     A top-down reflection of what the whole business wants to do 2.     a bottom-up activity whereby operations strategy improvements build business strategy 3.     A translation of market requirements into operational decisions and 4.     Exploitation of the capabilities of operational resources into chosen markets. Research One would have to agree to a certain degree each operations strategy is unique and individual to the firm. Furthermore, research seems to suggest that many of these operations strategies utilize similar building blocks. One would have to even then have to understand the fact that operation strategy for any given firm in order to be effective would have to employs unique strategies.   In the core traditional sense of the term, operations management has been concerned with the management of costs, but this focus has recently changed to the management of value. The concept builds on the premise that organizations needed ideally to compete either on low cost or by providing differentiated products in order to be profitable and yo avoid being stuck in the middle (Lamming and Brown, 2000). The term itself in wide in terms of the scope of its responsibilities and draws upon a range of functions within the organization and cannot be limited to a specific department. An innate and clear understanding of the nuances of strategic operations management is essential to the organization if it has to compete in the market.   Core competencies: Strategic Management Major decisions about and strategic management of core competencies, capabilities and processes, technologies, resources and key tactical activities necessary in the function or chain of functions that create and deliver product and service combinations and the value demanded by the consumer could be identified as the functional strategy aspect of the operations strategy variable.  Value delivery The wider value delivery aspect of the strategy on the other hand would automatically be inclusive of the major decisions that have to be made about and strategic management of the core competencies, capabilities and processes, technologies, resources and key tactical activities necessary bin any supply chain network, in order to create and deliver product and service combinations and the value demanded by a customer. The strategic role also involves the blending of these various building blocks into one or more unique, organizational specific, strategic architectures.   Strategy and operations management To begin with the very fact that operations needs to be seen as a strategic factor is a problem for some firms whose overall strategy may be governed by a few people at the top of the hierarchy who might have very little to no knowledge about the factors of productions and operations management. As a result, the rationale behind, and the measurement of success of business decisions may be driven almost entirely by short-term financial criteria. Such an approach, may often rob the firm of vital investment to support and sustain key operational areas such a technology, plant modernizations and ongoing training. Keeping this fundamental design of the strategic management operations in mind, the following analysis will bring out the various facets that are involved in strategic operations management-their related issues and the things that a business would have to keep in mind.    One of the most remarkable shifts in corporate strategy and operational activity in recent times has been the externalization of production to the extent that corporates are now thoroughly dependent on external resources. The reason for the trend, at least at the superficial level is the core-periphery model that has seen an impact. Design, facilities management Centralized operations like design, services and facilities management and logistics, among many others have now been taken over by suppliers. This is in fact on of the direct outcomes of the processes of integration in the world economy. What one needs to notice here is the fact supply chains that extend beyond the boundaries of a country or more recently of a continent will automatically push up the logistics cost of the corporation in question thereby making it clear that the importance of an effective management of this department is absolute must in the success of any given corporate that seeks to grow big. It also has to be understood in this regard that logistics and distribution need to make use of a number of variables in technologies especially in case of products that have a limited shelf life or are perishables. Examples would mean groceries, ice creams, milk products among others. Effective logistic management also has to seek to eliminate as many middlemen as is possible. This would not just help in reduction costs but also in an easier and better management of logistics.    Logistics Logistics delivers a service that is multifaceted and largely intangible. “Good Service is pretty hard to measure and difficult to quantify and in fact the contribution of logistics at the national level is almost impossible to document. Logistics and distributions help in the creation of time, place and even form utility, through the management of processes that enable companies to get goods to get to the right places at the right time in the right condition at the right costs (Rushton, Croucher and Baker, 2006). Simultaneously however the demands to reduce logistic and distribution costs have also grown (Chandes and Pache, 2010). Modern commerce requires a better arrangement and management of the logistics and distribution system of the organization because of the fact that most businesses are now working on production units that are more centralized (Fernie and Sparks, 2004). One particular school of thought views logistics as the umbrella strategy. Where the definition is concerned, logistics are defined as organizing, moving and supplying. The basic idea is that logistics deals mostly with the micro activities that take place after the production of a good or service in order to provide value in ultimate consumer service (Lowson, 2002). The idea therefore would remain that any given company that is able to successfully curtail logistics costs by ensuring that the entire supply chain is brought under the strategic operations management plan would stand to benefit in the long run because of the fact that The paper posits that  Strategic Operations and Logistics Planning (SOLP) the process is a success underpinned by the use of action research involving external facilitation, group consensus and tailoring the process to meet the enterprise needs (Sadler and Sohal, 2005). Stakeholders in operations management A stakeholder in any given organization would be the individuals that feel an impact of the decisions that are taken by the company at the, macro level. These might have a direct or an indirect bearing on the interests of a given business and may bring the stakeholder into contact with the business on a daily basis, or may just occasionally. One can identify stakeholders in the general terms in the following light: 1.      The most important and oft talked about stakeholders are the shareholders of a given company, their interest lie in the dividends and capital growth in the context of the share investment in the company 2.      Management and employees, are the other most important group in terms of stake-holding given the fact that they are ones affected in terms of job security, prospects and pay by the [progress of the company 3.      Consumers and Suppliers 4.      Banks and other financial organizations lending money to the business. 5.      Governments– This particular group would also be of real significance here given the fact that the issue at stake in the context of the Google case was of direct relevance to the Chinese government. 6.      Pressure Groups – who are interested in whether the business is acting appropriately towards their area of interest. Keeping these basic factors aside, one could define product life cycle in very basic terms- the various stages that a product, or parts of the product would undergo regardless of which decision-makers are involved. It may therefore involve all the perspectives that have been put above except the marketing perspective given the fact that the product life cycle is on the individual level of each product unit, whereas the marketing perspective is on the type level of the product.  By the same token therefore if one were to compare the product life cycle on identifies in operational terms one would find that the product life cycle consists of the processes and activities whereas the product life cycle consists of processes and activities whereas the market life cycles do not.   Product life cycle One of the most important components of the product life cycle is the component of product life cycle costing. The aim of the tabulation is so ensure that the company is able to work toward the optimization of the mechanized, preservation and maneuvering functions of the product (this would include things such as the equipment and the logistics) over a period that defines the product life cycle that is ultimately based on the establishment of the significant cost items covered over the period of the life cycle. This in turn helps in the facilitation of a more measured evaluation of the numerous alternatives that would be present in the context of a product design alternative. The idea in this case would therefore be to aim at the evaluation of links present within cost of process at the stages of the product development and consumption. This would also help one compare the varying stages aiming at the facilitation of the choice of best alternative.  The pressure for implementation of principles of sustainable development in corporate decision-making processes is increasing continuously. Other aspects concerning product life cycle management are also subject to this pressure (Westkempfer, 2000). Life cycle costing Some of the aspects that one would have to make note of in the context of the integration of environmental issues to life cycle cost accounting would include facts such as economic flows are understood as internal costs (i.e. attributable to a precise economic factor and therefore quantifiable on monetary flows of cost or revenue). Externality flows are understood as external costs, quantifying the monetary aspects of impacts on environment and society are not direct ascribable to economic actors (Guidice, Rosa and Risitano, 2006). Each phase of the life cycle traversed by the product would involve one or more actors. In particular the first two phases of design and development and production and distribution involve the producer; use involves both producer and the user; retirement involves an actor to be defined (end-of-life actor) who may be the producer and/ or the user.  Each actor interacts with the two systems (economic and natural) through the cost outflows internal and external to the economic system. The field of application where LCCA is concerned is automatically limited to the economic system; therefore to take account of external costs they must be internalized within this system and translated into monetary flows.   Team management: Responsibility delegation The delegation of responsibilities within the organization needs to be on two basic fronts.  First the customer care executives that deal with the product have to be well versed with the intricacies of the product. They need to know the charges and the requirements so that queries that are made in relation to the product are dealt with in a proper manner and also to ensure that the marketing process is carried on in a structured manner through them. Second, the agents responsible for actually making transactions need to be in charge of the decision about who to accept as customers and who to reject. Innovation can be understood as the remodeling of novel information and the transfer of this knowledge into the betterment of products and services. It is all about the creation of value and creating impetus for productivity, and therefore for growth. Innovations have often been equated to the concept of risk taking but it has been demonstrated time and time again that it is the ones that look to innovate and take these risks that grow and expand. The basic formula that underlies innovation is the acceptance of the risk factor to accept risk and the measurement performance. OM and technology In today's technology-driven world, where banking has also accepted the role of technology as not just a cost effective but a method of customer appeasement, business life cycles have accelerated in a big way. This does not, however mean that good innovation management basics now no longer apply. The need of the hour is to ensure that one stays a step ahead of the changing and evolving market conditions via the medium of new technologies and effective human resource management. In order to ensure that the company maintains its competitive nature it has to do more than simply deliver products or services that are better or cheaper than those of their rivals (Dekimpe, Parker, and Sarvary, 2000). They must also add features, improve performance, and reduce prices more quickly. Innovation dose not just mean the creation of demand through new products it also means the creation of new markets and the development of new lines and the venture of newer strategies. Conclusion In conclusion therefore it could be reiterated that the need of the hour where the process of operations management and its related principles are concerned is a process of innovation and product development. For operations management, the idea would remain that there would be a place for the correct management of the overall process of organizational management, related especially to the process of product growth and development. Finally, operations management in strategy and scope should be reflective of the need of the market and keep up with the flow of technology in order to ensure that Reference:   Prasad, B., (1999). ‘A Model for Optimizing Performance based on Reliability, Life Cycle Cost and other Measurements;. Production Planning & Control. 10(3). Pp286-300.    Giudice, F., Rosa, G. 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