The Importance of Operations Management - Essay Example

Student Name Tutor Title: Operation management Institution Date Operations Management Introduction The importance of Operations Management has increased significantly in recent past In part; this can be attributed to the fact that it remains one of the central functions of all organisations whether producing goods or services, or in the private, public or voluntary sectors. However, a lot of interests have been triggered by significant competition both in the local arena as well as the global market. In addition, there is shorter product and service life cycles, better educated and quality-conscious consumers, and the capabilities of new technology (Woods, 2008 and Behzadfar, 2011). According to Pysraft et al., (2000) surviving under prevailing challenges requires flexibility and responsiveness in dealing with even more fickle customer demands. Clearly, these pressures and responses require changes and improvements on the operations function to improve productivity while providing a broader array of high-quality products and services. The purpose of this paper is to give discuss operations management, defining what it means and also highlighting direct and indirect responsibilities of operations managers. This paper also gives an illustration of application planning and control techniques in both manufacturing and service industries. This paper is structured in a threefold manner. The first part as already seen relates to introduction. This will be followed by the major discussions in the main body and finally a conclusion drawn from the rest of the paper in line with the major themes. Towards a Definition of Operations Management Operations management (OM) is the production function that plans, manages, directs, and organizes the resources required to generate an organization’s products. Operations management is a management function. It includes controlling personnel, tools, technology, data, and various other resources. Operations management is the main key function of almost all company, whether large or small, providing a physical good or a service whether it is for profit or none- profit. Management of people, Process and Systems geared towards production or delivery a useful product or service having realized or discovered improvement opportunities in the areas of increasing Customer Value, reducing Operational Cost, Increasing Return on Assets as well as Sustainability. Direct responsibilities According to Slack, Johnston and Chambers (2007), the major or direct responsibilities of most organizations include: understanding the operations strategic objectives, developing operations strategy for the organization, designing the operations products, services and process, planning and controlling the operations and improving the performance of the operations. These are discussed in many details in the next section. Understanding the operations strategic objectives The first mandate of the operations manager is to comprehend and internalize the organization’s goals and objectives which is a gateway to the overall success of that organization. To this end, he or she can achieve having a clear vision of what role the operation is to perform in the organization. In other words, how should the operations translate to the organization’s achievement to its long term goals? He or she can also try and translate the organizations goals into their implications for the operations performance objectives including quality of goods and services, speed at which they are delivered to customers, the dependability with which the organizations keeps its goals or deliver promises, flexibility of the operations to change what it does (in line with the prevailing market demands) and cost of producing goods and services. Developing operations strategy for the organization: One of the major responsibilities of operations manager is operations management. Key among these is the continuous decision making in the organization. According to Pycraft et al., (2000) this involves hundred of minutes by minutes decisions through the working week. Therefore it is quite vital for the operations manager to have with him or her set of general principles which can guide decisions making towards the organizations longer term goals. To Pycraft and his colleques, this is what constitutes operations strategy. Conforming to this argument , Ginter, Swayne and Duncan have defined operations strategy as a set of guidelines or plans that help assure consistency in decision ,making and serve as a map to the future of the organization (Ginter, Swayne and Duncan, 2002: 14). Designing the operations products, services and process Design is generally conceived as the activities of determining the physical form, shape and composition of products, services and process. In the context of operational management, it is the set of activities which literally opens the scenes for all its other activities and therefore quite crucial for the operations of these other activities. Planning and controlling the operations: This basically relates to decisions on operations of the organization. Coming to a decision what the operations resources ought to be doing and guarantee that it is being done. The role of an operations manager as a planer and controller of operations are intended to successful achievement of organizations set goals in a better, more proactive delivery of goods or services from the organization to its stakeholders. According to Behzadfar, Planning can be seen as an inclusive, incorporated and money-making operation carried out in a business to compete with environmental factors so as to achieve the company’s major objectives in a more suitable method. An operation planning is part and parcel of the management geared towards establishing performance-based management system in line with correct guideline for the organization and designing the most appropriate program which creates first and most underlying action (Behzadfar, 2011). On the other hand, as a controller of operations, he or she ensures that operations’ plan to achieve the goals is being carried out in such a way that its accomplishment is guaranteed. This can also go along with evaluation through reviewing and assessing the success of the goal and the plan. To this end, controlling operations is quite vital in every organization. Bredmar asserts that help organizations to increase the probability that employees make decisions and take actions which are in the organizations best interest (Bredmar, 2011:106). Improving the performance of the operations: Operations managers are generally responsible for the continuously monitoring and improvement of the general operation. The role of a manager as a performance management may encompass activities or operations which ensure that goals are consistently being met in an effective and efficient manner. In the context of this paper, the key focus of performance management is on the processes of producing a product or service, as well as many other areas. This can be done for instance by fostering an appropriate operations or working environment. The Operations manager should exhibit good leadership qualities and be able to motivate and encourage his team. According to Hameed and Amjad (2009) improved outcomes and improved productivity is thought to be the effect of enhanced working environment. The indirect responsibility and Broad Responsibilities The indirect activities relates to activities concerned with interfacing with other parts of the organisation or simply defined as responsibilities interacting with managers in other functional areas within the organisation whose roles have an impact on operations. Such areas include marketing, finance, accounting, personnel and engineering while broad responsibilities include a wider set of tasks that involve scanning the business, social and political environment in which the organisation exists in order to understand its context (Slack, Johnston and Chambers, 2007). One of the indirect responsibilities of operations manager is the role of Informing other functions of opportunities and constrains provided by the operations capabilities this will significant help these other departments in making market informed decisions and the overall improvement of the organization. Again, the manager can also interface with Marketing department, informing them of opportunities and determining what customers' value prior to the production of their product or service. The manager may also need to discuss with other functions how both operations’ plans and their own plans might be modified for the benefit of both functions. This can be based on reviewing assumptions on external factors where the plan’s original assumptions about the external operating environment can for instance be challenged and validated for accuracy in relation to the organization’s regulatory, industry, economy, and technology or market issues. For example, a transportation-based business might need to reassess its business strategy in light of rising fuel prices that may not have been anticipated in the original strategic plan. The manager should therefore be able to inform the appropriate department while also encouraging other functions to suggest ways in which the operations functions can be improve its services to the rest of the organizations. In a manufacturing company for instance, the operations manager could advocate to Enterprise Resource Planning and Supply Chain Management through which the companies could establish operating systems and operating performance measurements to enable them to manage business operations and meet business and financial objectives (Chorafas, 2001). The application of “planning and control” techniques Manufacturing Company In relations to a manufacturing firm, planning and control techniques is essentially geared intended towards efficient management of flow of materials, utilization of people and equipment, as well as responding quickly to customer’s requirements through utilizing suppliers and internal resources. This can be achieved in various ways. One way is by internalization which relates to operations mode of market servicing, for which overall transaction costs are minimized. In a manufacturing firm this may involve a resource-seeking component particularly cheap labour. Others may relate to market-seeking, (strategic) asset-seeking and efficiency-seeking (Van Tulder and Van der Zwart, 2006). Customer responsiveness is also critical necessity in planning and control strategy of companies. It may also be necessary to consider customer responsiveness and flexibility while trying to adapt to strategies of controlling cost without compromising the customer responsiveness. The manufacturing firm can try to find out some of the strategic issued facing the need to reduce cost. Lastly, the manufacturing company may also need to increase Use of Information Technology to enhance effective communication and coordination within and between firms. They may rely on ERP systems to communicate data between departments such as production, shop floor planning, purchasing and accounting. This can be achieved for instance by the use of a computer software, ERP designed to give you a single view into all of your systems, including accounting, inventory management, and more. This cane can help among other things Respond quickly to changes in customer needs, supply, and manufacturing capacities, an make it easy to find, use, and share information with vendors and suppliers. Typical Manufacturing Planning and Control support a wide range of activities or task including Planning for capacity requirements and availability to meet marketplace needs. It is also helpful in planning for materials to arrive on time in the right quantities needed for production while also maintain appropriate inventories of raw materials, work in progress, and finished goods, schedule production activities so people and equipment are working on the correct things, provide information to managers, suppliers and customers on production activities as well as responding quickly when things go wrong and unexpected problems arise. Service Industries In the service industries, one of the planning and control strategies could be adopting of aggregate planning is an effort to balance capacity and demand in a manner that expenses are reduced and includes developing, analyzing, and sustaining an initial, estimated schedule of the generally operations of an organization. It may also necessitate the need to identify company, departmental, or union policies that are pertinent. For example by maintaining a certain safety stock level, maintaining a practically secure personnel, backorder policies, overtime policies, inventory level policies, and other less open rules like the nature of employment with the individual industry, the likelihood of a poor picture, and the loss of benevolence. Another strategy related to planning and control strategies in Service industries is sale management which may also include monitoring, directing, evaluating and compensating of employees with the aim of aligning its sales persons attitude and behaviours with the companies objectives(Muelle, 2011). Only if service industries can eliminate opportunities behaviours and steer up its sales activities goal-congruently with holistic sales management control systems then it is able to exploit the planned cross-selling opportunities and conducts its sales operations in an effective and efficiently manner. Service industries can also adopt an integrated approach that encompasses compensation, behaviour, cultural, profession and self control tailored to the organizations (e.g. bank) characteristics and external parameters (Joseph and George, 2011). Closely related to this is employing risk management systems. Here managers say in the service industry must try and strike a balance between taking advantage of the growth and returns that can be generated by taking risks with the potential losses that may also result from risk taking. By doing this, organizations through their line managers can meet strategic objectives whilst also aligning their risk taking to the risk appetite. This implies using risk management to improve strategic accomplishment. The ultimate objective is to ensure the existence of controls that improve corporate decision making and thus improve performance from the viewpoint of multiple stakeholders (Woods, 2008). Conclusion The purpose of this paper was to discuss operations management giving its key definition associated responsibilities and finally give illustrations of its application in relations to planning and control strategy. Operations managements basically revolve around the management of people, process and Systems towards effectively and efficiently producing goods and /or service of any organizations. All operations managers have both direct and indirect responsibilities which in one ways or another affects the overall output of the organization in terms of products or service delivery. On the same vein, manufacturing and service industries tends to have one or more strategies like planning and control strategies key among them are individualization, customers responsiveness and use of information technology, same management strategies, risk management systems, and aggregate planning. Reference Amina Hameed and Shehla Amjad (2009) Impact of Office Design on Employees’ Productivity: A Case study of Banking Organizations of Abbottabad, Pakistan Journal of Public Affairs, Administration and Management Volume 3, Issue 1 Dimitris N. 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