Theory and Problems in Production and Operations Management - Literature review Example

Client inserts his/ her name Name of tutor Name of institution Course title Date of submission Introduction According to Mahadevan (2010), Production and operations management refers to the process which makes use of various resources that are used in productions and operations in organization subsystems by transforming them into value added products and services in a controlled and regulated method according to the policies pertinent in a particular organization. It is an organizational process concerned with the transition of a range of inputs into particular products and services with a desired quality for business. In regards to activities that are involved in the manufacturing of products the management process is termed as production management while when the same process is extended to services, it is termed as operations management. This field in concerned with the management and directing the technical and physical characteristics of an organization especially the departments that engage in development, production and manufacturing. The department programs include general instruction on principles of management, manufacturing and production systems. In addition, it entails plant management, equipment maintenance, production control and industrial labor management, manufacturing policies, cost control, productivity analysis and planning of materials. For an organization to succeed in its productions and operations, it is prudent for the managers to nurture people’s skills, creativity and rational analysis and equip them with modern technology techniques. (Sanjay et.al 1995) The current production systems and processes used by Hudson’s (a technical analysis). According to Sanjay et.al (1995), the company applies the continuous production system in specialized manufacture of identical goods, furniture, and this implies that the machinery and equipment is fully engaged. The continuous type of production in Hudson Company is associated with large quantities of products made at a high rate. The type of furniture produced is meant to meet the demands of the market. This kind of system needs proper planning for materials, maintenance of machines and process management since the intensity of the market need in tremendous. Also, the company acquires raw materials in bulk quantity which is excellent because it reduces operational costs due to the economies of scale. In regards to the theory of production as explained by Zan (1992), there is a problem of combing the available resources to produce an expected level of output. The Hudson managers have overlooked the significance of carrying out a precise analysis of the relationship between input and output because it is the basis for setting the maximum profit standards for the company. The theory of production informs the theory of value which in concerned with the extent to which a company satisfies the demand in terms of quality (Chary 1995). Hudson’s company cares much for the custom made furniture orders than the commercial ones which may make the neglected category of customers to pull out of the market. This is seen in the manager’s lack of concern for the need to expand the premises in order to take care of the expanding demand potentials. Nevertheless, the company has limited capacity in handling the ever increasing rate of demand for furniture. In the long run, the cost of production is high despite the high market demand for the products. The effect of the new commercial furniture orders on Hudson’s operations, including capacity constraints, operational efficiency and overall effectiveness of the plant (problem definition). The main challenge that Hudson Company is experiencing is rooted in lack of proper scheduling within the operation process. The new commercial furniture orders have interrupted the normal process since the firm has no capacity to deal in extensive orders. The managers have overlooked the fact that more employees are needed, the operational space should be expanded as well as new or more machines and equipments should be acquired. This has greatly affected the overall operation system of the plant. The production process lacks a smooth flow. For instance, the goods are left unfinished because of new custom furniture orders. Either, furniture lies in the stores because of poor time scheduling. In the process, much revenue is lost because the cost of production is increased greatly. This is a clear indicator of the intense inefficiency within the production and operations management of the Hudson’s company. According to Mahesh & Lynn (2008)’s theory of constraints, explain better the production and operation condition of the Hudson Company. Through this theory, it is easy to identify the challenges and hindrances within Hudson’s operational system that may limit the level of achievement that the company can attain. It is a fact that all organizations experience various constraints in their struggle to achieve continuous growth. The Hudson company has failed to identify the constraint elements which hinder the allocation of resources to the wanting areas such as the space within the premise, proper production and operation schedule, machinery and workers. It is therefore difficult for the company to achieve its goals with minimum inputs. Bozarth et.al (1998) indicates that the supply chain problems arise when there is a scarcity in the allocation of facilities of production, the level of capacity of the available facilities, components and materials. The Hudson company is experiencing the shortages mentioned above which hinder its efficiency in all aspects of operation and production. The daily operational decisions that the operations manager needs to make under the current operating conditions to maintain effective production (day-to-day operational issues The capacity constraints are clearly identifiable within the Hudson Company although the manager is not concerned with defining the problem at hand. Through logistics, the company requires analysis of resource allocation, the level of growth and time of expansion and the costing systems. The application of the theory of constraints will move the company a long way because its relevance stretches to all levels of management within an organization. The company will experience tremendous success in the production and operations department if the theory of constraints is understood and applied fundamentally. (Mahesh & Lynn 2008) According to Chary (1995), since the market taste and preference is taking a diverse perspective, the operations manager of Hudson firm should make changes in the day to day operations of the company. This should begin with the proper selection of materials with a sound knowledge of the materials suitable properties that could offer the best result that suits the customers. It is very important for the manager to do some research on any other alternative material that may best satisfy the changing needs of the design in the products. In order to maintain effective production, the manager should aim at finding the best method for the production process that can suit the available resources which the firm can access with ease. Therefore, the sequence of the process of production should go hand in hand with selection of suitable machinery and equipment for the process desired. There is a challenge in Hudson Company that need to be solved, for instance, the use of machinery as general purpose for all types of furniture may make their maintenance difficult. Thus, designing the maintenance policy as well as designing the layout of machines could be of great significant in granting the machines good care for long life. (Mahesh & Lynn 2008) Nevertheless, Hudson Company could be very effective in terms of manufacturing and delivery if the operations mangers estimates and fixes up production targets and dates of delivery. This could keep the production costs very minimal because of efficiency. Also, there could be no incomplete furniture lying in the stores as described by Williams (1984). This will increase profits in the long run if the company works on both a cost and a time schedule. The production management department should be conventional in drawing the time table for various activities, with specifications of the starting time and finishing time in regards to the production process. In reference to Bowersox et.al (2002), the manager has to project timings for the movement of materials and plan appropriately for manpower activities since the same workers multitask in regards to creating the custom made furniture and the commercial made furniture. The manger ought to keep in mind the capacity of the loads in the stores and the facilities available in order to reduce overcrowding in the warehouse. Routing is also important to ensure that the flow lines for raw materials and final goods are well monitored so that every stakeholder knows what is happening within the company. For the company to become efficient, the manager should begin by identifying the constraints, devise ways of handling the constraint and finally elevate the constraint by breaking it down into manageable bits. In this way, it will be easy to eliminate the constraint slowly until the system is realigned as desired. Nevertheless, the move may seem simple, but it requires pure concepts especially for Hudson Company that needs to establish right measures to solve the current operational constraints. (Arntzen et. al 1995) John et. al (1989)’s survey of operation and production management in New Zealand, the main areas that impact a company’s financial progress and efficiency in its operations include how the inventory is controlled and managed, sales control and forecasting, planning and scheduling of the production systems, critical path scheduling and the overall operational strategy. The Hudson Company therefore can salvage its financial position in case the managers consider the factors of efficient production and operations management outlined from this research. The effect the move to producing commercial furniture might have on the company’s financial structure (broader organizational issues caused by operational problems). Hudson Company faces a congestion constraint which in the long run leads to excess inventories since they have to keep records of the furniture in the stores as well as the unfinished ones. The company has currently not installed any capacity in case of excess demand. There is no strategy that focuses on uncertainty and variability of the operations and production’s process. The disruptions within the production process lead to congestion which lowers the speed of production and increases the costs of production (Bowersox et.al 2002). Cost inefficiencies are experienced all over. In regards to the queuing theory of operation management, the Hudson Company’s financial position will definitely go down due to the queuing problems that are occurring in the introduction of commercial furniture orders. The factors that are queuing in Hudson Company which will bear a financial and economic constraint include the physical capacity problem, design of the premise layout, maintenance problems and time schedules and estimations. To save the situation, the managers should engage in a fast time cycle strategy so as to deal effectively with waiting and focus on time based competition. (Sanjay et.al 1995) The supply chain management of Hudson is complicated because of the introduction of the commercial furniture. In the global situation, costs increase because of mismanaged supply chains through increased transport costs, inventory cost tradeoffs and complex store of warehouse management. It is prudent thus for a company to carry out proper forecasting on demand and prior material planning. Infrastructural inadequacy is experienced in the case study presented since there is lack of adequate workers, technology, premise space and equipment. (Verter & Dincer 1992 Cohen & Lee (1989) argues that many developing countries suffer the same challenges which make it hard for them to level the competitive advantage in the global market. This is a serious operational challenge which may greatly affect the company’s financial and economic position over time. It is already evident that despite the high levels of production, the profits achieved are not fine as expected since much of it is lost in expenses. The operation costs are not well managed due to poor planning as well as timing. The infrastructure plays a significant role in cutting off the returns due to congestion. Human labor competence is overlooked since workers are forced to switch jobs in the production of commercial furniture. With time, employee loyalty is bound to diminish. This will automatically impact the quality and quantity of production. The increasing demand may be diverted to the competitors if the company is unable to manage both its quality and quantity. Therefore, the financial position of the company is at stake since there are no prospects of expansion or advancement. (Dornier et. al 1998) Verter & Dincer (1992) argue that many organizations are not dedicated towards areas which are time based, new product development, flexibility in operations, service advancement, process improvement and project creativity and innovation. Many companies such as Hudson lack commitment towards expansion of the firm and its production. That is why they stick to the old premise and even chose to hire a warehouse instead of constructing of purchasing one. This lack of dedication has adverse effects on the financial position in the long run although the mangers seem not to care much about this fact. Conclusion It is evident that there are numerous benefits accrued to an organization which practices efficient production and operations management. The consumers benefit a great deal from the advanced industrial productivity which increases the general value of the man-made goods. They enjoy the flexibility and convenience of obtaining the products at the time when they need them from the right place. The products are often in the right quantity and quality. In reference to Sanjay et. al (1995), the company is bound to acquire a good image within the society in which it operates. This will influence the level of trust by investors who will venture more into the organization or business. Consequently, the company will experience good profit returns which will benefit the shareholders as well as the society as a whole. When a company gets good returns, the community benefits economically and socially because more investors and customers are expected to come in the scene. The nations in which the businesses operate achieve better security and economic advancement because of increased innovation, creativity and productivity within a healthy industrial atmosphere. Arntzen et. al (1995), suppliers of raw materials and other industrial needs will be confident in the management system since they will be secure that the bills will be paid without delay. Loyalty is achieved in a well organized institution especially from employees who are paid adequately, have job security and work in a serene environment with reasonable working conditions Chary (1995) asserts that each system or section within an organization has different aspects and elements. The characteristics endow the sections with specific capacities and efficiency to perform the various functions that it is designed for. When the systems are well coordinated, they produce the best and maximum results. Failure of one aspect may make the entire element a constraint to the production process. All the elements are equally important and they collectively determine the efficiency of the operation system. Review of the system often allows for the identification of problems that need to be realigned to ensure that a system bears greater levels of efficiency. References Arntzen, B., Brown, G., Harrison, T. & Trafton, L. 1995. ‘Global Supply Chain Management at Digital Equipment Corporation.’ Vol. 25, p69–93. Bowersox, D, Closs, D. & Cooper, M. 2002. ‘Supply Chain Logistics Management.’ McGraw-Hill Irwin, Boston, MA. Bozarth, C., Handfield, R., Das, A., 1998. ‘Stages of global sourcing strategy evolution: an Exploratory study.’ Journal of Operations Management, vol.16, p 241–255 Chary, S. 1995, ‘Theory and Problems in Production and Operations Management.’ Tata McGraw-Hill Education Cohen, M. & Lee, H. 1989. ‘Resource Deployment Analysis of Global Manufacturing And Distribution Networks.’ Journal of Manufacturing and Operations Management vol. 2, p 81–104. Dornier, P., Ernst, R., Fender, M. & Kouvelis, P. 1998. ‘Global Operations and Logistics: Text And Cases.’ John Wiley & Sons, Inc., New York. Handfield, R. 1994. ‘US global sourcing: patterns of development.’ International Journal of Operations & Production Management vol. 14, p 40–51. John, A., Gary, C. & Roger, G. 1989. ‘Operations Strategies: A Literature Review.’ Journal of Operations Management Vol. 8, No.2, P 133-158. 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Zan, W. 1992. ‘The Limits of Japanese Production Theory,’ Interfaces vol. 22, p.14-25. Read More