A Reflective Portfolio& Demonstrate Your Understanding Of Operations Management - Literature review Example

Assignment 1: Application of Operations Management Tools in Marketing Table of contents Introduction This report is based on the relationship between operations management and the marketing function of business organizations. In it, different ways in which specific tools and techniques that are used in operations management can be effectively applied to the way an organization performs its marketing function are discussed. The basic idea is that there are specific operations management tools which, when effectively used in the marketing operations of a business environment, can contribute to the improvement of the overall performance of the business organization. The report is divided into two broad sections. These are described as follows. In the first section, a detailed examination of the different tools and techniques that are used in operations management is presented. The tools and techniques that are reviewed in this section are those that are most common and pertinent in operations management. Also, the meaning of the concepts of operations management and how it is important for the success of business organizations is presented. In the second section, a detailed examination of different way in which specific operations management tools can be used to improve marketing within an organization is done. Also, this section contains a brief review of the concept of marketing and how it contributes to organizational success. Operations management The concept of operations management Business organizations have various functions that work simultaneously for their overall success. One such function is operations management. Simply put, operations management refers to the methods, tools and techniques that are used to manage processes that take place within organizations for the transformation of inputs into value-added outputs (Kachwala & Murkherjee 2009, p. 6). The concept is applicable to organizations that operate in either the manufacturing or the services sector. In the case of manufacturing organizations, operations management is used to transform inputs which occur in the form of raw materials, labor and machinery into outputs that are produced in the form of value added finished products. When applied in the service sector organizations, the inputs that are used in the value addition process of organizational management are the customers while the outputs from the process are in the form of the value added customers at the end of the process of value addition. According to Pycraft et al (2010, p. 32), the manner in which operations management interacts with operations strategy within a business environment determines how effective an organization is in transforming a set of inputs into value added outputs. The basic activities of operations management, which include design, improvement and planning and control, need to be integrated with the specific strategic objectives of an organization. It is only when this is the case that organizations can make use of effective operations management as a competitive advantage in their business environments. Tools and techniques used in operations management There are several tools and techniques that are used in operations management. Their usage is based on the required needs of an organization at a particular time. These are discussed as follows. Total quality management (TQM) This is a technique that is used by organizations to improve the quality aspect of all the processes that are undertaken as part of the operations of the organization. Essentially, TQM is an important approach since organizations seek to identify what the specific needs and requirements of customers are and then endeavor to meet the needs and requirements (Oakland 2003, p. 344). To do this, organizations use different types of resources. For example, there is need for organizations to develop the right plans and strategies on how the needs of customers shall be clearly identified and met. Further, organizations need to have the right processes and supporting tools in place as a means of ensuring that the primary objective of using TQM, which is to improve the overall performance of the business, is achieved. Lastly, the successful use of TQM to improve the performance of a business organization requires that every aspect of the organization be examined, the specific needs of customers in the areas identified and the right tools and strategies used to meet the needs (Oakland 2003, p. 345). There are several tools that are used when TQM is used to improve the operational performance of organizations (Mahadevan 2010, p. 257). First, control charts, histograms, scatter diagrams and common graphs may be used by organizations to determine specific problems in their operations. Also, these tools may be used to identify opportunities that organizations may take advantage of to improve their operational performance. Second, organizations may use cause and effect diagrams as a way of identifying the deep seated causes of problems that are being experienced. Such tools can be quite effective in helping an organization analyze in detail the root causes of problems in its operations and thereafter, be in a position to identify the most appropriate solution. Third, organizations can use some of the tools such as Pareto diagrams and charts for planning on how to improve the quality of the products and services that are offered to the market. The process of implementing TQM within organizations usually takes place in several interrelated stages (Oluwatoyin & Oludeun 2008, p. 9). First, the overall policy of TQM is implemented within an organization. This is usually done after different indicators of performance have been used. Second, the system for quality assurance is developed within the organization. Third, quality control activities like planning, use of specific statistical measures and inspection of products is carried out. Fourth, a detailed inspection process is conducted as a means of identifying elements that do not adhere to the proposed standards. This allows for corrective measures to be taken. Forecasting techniques Forecasting is an important technique that is primarily used in the decision making process of business organizations. In operations management, organizations use forecasting techniques to determine their current operational capacity, plan for future production and determine the levels of demand for their products in the future (Kachwala & Murkherjee 2009, p.389). Therefore, organizations rely on forecasting techniques to determine their course of action in the future. There are different methods and skills that are used to forecast future trends in the market. Basically, organizations may use either quantitative or qualitative methods in using current statistics to predict future trends. According to Ryu (2002, p. 20) there are different quantitative methods that can be used in business forecasting. However, the most important aspect of quantitative methods of forecasting is that for them to be highly effective, organizations need to have access to a lot of historical data. When organizations have access to a considerable size of data on the past occurrences, they can be in a position to accurately predict future trends using quantitative forecasting methods. This is so because the approach is based on the assumption that future occurrences are bound to follow the pattern of those that have already occurred in the past (Ryu 2002, p. 21). Therefore, when organizations have a lot of information on the past events, they can use either time series or casual forecasting methods as important ways of using quantitative data to forecast future trends. This may be done by use of specific methods such as trend prediction, simple moving averages and weighted moving averages which have proven to be effective in determining possible trends in the future (Kachwala & Murkherjee 2009, p. 390). On the other hand, organizations can manage to forecast future trends by using qualitative methods. Ryu (2002, p. 22) observes that the use of human judgment and intuition to predict future trends in business organizations has been growing in popularity in the recent past. The main difference between this method and quantitative techniques is that unlike what takes place in quantitative forecasting, qualitative forecasting does not depend on historical data. This aspect, therefore, makes it an important method of predicting the future in cases where historical data is not available. There are several ways in which qualitative forecasting can be used within an organization. For example, organizations may use the method of jury of executive decisions as a method of predicting future trends. Here, a small group of highly knowledgeable individuals decide on what is likely to be the trends of the future. Their decision is used in the decision making process of the entire organizations. Separately, organizations may forecast future trends qualitatively by relying on the decision of the sales force team. Since individuals in the team spend a considerable amount of time with clients, they can be used to determine future trends in the business environment (Ryu 2002, p. 22). Six sigma technique This is one of the most common tools that are used in operations management within organizations. Jones (2014, p. 105) observes that six sigma technique is an important tool that is used by organizations as a way of designing and improving their specific processes. To this end, six sigma technique is an important tool that can be used to improve key processes that take place within organizations. Basically, there are different types of processes that are carried out within organizations. These processes vary from each other in terms of their actual purpose, nature and results (Jones 2014, p. 105). For instance, work processes, which are the activities that are used to transform inputs to outputs, are carried out solely to achieve the main purpose of existence of an organization. On the other hand, behavioral processes are used to influence the way activities are carried out within an organization (Jones 2014, p. 105). This so because such processes are based on the overall way in which individuals behave and interact with each other. Lastly, organizations may undergo change processes in their operations. Such processes are defined by their purpose, which is to change the way things are being done within the organization over the course of time. Therefore, six sigma technique is used to improve the manner in which working operations within an organization are carried out. The importance of this method in improving quality management arises from the fact that it is a measure that completely relies on data and seeks to improve specific processes within an organization. Therefore, when the process is used, organizations can benefit in different ways (Rastogi 2010, p. 84). For instance, organizations that use this technique benefit from reduced levels of defects in their production processes. Consequently, organizations are able to experience reduced costs of operations and enhanced productivity in the course of time. Furthermore, the use of six sigma technique is advantageous to organizations because of the way that it helps organizations focus on the needs of customers on one hand and those of the employees on the other (Rastogi 2010, p. 84). What this implies is that the performance of employees and the manner in which an organization treats its customers are set to improve following a successful implementation of the six sigma technique in the management of the operations of the organization. For organizations to effectively implement the six sigma technique in their work operations there are specific steps that should be followed (Rastogi 2010, p. 85). First, organizations accurately define what the expectations of the customers are with regard to the quality of the products. Second, organizations have to determine the root cause of the problems that are experienced in the quality of the goods and services that are provided by the organizations. Third, the most appropriate course of action is determined as a way of improving the quality of specific processes of organizations. Lastly, once the improvements have been implemented, organizations have to ensure that the newly improved processes are maintained. Application of operations management in marketing The concept of marketing Marketing is one of the most important functions within a business organization. Basically, marketing is used to determine the kind of products that are to be developed; the prices at which they should retail, the manner in which they shall reach the market and finally, the methods that shall be used to promote the product in the market (Wild 2002, p. 38). According to Wirz and Tuzovic (2014, p. 175) there are several factors that affect how effective marketing can be used within an organization to achieve the objectives related to the product, its placement, packaging and pricing. First, the amount of resources that is made available for marketing determines the extent to which the marketing function of an organization seeks to achieve its important objectives and, in the process, bring value to the entire organization. Second, the level of responsibility that is given to the individuals in the marketing department of an organization determines how they prioritize their duties. Lastly, the overall characteristics of a business organization determine how effective the marketing department within it discharges its responsibilities. How operations management tools can be used to improve marketing There are several ways in which operations management tools can be used to improve marketing. Their usefulness arises from the different ways in which the fields of operations management and marketing interact with each other within business organizations. These are outlined in the sections that follow. TQM and marketing There are several ways in which TQM can be used by organizations to improve their marketing operations and, in the process, enhance their overall performance as business organizations. Basically, TQM as a tool is focused on the existing and future demands of the market. This nature of the tool makes it quite effective a method that organizations can successfully utilize to enhance their responses to changes in the market. According to Wang, Chen and Chen (2012, p. 122) the usefulness of TQM in improving the marketing function of organizations arises in different ways. First, it is argued that TQM builds the internal capabilities of an organization by setting standards for continuous improvement in operations, focusing on the needs of the customer and ensuing that the employees remain fully satisfied (Wang et al. 2012, p. 124). These attributes then enable an organization to be highly market-oriented by channeling its resources and capabilities to the processes of generation, dissemination and sharing of market information. This approach helps organizations to effectively manage prevailing factors in their external processes and, consequently, perform better in meeting the needs of the market. On the other hand, Samat (2004, p. 16) argues that the ability of TQM to improve the marketing function of business organizations lies in its attributes that focus improving the quality of the goods and services that are produced. This happens in several ways. For instance, implementing TQM within the operations of business organizations means that the qualities of all the aspects of the organizations are improved. When this happens, it contributes to the production of high quality goods and services. Since production of high quality goods and services is one of the key functions of marketing, use of TQM boosts the performance of the marketing function and overall performance of a business organization. Further, TQM seeks to improve other aspects of the organization such as the manner in which the human resources are managed, the role of the senior management team of the organization and degree of innovativeness (Samat 2004, p. 18). When the technique is effectively used to improve the other aspects of a business organization, the benefits that are derived from its use may translate into the production of high quality goods and services and improved customer service. When this is the case, the marketing function of a business organization is greatly improved and this contributes to the success of the business as a whole. Six sigma technique and marketing There are several ways in which six sigma technique that is used in operations management can be successfully applied to the marketing function of an organization for general improvement in performance. For instance, Pestorius (2007, p. 22) identifies several specific ways in which this can be done as follows. The first one is that the specific methods used in six sigma can be successfully applied to the process of managing the stock that is given to individual sales personnel within an organization. Second, six sigma techniques can be applied in the process of training the sales personnel of different business organizations. Third, organizations can successfully use six sigma techniques to identify and nurture high value clients. Therefore, it is clear that six sigma has the potential to improve the performance of an organization when used in different ways to improve the manner in which the marketing function operates. In addition to this, it is observed that the usefulness of six sigma in marketing arises from nature of the technique which is to help organizations make decisions that are based on facts and, in the process, be able to identify and effectively resolve all problems in their processes (Pestorius 2007, p. 19). Because of this, it is observed that the technique can be successfully used to improve organizational performance by being implemented in the actual marketing process (Wang et al. 2012, p. 127). Therefore, when organizations are making decisions about the objectives, audience and logistic to be used in the process of promoting their products and services, six sigma techniques can be used to identify specific problem areas, institute the right corrective approaches and, therefore, contribute to the success of the process. In applying the six sigma technique to the marketing process of an organization, there are important principles that an organization should take into consideration (Asefeso 2013, p. 28). First, organizations need to break down the entire marketing process into small steps. It is only when the marketing process has been analyzed into sub-processes that the methodologies of six sigma techniques can be successfully used to improve the entire process. Second, organizations need to make use of the knowledge that they can only make revenue from three main sources: new customers, getting old customers to increase their purchases or making the old customers to increase the frequency of their purchasing (Asefeso 2013, p. 28). This is important in helping them successfully implement six sigma techniques in their marketing operations. Lastly, organizations need to focus on using six sigma technique to either get new customers or improve the level and frequency of purchasing of the current ones. Forecasting techniques and marketing There are several ways in which forecasting techniques that are primarily used in operations management can be used to improve marketing and enhance the performance of a business organization. For instance, Armstrong and Green (2012, p. 4) state that there are several types of forecasting methods that can be successfully used to predict future demand for the goods and services of an organization in the market. To achieve this, business organizations can use different tools to forecast future demand. For instance, they can rely on the opinion of experts to predict future trends in the market. The experts may be consulted as a group or separately as individuals and their opinion weighed to enable the marketing department of an organization make informed decisions its operations. Further, Pride and Ferrell (2008, p. 182) observe that organizations can effectively rely on forecasting methods to predict future sales of their products and services. This can be done in several ways. For instance, controlled market tests for the new products can be organized in specific areas. The results of the tests can be extrapolated to help the organization make informed decisions about production as well as plan for its marketing activities. Furthermore, organizations can successfully use quantitative forecasting methods to predict future trends in different market segments (Pride & Ferrell 2008, p. 183). Since marketing seeks to establish the pricing, packaging, promotion and placement of products and services, the information about different market segments that is provided by quantitative forecasting can be useful. Lastly, according to Baker (2012, p. 214) every specific forecasting method can be used in marketing operations within an organization in a unique way. For example, the forecasting method of discriminant analysis can be successfully used to determine the level of loyalty that the brands of an organization enjoy in the market. In addition to this, the tools that are used to determine regression analysis in operations management can be effectively applied in marketing by being used to analyze the behavior of consumers in different segments of the market. Therefore, the different ways in which quantitative forecasting methods can be used to predict future trends are applicable to the marketing functions of organizations. Conclusion From the foregoing, there are several conclusions that can be drawn. The first one is about the different tools that are used in operations management. It is clear that in order for organizations to enhance the way they operate, they make use of a number of tools. However, the choice of tools depends on the nature of the business of the organizations and the prevailing external business environment. The second one is about the role of marketing in business organizations. It is clear that marketing, like all the other functions of an organization, plays key role in determining organizational performance. The third issue is about the application of different operational tools in marketing. It has been shown that six sigma, TQM and forecasting techniques can be successfully utilized to improve the marketing function of organizations. This, in return, contributes to the performance of the organizations in general. 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