Operations Management in Decision-Making - Essay Example

Operations Management: Introduction: Operations are responsible for delivering goods and services to the public. Management of these essential cores of any business organisation is called operations management (OM). It is about managing all those processes which are involved in creating goods and services for consumers. General consensus is that operations and supply chain are inextricably linked to one another. Appropriate management of various processes and supply chain is not a minor issue. Lean Management (LM) is a major area of OM. It is now known as a focal point in OM research conducted over last many years. LM is an entire management philosophy which is often also called Toyotism because it was actually introduced by Toyota automotive manufacturer. This essay is based on scrutinising what the modern literature has to say on the subject of LM and how different principles related to this business strategy can improve the value stream of an organisation. After discussing major concepts identified in LM research, the following discussion will include application of those concepts on a chosen area of tourism, which in this case is the accommodation sector. The accommodation sector includes luxury resorts, hotels, and bed and breakfasts which are built to accommodate tourists. The essay will conclude by evaluating the extent to which OM contributes to organisational decision making. Overview of LM Research/Concepts: LM is not an enemy as thought by some. It does not lead to even more serious problems because it is only incorrect lean implementation that is to be feared. This explains why it is important to analyse multiple important ways which show how lean principles can be applied in a safe manner. Basically, LM is a management principle which considers the goal of delivering value to the customers to be the most important in terms of lending strength and reputation to an organisation (Sarkar, 2012, p. 2). It stresses that the limited resources available to an organisation are critically valuable and they should be only spent on creating value for the customers. Resources spent on other goals which do not add value are wasted (Duggan, 2012, p. 3). A value stream is one of the key concepts of LM which may be either based on internal processes alone or also include external suppliers. It basically includes all processes involved in the creation, production, and delivery of goods to the market. Deep investigation into value stream should be considered a top priority by all organisations because before eliminating waste, it is important for it to be identified, which is exactly what a value stream does (Duggan, 2012, p. 3). This shows why lean managers attach huge importance to a value stream and stress on applying important lean principles to continually improve it. There are many potential benefits offered by a value stream, which make this concept enormously important for lean managers. First, it helps managers to stay committed to the goals which are most promising, and eliminate those from the agenda which do not promise any value. Second, it adds the element of efficiency to the processes of manufacturing and product supply to the market, which boosts customer satisfaction also. This helps in smooth flow of work from one stage to another until the ready products reach the market. This also leads to the development of a value-creating chain which is largely described as a value stream (Hill, 2012, p. 376). Delivering value to the end customer is the theme which forms the bedrock of this stream. The flow of work is smartly managed by lean organisations through effective value stream mapping because it uncovers many improvement potentials (Ruffa, 2010, p. 189). Research suggests that one of the most important lean concepts is to motivate people with a sound vision which has the potential to attract and impress them. This is especially important in “the early stages when there is more scepticism toward the effort, and is also necessary during the middle stages of the implementation” (Ehrlich, 2002, p. 27). The vision should be inspiring and also believable to ensure the workers that their efforts will not go wasted on any level. This technique can really motivate the people and educate them about what roles they are supposed to play in the value chain. This can also make them increasingly compliant and supportive of any changes introduced. Delivering value to the customers in the way desired by them is the first lean principle. Second lean principle is about value stream mapping which requires managers to identify all steps which contribute value to the process of product manufacturing and discard those which do not. The third principle is about maintaining smooth flow in the value-adding steps because this is the only way the customer can appreciate the value delivered to him/her by an organisation. The fourth lean principle is about establishing pull, which means letting the customers derive value from the organisational activities regarding quality product manufacturing. In the final principle which is about seeking perfection, value is identified and value stream is established. Flow is created and pull is established. Also, the wasted steps are eliminated (Trent, 2008, p. 5). This cycle is then repeated again and again to perfect value and minimise waste to the shortest proportion possible. There are many steps which make the process of creating, producing, and supplying products painfully complicated. Lean philosophy stresses on getting rid of those time-consuming steps and simplifying the operations. Lean consciousness and value stream mapping help to master perfection, but it is very important to stay focused on this area and not get distracted by others. Analysis of the Application of LM Concepts to the Accommodation Sector: The star system is used as a way of grading the quality of popular resorts and hotels used to accommodate tourists. Accommodation is a very big and important area of tourism. There is a broad range of accommodation choices near a popular tourism destination including some big international hotel chains. However, fairly basic accommodation choices are available in a remote area. There are many restaurants and cafés in big hotels which strive to cater to the needs of particular tourist groups. Such hotel managers aim to deliver value and quality to their customers. It is important to analyse how these managers can apply LM concepts to their service area. Accommodation providers can improve their value stream by implementing lean principles as discussed above in the areas which are haunted by myriad problems. Quality issues and supply chain risks can be avoided by showing commitment with persistent improvement and removal of waste. LM research stresses that malfunctions associated with room services, waste and sewage management, reception duties, serving meals, and concierge duties etc. should be acknowledged and corrective actions should be taken early on in the crisis (Tapper & Cochrane, 2005). Hotel managers are very important accommodation providers who should be more assertive in terms of providing consumers comfort. They should be determined to maintain quality from the perspective of consumers in two important areas, service quality and after-sales service. For correct implementation of LM, hotel managers and all other accommodation providers should reaffirm their desire to adhere to lean principles. Application of LM principles in accommodation area by accommodation providers is quite possible. For example, this can be done by putting everything else aside and seriously practicing the principles of “Customer First” and “Quality First”. Lean consciousness is picking momentum in all major hotel chains spread around the globe as managers have become intent on conveying this knowledge and skills to every worker operating on every level. LM principles should be used in the accommodation system to improve quality in addition to promoting support for after-sales service. All of this should be done to achieve only one end, delivering value to the customer, which is the core principle of LM. It is common for accommodation providers to accommodate a large number of tourists to maximize profit. When the number of accommodated tourists exceeds the required limit, there is customer dissatisfaction and many complaints because the entire travel experience is ruined due to greed of the providers. This is why LM should be applied in this area because then, focus is maximised on creating value and not on maximising growth. Research also stresses that it is important that hotels establish themselves as budget accommodation providers (Witt & Moutinho, 1989, p. 194). Conclusion: How OM Contributes to Organizational Decision Making? Operations managers can contribute to organizational decision-making by developing concrete operations strategies. There is always a great deal of decision-making involved with operations like production of goods and services and management of waste. Therefore, it is important that operations managers develop a proper set of guidelines in accordance with organisational goals to enhance the decision-making process and save time. Good OM which is based on deep understanding of organisational goals and a clear vision of how different operations will seek to achieve those goals contributes to organisational decision-making. This is because a smooth flow is created which ensures smooth functioning and easy decision-making. Decisions are also made easily because OM focused on lean principles instils a sense of urgency in the workplace atmosphere. All those concerns which do not add value and consume too much time are identified and discarded. This enhances the process of decision-making. Focus is laid on making such decisions which ensure delivery of real value to end customers. This not only contributes to organisational decision-making, but also generates more loyalty and respect for the organisation. References: Duggan, K.J. (2012). Creating Mixed Model Value Streams: Practical Lean Techniques for Building to Demand (2nd ed.). USA: CRC Press. Ehrlich, B.H. (2002). Transactional Six Sigma and Lean Servicing: Leveraging Manufacturing Concepts to Achieve World-Class Service. CRC Press. Hill, A.V. (2012). The Encyclopedia of Operations Management: A Field Manual and Glossary of Operations Management Terms and Concepts. USA: FT Press. Ruffa, S.A. (2010). The Going Lean Fieldbook: A Practical Guide to Lean Transformation and Sustainable Success. USA: AMACOM Div American Mgmt Assn. Sarkar, D. (2012). Lessons in Lean Management. Westland. Tapper, R., & Cochrane, J. (2005). FORGING LINKS BETWEEN PROTECTED AREAS AND THE TOURISM SECTOR: How tourism can benefit conservation. Retrieved from http://www.unep.fr/shared/publications/pdf/DTIx0591xPA-ForgingLinks.pdf Trent, R.J. (2008). End-to-end Lean Management: A Guide to Complete Supply Chain Improvement. USA: J. Ross Publishing. Witt, S.F., & Moutinho, L. (1989). Tourism marketing and management handbook. Prentice Hall. Read More