An Analytical Study of the Approaches to Operations Management

This study is aimed at comparing and contrasting the attacks to operations direction in at different types of administrations. Operations direction is a nucleus subscriber to a house ‘s success and developing competence is widely recognized as a cardinal factor in finding the strategic and competitory advantage of the house. The writer has chosen two wide classs of organisations i.e. merchandise based and service based to analyze the practises and common differences between the attacks. The study begins by designation of different types of operations/transformation procedure in the chosen organisations and analysis of their suitableness and adequateness. This is followed by a critical analysis of rules and constructs in footings of capacity planning, stock list direction, supply concatenation design, public presentation steps and entire quality direction. The study concludes with an rating of the combination of these factors and its impact on fight, invention and sustainability of the different types of organisations being studied in this academic exercising.

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Operations Management – an overview

Operations direction is an of import country in pull offing a house. It can be defined as the country of direction related to plan and operation of concern procedures in production of goods or services. In a nutshell, it is the transmutation of resources into merchandise and/or services as depicted in figure 1. The competitory advantage of a house is straight impacted by the efficiency of use of available resources fulfilling client demand. ( Slack et al 1995, Voss, 1995 )

Figure 1: Operationss Management ( from sussex.ac.uk )

Operations direction serves the map of pull offing the procedure of change overing ‘inputs ‘ in footings of stuffs, labour, and energy into ‘outputs ‘ in the signifier of goods and/or services. It is critical to guarantee that the strategic way of the house is maintained by put to deathing the tactical determinations of resource use to guarantee that competitory advantage is maintained ( Schmenner et al, 1998 ). A suited illustration of efficient operations direction is Apple Inc. Apple is a transnational corporation that designs and markets computing machines and related merchandises and services. The house manages its operations in a manner that it ensures that the demand is met by the supply but at the same clip it does n’t necessitate to stock big measures of merchandises in warehouses ( figure 2 ) i.e. Apple has a fast stock list bend over rate. ( Gamet, 2009 )

Figure 2: Warehouse solution for a fast stock list bend over organisation

Operations Management encompasses a figure of theoretical constructs, suitableness and application of which varies within and across the organisations ( Figure 3 ). Cardinal factors include but are non limited to capacity planning, stock list direction, supply concatenation design, public presentation steps and entire quality direction. In goods based organisations the constructs of stock list, supply concatenation, quality and capacity planning are extremely critical. Where as, in service based organisations factors associating to human resources, public presentation and quality direction are given premier importance. ( Bayraktar et al, 2007 )

Figure 3: Factors in Operations direction

The construct of operational schemes encompasses the programs for telling natural stuff, change overing them to complete merchandise, hive awaying and selling to the client. Its execution is frequently mismanaged in the fast changing environment in the extremely globalized markets at present. The direction jobs in the country of operations direction comprise of quantitative, societal, proficient issues and their complex mixtures ( Liet al, 2000 ) Quantitative jobs may include factors associating to planning, critical way analysis, supply concatenation direction etc. Technical issues may dwell of factors associating to mechanization, optimisation, scheduling etc. Social factors may include human resource direction, outsourcing etc. It is deserving observing that these issues are non isolated and independent of each other but they affect the effectivity of the overall operations direction in the concern. Therefore it is indispensable to pull off these job countries to guarantee that the overall operations direction is non impacted adversely by these factors. To remain competitory a concern needs to germinate so as to guarantee that alternate class of actions can be adopted as per the available resources while efficaciously pull offing alteration ( Volberda, 1999 ).

The Human resources i.e. people in an organisation are highly of import in operations, procedure and public presentation direction procedure. The success of an organisation is straight relative to the success and satisfaction of its employees. Therefore from an operational point of position it is of import for the concern to use and retain the right people for growing, profitableness and sustainable concern ( Pfeffer, 1998 ).

Analysis of operations procedure in different types of Organizations

To understand how operations differ in different types of organisation the instance of an Aircraft maker versus an air hose operator is considered. The footing of this analysis is competitory precedence and selling scheme. The different types of operations procedure in these organisations will be identified and their adequateness to run into the clients ‘ demands assessed to understand the cardinal factors of operations direction.

The really first and the most basic difference in the organisations chosen in this instance survey is that the aircraft maker trades in the production of aircrafts and allied services for its clients while the air hose operator trades entirely in the proviso of logistic services. For the intent of simpleness and easiness of apprehension, the writer has considered merely the production of aircraft and proviso of logistics to tag a clear differentiation between goods based and services based organisations. To keep competitory advantage both types of companies need to guarantee that their operations are managed expeditiously for maintaining the costs under control and thereby offering the goods and services to their clients at competitory rate while guaranting maximal profitableness ( Frohlich et al, 2002 ).

The aircraft maker invests to a great extent in research and design as it needs to ‘do it right the really first clip ‘. Due to the graduated table of operation, the assorted maps are distributed globally, therefore efficient stock list, capacity and supply concatenation direction are indispensable. Entire quality direction and public presentation are besides needed to keep the competitory and selling advantage ( Chow, 2002 ). The air hose operator on the other manus relies on the aircraft supplied by the maker to supply service to its clients. The operator does n’t necessitate to keep an stock list of planes but it has to guarantee that it utilizes its capacity to maximum possible for supplying competitory menus to its clients. The public presentation prosodies for the air hose are different as it has to guarantee timely flight operation which once more is indispensable from the selling scheme point of position ( Rae, 2001 ).

The adequateness and suitableness of the cardinal theoretical rules and constructs in operations direction are discussed in the following subdivision of this instance survey.

Evaluation of Operation Management constructs in different Organizations

As discussed in the old subdivisions of this study, Operation Management is a cardinal map in organisations whether they are merchandise based or service based. In this subdivision we look at the operations direction patterns in these industries.

Product Based Industries

We take a expression at the operations direction patterns in a fabrication company. These patterns include use of techniques such as Kaizen, Just in Time, Kanban etc for pull offing operations. Inventory direction and capacity planning are of premier importance to guarantee that the natural stuffs and finished goods are maintained at optimal degrees. Therefore, assorted maps within the organisation interact with the Operation Management map ( Slack et al, 2007 ). The technology or proficient map interacts in the infinite of understanding procedure demands and analysing the new options available. The Product development map trades with apprehension of capablenesss and restraints every bit good as managing and introducing merchandises. The selling map trades with apprehension of market demands. The information engineering map trades with proviso of systems for design, planning, control and betterment. The Human resource map interacts in understanding the enlisting, development and preparation demands every bit good as employee public assistance. The Accounting and finance division trades with cashflow and fiscal analysis of public presentation and determinations. Thus it can be noted that operations direction sits in the Centre of the assorted maps and therefore is indispensable for the sustainability and growing of the organisation ( as shown in figure 4 ).

Figure 4: Placement of Operations Management in an organisations concern maps.

Service Based Industries

Efficient ‘Operations Management ‘ is every bit of import in service industry. As the inputs in service industry are intangible human resources and intellect the operations direction challenges are different. Techniques such as ‘Agile development ‘, collaborative and distributed working are cardinal factors in keeping the competitory advantage and sustainability. ( Johnston, 1999 ) Like fabrication, assorted maps within the organisation interact with the Operation Management map. The interactions and interfaces are similar but the comparative maps vary due to the nature of industry. The proficient map operates in the infinite of understanding procedure demands, keeping rational belongings and analysing the new options. The Service development map trades with apprehension of human resources capablenesss and restraints every bit good as managing and introducing merchandises. The information engineering map is of great importance as it forms the anchor of the modern service industry. The comparative functions of selling, human resource and finance map remain the same.

Integrated Products and Services

This is a new and rising industry section, which has been pioneered by industry veterans like Rolls Royce. A cardinal displacement is happening at the house which is traveling off from selling merchandises to the proviso of services. Alternatively of selling engines and so supplying care contracts, the company is now offering ‘power by the hr ‘ contracts. Under this new system, it leases engines to air hoses while staying responsible for their care. In this sector, lower costs are accomplishable merely by using service experience of the bing merchandises in the design of following coevals of merchandises. ( Anon, cam.ac.uk, 2011 )

Impact on fight, invention and sustainability

Effective operations direction practises are critical for keeping competitory advantage, introducing in the market and sustainability of the organisation. History is filled with illustrations of houses that employed fresh operations direction practises and succeeded in making a niche of their ain in the market infinite. A outstanding illustration is the ‘Ford Assembly Line ‘. The assembly line was non the inspiration of Henry Ford but he merely adopted and implemented it in a manner that mass production of autos became possible. By implementing the ‘Moving Assembly Line ‘, Ford was able to convey production costs to an all clip low and at the same clip fuel the competition so much that many low volume rivals had to shut store ( Womack et al, 1990 ).

A more modern illustration is of Toyota which has revolutionized the fabrication industry by open uping and/or implementing systems like Lean, Six-Sigma, Kaizen, Just in Time to call a few. These systems were conceived chiefly due to legion restraints presented to Toyota in its place state, Japan, where land and resources were scarce and expensive ( Smith, 2003 ). Using these operations direction practises has enabled Toyota to go the figure one car maker in the universe, suppressing Asiatic, African, European and American Markets likewise.

In the Services sphere, operations direction is playing an every bit of import function. Due to the differences in the basic nature of terminal merchandise, the rules and their execution differs in the sphere of operations direction. The input in service industry is intellect instead than natural stuffs. Therefore constructs like stock list direction which is a cardinal constituent in fabricating operations direction does non use to services. Methodologies like agile development, distributed and collaborative working are of greater importance in service industry ( Coram, 2005 ).

International Business Machines ( IBM ), which is one the universe ‘s oldest services based houses is a innovator in using market taking operations direction practises in this industry. It makes utilizations of advanced tools to pull off visibleness, control and mechanization needed to present quality service, pull offing conformity and hazard, and maximising return on investings. It besides provides package and execution to houses runing in fabrication every bit good as in services infinite ( Johnston, 1999 ).

Decision

Operations Management is a cardinal concern procedure in any organisation, whether it deals in merchandises or in services. The rules or constructs of operations direction and their execution differ in these industries. Manufacturing industries rely on stock list direction, capacity planning and production optimisation techniques to introduce, keep competitory advantage and safeguard sustainability. Service industry relies more on efficient use of its human resources and engineering anchor for its operations direction patterns. In recent times it has been seen that a clear differentiation between merchandises and service industry is film overing and most concerns now offer a combination of merchandises and services to their clients. This tendency is even apparent in more traditional fabrication industries such as Rolls Royce which is traveling off from selling merchandises to offering ‘power by hr ‘ contracts in the signifier of rentals. Therefore “ incorporate merchandises and services ” is clearly emerging as a incorporate entity. Operations direction will turn out to be an built-in concern procedure and a cardinal discriminator between leaders and followings in these altering times.

Mentions

Slack et Al ( 1995 ) Operations Management, Pitman Publishing: London.

Voss, C.A. ( 1995 ) ‘Operations direction – from Taylor to Toyota – and Beyond? ‘, British Journal of Management, Vol.6, Special Issue, S17-S29, December.

Schmenner, R.W. and Swink, M.L., On theory in operations direction, Journal of Operations Management, Volume 17, Issue 1, December 1998, Pages 97-113, ISSN 0272-6963

Gamet, J., Apple Beats Competitors at Inventory Turn Over, macobserver.com, Mar 2009

Available from:

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Accessed: 21st February, 2011

Bayraktar, E., Jothishankar, M.C., Tatoglu, E. Wu, T., “ Development of operations direction: yesteryear, present and future ”, Management Research News, Vol. 30 Iodine: 11, pp.843 – 871, 2007

Li, H. and Li, L. X. ( 2000 ), “ Integrating systems constructs into fabricating information systems ”, Systems Research and Behavioral Science ”, Volume 17, Issue 2, pages 135-147, 2000

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Pfeffer, J., “ The human equation: Building net incomes by seting people foremost ”, Harvard Business Press. 1998

Frohlich, M. T. and Westbrook, R., “ Demand concatenation direction in fabrication and services: web-based integrating, drivers and public presentation ”, Journal of Operations Management, Volume 20, Issue 6, November 2002, Pages 729-745, ISSN 0272-6963,

Chow, C. and Shields, M. “ The importance of national civilization in the design of and penchant for direction controls for multi-national operations ”, mit.dspace.org, 2002

Rae, D. “ EasyJet: a instance of entrepreneurial direction? “, Strategic Change, Volume 10, Issue 6, pages 325-336, September/October 2001

Slack, N., Chambers, S. and Johnson, R., Stratgeic Operations Management, 5th Edition: Harlean carpenter: FT, Prentice Hall, 2007

Johnston, R., Service operations direction: return to roots, International Journal of Operations & A ; Production Management, Vol. 19 No. 2, pp. 104-124, 1999

Anon, Integrated Products and Services – IPAS, University of Cambridge

Available from: hypertext transfer protocol: //www-edc.eng.cam.ac.uk/research/knowledgemanagement/km1/ipas/

Accessed: 23rd February, 2011

Womack, J., Jones, D., Roos, D., The Machine That Changed The World, New York: Rawson Associates: Oxford: Maxwell Macmillan International, 1990.

Smith, B., Lean and Six Sigma — A One-Two Punch, American Society for Quality, 2003.

Coram, M. ; Bohner, S. ; The impact of nimble methods on package undertaking direction, 12th IEEE International Conference and Workshops on Engineering of Computer-Based Systems, 2005.

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