Need for an recruiting an operations management

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Operations management focuses on carefully managing the processes to produce and distribute products and services. Operations management major overall activities often include managing purchases, quality control, storage, inventory control, logistics and evaluations. A great deal of focus is on effectiveness and efficiency of processes. Therefore, operations management often includes substantial measurement and analysis of internal processes. Ultimately, the nature of how operations management is carried out in an organization depends very much on the nature of products or services in the organization, for example, retail, manufacturing, wholesale, etc.

Operations Management deals with the management and design of products, processes, services and supply chains. It considers the acquisition, development, and utilization of resources that firms need to deliver the goods and services to their clients whom they want (William J.).

Operations management ranges from strategic to tactical and operational levels. Representative strategic issues include determining the size and location of manufacturing plants, deciding the structure of service and designing technology supply chains. Tactical issues include plant layout and structure, project management methods, and equipment selection and replacement. Operational issues include production scheduling and control, inventory management, quality control and inspection, traffic and materials handling, and equipment maintenance policies.

Nature and Scope of Operations Management:-

Operations management is often used along with production management in literature on the subject. It is therefore, useful to understand the nature of operations management. Operations management is understood as the process whereby resources or inputs are converted into more useful products. But, there is a point of distinction between production management and operations management. The term production management is more used for a system where tangible goods are produced .Whereas operations management is more frequently used where various inputs are transformed into tangible services .Viewed from this perspective, operations management will cover such services organization as banks ,airlines ,utilities ,pollution control agencies super bazaars, educational institutions ,libraries ,consultancy firm and police departments, in addition ,of course ,to manufacturing enterprises (Manish Agrawal).

Quality of Operation manager:-

Operations managers need a broad range of skills, including a keen understanding of people and processes. Most importantly, operations managers should enjoy working with people-talking about projects and solving problems in teams. They should also possess:

Strong interpersonal communication skills

Strong leadership ability

Strong analytical and problem-solving skills

Roles of Operations Manager:-

Strategic change involves re-structuring, re-engineering

Marketers

- emphasises

Quality

Dependability

Range

Innovator

Quality

Product/service performance

Speed

New prod. Dev.

Reorganiser

Quality

Product/service performance

Flexibility

Speed

Maintainer

- emphasises

Schedule

Dependability

Quality

Price/cost

Customer service criteria

Enhanced

Basic

Traditional

Enhanced

Strategic change involves enhancing the

Operation's infrastructure

Role of production and operation manager:-

Produce the products and services in the quantities needed, available when needed and at a controlled cost and quality.

The deal with forecasting and scheduling systems and a variety of controls to ensure that the systems are continuing to function properly

Decisions seem to seek balance

Must try to see relationships and integrate the results.

What do Operations Managers do?

Strategic level (Long term):-

In Book Rags (2005) it is elaborated about all above levels likeWhat to make next is considered as important factor in strategic level, in other words it is about the decision making of any new product to launch or to develop the existing ones. Next step at this level is to find out the suitable location where product should be make, after that the way of making it is discussed that which process or layout should be chose. And finally about the capacity that what is market demand and how much can fulfill it and this step is most important than others.

Tactical level (Intermediate term):-

In tactical level there certain important have to make by the managers like how much staff is need and at what time, next step is about the capacity needed to accommodate them in proper shifts as per their available timings and also checking the need for overtime. Another important step is to check out the material level on frequent basis to find out how much we need to proceed further without wasting time and money.

Operational level (Lower level):-

At this level we find out the routine matters performance at daily basis sometime but can be at weekly or monthly basis as well to plan and control the work. Its responsibility of the operation managers and the people under their supervision to make decision about the perfect suitable process for production and perfect time as well. Decision should also make about the choice order make by which certain machine as per customer demand and at the same time about the work assignment to each individual as per machine and process requirement. Lastly, to make sure which order is on urgent basis or should we deal them as per first come first serve basis.

Requirement of Operations Manager

It is an important issue to discuss that an Operations manager need what kind of knowledge and capability to deal with problems during his job. First of all he or she must know about the information technology which is being used in operation process and must also keep knowledge about the industry in which it is being used. Secondly, communication ability also matters a lot while dealing with subordinates and at managerial level, if manager can not motivate it's staff then it can be great problem for him to get proper results. And finally, knowledge about the functional areas and the interpersonal skills to deal with all sort of issues more effectively throughout the firm.

Introduction of Company

Impressive Burgers was established 10 years ago with the goal of providing fast take away food to their customers quickly and of a higher quality to that of their rivals. Each restaurant offered a simple menu structure with a choice of six set meal options.

1. Burger, Chips & Soft Drink

2. Cheeseburger, Chips & Soft Drink

3. Chicken Burger, Chips & Soft Drink

4. Vegetarian Burger, Chips & Soft Drink

Customers were offered a choice of size of each meal: Regular, Medium or Large. The size of the chips and drinks portions varied but the burger size remained the same. Using this format they were able to serve each customer their order within 4 minutes from a ordering at the till to receiving their complete order to take away.

The company has grown to a chain of restaurant operations and the management introduced a number of changes to the format 12 months ago in an effort to increase each business at each restaurants.

The menu options were increased by further three options:

5. Chicken Nuggets, Chips & Soft Drink

6. Chicken Salad, Garlic Bread, & Soft Drink

7. Hot Dog, Chips & Soft Drink

In addition to these set menu additions the company also offered the option of changing the chips option on the set meals for either a Side Salad or for Potato Wedges. The restaurants themselves have not changed and the number of staff and machinery has remained at the same levels before the menu changes.

Summary of the Problem

Since these changes were implemented there has been a dramatic increase in turnover and the number of customers that are visiting each of their restaurants. However, overall profit has declined dramatically over the last 12 months. Serving times also have increased dramatically and it now takes an average of 9 minutes for a customer to be served and the number of customer complaints has increased. The main complaints include rude and agitated staff and incorrect or incomplete orders. The total value of stock held at each restaurant has increased by an average of 20% and waste has dramatically increased.

Critics at Impressive Burger

Face is different and every operation manager must keep in his mind that only increasing the volme of the product is not a single issue but the main priority of the business should be keep an eye on net profit ratio. External factors like weather and prices of oil and gas are not under the control of the manager but the factors which are controllable like way of operation should be controled. Any business which want to increase its profitablilty level must control the system effectively and efficiently.

Initially on takeaway the Impressive Burgers was offering four options to their customers

1. Burger, Chips & Soft Drink

2. Cheeseburger, Chips & Soft Drink

3. Chicken Burger, Chips & Soft Drink

4. Vegetarian Burger, Chips & Soft Drink

There were three options for the size of meal like small medium and large but actually it just affects the size of chips and drink, though the size of burger remains same. In every fast food customers want to get their order in minimum time. So according to this menu Impressive Burger was able to deliver meal on takeaway in just four minutes from placing order.

Impressive Burger expanded their business by opening new takeaways that automatically increase the overall sales. Because earlier they were serving in one market area but now they are serving in several market areas, so it is understandable to gain increase in overall sale. In the same way they found dramatic increase in turnover. It is fact that the overall sales is increasing but average sales of each takeaway has decreased. Earlier customer from other market areas may also used to place order at first take away. But after opening new takeaways in other areas customer may use to go takeaway of their areas. So it will definitely decrease the sales of first takeaway too.

Moreover Impressive Burger added three more meals in their menu to attract the customers, definitely to earn more profit. The menu options are as under

5. Chicken Nuggets, Chips & Soft Drink

6. Chicken Salad, Garlic Bread, & Soft Drink

7. Hot Dog, Chips & Soft Drink

As the meal options increased there is a need of more workers to serve the order in the same time but if human resources remain constant than ultimately time to deliver the order will increased too. Furthermore Impressive Burger also offered the option of changing the chips option on the set meals for either a Side Salad or for Potato Wedges. That also played a vital role to troublesome the workout and time required for delivery of meal to customer with the same number of workers.

The important thing to run the operation smoothly is that there is a need of more restaurant equipments and human resource which Impressive Burger ignored. That's why serving time also dramatically increased from 4 minutes to 9 minutes. Human resource was limited so operations were not smooth and complaints were increasing about rude behavior of staff because they were messed up with over burdened workout. So they were not able to greet customers properly. As there was various choices of modification for customers so staff was getting confuse about what changes are ordered with which meal.

Problems Identification

Problems the Impressive Burger is facing are, declined in overall profit over the last 12 months, dramatic increase in serving times it now takes an average of 9 minutes for a customer to be served and the number of customer complaints has increased that include rude and agitated staff and incorrect or incomplete orders. Furthermore total value of stock held at each restaurant has increased by an average of 20% and waste has dramatically increased.

The reason which I found is that there is not enough human resources to deal with the customers properly. That's why the serving time increased from 4 to 9 minutes and behavior of workers with the customers become rude and harsh due to the over burden of the increased work load. The other reason is that there is seen no change or improvement in the equipments of the restaurant. Due to these both reasons there is observed problems in placing the exact order as the customer demand. Resource remained constant and production increases that messed up all operations and in result complaints increased.

Reason behind wastage of material is very clear. Customers are making complaints for incorrect orders. So the material that is used in incorrect order delivery is wastage for the restaurant. Secondly the material which is mishandled during messed up operations is also a source of increase in wastage.

On the other side the total value of stock held at each restaurant increased by an average of 20% is due to wrong predictions of manager. For making order of supplies we must consider the average sale of every takeaway separately.

Suggestions to correct the Problems

1 - Process Management:-

Process management is the selection of input (such as raw material, labor and capital), operations, workflows and methods to convert input into output of goods and services. It plays a vital role in an organization because without it, effectiveness is not possible.

The process decision is usually made when there is a thread of competitive environment as there are the usage of new technologies and equipments and the demand of the product is decreasing. These things we have observed in Impressive Burger that they are facing problems due to the lack of proper equipments.

The three major decisions in process management are: process choice, resource flexibility, and customer involvement.

If we talk about first one decision, process choice, there are four choices. That are;

Small organizations producing goods in small quantities but offer large varieties.

Organizations produce goods in average quantities using standardized methods, but their production capacity is larger than the first choice.

Organizations produce goods in relatively larger quantities than first two mention organizations.

Organizations produce goods with the highest scale of production, which is the highest among all other process choices.

The second one decision is called resource flexibility. Here the firms decide the required skills of human resources including their qualification and expertise and their responsibilities to do the job. They also decide whether to use equipment that can produce the goods in a great variety or the equipments that can only produce the goods with one or few designs.

The third one decision is called customer involvement. The firms decide their process by considering whether they want to offer customer service or self service and which location to choose to serve the customer, whether the customer will come to the organization or vice versa.

2 - Workforce Management:-

Workforce management play an important role in any organization because workers and managers belong to various countries, racers, religions, languages, etc and possess different backgrounds in skills. Managing such teams is complex thing. It is not easy to do this task but without this a flawless activities cannot be achieved which is necessary for Impressive Burgers. The managers have designed multiple techniques to enhance workers efficiency and efficiency, such as:

a. Training and Development: Training by the training department, by seniors or supervisors, or by external trainers who pass on basic skills in workers compulsory to do the job correctly. An on-the-job training concept grooms basic skills in labor-force. Development is an advanced training to further encourage and polish worker's skills.

b. Incentive Plans: As money is one of the main motivator, so in additional to an attractive incentive plan, recognition of work, worker's respect, dignity of workmanship, etc are exercised to attain performance goals. The major incentive plans are individual based plans, team based plans and group based incentives.

c. Job Design: It is a set of duties and responsibilities to do the job and an employee's skills, qualification, experience, specialization, and training needed to perform the Job. Some of the techniques to enhance the scope of job and achieve greater performance are job specialization, job enlargement, job rotation and job enrichment. We can assign each employee a specific task according to his skill which will decrease the problems in handling customers and will minimize the delivery time. We also can engage a employee in different tasks if he/she have skills to perform multifunctional tasks. By doing so we can decrease the cost of hiring more employees and get accurate work by handing over the task in those hands that have skill related that scenario.

We can also rotate the workers on different tasks if they have required skill. By doing so they can learn the other tasks and they feel fresh and energetic as they became bored due to doing same task for a long time. we can also give workers the more control over the operation by reducing the number of supervisors.

3 - Capacity Management:-

Capacity is the maximum level of goods and services produced in a work station, service place, factory, or a laboratory. Companies plan their capacity of production to successfully meet the sales estimate. Capacity should neither be very low or high than demand because a low capacity results in a loss of sales revenue, while a high capacity results in a blockage of investment in resources like men, materials, machines, products, etc. Capacity planning is done through total capacity measurement, estimating current capacity utilization.

Capacity is measured in terms of total output produced. For example, TCS Courier Company's staff can handle 20 customers in an hour; PIA has the sitting capacity of 100 passengers per flight in its Boeings; a machine can produce 10000 tablets in an hour is its capacity. It is essential to know the level of capacity utilized every time i.e. either the firm is utilizing its 100% capacity or how much capacity is idle or further needed to cover the demand.

4 - Materials Management:-

It is concerned with supplies, inventory level, production level, staffing schedules and distribution of products. It is necessary for Impressive Burgers for cost reduction by minimize the wastage of material.

Materials Management Cycle: It includes five steps starting with acquisition of raw material, storage; conversion into semi finished and finished goods, again storage, and finally distribution of products to the customer.

Purchasing: It normally involves a seven step process including:

1. Recognition of need by the production department

2. Assessment and approval of procurement by the management

3. The purchase department finds and selects the suppliers (on the criterion to supply quality materials at an economical price and agreed delivery schedule and payment terms)

4. Placing the order

5. Tacking the order

6. Receiving the order

7. Evaluating the desired quality and features as agreed upon with the supplier.

5 - Inventory Management:-

Inventory includes both semi-finished and finished goods. Various techniques to manage inventory efficiently are defined hereunder:

a. Demand and Sales Forecast: Sales forecasting is the estimate of sales of a product. Mostly companies want to know their future sales revenue and acquire their expenditures accordingly.

Generally sales forecast is made through an analysis of past sales. Seasonal fluctuations in sales are also taken into account. Sales forecasting is done by experts including the sales force, marketing team, marketing researchers, consultants, franchisers, distributors, dealers, suppliers and even some government agencies sometimes.

b. Inventory Measures and Continuous Records of Inventory: After the sales forecast, inventory is produced and is measured in terms of units of quantity and value. Companies continually maintain records of inventory in tables, charts and graphs to keep an eye on inventory levels.

c. Inventory Carrying Cost: Also called holding cost, it includes interest, insurance taxes, and warehouse maintenance cost (such as air conditioning, staff salary, stationary, computers, cleaning supplies, etc).

d. Just-in-time (JIT) Production: JIT is a Japanese management technique that favors to arrange the stock exactly at the time when needed in production so that investment can be utilized most efficiently.

e. Safety Stock: It is the minimum stock level maintained at one time to meet the surplus demand.

f. Stock out/ Shortage: It is the finishing point of stock or having zero inventories.

g. Lead Time: It is the time between stock order and stock receipt. For example, the lead time for a motor bike assembler may be 15 days.

h. Time between Orders (TBO): It is the time difference between one order and another.

i. Total Inventory: Total inventory equals to inventory on hand plus pending orders/ open orders/scheduled receipts.

j. Inventory Turnover: It is the movement or sale of stock number of times a year. The normal turnover for various goods is 6 to 7 times a year, which proves very profitable for firms. An inventory turnover of 4 times a year is even fine.

k. Economic Order Quantity (EOQ): EOQ is the optimum level of cost to order goods that saves the cost to maximum level. On placement of every order, a firm acquires ordering cost. The ordering cost includes the cost to generate a purchase order, stationery cost, computer cost, etc. Firms plan to minimize ordering cost or setup cost, time between orders (TBO), and carrying / holding cost.

Location:-

Locations decisions are very prominent in operations management, whether it is about locating a new facility, expanding its subsidiary and branches or relocating its facilities. Why do car showrooms or shops of electronic products cluster near one another? The reason is their customers do comparative shopping. A company determines its location or a geographic site for its operations by considering the factors enlisted below:

i. Availability of labor at a cheap cost (and with desired level of skillfulness),

ii. Availability of raw material and supplies (at an affordable/ cheap rates),

iii. Proximity to market (which will save transportation cost and time),

iv. Reasonable cost of utilities, finance, taxes, and real state.

A company compares the cost of doing business at one place or the other. It collects the relevant data, analyzes the information, and makes the wise decision.

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