Operational Management Of A Company Mostly Depends On Growth


Operational management or processes of a company mostly depends on the growth of a company. The more a company grows, the more likely is the complexity to grow in terms of its operational management. This increasing of complexity increases the human errors in the operations. One of the key issues for this is because the important know- how's of operations are not inherited and utilized in a business organisation. It so happens that most of the operational processes become obscure and bound to the operators (Fujitsu, 2008)

Operational Management Strategies

For a company like Bixi, where providing services to the customers is the no 1 goal, it is necessary that it prioritizes its operational strategies within the framework of its organisational strategy. Most often this is developed by the top level operational managers and all the mangers throughout the operation's functional area are expected to follow it. While developing the operational strategy Bixi should consider the following criteria's:

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It should interpret the implication of the corporate strategy from the Operational management area.

Should determine the necessary operational management resource requirements to accomplish the operational goals.

Should determine the necessary operational management resource capacities needed to meet the operational goals.

It should also design a detailed operational management plan to schedule and specifically achieve the goal (Schniederjans, 1994)

(Lew, 2009)

In order to achieve these, it is necessary that Bixi analyses its operations in terms of its:

Total Quality Management

Capacity Planning

Inventory Management

Scheduling of Service Operations

Service Design

Location Analysis

Quality Assurance

Total Quality Management

Total Quality Management is a management approach to long term success through customer satisfaction. It is an effort in which all members of an organisation work together in improving processes, products, services and the culture in which they work (Organisations - Wide Approach, 2008). It places strong focus on process measurement and control it as a means of continuous improvement (River, 2008). Total Quality Management mainly stresses on the three principles:

Customer Satisfaction

Employee Involvement

Continuous Improvement in Quality (Krajewski & Ritzman, 1999)

(Krajewski & Ritzman, 1999)

It is important as it refers to the quality emphasis that encompasses the entire organisation, starting from suppliers to the customers. It stresses on a commitment by the management to have a continuing companywide drive towards excellence in all aspects of products and services that are important to the customers (Heizer & Render, 2004)

Capacity Planning

Capacity Planning is a long term strategic decision that establishes a company's overall level of resources (Russell & Taylor III, 1998). When it comes to capacity planning in the case of services, response time, throughput, service time, percents with targets etc are some of the factors taken into consideration (Sherkow, 2003)

In the case of most of the companies, the concern is whether the resources will be available in the right place to handle the increasing number of requests as the number of users' increases. The aim of capacity planning is to plan so well so that the new capacity is added just in time to meet the anticipated need but again not so early that the resources go unused for a long period of time. A successful capacity planner will be one who can make the trade off decisions between the present and future and arrive at a most cost efficient one. The capacity planning changes with the emerging new technologies, business strategies and with the change in forecasts also (Search Enterprise WAN, 2005)

Inventory Management

Inventory can be classified on the type of demand:

Independent Demand

Dependent Demand

Dependent demands are often demands for an item that is generated by the company's own production process. Example could be the demand for the production of tyres for a tricycle and not for the tricycle as a whole whereas;

Independent Demand is the demand that is not controlled directly by the company, as it is the demand from customers. It usually includes finished products such as the complete tricycle or replacement parts sold to customers etc.

In the case of Bixi, the demand can be said to be independent demand as it is the demand from the customers. The need to produce or not to produce an item depends on the response of the customers to the company's products (Vonderembse & White, 1996)

Scheduling of Service Operations

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In scheduling, management often decides what product to produce, who will do the work, what kinds of equipments and materials to use, when to start the production and ultimately what to do with the finished products (Vonderembse, 2008)

Service Design

An organisation often develops strategies and plans to deal with the day to day opportunities and threats which relate to developing a system that is capable of producing services in the demanded quantity, planning how to use the system effectively and managing key operational elements (Vonderembse, 2008).

Location Analysis

Quality Assurance

Quality assurance is the process of verifying or determining whether the products and services meet the customer expectations. It is a process driven approach with specific steps to attain the desired goal. It takes into consideration the design, development, production and service. The cycle for quality test comprises of the steps: Plan, Do Check and Act (Kietzman, 2010)

(Reliability Enhancement Activities, 2008)

The organisation must set policies regarding the desired quality in relation to the changing market needs, investment requirements, return on investment, potential competition etc. For a profit making organisation, this indicates where in the market the organisation has its relative advantage. In service oriented systems, measure of quality may not be that objective. However, the waiting time can often be a criterion for service quality (Buffa & Sarin, 1986)

Operational process

Operational process is the process that comprises of the core business and the primary value streams. It typically includes the purchasing, manufacturing, advertising, marketing and sales. Although all operations are similar, as they all transform input resources into output products or services, they do differ in a number of ways such as:

The volume of output - it determines the rate or level of output a company obtains from a process. It is a key characteristic that determines the process behaviour.

The variety of output - it is range of products and services produced by that process

The variation in customer demand determines the degree to which the rate of output varies from a process over time.

The degree of visibility that the customer have over the production of the product is the amount of value added activity that takes place in reality or in the presence of the customers which is also called as customer contact (Slack, Chambers, & Johnston, 2007)