The Use Of Operations Management Today Business Essay
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Published: Mon, 5 Dec 2016
Operation management is a term used or the activities which produce and deliver product and services.in many small organisation operation management performed by people who perform task and activities within the organisation. First of all we use the four V’s of operations, volume, variety, variation, and visibility. Before we tackle the activity think about how we could measure each of these dimensions for the operations that we will visit,
Volume – It is important here to distinguish between the actual volumes in this case the number of customers served that the impressive burger has to cope with, and the maximum it could cope with. This is called the capacity of the operation. Capacity is easier to measure because it can be calculated by multiplying the number of seats in the takeaway by the average number of customers per hour (calculated by timing the customers) and by the number of hours the takeaway is open. In other words, imagine there is a queue of people outside the restaurants, what is the maximum number of customers that the impressive burger could serve? Contrast this capacity figure with the actual number of customers in a day that the restaurant serves. You could ask the restaurant manager for this information or make an approximation from your own observations at different times of day.
Variety – There are two important aspects to measuring variety for restaurants. The first is the range of different foods that the impressive burger serves. Just count the number of different items on the menu to get an indication of this. The other factor to take into account is whether the impressive burger will ‘customize’ food to your own preference. For example, does it serve burger well-done, medium and rare? Does it allow you to choose the fillings for your sandwiches? Etc.
Variation – Possibly the easiest way to measure variation is the ratio of peak demand in a day or a week, to the lowest demand during that day or week. Again, you could try asking the impressive burger manager for this information or (if you have time) make observations throughout the day or even the week. So, for example, if the restaurant was busy up to its full capacity for part of the day but, at its lowest, was only ten per cent full, then the peak to trough ratio is 10:1.
Visibility – This is a relatively simple issue. Simply ask, how much of the preparation of the food do you witness. It is unusual to see every aspect of food preparation, for example preparing the vegetables, slicing the bread etc. But you may see food being cooked and assembled in some burger restaurants. The other way of looking at this issue is to ask yourself whether the preparation of the food is being deliberately put centre stage in the restaurant. Some restaurants deliberately do this so as to entertain customers while they are waiting for their food.
Function of Operation management
The role of the operations function means something beyond its obvious responsibilities and tasks it means the underlying rationale of the function, the very reason that the function exists.
The implementer of business strategy.
The supporter of business strategy.
The driver of business strategy
Two things are important in understanding these roles. First, they are stated in order of difficulty and in order of importance. Implementing business strategy is a very basic responsibility for operations, supporting business strategy is what most operations should aspire to, but driving business strategy is only possible if the operation really does have unique capabilities. Second, they are cumulative in the sense that an operation cannot be a supporter of business strategy unless it has skills as an implementer, and cannot drive business strategy unless it has the skills to support the business strategy.
Volume-variety and design
In the four V’s of operations were described. These were volume, variety, variation and visibility. The first two of these – volume and variety – are particularly important when considering design issues in operations management. Not only do they usually go together (high variety usually means low volume, high volume normally means low variety) but together they also impact on the nature of products and services and processes which produce them.
The volume and variety of an operation’s activities are particularly influential in determining the way it thinks about its performance objectives. The figure below illustrates how the definitions of quality, speed, dependability, flexibility and cost are influenced by the volume-variety position of the operation.
Quality in a low volume-high variety process such as an architects’ practice, for example, is largely concerned with the final aesthetic appearance of the building and the appropriateness of its detailed design. In an exceptionally high volume-low variety process, such as an electricity supply company, quality is exclusively concerned with error-free service – electricity must be constantly available in the correct form (in terms of voltage, frequency, etc.). The meaning of quality has shifted from being concerned primarily with the performance and specification of the product or service towards conformity to a predefined standard, as we move from low volume-high variety operations through to high volume-low variety operations.
Speed for the architects’ practice means negotiating a completion date with each client, based on the client’s needs and the architects’ estimates of how much work is involved in each project. Speed is taken to its extreme in the electricity utility where speed means literally instant delivery. No electricity company could ask its customers to wait for their ‘delivery’ of electricity. Speed therefore means an individually negotiated delivery time in low volume-high variety operations, but moves towards meaning ‘instant’ delivery in some high volume-low variety operations.
Dependability in processes such as the architects’ practice means keeping to each individually negotiated delivery date. In continuous operations, dependability often means the availability of the service itself. A dependable electricity supply is one which is always there. So dependability has moved from meaning ‘on-time delivery’ in low volume-high variety operations to ‘availability’ in high volume-low variety operations.
Flexibility in low volume-high variety processes such as the architects’ practice means the ability to design many different kinds of buildings according to its clients’ various requirements. With the electricity company’s process, the need for product flexibility has disappeared entirely (electricity is electricity, more or less) but the ability to meet almost instantaneous demand changes through volume flexibility is vital if the company is to maintain supply. Flexibility has moved from meaning product flexibility in low volume-high variety operations to volume flexibility in high volume-low variety operations.
Cost, in terms of the unit cost per product or service, varies with both the volume of output of the operation and the variety of products or services it produces. The variety of products or services in low-volume operations is relatively high, which means that running the operation will be expensive because of the flexible and high skill levels employed. Further, because the volume of output is relatively low, a few products or services are bearing the operation’s high cost base. Also, and more significantly for the operation, the cost of each product or service is different. At the other end of the scale, high-volume operations usually produce similar products or services, output is high, so that whatever the base cost of the operation, it is shared among a high number of products or services. Cost per unit of output is therefore usually low for operations such as the electricity utility but, more significantly, the cost of producing one second of electricity is the same as the next second. Cost is relatively constant.
Change the face nothing will change but facing to the change everything can change.
The process of making things different is known as CHANGE. like impressive burger changed its menu to get more customer attention but because the lack of staff and its training business started to decline.
Organisational change is an on-going process,
Change can make things different
Change is an ongoing activity
Change creats new opportunities and challenges.
Change is extensive in nature
Change is impossible to avoid
Help organisation to move from the present state to a desire state.
Bring new opportunities for the business
Reasons for change
There may be a change in leadership, structural change, adoption of new technology, there may be a decline in profit like impressive burger because of change, industrial relation problems.
Change in the policies by the government, technology advancement, demographic changes, change in the market, changes in the economy conditions.
There are different types of changes,
Planned and unplanned change
Rate of change can be slow or fast
Remedial and development change
Wide and subsystem change for organisation
Impressive burger point of view it brought some risks and uncertainties and brought new challenges for the staff and decline in the profit was big threat to the organisation.
Failure reason for Impressive Burger
Main reason behind problems of Impressive Burger
1. New service development: Due to development of new services all the schedule and activities of company disturbed. Numbers of operations within the impressive burger increased, but number of staff and machines remained same.
2.lack of proper arrangement: due to fast growing changes, there should be need to arrange staff,equipment,inventory,cleaning services,maintance etc. But due to lack of proper planning all schedule is disturbed and cause problems.
3. Reduction of staff: as the operation of PLC company increases, there is need to be recruiting new staff. but plc company did not focus on these things. results of less no. of staff:
Poor productivity levels
Bad feeling among staff
4. Lack of training: due to increasing customers and functions of PLC there is need to be trained staff. Lack of proper training causes customers unsatisfaction.
5. Lack of machinery: main problem of the company
Is that they increase their operation function
But there is reduction of equipments or resources. The staff cannot do anything without useful resources like electrical equipment, fridge, microwave oven, vacuume etc.
6. Lack of motivation of staff: motivation encourages staff to do their services properly
.but lack of motivation from high authority side, the staff don’t know how, when and why to do this.
Dissatisfaction about the job
High level of absenteeism
The search for a replacement
7. Overburden of staff: due to less number of employees, the responsibilities of each staff member become double. For e.g. the person who cooks food, now doing dish washing as well. These type of workload became employees frustrated, irritated and they can’t serve customers properly
8. Time consumption: due to lack of machinery and equipment, the whole process from food making to serving becomes time consuming the order that suppose to be completed in 4 min is now taking 9 min.
9. Hygienic problem: due to lack of proper staff and equipments, the hygienic problem increases. Because there is not proper cleaning of store inventory, kitchen, bathroom. So that the customer feel uncomfortable to sit on these places.
10. Lack of quality: quality is consistence conformance to customer’s expectation, the quality of product decreases day by day due to overall problems.
11. Incomplete order: due to untrained and rude staff the customer’s order remains uncomplete.This is also the main cause of their operation problem.
Impressive burger failed its operation because of following reasons,
Change in impressive burger menu brought some uncertainties and new challeneges for the organisation which created a threat for the company because staff was not ready for a change because of unplanned change.
People don’t resist change , they resist being changed. (peter senge)
If u want to make enemies, try to change something. (Woodrow Wilson)
Impressive burger made change because of changing customer needs and preferences.
Goal of change management is to ensure that procedure and standards are being followed efficiently and prompt handling of all changes, to minimise change related incidents and service quality to improve day to day operations in the organisation.
The Need to Change
The pressure of market forces organisation to change rapidly. Specified this persistent speed, influential discover they no longer can consider above choices before taking action. Organizations must be quick in considering and acting on changing needs in staffing. Leaders must ask:
What kind of expertise they need?
What kind of experts do we need in future?
Ensure that we have exact amount of staff?
Ensure that we have right amount in future too?
Compare the cost of staffing with other same kind of business?
These questions are difficult but essential and if we don’t address these problems we have to react quick if problem happens in the organisation. Reduction in force almost always happens when we respond shoot from hip. Study explains us that downsizing is unsafe chance which means very less chance of improvement in revenue or production.
Downsizing has different alternatives. There are thirteen different alternatives which explain either need for long term staffing and reduction in short term expenses. Last option number fourteen is considerably is one possible option as well.but I personally think that it is awrong choice for the organisation and its people because it is too much on the side corporate philosophy nowadays so it should be consider with other options.
Several of the alternatives depend on two important points.
They Share the Discomfort. This seems to be a significant factor in the success of alternatives, according to researcher Wayne Cascio. Sharing the pain means that no one – from executive to maintenance worker is immune from the strategies for saving money.
Strong Human Resource Advantages. The Human Resources Department must be proactive in developing career assessment, training and placement opportunities, and creative wage and benefit packages.
Long-Term Staffing Alternatives
1. Hiring Linked to Vision
The institution identifies what skills it will need in order to meet its vision and goals. During job interviews, human resources and department managers need to ask questions specifically related to skills it will need now and in the future. This strategy helps assure that you are recruiting and hiring people who can meet future challenges.
2. Cross Training
By understanding the skill mix of staff today and linking it to the skills needed in the future, the organization allows individual employees to determine what they need to do in order to remain gainfully employed. It also gives the training department a clear mandate regarding the type of skills training they need to make available to staff.
In Prahalad and Hamel’s excellent book Competing for the Future, they suggest that businesses identify their core competencies and build strategies based on these fundamental building blocks. This provides a foundation for the organization and employees to build a career development process that matches what the organization needs.
3. Succession Planning
The institution needs to identify the types of management and technical skills it needs in various positions. Human Resources should work with line managers to identify likely candidates so that they can begin preparing them for positions once they become vacant. Often, succession planning is left to chance. Baseball provides a good analogy for effective succession planning. With its farm systems, players move up from A to AA to AAA as their skills increase and as openings occur.
4. Redeployment within the Organization
Redeployment can be linked to “Alternative Placement,” but it seems to be used most often within the organization. Successful redeployment requires:
A sophisticated career management process so that managers and employees are aware of open positions.
Career assessment and development activities that allow people to get ready for positions. One company linked individual career planning to corporate objectives so that people could see how their plans fit into overall direction. It allowed individuals who wished to remain within the company to make career development and placement decisions that increased their chances of succeeding.
5. Creating Value-Added and Revenue-Enhancing Opportunities
This is an “Employee Buy Out” within the organization. A group of employees create a new business or line of service that the company can market. (3M is a leader in this form of entrepreneurship.) Of course, the company does not enter this agreement lightly. When Ford was about to sell the name Mustang to a foreign automaker, engineers asked Ford leadership for a chance to reintroduce a Ford version of the car. Leaders said they would agree if the engineers could demonstrate that the car could be built to certain stringent quality specifications and manufacturing time that rivaled their most efficient operations. On their own time, the engineers developed plans that met these requirements.
6. A Comprehensive Model
Automakers, as well as other industries in Japan, have adopted a series of steps they use as an alternative to downsizing. If the first step does not get the needed savings, they move to the next.
Compensation. 50% of compensation is set, the other 50% is determined by profit or productivity measures.
Hours. Cut the number of hours.
Wages. Cut salaries.
Placement. Make arrangements with other employers who will agree to take displaced workers.
7. Reduced Hours
A policy is established that either places everyone in a particular job category on a flexible working arrangement or creates a flex-pool made up of volunteers from the department. The goal is to reduce the number of hours worked by each employee.
Job sharing is a variation of flextime and has been used successfully in many organizations. People divide a job between them, with each person receiving proportionate benefits.
8. Lower Wages
Wages are lowered in order to save money. Wage reduction programs differ, but here are some typical elements:
Everyone in the institution is part of the wage reduction program.
Executive compensation is reduced by the highest percentage, followed by middle management, with non-management staff suffering the smallest percentage of loss.
This is usually a temporary program instituted to get through a downturn or until other reductions such as attrition can take place.
Attrition, or waiting for people to retire or leave on their own, can work in two ways:
Natural attrition. Positions are not filled as people leave. This can work in an organization where turnover is sufficiently high to gain the savings quickly.
Offer voluntary early retirement or other packages to people within a certain category, such as particular position or years of service. If this offer does not result in enough savings, it is extended to a broader pool. In an agreement between the Communication Workers of America and NYNEX, they created an eight-step process for reducing costs.
10. Alternative Placement
Offer early retirement incentives to pension-eligible employees in a specific area. If that doesn’t get sufficient response, expand the pool and so on. None of these options includes downsizing.
The organization makes arrangements with similar institutions or suppliers for placement. A variation of this occurred at AT&T: after the company said it would downsize, they ran ads letting other technology companies know that there were many talented men and women available for positions. Although they have been accused of using this as a public relations gimmick, it has resulted in a significant number of requests for more information about potential candidates.
11. Leave of Absence
People are offered a leave of absence with full benefits for a specified period of time to help organization weather a downturn. Although people are promised a job upon completion of the leave, it may not be the same job or at the same pay level. This alternative must be used as a temporary measure to help an organization through a crisis.
12. Employee Buy-Outs
Some organizations have allowed employees to buy the operation that was slated for closing and set up their own business.
13. Shared Ownership
An alternative to “wage cuts” is concessions for equity. In other words, trading pay increases or pay cuts in return for company stock. This requires a high degree of employee participation in decision making. Employee ownership seems to falter when people are owners in name only, but are shut out of the decision making process.
Downsizing means that the organization makes a decision to terminate people against their will. Although sometimes described as “getting rid of dead wood,” the sweep of downsizing is much broader. (If an organization really has so much dead wood, shouldn’t those who allowed this condition to persist be the ones to go?)
There appears to be no good way to downsize. Studies indicate that in over half the cases, it does not meet its intended goals. And many companies find that they must rehire staff within a year. Morale and productivity often plummet. Among employees who remain after downsizing, more than half report increased stress. And the risk of violent behavior of people laid off is six times that of their employed counterparts. In a study of 531 large corporations, three-quarters reported having cut payrolls. Of the 85 percent that sought higher profits, only 46 percent saw any measurable increase. 58 percent sought higher productivity, but only 34 percent saw even a slight increase. 61 percent wanted an increase in customer service but only 31 percent achieved it.
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