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In this assignment we have evaluated and explained the role of operations management and operations managers in the competitiveness of the company i.e. what and how operations management contributes towards the profitability and success of the business and what the core responsibilities of operations managers comprise of, operations strategies have been discussed and some recommendation have also been made, in lined with the over all nature of business the organisation is currently operating.
The operational strategies of big and old organisations such as Caterpillar Inc are more reformed than that of new and relatively small ones, we have in this assignment work analysed the main strategies implemented and are in effect with in the organisation for a long period of time, and the ones which gradually have changed and still need to be reformed with the passage of time with regards to legal, economical, environmental, social etc changes, further to this the information has been shared here in about the threats an organisation could possibly face towards its operational strategies in lined with other opportunities, few recommendation have also been put forward which can be useful to amend some areas of operational strategies which could be worth implementing for the betterment of the organisation with regards to overall business and companies reputation in the corporate sector.
ABOUT CATERPILLAR INC
CAT is a Global enterprise, operating for more than 80 years now having hundreds of locations world wide at present. Its has now grown to be the biggest producer of Construction and Mining equipment, Diesel engines, and Natural Gas engines as well as Industrial gas Turbines.
The products of CAT are well known and reliable with the wide range to facilitate the needs of consumers in almost every part of the world on competent prices.
CAT has contributed on a vast scale towards transforming the world into a developed planet in relation not only to the construction but also in providing means of energy which can be used to enhance companies operation with the help of generators and engines to rail services, with the collaboration of NASA now CAT is working on developing a technology to make the living possible on Moon.
In service sector CAT also offers financial services since 1981 (CAT official website) to the customers all over the world to help the customers fulfil their needs when and where they arise.
Operations management is the term which is used for the activities, decisions and responsibilities of the operations managers.
Every organisation no matter big or small produce goods or services, every thing which can be used to be benefit of is produced and different resources are transformed to have the finished good. Operations management is about the way these resources are arranged in a way which benefits the end user and or internal and external customers.
The fig below is used to depict and examine the over all nature of operations management. (Pitman Publishing, Operations Management, Second edition) Page3.
GOODS AND SERVICES
INPUT, TRANSFORMED RESOURCES
"The operations function of the organisation is the arrangement of resources which is devoted to the production of its goods and services. All firms have an operations function because every organisation produces some type of goods and/or services. However, not all types of organisation will call the operations services by this name". (Pitman Publishing, Operations Management, Second edition)
"Operations managers are the staffs of the organisation who have particular responsibility for managing some, or all of the resources which comprise the operations functions. Again in some organizations the operations manager could be called by some other name. for example, he or she might be called 'fleet manager' in a distribution company, or the 'administrative manager' in a hospital, or a 'store manage' in a supermarket.
Operation management is the term which is used for the activities, decisions and responsibilities of operations managers." (Pitman Publishing, Operations Management, Second edition)
Caterpillar Inc's operations strategy is quite complex in nature as the company has been operating for past nearly 80 years, and at present the global revolution of business compelled each and every business to mould its operating behaviour according to the best of customer needs and competitor actions and market demands, due to which companies have developed their infrastructure to meet customer needs across the globe.
The products and services offered by the Cat Inc are vast and cover the large portion of the world market, in the production area where it produces construction equipment, bulldozers, generators, engine and turbines the operations are managed in a sophisticated way while keeping the competitive factors in to account, set up of performance objectives play a vital role in determining the company's operational strategy, looking after customer's needs providing vide range and reliable goods/services with in desired time and of acceptable quality for competitive prices gives a company a productive edge in the market.
organization's corporate strategy includes to be in operative in most parts of the world not only to be there to operate in a manner which other relatively small alike companies are working but in particular provide the services which no one else offers in the world, an examples of which is that in Skallingen Beach Denmark in 1944 the occupation forces placed landmines and for years no machines could handle the dangerous task of removing the mines from the area until one of the contractors using the High Tec AccuGrade equipped Cat Equipment got the job. http://www.uk.cat.com/cda/files/2096799/7/Caterpillar%202008%20Annual%20Report%20-%20electronic%20only.pdf
Such operations prove the versatility of the organisation and builds confidence in the investment market, being capable of reaching any where in the world and providing goods and services with the help of more than 100 locations world wide and 93000+ dedicated staff including a chain of operation managers in every segment of organisation who make it possible to carry out day to day tasks productive towards the corporate strategy operating in different departments taking their own decisions in lined with the business strategies and corporate strategies making it possible for the top management of the company to commit to the share holders and forecast future aspects.
The over all business depends not only on the structured framework decided by high ranked personnel (corporate decision makers) in the organisation but also the strategies on every level in the strategy hierarchy is some how depended on the trends in the market such as technological, social, economical and legal etc, as well as the day to day experiences bring demands to the operating section of the business for introducing changes to the operating manner, every level of strategy in hierarchy depends on the higher or lower level, For example the functional level will depend on the strategies of business and corporate level of the organisation, so as the business level will formulate its strategies according to functional and corporate strategy requirements and similarly there will be more or less effect on corporate strategy because of changes required in business and functional (operational ) level strategy, with in the business each function will need to consider what part it should play in contributing to the strategic and/or competitive objectives of the business.
In year 2009 the company found customized solutions for its customer's unique circumstances, the year proved to be the worst economic environment. The organizations the Cat Inc was into business with were been hit hard by the recession which resulted in profit downfall, despite all hard times faced almost through out the globe, due to a solid business model, global footprint, diverse line of products and services, and integrated services businesses all of above helped the organisation go through the recession enough smoothly that it instead of making loss in the year it maintained its share in the market and even planned ahead for the future, it climbed up to 46 percent of the company's 2009 sales and revenues. (Cat Inc) official website
Other than the long term corporate strategy and best business objective performance set up which was been introduced in 2005, each of the company's operation was required to have and specific plan that was ready to be executed in the business down turn, when the credit crunch hit the economy world wide the Cat Inc reacted in a quick and smart way of lowering its production levels and brought their costs down in lined with much lower volumes. The employees, dealers all over the dealers network of the organisation as well as suppliers in every region pulled together, every segment of the business with in the organisation the operations were tackled by the team of operation managers in a way that future plans of the corporate level should be in placed and practiced which had been formed years back to prevent loss of profit and reputation of the company.
The products and services of the company are designed to meet maximum of consumer needs and bring competitiveness for the organisation it self.
Financing: It provides customers and dealers a wide range of financing alternatives for many years, with numbers of financial offices across 4 continents.
Insurance: The company provides insurance to the customers including dealers around the world with the products and services they need to protect including new and used equipments.
Locomotive and Railcar maintenance and Repair: Company owns the subsidiary which is one of the largest providers of outsourced maintenance and repair services.
Logistics: Its one of the services which benefits the organisation it self as well as many other corporations in the market sector including automotive, industrial, consumer durables, electronics and technology.
Original equipment manufacturers solutions: To achieve product differentiation and enhance competitiveness it provides Original Equipment Manufacturers with integrated systems which are performance matched to meet specific application requirements.
Remanufacturing: Cat Reman global organisation focuses salvage capabilities which does reconditioning, refurbishing and restoring used machinery and technologies to bring life unused and unrecognised equipment and technologies.
Rental: The rental stores provide and meet customers' requirement in 1000s of locations of the world through its own equipment and also other recognised brands.
Training: Cat has designed a training programme which helps its internal and external customers in improving efficiency, jobsite safety and cut costs, the operating training programs and eLearning enable operators achieve high level of proficiency to obtain maximum value from its equipments.
All of above products and services have been developed through time, the operations of the organisation in each segment is designed keeping customer friendliness, share holders interests, employees benefits their grooming while operating with in the organisation and focusing towards their careers, environmental factors, significant growth factor of local area, contribution towards home country's economy, each and every one of above is based on company's operations strategies in practice by the Cat Inc which when get effected by any of legal, economical, social, environmental or political changes these strategies are flexible enough to be amended at all levels accordingly and play a significant role in success of the over all organisation.
As Cat Inc is based in more than 100 locations in the world the team Cat at all times keep track of new demands in the vicinity of its business locations, and work towards fulfilling needs in any location on the globe possible, the products are designed to meet customer's demands and satisfaction is of primary importance, and quality of its products and services is taken into account at all times with the help of feedbacks.
In manufacturing area of the company the operations are designed not only to produce the finished goods in form of heavy equipment for construction purposes, engines, generators, turbines etc but also the production management engages it self in providing service parts and extra production of products' parts which on frequent bases are required by the users for their product they bought or rented by the company. These practices are of competitive in nature and on such scale they are near to impossible for the rival companies to imitate. Where as thanks to Corporate strategy of Cat Inc that many areas of the organisation do benefit form its practices and services and products are designed also to serve similar companies.
RECOMMENDATIONS AND CONCLUSION
After the research on the corporation its been derived that its engaged in several products and services including construction equipment, highly advanced diesel engines, natural gas engines, financial services, advanced technologies, logistics, rentals, training programs and several other practices, it is recommended that since the Cat Inc has a huge dealers network across the globe who market and promote the products and services for the company, if production of equipments and all physical products offered by the company have more than one location which at present is United States it will be much more beneficial for the company to cut down costs in many ways, for example if the production plant with same quality standards has been set up and developed for example in china and/or India covering the Asian and far east Asian region the production cost will be saved for reason being utilising cheap labour, low cost raw material, less environments restraints, cost savings on logistics involved in delivery of equipment to its own dealer's network and other recognised brands. Their could possibly be some legal issues involved at initial stages of such a set up depending on the selected area.