The Significant Difficulties Of Operational Management Commerce Essay


Operation Management has always been one of the most significant difficulties the pertaining to the efficiency and effectiveness of any organization. Strategies to achieve operational excellence deliver significant gains in productivity, reliability and competitiveness. Taking advantage of globalization and technological innovation, organizations have access to an exceptional level of performance throughout the extended enterprise.

2.1 Purpose and objectives

This individual assignment has been prepared in order to understand and examine the process of Operations Management by covering a range of protocols within the respective topic.

2.2 Background of the assignment

Understands the process operations management;

Explores the importance of strategic operations management;

Examines the operations process of an organization; and

Analyzes how the concepts of planning and controlling are used in operations management.

2.3 Methodology

The materials and resources referenced in order to prepare this individual report includes but not limited to be books, online articles/journals and an array of internet resources.

2.4 Assignment Structure

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This individual assignment has been structured in such a way in order to understand and examine the process of operations management by covering a range of protocols within the respective topic, and therefore considering the importance and the depth of the topic of operations management this report has been divided in to four sections as discussed above in the background of the assignment. I would like to bring in to the kind attention of the reader that, this individual assignment covering a broader topic of “Operations Management” has been successfully completed after gaining a substantial understanding and gathering valuable information from the various reliable sources.

3.0 Operations Management - An Introduction

Operations management can be defined as a continuing business activity that deals with the design and management of products, processes, services and supply chains. It considers the acquiring, development, utilization and efficient use of available resources whereby an organization provides products and services to their respective customers by identifying their unlimited needs and desires.

3.1 The focus of operations management

Operations management provides an array of support from strategic to tactical and operational levels. Strategic concerns represent, determining the size and location of production facilities, the structure of telecommunications networks and services, and the design technology of the supply chains.

In fact, all other functions of an organization are there primarily in order to support the function of operations management, due to the fact that without operations, an organization will neither have products nor services provide tits respective customer segments.

Meanwhile tactical issues include plant constructions, selection of projects and equipment replacement. On the other hand the operational issues are in production planning and control, inventory control management, quality control and inspection, logistics and supply chains and equipment maintenance policies.

3.2 Importance of operations management

The importance of operations management has increased exponentially in recent years. Strong overseas competition, shorter product and service life cycles and better-trained and attentive to the quality and capacity of new technologies have put an enormous pressure on operations function that works to improve productivity and create a wider range of products and services with highest possible qualities. With the globalization of markets, organizations have recognized that the function of operations management can be used to strengthen their market position. Therefore considering the importance of operations management, it is very much evident that operations managers are the leaders who play strategic and tactical role in not only making the organizations globally competitive, but also they ensure that the needs and wants of the respective clients and meet.

3.3 Responsibilities of operations managers

Out of all the business functions, operations management is the most diverse in terms of tasks to perform. Operation managers perform a variety of functions which are respectively analysis of production problems, development of forecasts, schedules employee plans for new products, measuring quality, inventory control.

The role of an operations manager can be classified into 3 responsibilities which are process design, work planning and implementation. In order to do these entire tasks the operations manager breaks down the total task into subsystems to be able to control the whole, this would be the transformation process, which involves taking inputs and converting them into outputs. Moreover operations managers should be concerned with both the technology of the transformation process and the methodology of managing the process.

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In every organization the operations manager should be able to make the right decision at the right time. On the other hand an operations manager needs not to understand the technology itself as the level of technology involved and, more importantly the business trade-offs that can be delivered by the technology in use or being purposed. The task of the operations manager can’t be emphasized enough, it is extremely critical to the function of the organization that they clearly understand the overall objectives of the organization which are usually related to quality, speed, dependability, flexibility and cost.

3.4 Linkage with other business functions

Today most organizations rely upon three critical functions, respectively, operations, marketing and finance. Although these functions relate to different activities, which must interact to achieve the corporate goals and objectives of the organization, it is important to know that the strategic direction developed at the highest level of the organization. Many of the decisions taken by the managers of the operations depend on information from other functions. At the same time, other functions cannot be done properly without the operational information. The following diagram illustrates the information flow between operations and various other business functions in an organization.

3.5 Key environmental factors affecting operations management

Considering the key environmental factors affecting operations management, there is a rapidly growing emphasis on the need to reduce waste, recycle and reuse parts of sand produced. Therefore it is clearly evident that the pressure groups and various government and non-governmental organizations are putting an enormous pressure on organizations to focus on air and water quality, waste disposal, global warming and other environmental issues. Operations management plays a vital role in the redefining of processes and products to exceed and meet the environmental quality standards commonly known as ISO 14000, which provides guidelines and a certification program that demonstrates environmentally friendly actions of the organization.

4.0 Strategic Operations Management

In today's competitive environment which is unstable, the company needed a strategy that determines the type of competitive advantage in which the marketplace wants, and articulates how that advantage is to be achieved. Strategic operations management refers to the core competencies, technologies and resources used in a system in order to create specific product or service. The strategic role involves blending these various functions and operational requirements of one or more unique organizational specific, strategic architectures.

Adapted from Brown (1996)

One important task of leading shares must develop a strategy is that these leaders are aware of competitive factors and the result may introduce competition in the ability to cope with such requirements. In addition, it should be noted that all options will depend largely on controlling operations in a strategic manner. Forming an operating strategy, links, and is part of the overall business strategy may also be a decisive factor in bringing the organization. According to Brown (1996), the linkage between competitive factors and operations capabilities is illustrated in the above diagram.

4.1 Strategic operations management as a transformation process

All businesses, whatever their size, can be considered as transformation system that converts inputs in to outputs. The way that businesses create products and services is known as the transformation process. The ultimate objective of the transformation process is to create goods and services that meet the needs and wants of customers. These inputs typically are resources such as materials, equipments, labour; on the other hand the outputs could be goods and services. By selling these outputs to its customers the business hopes to collect sufficient revenue to, at the very least, buy enough resources to continue in their respective business.

The above pictorial diagram illustrates the transformation process in general. For example at a factory the transformation is the physical change of raw materials into products, such as transforming leather and rubber into shoes, tires, denim into jeans, or plastic into toys. At a hospital it is organizing resources such as doctors, medical procedures, and medications to transform sick people into healthy ones.

4.2 Importance of strategic operations management

Operations strategy can be very important in achieving organizational goals and to gain a competitive advantage in at least two ways. Firstly, it may be crucial for the implementation of an existing business strategy. Second, the strategy of operations used in a more proactive approach. Here, operational capabilities are considered part of basic skills and abilities that can be exploited and used to create new opportunities and target new areas.

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Operations management is the strategic importance to an organization. This is due to the fact that the aspirations of all modern organizations is to excel in one of the following, respectively, mass customization, lean manufacturing, agile manufacturing, and customer-centric supply depends on the organizational capacity to achieve these things, and these capabilities reside in the operations.

4.3 Content and process of operational strategy

Operational strategy of an organization focuses on long-term issues about how to manage resources in order to transform them into products and services. The issue of operations management mostly focuses on the design, planning and control, and enhance the resources those produce goods and services. The content of operations strategy focuses on particular decisions that shape and develop long-term orientation of the operation, whereas the process of operations strategy refers to the procedures used to formulate business strategies.

4.4 Developing a winning operational strategy

Good business strategies conspires an organization towards its vision. A successful and winning operational strategy can transform the vision in to a sense of operational reality, creating a strategic competitive advantage in the process. Operational strategy, finds new methods to structure an organizational operation and the economy to create better results, top-line growth, earnings and valuation as a competitive advantage. Therefore it is very much evident that when developing an innovative operational strategy an organization must consider the following four critical ingredients:

Global Insight Market - examine the global market forces to determine if the force can be used to stimulate operational innovation.

Intense focus towards competitiveness - helping companies identifies their main base competition, privacy, leadership, and product cost management, or customer.

Clear towards innovation - in collaboration with senior management to determine how to use innovation to maintain a competitive strategy, whether through product innovation, operational innovation, or both.

At the end of the end of thought - the configuration of the three core areas of operational strategy, which are, respectively, the chain of development, supply chain and customer chain - to achieve competitive advantage.

5.0 The Operations Process

Most authorities now recognize that in many organizations, the importance of design has been grossly underestimated for many years. Good design makes the products and services more attractive. The design process is the method by which an organization understands and defines the activities of cooperation to ensure its operation.

The design process is concerned with the concept of operations to ensure that designs are optimized to effectively meet customer needs, support and sustain organizational development and growth. A well-designed business process is expected to increase efficiency and improve productivity in the meantime; an inefficient process leads to poor communication, duplication, and technical barriers, delays, unnecessary costs, and finally production in whole or in part does not reach its designated target.

5.1 Factors affecting process design

Managers need to examine the dynamics such as nature of demand, the degree of vertical integration, flexibility, degree of automation and quality and degree of contact with customers while making the design process. The nature of the application revolves around the organizations that produce products or services based on customer needs and preferences.

Such operations managers must plan their production levels to meet projected future demand. Methods of assessing future demand should take into account factors such as seasonality, growth trends and demand that affect levels of future demand. It is clear that creative and interactive design of new products or services cannot succeed without including the ability to solve problems for producers. Therefore designers must work with producers to achieve a successful introduction of a new product or service.

5.2 Choosing the appropriate layout:

In the process design activity in operation management, has one of the most important core element is which is the layout. Layout is influenced by process type and it is the volume-variety characteristics of operation which dictate its process type. One of the main considerations in laying out work-areas is the ease in the flow of work. The flow of work may take place through the movement of material. Layout design process considers mostly a single objective while designing layouts. There are four basic layout types to be found in manufacturing and service settings, which are as follows with their respectively objectives :

Process Layout - the objective is to minimize the total cost of materials handling.

Product Layout - the cost of materials handling will be at absolute minimum. But the cost of equipments would not be at the minimum if the equipments are not fully utilized.

Cell Layout - the objective is to minimize the sum of the cost of transportation and the cost of equipment.

Layout by Fixed Position - in which the physical characteristics of the product dictate as to which type of machines and men are to be brought to the product.

The above mentioned layouts can affect the quality. If materials or information or customers are continually moving from one part of the operation to another, there are many points which could be occur damages. But often, they are introduced into the process after making a design originally proposed. This suggests the provision was amended to ensure full compliance with safety. Therefore it is clearly evident that these matters should be cautiously considered when choosing the appropriate layout in the operations management.

6.0 Planning and Control in Operations Management

Once and organization has made decisions on product design and production processes and systems, its next task take steps towards operations planning and control, because this feature is especially necessary to efficient and economical production. Operations planning and control typically involve the organization and its planning processes which consists mainly of route planning, scheduling, allocation, coordination and control of materials, machines, methods, tools and operating time. The ultimate goal is to organize the supply and movement of raw materials and labor, the use of machinery and related activities to achieve expected results in terms of build quality, quantity, time and place.

6.1 Capacity planning and control approach

Capacity planning is largely focused on the efficient and effective use of these inputs for conversion. In terms of operations management at the operational level, this is referred as capacity planning. To separate processes within and operation the management's ability to function includes activities such as production control, load or schedule of activities. Capacity planning has seen increased attention since the economic benefits of efficient use of capacity for additional funding for material requirements planning and other information systems. Insufficient capacity can quickly lead to deterioration in delivery performance, unnecessarily increase load of work-in-process, and were frustrated by the vendors and industry.

In other words, capacity planning is the process used to determine how much capacity is needed and when to produce more or to begin production of a new product. For example in car manufacturing company such as Toyota, several factors can affect the ability of many workers capacity of workers, the number of machines, wastage, scrap, product defects, errors and omissions, productivity, regulation of government suppliers, and preventive maintenance. Capacity planning is relevant to both long term and short term. But there are different challenges for each. Therefore it is very much evident that in the case of Toyota, the control must start with identification of customer quality requirements and end only when the product has been placed in the hands of a customer who remains satisfied.

6.2 Inventory management and control

Many Small Medium Enterprises (SME's) consider "inventory" as their biggest asset on the financial balance sheet. But without careful planning, inventory can easily be out of control, resulting in heavy discounts because of overstocks, and finally causing serious liquidity problems to the organization. Inventory management and inventory control must be designed to meet market demands and supply and support the company's strategic plan. Due to the fluctuations in market demand, new opportunities due to worldwide marketing, global sourcing of materials and manufacturing technology in new ways, many organizations must change their approach towards inventory management and change control process inventory.

Although many changes have been adapted by organizations, the basic principles of inventory management and inventory control remain the same. Some of the new approaches and techniques towards inventory management and control such as Material Requirements Planning (MRP), Just-in-Time (JIT), hybrid systems, and concepts of vertical and horizontal integration are wrapped in new terminology, but the implementation of the principles of good inventory management and warehouse Activities have not changed.

6.3 Project quality management and quality control

Quality can be defined as meeting or exceeding customer expectations make a delivery and activities to produce these results, whereas project management could be defined as a set of activities planned at the beginning of the project achieves the quality of the project. The Project Quality Plan is to define these activities and tasks that intends to deliver products while focusing on quality achievement expectations. These activities or tasks are defined on the basis of quality standards of the organization to deliver the product.

Project quality management plan in prepared to identify which quality standards are relevant to the project and decide how they can be met. It includes the implementation of quality events, using a variety of high quality materials such as models, standards, checklists which are available to an organization which is known as quality control. Since the release of various functions of quality indicators or measurements are saved to improve the quality of the experience by adding a report. Quality Assurance is concerned with the preparation of quality plan and the formation of an organization-wide standard.

7.0 Conclusion

I would like wrap-up this report which is purposefully prepared to in order to understand and examine the process of operations management by covering a range of protocols within the respective topic. It is very much evident that this report has undoubtedly examined the importance of concept of operations management; followed by an in-depth analysis that explores the various functions and key areas of operations management in order to bring a clear understanding about the critical operations functions.

To my utmost level of confidence, I want to mention here that, I strongly feel that the reader would be able grasp the importance of operations management after reading this assignment which is prepared after gaining a substantial understanding from the various reliable sources.

Last but not the least I wish to convey my heartfelt gratitude towards my lecturer, my parents, my colleagues and all other well wishers who immensely supported me throughout my studies in order to successfully complete this assignment.