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Every organization has product or services and in some cases organizations are providing both products and services to the customers. The purpose of this study or topic is that to understand and know how Operation Management work in an organization and what is the importance of the Operation Management in the organization. Operation Management makes the organizations more successful and helps them in achieving their goals in efficient ways. OM makes the working process fast and accurate and increase the productivity.
In this topic I discuss how it work in organizations and how in effect on human, company production process, inventory management, equipment, materials and its key role in the organization
Strategic Management and Operation Management
Before starting my discussion, I want to explain the Strategic Management and Operation Management. How they work in an organization and what is the role of the both in any organization. But my main focus is on Operation Management, its role, importance and functioning in any organization. Let's start from the Strategic Management.
What is Strategic Management?
Strategic Management is the process of company under which all working and targets are achieved. I want to add this definition on Strategic Management by Robert Lamb:
"Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment." (Lamb, 1984)
What is Operation Management:
Operation Management is the process through which we can operate the things systematically and manage the work efficiently and effectively. We also apply the operation management in our daily life routine in this prospect Slack et al define the Operation management in this way:
"Operations management is about the way organizations produce goods and services. Everything you wear, eat, sit on, use, read or knock about on the sports field comes to you courtesy of the operations managers who organized its production. Every book you borrow from the library, every treatment you receive at the hospital, every service you expect in the shops and every lecture you attend at university - all have been produced."
According to the U.S. Department of Education
Operation Management is concerned with managing and directing the physical and/or technical functions of an organization, particularly those relating to the development, production and manufacturing. [Operation Management programs typically] includes instruction in principles of general management, manufacturing and production systems, plant management, equipment maintenance management, production control, industrial labor relations and skilled trades supervision, strategic manufacturing policy, systems analysis, productivity analysis and cost control, and materials planning. Ies National Centre for education Statistic. 52.0205 (1990 Crosswalk). 52.0205 (1990 Crosswalk)
Relationship between Operation Management and Strategic Management
As described above in the definitions about the operation management and strategic management, how they work in organizations. Strategic management is the ongoing operation process that how we tackle with our working process, our competitors and our future strategies what are the goals and how we achieve them.
While Operation Management the process how all these things can be achieved, how we handle them, how much production we need for competition, how much efficiency and progress we can achieve. Operation Management breaks down the strategies and work efficiently and effectively.
Business Strategic Management and Operation Management are relate to each other and work together or combine. Strategic Management tells us our strategies and goals while Operation Management tells us how we perform it for more success in detail.
I describe the role of both in any business in the following headings.
Role of Strategic Management in Business:
i. Strategic Management has an important role in any organization, because the organizations are not successful and can't gain their objective without their proper strategies and strategic management.
ii. The role of Strategic management in any organization is that it involves in achieving balance between requirements of different functions and units and departments working in the organizations.
iii. Strategic Management in business is also involves balancing risks in short and long term of company projects and goals and objectives.
iv. Due to these considerations strategic management in any business determines the long term objectives to be pursued by the organization and identifies the ways and means of achieving the objectives.
v. Strategic Management also play the important role in organizational structural development, if the companies want to grow then they need the proper strategies and improved strategic management process.
vi. A good Strategic Management process in business also helps to articulate, communicate and monitor the implementation of strategy using a system interlinked with the long-term vision of the business.
vii. There's an old saying that if you fail to plan, you are planning to fail. The strategic management actually gives the direction to business and the sense of identity and unity towards what the business goal is and what to do.
Due to all these aspects I want to say that if we want the success in business then we need to develop good strategies and competitive strategic management plan. There is no doubt that without proper planning and strategies we can't get success. The role of Strategic Management in organizations is very important.
Role of Operation Management in Business:
Like Strategic Management Operation Management is also very important for the business success and its progress in fast way. The following points show the role of operation management importance and role in business/companies.
i. If a company operation management process is not up to-dated then there are a lot of efficiency and effectiveness drawback in the company working process and remain behind from others companies and competitors.
ii. Operation Management in the business/organizations deals with planning, organizing, controlling, directing, motivating and coordinating all the activities of an operation system.
iii. Operation Management play the role for timely and properly implementation of operations and effective management of resources, which are using by the organization in production, company operations and external activities.
iv. In the past companies don't take it seriously and used it as optional part of the company, but now the condition is totally different and it's become the mandatory part of the company operations and working. A proper operation management strategy makes the working easy and also brings efficiency.
v. Operation Management in the organizations brings accuracy and also increases the production.
vi. Operation Management one important role in business is that it used in the breakdown of process and man power and allocation of work to every employee and increase the working power.
vii. The importance of operation management increased in recent years. Because the foreign competition, service life-cycle, better educated and quality conscious consumers, and the capabilities of new technology increased the pressure on the operation process of any organization to improve productivity, high quality of product and also good services demanded by customers. All these things are become possible due to good and better operational strategies.
All these points show the importance of operation management importance and its role in the organization in the coming years.
Key element of Operation Management for business success:
After discussing the above all topic its came to know, that Operation Management is the important part of the business and its success. Now there is need to identify the key element of the Operation Management and how they configured to deliver the value in organizations.
In the case study which show that company don't have a good operation management process and strategies. But what happened with the company when he launches the new system in the company, the results automatically came out working efficiency increase, customers satisfaction increased and allocate the more work to the employees on the other side of the company, revenue generation of the company increased. These are the effects which came out after launching the new system. Now I explain the other key elements which affect the company and its working in the organizations.
There are the many key elements of the Operation Management for the business success, but I want to discuss the following elements.
Allocating Resources to Strategic alternatives
Facility Location and Layout
An organization that wants to succeed in a competitive business environment needs the strategy. The strategies are design at three levels in organizations: corporate Level, Business Level and third one is at Operational level. Operation strategies are design for the operating structure that influence on the goods, services and production. In operation strategy there is need to do forecasting. Forecasting is doing in business for estimating and predicting the future demand for products and services and also for the resources needed to produce the products and services. In operation strategy a good and accurate forecast is very important for survival and business success.
Allocating Resources to Strategic alternatives:
In business success and one key element of the operation management is the allocation of resources. It's really an important part of business success and its future because if an organization do it in well and organized manner then he can save a lot of money and its resources from wasting.
In business the availability of several resources of production system like materials and supplies, machinery and equipments, manpower and expertise, cash and capital and utilities are limited. So Operation Management in the whole process help the organizations how to handle it carefully so it's an important part of the operations and its strategies development.
Because of good operation management a company remains up to date and be aware of the market. Because of good operation management a company production process are designed to produce the required quantity and quality of good, at right time and at minimal cost and it's also liked with the previous process allocation of resources. A good allocation of resources is result of good production process.
Facility Location and Layout:
After production location facilities and layout are also big factors in business, location decision are the strategic decision that requires large financial investments and they are irreversible in nature. There are many factors involve in this process like market factors, cost factors and qualitative factors all are effect by location choice.
The physical disposition of the product, the location, size and focus of operational resources are focused. These decisions are concerned with where to locate production facilities, how large each facility should be what goods and services should be produces at locations.
Inventory control is one of the important and compulsory parts of the business which make the business successful. Inventory refers to the materials that possess economic value and the product and material stored in the organization for future use and available stock. A good inventory system save you from the lost and theft of the products and generate a complete record of each product of the company. The inventory system tells how much stock remains and how much used what is expiry date when material comes in the organization. An inventory system is the input and output of the company production process.
Quality Management is one of the key elements of the business, because now every customer is aware and wants the quality. If a company not giving the good quality in the form of product and services then it can't gain its targets and profit. For this purpose Total Quality Management is one of the best element in operation management because it seeks the whole process of the production, it's going according to the plan or not. A good quality is the competitive advantage on the competitors.
In completing this section take help from the following sources:
ICMR, Centre for Management Research
Area of Improvements in OM for Business Success
For copping the new challenges and targets and to compete the competitors there is still need of the system improvement. There are many areas which a company needs to make them up to date. Like they need to do
Enhance their value added services for customers and for competition with their competitors. They must customer oriented and listen their customer's voice, what they want.
Information technology brings new innovation day by day and improving. There is needed to remain up to date according to present time by making efficient use of technology. Now internet technology is very big source for information and for product publicity and need to use all these technology.
Just in time process is based on the ideas of continuous improvement of an organization's production system. JIT system includes consistent production rate, small lot sizes, high product quality, multi skilled workforce, continuous improvement and effective maintenance in work method.
Managing global suppliers and supply chain management is also compulsory part of the organization improvement and it efficient working? A supply chain consists of suppliers, manufacturers, distributors and retailer who are working for the company. If the supply chain system is not effective then a company can't manage its whole process and those factors which are coming in the whole process. Therefore it's compulsory the supply chain system must be updated and need continuous improvement.
Study the following material and then describe the Area of Improvement:
ICMR, Centre for Management Research
Production and Operation Management, MGT613
Virtual University of Pakistan
Human Management Issues Relevant to Operation Management:
Human management issues relevant to Operation Management are guided taken from the Project: Incorporating Human Aspects in Operations Management Models, 02/2007 - 02/2010 from the website: http://www.narcis.info/research/RecordID/OND1324728/Language/en/;jsessionid=tpym9269fdp
In this article the writer describe that the human aspects in OM ignored for long time by operation management decision making process and also neglecting the human welfare objectives. In Operation Management inventory management and production is very important factor for production and business success, in warehouse and production environment workers play a key role in performance. Although there is issue with human and also drawback in production system that is bounded rationality, limited reliability, fatigue. If human is replace by machines, in this case human remain the integral part of the production system.
When new technologies are introduced in the operations and production then human issues arises and then there is need of new work force or trained persons who know the new technology. On the other hand if the machines are automated then the unemployment issues arise.
After discussing the whole topic I conclude that the Operation Management in any organization performs the key role and its importance is increasing day by day. Operation Management give the competitive edge to the organization on its competitors and also very important for customers satisfaction. It increase the company efficiency and also increase the capital and save the capital.
Lamb, Robert, BoydenÂ Competitive strategic management, Englewood Cliffs, NJ: Prentice-Hall, 1984
Slack et al (1995)Â Operations Management, Pitman Publishing: London.
Operation Excellence Case
Ies National Centre for education Statistic., 52.0205 (1990 Crosswalk). Available at:
ICMR, Centre for Management Research
Production and Operation Management, MGT613
Virtual University of Pakistan