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Effective Operations Management Benefits

1324 words (5 pages) Essay in Management

24/05/17 Management Reference this

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To increase the sales by 10 percent by the end of the quarter, reaching new customers who have not yet experienced our products and service, and to continue to be in the forefront in the market

To improve the product quality by adopting new technologies, new quality control process and implementing new quality measurement mechanisms in the production line by the end of this year (2012-2013)

To enhance customer satisfaction with the commitment to offer high quality product, improved product functionality, fair prices and improved service quality and convenience.

To increase productivity by implementing new equipment to decrease process time, reviewing and revising production line processes to decrease processing time, wait time, inspection time and move time to decrease the total manufacturing cycle time

What is Operation management?

Operations management (OM) is the business function that plans, organizes, coordinates, and controls the resources needed to produce a company’s goods and services. Operations management is a management function. It involves managing people, equipment, technology, information, and many other resources. Operations management is the central core function of every company. The role of operations management is to transform a company’s inputs into the finished goods or services.

Importance of Operations management

Vinseth Engineering is a company involved in manufacturing Zink Aluminum products; let’s examine how the operation process of the company help to achieve the objectives of the company. As we observed in the above diagram there are three stages in operation managements’ transformation process. The inputs needs for the process are technology, machinery, raw materials, human resource skills such as machine operators, supervisors, engineers, and facilities such as factory building, infrastructure and so on. Operations management is responsible for allocating all the resources needed to produce the final product. This includes designing the product; deciding what resources are needed; arranging schedules, equipment, and facilities; managing inventory; controlling quality; designing the jobs to make the product; and designing work methods. Basically, operations management is responsible for all aspects of the process of transforming inputs into outputs.

For successful operations management, it must add value during the transformation process. The term ‘value added ‘describes the net increase between the final value of a product and the value of all the inputs, the greater the value added, the more productive a business is. Vinseth engineering adds value to its products by reducing the cost of activities in the transformation process and increasing the efficiency in ways such as lean manufacturing, just in time, unique designs, state-of-the-art machinery, and customer focused service and so on. An important part of operations management is to analyze and eliminate those activities that do not add value, and re engineering the processes and jobs to achieve greater efficiency. In today’s competitive business environment the role of operations management has become the central point of efforts to increase competitiveness by improving value added and efficiency.

Explain the importance of effective quality management for the selected organization. Critically evaluate and apply any selected Deming’s two points (out of fourteen) to the selected organization. (AC 2.1, AC 2.2)

Quality definition

Today, there is no single universal definition of quality. Some people view quality as “performance to standards.”Others view it as “meeting the customer’s needs” or “satisfying the customer.” Let’s look at some of the more common definitions of quality

Conformance to specifications

How well a product or service meets the targets and tolerances determined by its designers

Fitness for use

A definition of quality that evaluates how well the product performs for its intended use

Value for price paid

Quality defined in terms of product or service usefulness for the price paid.

Support services

Quality defined in terms of the support provided after the product or service is purchased.

Psychological criteria

Quality is measured by psychological factor such as friendliness, prestige and environment you receive with the product

Importance of effective quality management

Product quality

Quality management ensures quality of product and service. Some primary aspects of our quality include; reliability and durability. Adopting quality management program, the company can deliver products and service that matches according to its stated promises.

Customer Satisfaction

Quality management ensures that the expected customer needs are met, and when the customer gets what they want customer satisfaction will increase. The quality management program provides a methodology to use to create the type of product the customer desires.

Increased Revenues

Quality products and services give the organization a great reputation in the industry. This reputation helps the firm to attract prospect customers and expand the market share. Applying quality management programs removes ineffective procedures within the system, and by removing unnecessary practices, the company can increase the employee productivity. As a result the company can manufacture more products in less time.

Reduce Waste

Waste reduction is another major advantage in quality management program, this might include methods such as lean manufacturing systems to reduce waste, and Just in time to manage the inventory avoiding the costs of the inventory management adding into the price of the product. Applying a quality management system saves the occupied inventory space which costs the company money and waste. Just in time is a systematic approach to work closely with suppliers to manage inventory at acceptable levels without incurring waste


Quality management programs force different departments to work together as a team to produce a quality product that meets and exceeds the customers’ expectations.

Applying Deming’s Philosophy

Dr. W. Edwards Deming was a statistician who introduced 14 principles of quality philosophy, His message was this: By improving quality, companies will decrease expenses as well as increase productivity and market share. These 14 points have become a standard reference for quality transformation. Let us look at implementing two of these points to improve the Quality Management in Vinseth Engineering.

Cease dependence on inspection

The general practice is to manufacture the product first, and then to inspects for defects later. By the time of the inspection the firm has already spent the time, effort and money on production. Furthermore once the supervisors identify the defect it has to sent back for re work or scrap the whole thing. Rework or repair is a lot more complicated process than it is to manufacture it right in the first place. Therefore inspections are costly and unreliable, because the company has already spent twice the time, effort and money on the product.

Inspections do not improve quality; therefore the company must look for profound knowledge of the process from start to finish. Supervisors should thoroughly understand the variations (defects) inbuilt to the process and work to eliminate those variations altogether. Implement quality into the process from start to finish. The company should adopt not only physical inspections but statistical control methods, to prove that the process is working.

Implement education and self-improvement

Engineering industry is constantly in a changing condition, as the industry is exposed to new technologies, new methods, new technical innovations and so on. Therefore to survive in such a industry employees must have a updated knowledge about the new industry trends. Management must encourage employees towards a learning culture, investing and supporting to improve the skill level of workers. In a rapidly changing environment these skills and knowledge will help the employees and company to prepare for the future changes and challenges. Therefore the management should not view investing in employee education as a cost but as an approach to build skills to increase productivity, and better able to find and achieve improvements.

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