Key concepts for operations managers
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Over recent years, a small number of key concepts have become very significant to Operations Managers.
Four of these concepts are:
Total Quality Management
Your task is to compare and contrast each of these four concepts, clearly describing each. Your work should help the reader to understand how each interrelates to the others and how, if properly applied, they will help any organisation to be a success.
In order to understand the four concepts of customer care, kaizen, just-in-time and total quality management, there is a need to understand operations management and what this entails in the relationship between the four concepts and operations management. It is vital to the task to understand the meaning of each of the concepts in relation to operations management as well as to the business in which it is situated.
Operations management is the area of business practice which is associated with the production of goods and services. It involves the responsibility of ensuring that business operations are efficient through the use of as little resources as possible and also that the customer requirements are met in and effective and efficient manner. According to Bartol et al (1998: p. 53), operations management
Is the function, or field of expertise, that is primarily responsible for managing the production and delivery of an organisation's products and services.'
The main use of operations management is the management of the process that converts inputs into outputs. Every organisation has an operational function, because every organisation produces a good or service for its consumers. According to Slack (1999: p. 122), operations managers are
‘the staff of the organisation who have particular responsibility for managing some, or all of the resources which comprise the operations function.'
The main aim of operations management is to increase the organisation's value added activities within any given process. This organisational aim is helped along by the four concepts mentioned earlier – customer care, Kaizan, Just-in-Time and Total Quality Management (TQM). Each of these concepts are integral to the productivity of the organisation and to its overall success within the business environment.
Customer service is often referred to as customer support operations and this provides the activities which support the customer in the use of the organisation's products as well as providing the means by which the equipment is serviced. Customer care is the after sales service which is often regarded as the need to satisfy warranty requirements. According to Slack (1999: p. 30) many organisations mistakenly believe that this is relevant after a sale has been made,
‘However, customer service and support is influenced by, and should influence, earlier stages in the contact with customers and the design and production of products. This philosophy is one of a consistency of service for customers by means of a designed and built-in serviceability of products.'
The role of customer care should be an integral part of the organisation's service strategy. Customer care is driven by three factors:
It's initial purchase price
The cost of failure to customers, and
Its reliability index.
Customer care is important to any organisation and in order to gain customer approval, the organisation must concentrate on not only the quality of the product or service but also on the customer service both while the customer is in the process of buying the product but also in the aftercare period of the product.
Kaizen is the Japanese word for improvement and refers to the philosophy that focuses on continuous improvement in manufacturing and business activities. The concept of Kaizan was implemented first in Japan during the post-war economic miracle and has spread through the global business environment. Kaizan refers to the continual improvement of all the business functions of the organisation, from the manufacturing of the product to the management of the organisation, from senior management to assembly line workers. Kaizan's aim is to eliminate waste through the improvement of standardised business activities and processes. The process of Kaizan when completed correctly ensures that the workplace is humanised and sees the elimination of overly hard work, and through this process increases productivity. In order for the concept of Kaizan to work, there is the need for the participation of all of the organisation's employees from senior management to the assembly line. The key elements which are crucial to the process of Kaizan are
Involvement of all employees
Willingness to change
It is important to the concept of Kaizan that the theories of teamwork are established as well personal discipline and an improved morale from the employees as well as the establishment of quality circles and suggestions for improvement.
Just-in-Time is the modern day Western approach which has been developed from Japanese companies in the 1950's and 1960's. The primary objective of Just-in-Time is to make the time between the order of the customer and the payment of cash. Just-in-Time is the process which is the integration of philosophy and techniques which are used to improved performance. According to Slack (1999: p. 85)
‘only the customer is free to place demand when he or she wants: after that the JIT system should take over to assure the rapid and co-ordinated movement of parts throughout the system to meet that demand.'
The key philosophy behind Just-in-Time is to squeeze out waste at every junction. Waste, by definition in this context is defined by any activity which does not add value. Just-in-Time can be defined as a quest for superior performance manufacturing. Just-in-Time operations are done as and when they are needed. According to Waters (2002 p. 454)
‘In essence, just-in-time or JIT organises all operations so the occur at exactly the time they are needed. They are not done too early (which would leave products and materials hanging around until they were actually needed) and they are not done too late (which would give poor customer service).
The management philosophy of Total Quality Management (TQM), according to Slack (1999 p.224) embraces
‘all activities through which the needs and expectations of the customer and the and the community, and the objectives of the organisation are satisfied in the most efficient and cost effective way by maximising the potential of all employees in a continuing drive for improvement.'
Total Quality Management places emphasis on the planning and organisation features which are integral to the quality improvement process. There is a need for a long term approach for Total Quality Management which needs to be integrated with the other strategies such as information technology, operations and human resources, organisational business plans etc, in order for the business to compete within the environment. For the Total Quality Management process to be successful, effective use of the quality systems and procedures are imperative to the running of the system. Total Quality Management has become a particularly important development and the effects of this process are likely to remain in good organisations. This concept is the realisation that poor quality can cost the organisation in terms of cash and loss of the future market share, whereas excellent quality can offer the organisation a definite competitive advantage.
These four key concepts of operations management are essential to operations managers in determining the future of the business and are important in significance to the nature of success of the business and how it is run. All four concepts of customer care, Kaizan, Just-in-Time and Total Quality Management are all interrelated to each other through their respective processes and if these concepts are properly applied they can guarantee the success of the organisation. The concepts are all essential to the workings of the organisation and these concepts are overseen by the operations manager. The concept of customer care is seen by the operations manager as essential to the overall success in the organisation through the value which the product or service has added as well the aftercare service which is provided whether this is by technical support or through a warranty which the organisation has provided. According to Bartol et al (1998: p. 588) on the subject of managing customer contact
‘Experts argue that the degree to which a service can be efficient is directly related to the extent of the customer contact.'
This can be related to the other concepts especially with regards to wastage. The more time the employ has to manage contact with the customer, the more time they are neglecting other aspects of the operation. Contact with the customer can lead to a greater prospect of requests from the customer, changes in the instructions which had been finalised or the desire for the customer to chat can be seen as wastage. The role of the operations manager is to control this contact in a manageable and reasonable fashion so that there is no major loss to the company.
This in turn can be linked to the Just-in-Time system which controls the inventory as described by Bartol et al (1998: p. 565)
‘an approach to inventory control that emphasises having materials arrive just as they are needed in the production process.'
It is important in supply and demand as well as the value chain when adding value to the service, the product and the company that this inventory system is vital to the successful running of the organisation. This inventory system is also overseen by the operations manager and like customer care it is necessary to allow little wastage in order for the implementation of successful future planning. With the Just-in-Time system high quality is a vital necessity as the production is reliant on the materials being provided by the supplier in a timely manner. It is up to the operations manager to monitor and stay on top of this operation to allow production to be continuous.
In relation to the concept of Kaizan, it is up to the operations manager to guide their employees through the process. There is no set group through which Kaizan can be initiated, it can be through the individual, a small group or a large group. Through this concept of Kaizan, the process can generate in organisations Total Quality Management and helps free up the efforts through improvements in productivity through the organisation's employees. Total Quality Management as part of the operations management process is important in conjunction with the other three concepts. Bartol et al (1998: p. 544) defines the process as
‘A management system that is an integral part of an organisation's strategy and is aimed at continually improving product and service quality so as to achieve high levels of customer satisfaction and build strong customer loyalty.'
All four of these concepts are interrelated and cannot be separated from each other in a successful organisation.
It is important that the operations manager understand the needs for these concepts and how they affect the overall success of the business and how both customer loyalty and employee morale are important to the direction of the organisation for future planning. It is important to the role of the operations manager for these concepts to be installed in the organisational ethos and so that they are not separated and can be worked in conjunction with each of the concepts. The role of the operations manager within the organisation is to oversee the production side of the organisation and with the four concepts implemented successfully, this can place both a greater emphasis on future planning and success of the organisation as well as building customer loyalty and employee morale, therefore allowing the organisation, the customer and the employee to have an element of satisfaction.
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