A contemporary organization strives to excel in lean production, customer centric provision, flexible manufacturing and large customization among others. The capability to attain these qualities aids organizations sustain their operations. Operation management is about transforming ideas into products and planning as well as controlling all structures and the systems that generate services and goods. Customers need products that can meet their needs and ensure they get value for money. Such products are supposed to be affordable, dependable, exclusive and standardized. Effective operations management has the capability of adding value to its venture by increasing productivity, costs minimization and development of quality products. Operations management ought to know the kind of customers they deal with in order to prioritize their needs. The purpose of this study is to analyze and discuss importance of operations management industries.
Importance of Operations Management to Industry
All the business organizations place emphasis on how to flourish and survive in future. How an organization is able to manage its resources is what determines how it related to its external environment and the ability it has to meet the needs of stakeholders. Operations management is crucial in an industry since it helps in administration of industry resources. It is a vital part of the industry’s strategy. Operations management is of great importance since it exercises an approach that is systematic to production of goods. For example, a manufacturer of an electrical bulb processes raw material though use of productive resources, however, the results are bulbs of different ratings (Mahadevan 4). As such, operation management offers an approach that is systematic in transformation of raw materials into quality products and generation of revenue.
Operations management is important in reduction of production costs. Whenever an industry produces a variety of products in large scale and uses the latest technology, the costs of production decline as a result of economies of scale. MTR Foods is one of the fastest growing companies in India dealing with food processing with a market turnover of US$ 20million (Mahadevan 3). The growth is the result of technological ability and the quality of its products. MTR deals in production of various products familiar to both domestic and the foreign customers. Most of these are ready-to-eat products that attract a large number of customers. Additionally, the manufacturing facility of MTR Foods is located at environs of Bangalore, where labor is guaranteed to be cheap.
Efficient operations management thus is fundamental in helping an industry improve its revenue earnings. This is achieved through production of quality products and increase in customer satisfaction. Operations must be flexible to adapt to changes required by customers. Industrial products are tangible and once made, it is difficult to change the products. As such, quality management is an aspect that is crucial in an industry. Perception of products plays a crucial role in the mind of customers regarding the quality of the company’s products.
The amount an industry invests in production of goods can easily be reduced through operations management. Operations management aims at reduction of costs and acquiring higher revenues through controlling and cautious operations. Lean manufacturing strategy is what helped Toyota Company eradicate unnecessary resources that were not adding value to its products. Operations management inspires innovations in utilization of industry resources and identification of non-value added resources. Technological changes have permitted industries to streamline processes, as well as improve on supply chain collaboration.
Majority of multinational corporations have enjoyed success in the global arena as a result of efficient operation managements. Toyota Company has achieved remarkable success for years as a result of its aggressive marketing and production of what customers in western countries’ want (Brown, Bessant and Lammings 31). Affordability, design, reliability and durability make customers across the globe refer Toyota cars to others from western nations. Spare parts are readily available as well making maintenance of Japanese automobiles easier. Toyota Company has been capable of value chain creation in its products as a result of its efficient operations management.
Operations management creates basis of innovation by establishing a foundation for knowledge and operations in the industry. Success of the iPod, Apple’s product was the result of its sleek design, which had the capability to hold a lot when compared to other devices of a similar size with the iPod yet they could not contain as many songs (Boyer and Verma 10). This benefit, together with marketing perspective, gave iPod benefit in unlimited market and pricing. Apple Company as well gained the foundation by helping the company introduce more versions, as such, gaining competitive edge in the industry.
In operations management, the constraints theory is equally fundamental since it helps the operations manager recognize imperceptible constraints that might hinder the industry from attaining its preferred goals. As such, operations management services on such constraints though it strategies on how they can be minimized. Constraints can either be external or internal. The operations manager needs to be in a position to always recognize issues offering much constraint to a firm and handling them first.
Any industry that has long-term goals uses its forecasting techniques to establish probable future operations. Operations management therefore is accountable for preparation regarding the industry’s future. Forecasting helps operations managers to formulate ideal plans and get rid of uncertainty in future. The need for balancing supply with demand is what necessitates the industry to forecast the market. For example, Toyota needs to exercise time series in order to forecast the trend in demand of SUVs as well as what will take place in a span of 3 years’ time. This will help in making an investment that can meet that demand. Additionally, it gives the operations manager enough time to carry out research as well as employ innovative techniques in the manufacture process.
Industrial products are fundamentally classified in two categories: necessities and luxuries. Necessities refers to products perceived as extremely essential while luxuries are products individuals can live without. Making products perceived as necessities and delivering them into the market is critical, since customers continue to purchase the items though there might be a shortage. Operations management therefore ensues necessities are available in the market always, at the right price and to the right customers. Luxury products necessitate operations management to be innovative, as such products keep losing fashion once they flood the market.
Every industry endeavors to distribute its products to a target market. This only happens when the industry is able to acquire raw materials, place them into processing plant and then, pack them as finished products. Production of goods in industries involves the transformation of inputs into finished products. The operations management has the responsibility to maintain a supply chain via high levels of shared working procedures and norms so as to increase operational fit between the industries (Brown, Bessant & Lamming 104). When H-P entered the PC market, it served as a manufacturer. Later, it opted to make a shift from manufacturing to assembling. The shift prompted the company to become rigorous in supply relations through its entire supply chain. Additionally, H-P merged with Compaq, its competitor in 2001 so as to consolidate its supply chain, leading to its success (107). Operations management is vital in placing an industry into a strategic position so it can sustain its competitiveness. Operations managers as well research on the products of the company and make a decision on what it should offer customers without disrupting the operations of the company. Samsung Electronics, in order to save its display business from being unprofitable in the future, made the decision to incorporate the flat-panel display venture to its semiconductor business (Ramstad and Lee). The aim of the merger was to hide the dwindling unit in the robust performing chip operation and also offer competition to other products by Samsung.
In economic terms, industries use operations management for purposes of analyzing explicit aspects of processing to the point where they can add value as well as place competitive cost. The industry, equally has to earn profits in order to satisfy shareholders. Transformation of the raw materials into finished products involves the addition of value, reflected in the course of pricing. Operations management takes into consideration all processes that are part of transformation, which includes innovation, research, packing, transport, mixing and packaging. For example, wheat is transported into a factory using trucks. It is grinded into flour, mixed into dough then baked into bread inside the factory. Breads are packed and packaged, to be distributed to customers. Operations management takes part in fixing a price in the value chain. Prices as well are set to a point where the customers can afford the products as well as compete with other firms.
Most industries face an increased demand for pertinent activities aimed at conservation of the environment. Customers, legislators and advocacy groups push industries to implement environmental conservation strategies, covering pollution, management of waste, re-manufacturing and recycling. The practice is one aligned to quality management, integrated in the process of transformation. A firm that is able to take into consideration environmental issues in order to create value for its products, as such, raisin expectation of shareholders. Environmental responsibility is a fundamental aspect of operations management. Firms train their employees on issues of the environment while embracing environmental technology so as to improve production. Operations management therefore benefits environmental management via cost reduction and customer satisfaction.
It is very important for an industry to conform to legal standards in the course of its operations. Conforming to such standards helps the industry to operate and safeguard its facility as well as minimize legal liability. Operations managements helps keep in check changes that might occur in standards in order to advise the industry on the changes that need to be implemented. To ensure production efficiency, operations management needs to allow standard activities to begin early in the course of the processing life cycle so as to meet legal codes.
Operations management as well covers people. Ergonomics involves study of workers in an industry with the purpose of minimizing stress and reducing injuries while working. The ergonomics process is established by risk reduction strategies and the approach means all factors contributing to workers injury or illness need to be addressed and identified promptly (Smith 49). Ergonomics is necessary for purposes of checking the performance of a business. Several ergonomics risk factors can be easily recognized and the operations manager offers a solution to work through the team. Toyota Company plant in Georgetown, Ky., US experienced a change in design of its models which resulted to ergonomic inefficiencies and risks, especially with rear spoiler installation (52). The operations management of the company commissioned an external consulting firm to carry out an assessment of ergonomics risk. The consulting firm recommended that the company should design hand tools which could be used to harness wire installation. The tools that were newly designed allowed the mechanics to work on the trunk from outside eliminating waste motions and ergonomic risk while saving time.
Is Operations Management Rated sane to finance, Human Resources, R&D or Marketing?
Operations management achievements are related closely to human resources, finances, marketing and development as well as research. Operations managements works to reduce the costs of a firm and offers competition to other firms. As such, operating managers need to check on the finances of the firm in order to attain these goals. They make decision of the number of employees needed to carry out packaging and processing. Depending on an industry, operations management is important in the management of human resources and materials to attain the desired objectives.
Operations management undertakes research and development (R&D) in order to establish whether the products of the firm meet changing demands of customers and sustain the firm in the market. The operations manager is also fully responsible for determination of how much will be spent on research and marketing. An industry should not manufacture products if it does not understand its target market. Hence, it must plan on how it can reach its customers and increase sales.
Operation management is essential, as it assists in the management of an organizations resources. It offers the key to achieve competitive advantage for an industry by offering quality, affordable and reliable products in the market. Customers as well look forward for products incorporating technology and offering value for money. Operations management is mandated with making sure the production costs are kept low and that the expectations of shareholders are met. Industries manufacture different kinds of products in accordance to their target customers. The industry strives to make adjustments to meet the needs of customers through research and innovations. A successful firm needs to invest on environmental conservation activities, as customers are attracted to products that meet high environmental standards. Operations management needs to invest in product designing as well to attract more customers so they can buy the firm’s products.
Boyer, Kenneth K, and Rohit Verma. Operations & Supply Chain Management for the 21st Century. Mason, Ohio: South-Western/Cengage Learning, 2010. Print.
Brown, Steve, J R. Bessant, and Richard Lamming. Strategic Operations Management. , 2013. Print.
Mahadevan, B. Operations Management: Theory and Practice. Upper Saddle River: Pearson, 2010. Print.
Ramstad, Evan and Jung-Al Lee. Samsung Combines Component Operations. The Wall Street Journal, July 2, 2011. Web. 6 March 2014. online.wsj.com/news/articles/SB10001424052702304584004576418732760372012
Smith, Scott. “Elements of Effective Ergonomics.” Industrial Engineer: IE 35.2 (2003): 49-52. Business Source Complete. Web. 6 Mar. 2014.