Keywords: operations management, operational management
According to Collins English Dictionary (1986), an operation is defined as "an activity, method or series of serves especially of functional nature".
According to Galloway (1993) "operations management is concerned primarily with production or the change of point out of physical goods".
However, Galloway (1993) argues that "the procedures management is all about effective and successful management of any operation whether a physical good is included or not".
According to Kumar & Suresh (2009) "Operation is the fact that part of as group, which can be involved with the change of a range of inputs in to the required output (services) having the requisite quality level. Management is the procedure, which combines and changes various resources found in the procedures subsystem of the organization into value added services in a controlled manner according to the plans of the organization. The group of interrelated management activities, which get excited about developing certain products, is named as development management. If the same strategy is lengthened to services management, then the corresponding group of management activities is called as operations management".
In modern days and nights operations management is seen in very different way, it is seen as set of activities which carefully programs, organises, leads and adjustments the organisation's operation. This shows the value of the procedures management, the effective handling of the functions can prove very effective and profitable on the other hand failing to manage it in an effective way could spell disaster to the business (Karlsson & Voss, 2009).
Importance of functions management:
The common notion amongst folks was to believe that the operations management was important only in the production industry. The notion was reinforced with the fact that the processing industry were required to manage more amount of processes and operations starting from acquiring the recycleables till the products are sold and also in many cases after sales assistance was also was considered hence creating the fact that the procedures management is important to manufacturing industry (Run after & Zhang, 1998). In case of the service industry they have various amounts of process involved beginning with understanding the client needs to obtaining a responses on the service and hence at some point the service industry tells the creation industry what they want and hence to control businesses within the service industry is as important as managing the functions within the creation industry. Whenever a company offers a product or a service then that company has to be sure that the customers' needs and demands are met by any means time. This is an essential process and hence the marketing team performs a vital role in understanding what customers' want and the way to fulfil it. The marketing team gathers details from the customers' and uses it as the type for the look of products and services (Gupta & Boyd, 2008).
So any businesses management entails similar management jobs irrespective of what industry or business one operates. It entails Planning, Staffing, Controlling, Directing, Motivating and Organising. Irrespective of business, the functions management ranges over the organisation as part of proper and tactical operations (Voss et al. , 2002).
To understand the importance of operations management IKEA is used as an example.
IKEA is a Swedish company which offers ready to assemble furniture, home appliances and home accessories. With net income of 3. 202 Euros in the year 2012, IKEA is one of the primary businesses on the planet. IKEA gets the merchandise and furniture designed in Sweden nevertheless the manufacturing is performed typically in the growing countries to keep the expenses down. IKEA has suppliers from almost 50 countries. The largest of the entire supplier for the IKEA is China (Johansson, & Thelander, 2009).
The circumstance of IKEA is ideal to make clear why Functions Management is important to all or any types of business, at the development or processing section the company aims to reduce the wastages, increase output and time and resources management in order to make certain that the creation cost is low with the stores the company aims to be sure that they warehouse is utilised properly, customers are described the details last but not least the product is supplied without issues so that the shifting cost is low. Also the stores have to manage marketing and sales that involves their own process. So this reveals that there will always be set of businesses irrespective of what field a company is and at the end of the day successful companies are those which control their functions effectively and proficiently.
Objectives of Functions Management:
The operations management has two primary objectives that must achieve and in many ways it could be said that both these goals are interrelated. The aims are customer service and source utilisation.
The customer service is the key objective any company because by the end of your day regardless of all the strategy, marketing and procedures management if the client is unhappy with the product or the service then the purpose of the complete enterprise is dropped. So the businesses management makes sure that all the customers' needs and needs are met and do that the company also offers to make certain that it makes use of the resources effectively. In case the resources aren't used carefully then there are chances that the creation cost increasing and therefore the overall profit percentage will certainly reduce and the organization purpose has failed. So both goals must be fulfilled in a complementary way so that the company benefits from it.
The goals of the IKEA are to make sure that the quality is managed all the time and yet making sure that the procedures are done effectively to save lots of the resources so the company will benefit out of it.
All operations managers manage techniques:
Business dictionary defines process as "Series of interdependent and linked steps which, at every stage consume one or more resources to convert inputs into outputs".
According to Kumar & Suresh (2009) "Strategic planning is the procedure of thinking through the current mission of the business and the current environmental conditions facing it, then setting forth a guide for tomorrow's decisions and results. Strategic planning is made on fundamental principles: that current decision is based on future conditions and results".
So out of this it can be known that the tactical decision of the company are all regarded as the process and because the proper decisions are all made by the managers it could be said that operations managers deal with processes.
- Designate an activity champion: The supervisor is the foremost person because he gets the understanding of all the process and you will be capable of handling those processes effectively.
- Know the process: It is important that not only the administrator but every staff within the operations knows the details regarding the functions.
- Understand the linkages: Every process will be interconnected and hence it is important to comprehend the linkages between the operations.
- Work on the trade-offs: If the procedure is being produced from a cross-functional qualifications it is useful to discuss practical versus process trade-offs. This will allow you to make clearer decisions about what is the foremost balance.
- Teach others about the procedure: Teach others who might need to supply inputs or receive outputs about the process. Moving to management by business process is a learning chance for your company. Process owners and teams should be expected to truly have a responsibility for dispersing their learning. Some organizations would see this within the general communications process which helps understanding and allows issues to be brought up and responded from any area of the organization.
- Train within the procedure: Cross-functional customer-facing procedures require new roles, jobs, skills and skills, often sorted out around teams. There are a number of facts to consider. Training and development of new skills for folks and of the team provides with it a change in the culture of your organization.
- Measure the process: Measure for control, improvement and benchmarking, using a selection of financial and non-financial measures. Measurement is important for handling the interfaces between sub-processes and also between functions at the same level.
- Manage jobs: Jobs needs management in the new process-oriented, possibly flatter organization. Align anticipations and dreams with another kind of development emphasizing cross-skill training and the value of gaining wider business experience both within the process and in other functions.
- Build specialist experience: Within the context of the new group, take accounts of any weakening in this role where in fact the traditional functions in the business are created weaker. The process teams will most likely need a mixture of specialist skills as well as more general skills.
- Improve the process: This must be done continuously. The globe won't stand still; nor should any members of the team.
The operations director can utilize the value string research to analyse the process that goes on within the business. It can be said that the operations which exist within the worthiness chain can be viewed as as the operations. The value string is one of the main tools to understand how all the operations are related to one another and how variations in any process will lead to a big change in the entire profit margin.
In the value chain we can see that there are key activities, support activities and offer chain management and company infrastructure. Within each one of these activities rest the operations which are extremely essential. These processes are managed by people and the efficiency of the processes decides the entire result. So all the operations are being looked after by the operations managers and hence it is evident that all operations managers manage procedures.
At IKEA the inbound logistics is seen at two tips one in the production and other at stores. Outbound logistics of the processing works as the inbound to the store. Each of these processes is managed by the businesses administrator. The inbound logistics at the manufacturer is managed with a purchasing manager who have to make certain that the various quality of woods and materials are ordered and also has to make sure that constantly the suppliers are modified about the requirements. Getting the shipment, examining them for quality and quantity and returning whatever does not meet the standards are area of the purchasing manager's job. By controlling each of these processes, the director is ensuring the activity achieves the desired levels (Tarnovskaya & Chernatony, 2011).
Similarly the operations manager makes certain that the raw materials are all turned or produced into end goods which are ready to be sent in. The outbound logistics is handled by another supervisor who will get the suggestions from the stores and based on their requirements he ships the items to all or any the stores. Now the shipping and delivery must be achieved in the timely manner if not there are chances that the items will be stored in warehouse for very long time or may be delayed and customer might not show any affinity for it any longer. So time management is vital at all times (Sower et al. , 2007).
So the functions managers faces the challenges of maintaining enough time, managing procedure for acquiring recycleables, managing procedure for quality control, inventory management, outbound logistics etc.
If the operations manager doesn't exist then there are chances that the quality control doesn't exist, time is not supervised properly, inventory is not monitored etc. this will lead to chaos and by the end of the day the entire brand image will be ruined and company will have to faces un-repairable problems. The success of the business enterprise will depend on efficiency of the functions and the efficiency of the operations is determined by the way they may be being taken care of by the functions managers. The operations managers manage all the procedure and by doing so they make sure that the company is achieving all its tactical aims and aims. This makes sure that all the stakeholders are happy and look forwards to be from the company at all times (Armistead & Machin, 2007).
The processes in various operations can have different characteristics:
The biggest challenge that the IKEA could face is the management of resources. The resources are extremely important because the company has achieved such a huge reputation that the demand for products will be present. In order to fulfil each one of these demands, it is very essential that the IKEA has not simply enough resources but also must know how to manage these resources.
The techniques that happen at the making units were created so that the choice is given to ensure that the wastages are reduced and the efficiency is increased. However at the stores the process that involve must make sure that the customer needs are found even if there are chances that the things are returned back to if the clients do nothing like. In this case the preference indicates that the company is preparing to allow any loses and does not worry very much about efficiency alternatively it talks about the way the customers' needs are satisfied. This clearly signifies that processes in various operations will have different viewpoints and therefore will show off different characteristics (Armistead et al. , 2005).
According to Johnston (1999) even though the operations processes are extremely similar to each other, they all transform inputs nonetheless they differ in a few ways.
- The level of their output
- The variety of these output
- The variant in the demand because of their output
- The degree of visibility which customers have of the creation of the output
The IKEA offers a lot of furniture within the European countries and hence there will be a need to make certain that specialised machineries are designed and used to create this furniture and at the same time the health care must be studied to make sure that the wastages are reduced and the efficiency is increased at all times, in so doing it'll lead to low product costs. In the same way consider IKEA in growing market segments such as India. Here even although number of items which IKEA sell may be similar however the rate of which it sells these things will be very slower compared to those in the European countries. Hence in this situation the IKEA doesn't need to establish specialised machineries by paying high price as they know that the basic machineries will do the job for the kids. Also number of folks applied within India will be less compared to countries in Europe. So even though prices can be likened in different market, the techniques are completely different (Jayaraman & Srivastava, 2006).
Variety provided by the IKEA in the developed market segments could be more as it is positive that the customers would look for variety and will help boast the sales. Yet, in the less developed markets, IKEA can look into ensuring the budget is retained at minimum so that the profit margin reaches acceptable levels. So the standardisation will never be possible in several markets hence steps that are involved will have to be different.
Variation dimension is all about how the demand differs within two market segments, consider that in the UK the demand for a espresso table was around 2000 desks monthly and the same coffee stand demand rate in India was 500 monthly. Now consider that the demand comes by 50% in both the territories. In case of India the amount of wastages would be less even though the percentage is same however in the UK the quantities will be unsustainable and therefore when the processes are completed all the market segments cannot be seen in the same manner. Reports are sometime no use, understanding the truth will yield an improved result.
Visibility dimensions is something that'll be difficult to comprehend. Visibility refers to how much of the operation's activities the clients will experience or how much is it exposed to the customers (Pagell et al. , 2005). In case there is IKEA manufacturing, the customer vulnerability is very less and hence how the functions are treated will be importance only from the company point of view however at the store the customer is observing every move that the business makes and therefore it is important the way the procedures are done. The client will have zero tolerance and hence the challenge to manage process becomes much difficult.
All these aspects describe how processes in various operations exhibit different characteristics. Predicated on these characteristics, the decisions are made, the ideas are taken from these characteristics to create new ways to control and perform techniques.
All operations managers have similar group of responsibilities:
Operations managers perform operations and search after the procedures based on the input from the entire objectives and proper eyesight of the organisation. No process or businesses will be done without having the complete knowledge regarding the importance of it. A couple of basically two sets of responsibilities that every operation supervisor must look into. First, the functions manager has to ensure that the processes and the procedures that he is taking care of is conducted to a commendable levels and secondly by the end of these techniques and activities, it should create a avenue for the following processes and activities. If anybody of the two does not be performed then it could be said that the businesses manager hasn't fulfilled his responsibility and that may be fatal (Ruffini et al. , 2000).
Every operations manager needs to make 100's of decision every minute and therefore they would device an over-all rule to check out in the changing circumstances. These would further lead to development of the procedures strategy which would fall season in collection and derive the fundamentals from the overall strategy of the company. Every operations supervisor will have the same group of beliefs and by the end of your day they all draw inputs from the corporate technique to perform their activities and processes. In order to determine how every process and activities need to execute, the look should be produced as the way the resources are allocated and managed. By doing so the procedure because easier and a chance of errors are nullified (Dul et al. , 2010).
If it is consider that the operation administrator at IKEA abruptly quits the job, in such a scenario a new person who comes to take up that role doesn't have to decide about how precisely the processes are completed and managed. Supervisor can simply look into the aims and tactical objectives of the company and how the processes have developed their own strategy from them and predicated on that he is able to opt for it up from where in fact the other manager acquired left. This means that that not only the inter operations are similar every process can follow an identical guideline which is not hard to establish because of the common use by all the techniques (Forrester, 2006).
The belief that folks got was the proper planning by the top management was the only important role, the role of the procedures managers were neglected. As the business enterprise environment became more and more challenging, the firms began to understand the value of the operations managers. Operations professionals plays a vital role in controlling different procedures, taking the troubles, making decisions and guiding the other process to perform in the similar way. A procedure manager needs to take decisions at a fast rate and therefore to devise a technique as how these decisions are used helps the performance of the businesses managers and subsequently it can help the procedures to be chose at a faster rate and that would lead to efficiency of process and efficiency in the management of the resources. Resource management is often an important criterion and in many cases the efficiency of which the resources are managed will lead the success of the company. All these activities are very important irrespective of what business one performs or within what industry that business operates in. Functions management can be an important aspect of successful business and will continue being so in the foreseeable future as well.
For Ikea to reach your goals it must ensure that it employs proper procedures strategies at all periods of the procedures process and that is the only way that the business can add value and make the business profitable. It had been seen that the business is not ready for any surprising changes in the management, if it did happen people who take up the work will have difficult experience to understand the process and how it requires to be completed so service must be studied that it is not the case.
When working on a global scale it's important for the business to create solutions to the majority of the daily challenges if not deciding the process to handle will eventually lead to wastage of resources and wastage of your time and may postpone the procedures process. That is never good as the customers expect a global category service from the Ikea since it has always establish a higher standard all the time.
Plan of activities:
For the Ikea it is important that it offers value at every stage and hence the business must look to minimise the storage of the products in the warehouse and instead deliver the merchandise right to the stores all over. The stores are designed generally to involve some goods and products stored and therefore by maximising this consumption the warehouse expenditures drop and the business will be profitable.
Ikea must make sure that the successor for each and every director is predetermined; if it's not the case then the company must at least try to make record of the process transparent and readily available through the information systems management. By doing so any person taking up the position will not have to go through the process of determining the processes that needs to be performed, for that they need to measure the overall strategy of the company which may not be a great idea as this would be frustrating and also will waste the business's resources.
Even for the businesses management it's important the company has an accurate plan of actions, planning helps to make certain that the exact steps are determined yet others can follow the same. The Ikea manages worldwide and therefore it cannot waste time in every store trying to determine the possible group of procedures, instead company can test in one place and predicated on those results it can alter the operations in other areas as well.
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