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In any organization, effective operational management is essential. Operations management, which entails producing and providing goods and services to clients, is what keeps the business operating, claim Slack, Brandon-Jones, and Robert Johnston (2013, p. 3). According to Anil and Suresh (2008, p. 2), managing a firm's operations requires a dedicated person or a team to guarantee that everything runs smoothly and effectively. This demonstrates the significance of an operations manager in a business. Therefore, it is essential for a business to employ qualified staff to guarantee a good operational system. However, as Drake and Spinler (2013, p. 690) note that new operations manager need to understand that the operations management roles are not simple since it is faced with numerous challenges. The main objective of this report is to identify the challenges faced by a new operations manager. However, this report also includes other aspects such as 1) The different approaches and framework that can be used and, 2) The possible solutions to manage the challenges.
The process of completing this report consists of two parts. First, research and reading are done on the basic understanding of the terms involved and used in this paper. Secondly, in order to support the information used in this paper, secondary data are used. It is mainly from journals, e-books and newspaper from several different databases such as Science Direct and Emerald Insight and ProQuest Journals.
Job Advertisement from Amazon
Amazon is considered one of the largest online retailers in the world. It is founded by Jeff Bezos in July 5, 1994 based on Seattle, Washington. An advertisement on the operations manager position has been posted by Amazon on March 3, 2017 in an employment related search engine. The position offered is based in United Kingdom. There are a few responsibilities for this role as it is a critical position for the company. It is specifically mentioned in the job adverts that the operations manager is required to manage control and direct a team of Area Managers. Also, operations manager is responsible to lead some improvement projects (Amazonjobs, 2017). Specifically, the operation manager is required to:
Role: Operations Manager
Maintain a positive safety culture
Act as a leader to a large team and provide support and motivation
Handling large processes and activities
Able to multitask on multiple work procedures
Perform data collecting processes on the fixed time basis
Work closely with other departments and support teams
Amply several tools and techniques to improve performance
Amply continuous process improvement techniques
Table 1: Responsibilities of an operation manager in Amazon
Table 1 shows the responsibilities of an operations manager that are mentioned in the job advert posted by Amazon. As mentioned in table 1, the main prioritized responsibility of an operations manager is to maintain a positive safety culture on the site. As Amazon is a large online retailer, the items that are being purchased are hand-picked by the so called ‘picker’ in a large warehouse. Safety is the foremost important factor to consider because the possibility of getting injured is fairly high. It is also mentioned that as the operations manager are leading a large group of area managers, he/she is required to motivate as well as provide support to the team that are directly under his/her supervision. Being able to multitask and handling a large processes and activities are also included in one of the many duties. However, the operations manager is required to work closely with other departments and support teams in order to schedule the staffs as well as plans to improve the efficiency of the workforce. Therefore, effective communication is essential in the workplace. Lastly, an operations manager is also responsible to imply several different tools and techniques to improve the operations network and performance level to further enhance their customers’ experience.
The job description in the job adverts clearly defines the roles and requirements of the operations manager position. Such a comprehensive description is important in hiring competent personnel. Effective communication in a job description is paramount as the applicant would understand and get to know more about the organization, the position and qualifications needed (Sahoo & Mishra, 2012, p. 4). As a result, the applicant would be ready and prepared accordingly to shorten the process of recruitment. Sahoo and Mishra further emphasize that effective communication in a job description could make interview session easier and make sure the company hire the personnel that it really need.
Operational Challenges a Successful Candidate would face
According to Hayes (2002, p. 22), there are numerous operational challenges to face as businesses are operating at the highly dynamic, competitive and global environment. More specifically, operations managers face day-to-day challenges of ensuring effective management of financial resources, shareholders, communication and staff to mention but a few. The operational challenges a successful candidate would face includes internal challenges such as selecting and recruiting the qualified staff, managing the financial resources of the company, effective communications as well as conducting the social and ethical responsibility. The external challenges are challenges that are hard to predict and control, such as the economic and environmental factor, the technology factor and also the competition faced by the company as it developed and operate on an /international scale.
Internal and External Challenges
Selecting and recruiting the qualified staff and managing financial resources
According to Ahmad (2002, p. 541), the process of recruitment and selection is costly and complicated. The purpose of the complex process is to distinguish the right employees for the right job which then, increase the effectiveness and efficiency of getting the job done. Although, recruitment of staff is the responsibility of the Human Resource Department, a project requires enough and competent staffs to be successfully carried out. Therefore, it is the role of an operation manager to select the optimal and qualified employees to be involved in the project’s operations. For instance, Amazon operation manager would need to select and lead a team that are able to work under pressure in an oppressive and transitory environment. Thunnissen, Boselie and Fruytier (2013, p. 330) argues that finding the right staff is a bit of an art form that requires extra effort and skills. It is also necessary for the operations manager to assign the appropriate duty to the right staff. Moreover, as Cappelli and Keller (2014, p. 317) note that project staffing depends upon the balancing of cost and productivity. Operations manager are required to ensure that the scheduling of employee is within the project’s budget as understaffing or over staffing may cause serious problems for the project operations. Overtime pay often arises as the current employees have to put extra hours to complete the work (Cappelli and Keller 2014, p. 316). Overstrained employees may result in to absenteeism and/or high turnover rate which will cause high operational costs and project failure. Therefore, it is a challenge for a new operations manager to manage and learn to balance the number of workers and the amount of work available while staying within the project’s budget.
Managing effective communication
The operations manager’s job is to ensure efficient communication flow between project’s stakeholders. The stakeholders include the consumers, employees, organization leaders, suppliers and distributor. To achieve high productivity and high quality working experience and product in an organization, it is necessary to maintain a fluent communication in the workplace (Adu-Oppong and Agyin-Birikorang 2014, p. 208). As shown on the figure 1 below, effective communication consists of message being sent by the correspondent, the medium where the message is conveyed, the receiver who then interpret the message and later provides feedback to the sender.
The full understanding of how the message can be clearly convey to the sender can aid operations manager to communicate properly with the stakeholders. The managers need to consider the impact of their decision to the stakeholders. According to Bettley, Mayle and Tantoush (2005), operations manager need to understand not all decisions will be of best interests to various stakeholders. Therefore, it is best for the manager strive to achieve balance in the organisation.
Figure 1: Elements of effective communication
As Gunasekaran and Irani (2014, n.p.) argues, the managers are faced with ensuing that the right information reaches the intended person and at the right time. Inefficient communication process often delays completion of operations which may be costly in terms of finances. Also, operations manager must be technically literate and able to converse in technical terms as well as the language of other areas so that other managers may fully understand because miscommunication may affect the whole decision making process (McFarlane, 2014, p. 20).
Hayes (2002, p.23) noted that sometimes the operations manager has to deal with geographically dispersed project teams. By using computer networks and telecommuting and electronic technologies enable operations manager to receive and response messages swiftly (Barner, 1996; Monge and DeSanctis, 1998). Timely delivery of information is crucial to ensure the completion of projects on time. According to Geoffrion (2002, pp. 94), in today’s face-paced economy, information has to be passed fast to be implemented.
Social Responsibility and Ethical Conduct
While businesses have to maximize their profits, and increase customer base, they have to ensure social and environment responsibility. Corporate Social Responsibility (CSR) is defined as the relationship between the organization, citizens as well as the government (Crowther and Aras, 2008, p. 10). Needless to say, Amazon have a policy as regards to the CSR. Therefore, it is mandatory for operations manager to produce a report on the activity regarding the CSR. He/She also face the challenge of balancing between maximizing returns and addressing the CSR (Jung, Lee and White, 2015, p. 8).
Economic and Technological Factor
The economic factor in this case may affect the cost of the materials that are being purchased. The economic variables include the inflation or recession is hardly predictable. There is a bigger fluctuation in the price of the products. Operations managers are required to observe the different aspects that could contribute to the changes in the country’s economy. Technological advances are also one of the big factor that could impact the operation of the company. It provides a new way of doing business. For instance, a large multinational company such as Amazon are able to use Big data to store complex information and process the information into a useful knowledge that can be used to address the competitors and the market demands. This also imply that the operations manager need to keep up the pace with the technological advancement, not only does it helps in improving the effectiveness and efficiency of the workforce but also creates opportunities for a more flexible work patterns.
Solutions to Manage the Challenges
Total Quality Management
Total Quality Management (TQM) has been touted as the most efficient model for the resolution of challenges within the management environment. In its application, TQM looks at three core elements: (1) customer satisfaction, (2) improvement of employee satisfaction and performance, and (3) organizational resilience in promoting performance (McFarlane 2014, 23). TQM as a practice emphasizes on the need for continuous improvement such that each aspect of the production process gains in the long run (Douglas, and Judge 2001, p.166). In practice, the Operations manager has the role of ensuring that each of the following aspects of the company’s operations are in line with the company’s overall vision and mission (Giffin 2015, p.488):
Demand and its forecasts are up to date using various statistical measures. At this point is where Six Sigma comes in
Inventory control is such that it does not disadvantage the company with overly unrestricted stock numbers
Transportation does not make up most of the price of the commodity
Customer service is at its best and t takes care of customer needs to the optimum.
Procurement is streamlined to prevent unnecessary costs
Strategic planning becomes the core element of the TQM process
Risk must be profit-centric and not divulged
Benchmarking has been defined as a corollary of TQM in many aspects. In actual sense, it is an improvement of the TQM model where it emphasizes on the fact that the organization is not the best until it has seen what other firms operating at the same level and those above it are doing. From benchmarking exercises, firms can always adopt performance methods that are superior to theirs within the industry for improved profitability and market presence (McFarlane 2014, p.22). In fact, a benchmark exercise ends with improving the newly acquired methods to improve the firm’s performance in the market.
At Amazon, Benchmarking is not a very useful tool, but it also works as a pointer towards the optimization of the current potential to continue leading the market. While Amazon started as a lone ranger in the online retail business, many other players joined the market and Amazon can only try to remain ahead in terms of innovation and improving internal efficiency since it is hard to control the external environment. However, companies like Wal-Mart and Buy.com also provide a good point of reference as far as modern practice in ecommerce is concerned since they joined the market and are making an impact. Thus, the operations manager is tasked with the responsibility of finding out how to surmount the competition by remaining ahead in terms of innovation through benchmarking.
Perhaps one of the benchmarking paradigms that can be helpful to Amazon is comparing the performance of the company with other well performing companies outside the online retail industry. Extra-industry benchmarking is key where the firm has got very little competition from within the industry, or where the level of innovation is constrained due to lack of new ideas (Hong, Hong, Jungbae Roh and Park 2012). This means that the Operations manager at Amazon should be outward looking so as to obtain best practices from companies like Apple and Coca Cola that are doing well for many years now without signals of a possible fall.
The SERVQUAL model is primarily designed for solving management problems within the service provision firms. Today, so much emphasis has been placed on the service industry with even manufacturing entities dwelling a good proportion of their resources on customer service. Perhaps responsiveness and empathy come across as the core elements of service provision in today’s business world such that without them customer satisfaction is greatly hampered (McFarlane 2014, p.23). Amazon is a company that has a virtual relationship with its clientele, and therefore should have a customer relations office that is dedicated. The operational manager should work towards ensuring that all customer issues are handled professionally through the customer relations department.
Six Sigma is a “comprehensive and flexible system for achieving, sustaining, and maximizing business success by minimizing defects and variability in processes” (McFarlane 2014, p.24). Primarily, Six Sigma is designed to reduce defects in work done in a manufacturing environment. The essence of Six Sigma is its ability to maximize quality by anticipating very few defects in millions (McFarlane 2014, p.24). Six Sigma, as the name suggests is a data driven production philosophy where there are six standard deviation measures that are used to measure performance of a business (Retail Intelligence 2016, n.p). At Amazon, which is undoubtedly the number one global online retailer, Six Sigma has been applied at its optimal best. The company has mastered the art of applying Six Sigma to the core by applying the basic and keeping it lean (Retail Intelligence 2016, n.p). Thus, an operations manager at Amazon will be expected to work in line with the established six sigma metrics for the enhancement of the sales potential.
As a matter of fact, “Lean” means everything for Amazon since most of its sales are done with drop shipping as a service. Therefore, the potential of the company can be maximized using lean methods of production. The problems of wastage of resources as far as shipping products and preparing goods into the merchantable state is perfectly solved by Six sigma thereby giving the company an edge over the rest of the online retailers who do not understand the process.
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