Operations Management

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Operations management plays a crucial role in every organization that competes effectively with its competitors. In particular, operations management ensures an organization is able to plan, organize, manage, control, as well as supervise the production process (Jacobs & Chase, 2013). Thus, it would be imperative to stipulate that operations management ensures that all business activities, which take place in an organization align with needs and preference of consumers. Since operations management focusses on using the available resource of an organization efficiently, so it ameliorates the overall productivity. Thus, there is optimum resource utilization that leads to enormous profits, which is the crucial determiner of operational effectiveness. From this description, it is clear that operations management is the backbone of every organization as it controls entire operation, thus its role cannot be underestimated. In this perspective, the paper seeks to define and explicate terms used in OM including operational efficiency, effectiveness, and sustainability as well as operation strategy. Further, the paper defines the concept of quality as well as Six Sigma, expounding its applicability in an organization.

Operational Efficiency

In operations management, the concept of operational efficiency encapsulates the practice, which improves all the organization’s activity involved that leads to the final product. Thus, operational efficiency can be defined to be techniques and strategies employed by an organization to realize the objective of providing quality goods and services to clients in a timely and cost-effective way. From the definition, it would be crucial to highlighting that some of the key aspects that facilitate operational efficiency encompass the manner in which resources are utilized, production of goods, inventory management, as well as the way goods and services are distributed (D’Mello, 2015). With no reasonable doubt, a business that desires to create a competitive advantage must have exceptional efficiency. An exceptional efficiency comes to play when an organization achieves stipulated goals and objectives by utilizing minimal resources in various business activity. Thus, it would be appropriate to indicate that it is a goal of every organization to achieve operational efficiency, which is one of the main measures of productivity. To develop a clear understanding of operational efficiency, it will be crucial to exemplify the highlighted aspects that facilitate this vital operation management concept.

 In regard to resource utilization, it is crucial for an organization to get value from minimal resources and eliminate waste in production, which clearly delineates operational efficiency consideration. For instance, operation managers opt to get most production results from employees. Moreover, every manager aspires to use financial allocation as well as material used in operations to generate high revenue. Thus, in terms of achieving efficiency, the cost of goods and services sold should exceed the overhead cost involved. This is a crucial way of achieving a high-profit margin. Proficiency in production is also a major element that dictates operational efficiency. This encapsulates the optimal use of products and employee output in order to produce quality goods and services, which corresponds with time as well as money invested (Jacobs & Chase, 2013). An ideal example to illustrate operational efficiency is Walmart, which has various internal methods including production, sales, hiring, as well as communication. Combination of these processes has helped the company to achieve the target in regard to product sales.

Operational effectiveness

In the contemporary competitive corporate world, businesses are challenged to perform at every level of an organization. In particular, most of the businesses are challenged by the desire to offer and heighten customer satisfaction. In this perspective, operational effectiveness can be illustrated as the aspect that enables stakeholders in an organization to always do the right thing. Simply, operational effectiveness entails a measure that dictates whether the mission and objective of an organizational operation have been accomplished. Ideally, operational effectiveness revolves around ascertaining that all fundamental operations of an organization create a final product, which satisfies the end customer (Jacobs & Chase, 2013). From the definition postulated, it would pertinent to highlight that organizational effectiveness signifies the concept of how effective a business achieves goals and objectives that it intended to produce. In this context, understanding operational effectiveness is indispensable since it enables operation managers to focus on interventions that result to unprofitability. This means that operation managers must identify practices, which allows an organization to maximize the use of the inputs and developing products with minimal time than competitors.

Therefore, it is irrefutable to indicate that it is a desire of every operation manager to achieve effectiveness in daily operations of an organization. To achieve this, the operation manager must understand the four components of operational effectiveness. The four components encapsulate of controlling and leading functional performance, improving organizational processes, controlling the processes as well as continuously heightening performance. Coca-Cola is one of the most organization that utilizes operation effectiveness to ameliorate its operations. The company facilitates this by amalgamating capabilities of manufacturing and distribution into one integrated organization.

Operations Strategy

For an organization to remain competitive in the market, it must establish vital methods to help in accomplishing goals and objective stipulated. In this regard, operations strategy can be defined as a plan outlining essentials of how an organization allocates resources aiming at supporting production (D’Mello, 2015). Simply, operations strategy is a key aspect that facilitates both operational effectiveness and efficiency. It is worth noting that the overall business strategy is a typical driver of operation strategy. Idyllically, operations strategy is premeditated to maximize and heighten the effectiveness and efficiency of production while attempting to minimize the cost. The question, however, remains on how operations strategy relates to operational effectiveness and efficiency. Evidently, by developing an operation strategy, an organization possesses the capability to implement and evaluate effective and efficient operations for utilizing various resources. As indicated, for an organization to maintain a competitive position, the company should establish long-range plans, which are referred to as operations strategy. Without operation strategy, an organization lacks adeptness in resource utilization, which can downplay competitive strategy.

As a component of business strategy, operation strategy focusses on specific capabilities that enable an organization to have a competitive advantage. These capabilities are defined to be competitive priorities, which focus on lowering cost, enhancing the quality of goods and services, as well as offering goods and services at an appropriate time. FedEx is one of the companies that has evolved with technology to adopt effective operations strategy. In particular, as a world’s largest provider of expedited delivery services, the company has used time and quality to promote its strategy. For instance, the company has been using barcode technology as a way of speeding up processes.

Operational Sustainability

A business that seeks to be successful must create an environment where the organization performs well economically, environmentally and socially. In particular, in operation management, it is the role of operation managers to assess whether their organizations have the capability to maintain existing practices without risking future potential resources. Based on this description, operational sustainability can be defined as processes that meet the present necessities of an organization without compromising the ability to achieve future needs (Longoni & Cagliano, 2015). Operational sustainability focusses on key business areas that require including ecological sustainability, social sustainability, as well as economic sustainability. Regard, to ecological sustainability, it is the role of operations managers to ensure that natural resources at a pace that does not deplete resources it relies on its production. Ecological sustainability ascertains that an organization recycles and reduce wastes during the production process.

Economic sustainability, on the other hand, ensures that operations managers utilize long-term strategies of business development to remain viable in the market. In regard to social responsibility, operational sustainability plays a crucial role in certifying that every individual in a community has equal access to resources and services offered by the organization. When the three crucial sustainability concepts are amalgamated, they improve the operational sustainability of an organization. However, it is important to indicate that operational sustainability can increase costs, which is not ideal for operational efficiency. Regardless, an organization accrues benefits in terms of creating a positive image, which attracts customers. For instance, Adobe had planned to reduce greenhouse emissions by 75% by utilizing renewable energy technologies.

The Concept of Quality

In operations management, distinct meanings can be attached to the word quality in various situations. In fact, the term quality does not necessarily entail the quality of the end product in the production process as may refer to the eminence of the procedure involved in the production. Thus, the quality of a product is defined as the degree to which it fulfills the desire of the operation manager and the requirement of the customer. In production and operation management, quality begins by ensuring that the product is designed in accordance with clients’ specification (Jacobs & Chase, 2013). From this portrayal, it is clear that quality involved establishment of measurements standards, the use of the appropriate materials in the production, as well as a selection of appropriate production process. Precise, quality is a relative term and it is mostly used to refer to the end product. Thus, by defining quality as conformance to specifications and requirement, it is vital to note that customer must always be involved in defining a quality.

To have a clear understanding of the concept of quality means to expound the fundamental factors that affect quality. The factors include market, management, motivations, and mechanizations. In regard to market, technology advancement has enabled production products, which meets and satisfy customers’ needs as well as preferences. In terms of management, the increasingly complex structure of organization necessitates operation managers to be responsible in ascertaining that quality is maintained throughout the operation process. Moreover, motivation acts as a technique that enables the employee to achieve quality while producing the designed quality products. Further, quality products which lead to high productivity necessitate the utilization of advanced machines at various levels of operations in an organization. Irrefutably, all effective organization such as Amazon and Walmart utilize the concept of quality to heighten their competitive advantage.

Six Sigma and its Applicability and Value

Effective operations management encapsulates various aspects and Six Sigma is one of the most important. Six Sigma, in this case, is defined as an approach employed by an organization to improve operations management quality by eradicating errors, lessening costs of production, and saving time, which are crucial determiners of operational efficiency. The main objective of Six Sigma is to streamline quality control in business operations ensuring that there is no variance. Six Sigma does this by eliminating the defects by defining a sequence around a target set that aligns with the objective of an organization. The Six Sigma operates using DMAIC as its most important tool, which stands for Define, Measure, Analyze, Improve, as well as control. As a tool, DMAIC is the methodology governing the management of Six Sigma and also acts as a method creating steps for every project undertaken in organization’s operation (Assarlind, Gremyr, & Bäckman, 2013). Define enables operation managers to delineate the requirements of customers that are to be met at the end of the production process. Measure indicates what is happening and it gives a clear indicator of what needs to change in order to meet goals and objectives. Analyze enables operation manager to identify roots cause of a problem when it arises. This creates an opportunity of amending to problem preventing it from re-occurring. Improve ensures that processes are capable of achieving the goals. Finally, control ensures that the operations are monitored ascertaining the goal is always achieved.

From the definition and description, it is worth noting that the applicability of Six Sigma in operation management cannot be underestimated. One of the practical applicability of Six Sigma is in port operations. As a competitive business, the port industry necessitates the provision of quality services. Irrefutably, Six Sigma can help ports to manage their operations better. By employing the use of DMAIC, a vital Six Sigma tool, ports ameliorates performance and quality level of container cargo handling process. It is imperative to indicate that Six Sigma is applicable to other organizations as well, which seeks to better their operations. For instance, the Motorola acts as an important case study that illustrates the applicability and value of utilizing Six Sigma in operations management (D’Mello, 2015). The case study illustrates how Motorola used the tool to develop and promote quality throughout its operations, thus eradicating defects. As a path-breaking methodology for business operations improvement, it has advantages and disadvantages. One of the merits of Six Sigma is that it is driven by customers and thus helps in achieving maximum customer gratification. It also leads to a rise in profitability and cost reduction, which promotes operational efficiency. In regard to demerits, Six Sigma requires a skilled man force and thus it requires a lot of concentration for its accomplishment. Moreover, theoretical concepts articulated by Six Sigma are hard to implement to the practical application since there is a real barrier that needs to be determined.

Conclusion

As a management function of an organization, it is clear that operations management acts as a business function responsible for crucial process accomplishment within an organization. In particular, an effective operations management must take into consideration key aspects, which include operational efficiency, effectiveness, and sustainability as well as operation strategy. As postulated, the four aspects are vital and every operation manager needs to define and articulate them into operation process. From the discussion, it is also clear that the concept of quality enables an organization to create a competitive advantage. Further, the application of Six Sigma has proved to be vital in improving the quality of operations management as they eradicate defects, which have the capability of hindering operational effectiveness and efficiency.

References

Assarlind, M., Gremyr, I., & Bäckman, K. (2013). Multi-faceted views on a Lean Six Sigma application. International Journal of Quality & Reliability Management, 30(4), 387-402.

D’Mello, J. (2015). Introduction to operations management. AMBA 640 / DMBA 620. https://www.youtube.com/watch?v=WERYyASsKzQ

Jacobs, F.R & Chase, R.B. (2013). Operations and supply management: the core, 3e. New York: McGraw Hill/Irwin.

Longoni, A., & Cagliano, R. (2015). Environmental and social sustainability priorities: Their integration in operations strategies. International Journal of Operations & Production Management, 35(2), 216-245.

January 19, 2024
Category:

Business Economics

Subcategory:

Corporations Management

Subject area:

Company

Number of pages

9

Number of words

2360

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