Introduction Operational management is the design and process whereby goods and services AR successfully delivered to customers. It involves designing of goods, services, and the process that creates them; it also involves day-to-day management of the processes as well as the on-going improvement of goods, services and processes. (Collier 2012-2013, 3) This involves both strategic planning as well as operations strategy. Strategic planning is a process of determining long-term goals, policies, and plans f an organization.
Its objective is to achieve goals even if there may be unforeseeable circumstances. There are three levels of strategy in operations strategy that are use in most large organizations, corporate, business and operational strategy (As show he diagram below). The three levels of strategy talks about the different levels and areas that are involved when a company makes a decision on developing a product. Corporate Strategy Also known as the strategic level is the processes of the business which is concerned with producing goods and services.
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For example, when an individual or group of people decided to do some investment, what to produce, when to produce and whew to produce are the first few questions that come in to their head. In Operation Management, activities like market research, goods and services design, forecasting, opacity planning and location selection can help people make strategically and effective decisions like: Producing a new product which never existed in the market and be the representative for that particular product.
For example, IBM was the firs company to produce computers (desktop), in United States and for a very long period of time, people referred it to IBM instead(The birth of the IBM PC. 2014). Lower the production cost by select at a low cost of human resources location to set up the factory. For example, Toyota set up factory in Philippines which reduce the reduction cost by 23% per year (Toyota Assembly Plant in Laguna Philippines. 201 2 Forecast the demand of the product to determine the capacity of the business, in order to have minimal investment and no waste of resources.
Business Strategy Sometimes also being referred to as the tactical level, this is where long term planning, the future vision of the business and the major decisions are involved. Strategic Business Units (SSW) is also defined and focused on at this level, as the company will look research on what market they should to start their ventures, and would it benefit them if they compete in those markets. When planning major decisions they will also have questions like, when and what resources is needed, when should the materials be delivered, how many shifts would be required and is there a need of a sub-contractor.
These questions that are asked, requires scheduling and planning. In cases when there is a new product that the company looking to introduce to the market, they will first question on the areas required to produce the product. Then decide on the tactics on how to beat their competition and bring their product or service to be an order winner and attract more customers. Operational Strategy Which is also called the functional level is where operations management is concerned with lower-level (daily/weekly/monthly) planning and control. (R.
Anthony Inman 2014) Operations managers and their assistants will decide the scheduling process. This is to ensure that there are enough products available for retailing and wholesaling. At this point, they need to manage and control the inventory in their warehouse. This is important as it helps to avoid any unnecessary production and also minimize cost. Inventory management is normally taken weekly and adjusted through the inventory management system. The next daily activity will be sequencing, where production orders run in the schedule.
For example: “Housekeepers in hotels must sequence the order of rooms to clean; Operations managers who run an automobile assembly line must determine the sequence by which different models are produced; and Airport managers must sequence outgoing flights on runways. ” (Collier 2012-2013, 308 ) Sequencing used to achieve objectives such as, meeting the unpredictable demand and customers’ order due date. Moreover, operations managers need to update the status of production everyday or even hourly to send the information to the sales and racketing departments, supply chain managers and in some cases, customers.
Loading is whereby the allocation of order is allocated to the specific machinery. Selection of machines and equipment for the desired process is important as it can affect the quality of the product and also the production time. Maintenance of machinery is also needed to make sure that it operates and functions well. Furthermore, an operations manager has to draw a time table for various orders to be produced, when to start and how long the process takes to finish. In addition, work assignment is one of the daily activities. It determines to whom we assign the work to, individual workers, machines or processes.