INTRODUCTION TO OPERATION MANAGEMENT
Operation Management (OM) is an area of business which is concerned with overseeing, scheming and monitoring the process of production and redesigning goods and services (Niknam and et.al., 2011). In common parlance, it is inclusive of responsibility of management to minimize the cost and maximize quality with effective management of transforming quality input into output.
Presently, the report is prepared with an intention to present the operational functions of Furniture supplier Company. It deals in supplying finished goods to furniture retailers. This organization is in move to review its business operations to bring more efficiency and effectiveness to the quality factor. With this idea, Furniture supplier Company is infusing the efforts to investigate new ideas by focusing on operational functions, strategic management, planning and control in procedure and activities of the firm.
Importance of Operations Management for an organization
Operation management is a very important activity of business. Following points present the significance of OM in context of Furniture supplier Company:
- To bring effectiveness and efficiency in skills of workforce so that operational activities of manufacturing furniture can be improved.
- OM is significant as it is the heart of organization and supports control of activities of this firm. Moreover, it deals in designing, operating and rising system to produce and deliver effective goods and services (Rivard, O'Connell and Wegman, 2012).
- In a business entity such as Furniture Supplier Company, OM is significant as every new design and process for manufacturing of furniture needs to be properly planned. Hence, it is equally vital to ensure the effectiveness and efficiency.
- OM ensures this furniture company with the employment of efficient resources and expertise so that profits can be maximized.
- The OM in this supplier firm helps to enhance the ratio, susceptibility and in filling the working capital utilization in skillfulness production of furniture.
- Management and control function cannot be ignored when the Furniture Supply Company is taken into consideration. It is inclusive of activities which can help to ensure the achievement of organization's objectives and goals.
- In this company, the approaches to monitor and control the production and operations in business are inclusive of evaluation of goods and services, design, polishing of furniture, distribution to retailers, furniture development etc.
Analyzing operation functions
The analysis of operation’s functions of Furniture Supplier Company has been made. It is to identify the key functions which are the part and parcel of this supplier organization. Following are the operation’s functions that are stated as follows:
- The OM of this supplier firm comprises of managing the required resources in producing furniture. It is indulging in production and delivery of number of furniture goods and services to different retailers.
- The planning is demanded which is inclusive of exercising the best ways of responding to the existing business environment (Clark, 2014). This is made successful with the strategic planning process where goals for action plans are achieved through the functions of OM.
- The core functional areas of this company is inclusive of taking orders, designing, producing, supplying, marketing, polishing of goods etc. It is made possible only with the help of OM which ensures interrelationship between these activities to ensure the work efficiency.
- OM helps to identify the nature of work planned and activities that are performed. This is made successful by identifying the similarities and differences in goods and services that are finally delivered to the retailer.
- The production process, cost planning and its contribution in maintaining sustainable environment are all measured on the basis of OM functions. With the help of OM in this supplier firm, sustainable measurement and evaluation of complete internal and external processes can be made.
- The core role of operational function lies in managing the supply chain. As soon as order for proposed delivery of furniture is delivered, the organization is set with next supply chain.
- The impact of ethical behavior is managed with the help of OM as they have number of retailers. It is important to maintain good and effective relationship with the suppliers, retailers and customers.
Evaluation of operation management by using process model
The evaluation of OM of Furniture Supplier Company is the key to its successful operations (Cao and Xie, 2012). For the core aspect of what it produces, methods which are used are all important as the resultant efforts of revenue that is earned by company.
Process Model of Furniture Supplier Company
The operations at this supplier firm produces goods and services by transforming inputs into output by using transformation model.
In this process model, input resources used by this company are transformed resources which are treated and converted. They are inclusive of material, information and customers. These resources are employed in the transformation process. These resources are employed to produce the output resources. The resultant outcome is produced are furniture as goods and delivery as services. The output here is the retailer of Furniture Supplier Company.
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Characteristics of operation process
There are four V's which are used to characterize the operational process of Furniture Supplier Company as follows:
Volume: The volume of their operation is the key which signify how the firm is organized. They produce less as and when required. The time for the order of goods, its manufacturing, delivery are all planned appropriately. It is defined as cost is associated with the same and also the volume too (Niknam, Golestaneh and Malekpour, 2012).
Variety: The variety should be provided by this firm so that more retailers are attracted for giving orders to this furniture supplier company.
Variation: The variation is brought about by the the quality of raw material employed which is responsible for producing the best of furniture variety.
Visibility: The service ability of the manpower working at supplier company is extraordinarily affected by the customer's experience. Thus, they must track the retailers and their demand at random basis.
Business Process Modeling (BPM) is also another method used by this firm to improve the overall efficiency of this organization. It is inclusive of techniques associated with the work flow and mapping to infuse effective changes in the organization. Similarly, Lean Management Technique is also used where core lies in applying waste saving techniques that are produced with manufacturing of the goods and services (Abdullah and et.al., 2014). Tools such as Just in Time (JIT), Kaizen are some more ways. A supply chain is developed when the retailers of this supplier firm work in coordination by involving in activities such as raw material, manufacturing, transporting and other supporting services of this firm.
The “three E's”
The three E's of the OM in the Furniture Supplier Company are inclusive of how activities should be planned and carried out to attain effectiveness and efficiency. With the use of various measures, whole project planning from design to distribution can be made possible with good money factor.
Economy: It implies performing things with the effective utilization of resources and cost saving techniques. In this supplier firm, unnecessary costs are cut down to save money. There should use some methods which can help to raise money or cost effective tools. This is to gain the advantage of the objective which can help this furniture supplier company in maintaining its demand and supply in the market place.
Efficiency: It refers to performing activities smoothly by reducing unnecessary activities in producing final goods and services. In this organization, growth is the vital factor and to attain the same, efficiency is considered at most (Qi, Shen and Dou, 2013). It is similar with this furniture company too as when whole process of transformation is performed properly, the efficiency in work can be easily gained.
Effectiveness: This implies to performing organizational functions in appropriate ways. It is all about developing them by infusing good decision making tools. In Furniture Supplier Company, proper management of work activities are made to achieve operational and strategic objectives. Similarly, when the work is scheduled or planned, the achievement of operational activities becomes easy too.
Cost minimization and quality maximization
The most important thing which need to be considered for manufacturing process is the cost and quality balance. No organization wants to produce the low quality goods. But have to compromise with the quality when wants to cut down the cost. Furniture Supplier Company is a growing business and have to deal with various aspects where earning profit lies in its core. Minimization of cost is very important and thus for the same, company need to deal with various planning techniques that could help in reducing cost (Sloane and Witney, 2001). Selecting best cost method is very important to serve the need of the company. While producing different varieties of furniture, design, style, number and various other factors need to be considered for the retailers. In case, the company becomes unable to meet the need of economy, decision need to be taken for adopting operations which could help in producing more and more work activities. The company can adopt a method where the less productive goods can be transferred with the consideration of the more beneficial products and services. The company, thus become able to produce more revenues and profit from this new initiative of producing best of good and services.
Significance of the five performance objectives
The performance objectives are necessarily very important for the organization. In context to this Furniture Supplier Company, operations management is required which can help to investigate new ideas in its business activities. In the operation management, there is a need to define the new objectives so that work activities can be performed effectively. Following are the five performance objectives defined for this retailer organization as follows:
Performance Objective 1: Reducing the cost- This is the first objectives which completely focus on the work progress of the organization. It is very significant to attain the economic strength for carrying out its operations (Stoppato, 2012). With the help of cost reduction policies and framework, the strategy of producing projects which saves money and create opportunity to invest more in the field of profit based projects can be planned properly.
Performance Objective 2: Dependability-Reaching more number of retailers- This is another objective which can be planned for the success of the organization. In accordance to this supplier firm, attracting more number of retailers is very important. For the same, they have to infuse the efforts which can help in attracting customer and retailers towards them. The network need to be created where the large number of retailers come in contact with this retailer firm and give order to them.
Performance Objective 3: Promotion speed-promotional Campaign- The next objective which can be set to attract the large number of retailers and suppliers is to promote more number of products (Vidler, 2001). The Furniture Supplier Company need to develop products which can attract a large number of retailers and buyers. The efforts can be infused with the marketing activities which can be used to occupy large market area.
Performance Objective 4: Quality-Focusing on efficiency- When the organization has to attain success and consistency in the existing market, it is very important to focus on quality factor. With the help of setting of marketing objectives, the efficiency can be attain.
Linear programming and assessing how it adds value to given production
Linear programming is a process based on mathematical technique of developing decision making in management. It is very widely used tool as has become very core in selecting best alternative for carrying out the business activities. The significance of this tool is to making use of technique which can help to reduce the cost and prices of the products. This helps to calculate the cost and make the effective changes by reducing at the quantities where required.
Application: In this furniture supplier company, two types of furniture are manufactured where type A make uses of 12 tons of extra raw material and type B uses 10 tons. Now the most critical aspect is in the hands of this company is to take decision which can provide effective production of the furniture at the minimal cost. This is the type of problem which are faced by this organization in their daily working activities. With the help of linear programming, such problems are solved by Furniture supplier company.
Critical path analysis and network planning
The Critical path analysis (CPA) and network planning are another tools which help in project management. These techniques are used by the Furniture Supplier Company to perform the following tasks as follows:
- To set activities separately which helps in accomplishing larger projects.
- To define activities which are supposed to be taken for undertaking so that other activities can be planned accordingly (Often the Difference Between Mediocrity and Noteworthy Success. 2015).
- To define the activities which need to be taken according to its priorities.
- To ensures arrangement of activities in an alternate manner so that overall time taken to achieve the project can be properly planned.
- To define framework where resources required can be made available as and when required according to the project.
For an example, in this organization, there arises need when the tools for cutting and giving special design for the furniture need to be hired as per the demand of the retailer or order. With the help of these tools, project for production planning is assured to be achieved. It make the effective and efficient use of resources depending on how everything is planned and used.
Need for operational planning and control
There arises need for operational planning and control even when the project is met successfully. In consideration to the managerial decision making, there lacks some loopholes where there is need of effective evaluation (Porter and Kramer, 2011). As when the project planning is made, the time allotted is taken on very quick and in shorter period of time. The probability exist that effectiveness may not occur. Thus, keeping this consideration in mind, periodic planning is infused where planning and activities are scheduled. This monitoring and controlling technique takes labor, material, capital input into account for producing required quality and quantity of goods and services at Furniture Supplier Company.
It is significant as it supports future forecasting too. However, market is dynamic and things may change and affect the forecasting being made. Time factor, unexpected market trend, competitors, new development of products etc may affect the operation system. In such cases, managerial decision are required to be taken to meet the demand and supply of the market place. This helps to achieve the organizational objectives appropriately.
Layouts for producing furniture and operational outcomes
The Furniture Supplier Company is in a need to propose a new product in its existing goods category. System furniture is planned in its new line of furniture manufacturing.
Process layout: The process layout for system furniture is planned by considering quality and flexibility in accordance to the production. In this layout, small number of system furniture will be produced to achieve the high level of efficiency (Walsh, 2012).
Product layout: In this layout, small range of goods are manufactured to infuse standardization. It is flexible and demand continuous process.
Fixed position layout: This is the type where process is not moved rather one who is participating in the process moves to make the project successful.
Group layout: This is the layout where manufacturing is done keeping in mind the all products processing.
The operational outcomes for this new layout planning will be helpful in producing high quality and flexible products and services. It helps to reduce the cost of the planned products and services. For the system product, the planning of process layout is more feasible as it helps to manage the cost associated process.
Approaches for project management and quality control
Quality is very significant factor in working process of every organization. It is taken into consideration as it brings quality to the products and services being offered by this supplier company. Project Quality Management (PQM) involves of all the activities of business functions that are required for quality framework, objectives and aims and responsibilities to be made within the quality system. Following are the ways by which project management and quality control can be used as follows:
- Quality planning which refers to identifying the quality standards which are relevant for sales, stock and purchase procedures in an organization. They are defined in an manner that could best serve the customers demand.
- Quality assurance is an important tool as the firm analyse an inspection and monitoring of its operations at both primary and secondary level on monthly, weekly and hourly basis in order to design a foundation of quality standards.
- Quality control is a tool where monitoring of projects are taken specifically. It is made so that ways can be identifying to reduce the reasons of unsatisfactory performances.
Operational functions are planned in a organization so that goals on short and long run can be easily achieved. In the selected furniture company where working are enacted on the basis to drive customer satisfaction are relying on parameters that are advanced and innovative. In this era of modern technology, there are methods exercised for offering customers furniture with latest designs and color made their living a beautiful place to live in. And thus what lies in implementation of this planning is the effective and efficient operational planning of this company.
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