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INTRODUCTION TO OPERATIONS MANAGEMENT
Operations management is the area which aims to organize and direct the functions which are technical and physical to the firm. Such functions relates to development, manufacturing and production. All these functions are making sure that operations of business are efficiently carried out through optimum utilization of resources (Brown and et. al., 2013). In the present report, operations management is taken into account with respect to a Furniture Supplier Company. The organization is engaged in providing finished goods to the leading furniture retailers. The study discusses to understand the nature and importance of operations management. Further, it entails the link between operations management and strategic management. Moreover, it also covers the planning and controlling in operations management. At the end, the report entails to assess and evaluate the effective management of operations at Furniture Supplier Company.
Importance of operations management in organization
The operations management is essential for Furniture Supplier Company because of following reasons-
Supervises operational system of business- It includes various activities like planning, controlling, directing, organizing and leading the operations of business. Hence, through this operational system of cited company can be managed (Kerzner, 2003).
Enhancing the productivity- Operations management enhances the quality in the goods manufactured. Thus, it helps in improving the productivity of Furniture Supplier Company. Also, it will assist business in improving the productivity and profitability of organization.
Improving the financial position of business- Through increasing the productivity of business, it will help in improving the financial position of company. Hence, it brings advancement in order to effectively process the business (Parker, 2012). Thus, the goods are offered to retailers within less period of time which thereby have positive influence on the financial health of organization.
Product and service management- In order to develop product, it involves various steps. This starts with idea generation and ends with sale of products (Greasley, 2007). Hence, for Furniture Supplier Company, operations management is essential as with this it can plan various schedules effectively and which would facilitate the firm in manufacturing the products within stipulated time.
Optimum allocation of resources- Operations management plays an important role in allocating scarce resources so that it can be effectively utilized in the business. The resource involves time and cost which are essential for the success of every organization. Through proper allocation and management of resources, business can increase its productivity and profitability (Schneider, 2003).
Helps business in meeting customer’s needs- Effectively managing the demand and supply will help company in fulfilling the demand of customers. Therefore, operations management is important in maintaining the balance between quality needed and supplied by firm (Bettley and et.al. 2005).
Analysis of operations functions of Furniture Supplier Company
The operations functions of cited organization are as follows-
Time management- It refers that the function of operations management is to prepare proper schedules of time taken by different activities of business (Slack, Chambers and Johnston, 2007). Also, it makes sure that the completion of activities will be achieved within set time so that project may not delay.
Management of cost- Cost management is a crucial function of operations management. The cost allocated with different business activities is assigned with the assistance of operations management. With this, Furniture Supplier Company will be able to minimize its expenses in order to ensure managing the overall business costs (McCrie, 2011).
Allocation of resources- Effectively allocating the resources is the significant function of operations management (Czuchry and Yasin, 2003). It ensures that production process of business runs in a smoother manner, when its resources and cost are allocated as per the priority of different tasks.
Managing quality- Quality management is another important function performed by operations management. Thus, it helps cited organization in effectively controlling its products which increases the overall efficiency of production system of organization (Maytorena, 2007).
Change management- This function of operations management is to manage the change that takes place within Furniture Supplier Company. It helps business in planning, monitoring and redesigning the different activities.
Evaluation of operation management of organization by using process model
The process model of Furniture Supplier Company is effective for business in making decisions. This model consists of input, transformation and output. In order to evaluate the operations management of company different theories and models are used. It comprises of closed and open system, random, probabilistic and deterministic systems. Here, the operations management of Furniture Supplier Company is an open system (Eriksson, Hilletofth and Hilmola, 2013). The four V’s in operations management in Furniture Supplier Company assists the business in enhancing the objectives. These four V’s are volume, variety, variation and visibility. For instance, volume states that business is producing volume of products through using raw materials. Further, variety implies that through using equipments business produces variety of products so that needs of customers can be satisfied. Also, there can be variation in demand as it helps the business to identify the preference of clients and produce goods. Finally, there is visibility of final good manufactured in business. This is because it needs to regularly communicate with the external business environment. The input process will require raw material which is provided by the suppliers of the company. Further, the conversion of raw material is done so that input can be converted into output. The input-produce-output process is used in business as it helps in analyzing the transformation of raw material into finished products. For instance, in the present case of Furniture Supplier Company it produces finished products through transforming raw material and delivers it to clients.
The transformation process includes different factors such as people, structure, environment and technology which are essential in order to complete the process in an effective manner. The finished goods are then transformed to ultimate users. In addition to this, Furniture Supplier Company has a probabilistic process model (Hazletta, McAdamb and Walkerc, 2013). The reason to this is that, the end results are determined by company in advance depending upon the future outcomes. Thus, through using open process model, business can deliver the finished products to its customers which also include furniture retailers. The future demand for the furniture products of the company can be estimated with the help of Probabilistic system. Hence, through this firm can keep an eye on its future capacity management.
The transformed resources can be further used in business in order to satisfy the needs of customers and attain goals. It helps in attaining profitability through providing finished products to retail customers.
The entire process of Furniture Company is that it input raw materials in business in the form of resources process it in business using varied equipments so that effective output can be produced in the form of furniture products as per the need of clients. The output is produced in the form of different products and services as per the demand of customers and satisfies their needs and wants.
Three E’s in Furniture Supplier Company
There are three E’s essential for the success of organizations which are efficiency, economy and effectiveness-
Efficiency- This states the way of doing things as smoothly as possible. Further, it includes allocation of resources in an appropriate manner so that process can flow in an easy manner (Pun, Lewis and Lalla, 2004). In order to achieve efficiency in business operations, it is essential for business to eliminate the activities which causes delay while carrying the operational process. It results in achieving the set results within appropriate time and will further improve the productivity of Furniture Supplier Company.
Economy- It is very essential for business to vary out the production in a manner that it incurs less cost to business. Economy means that carrying out the activities in the cheapest way which is possible for business (Wilkinson, 2001). Low cost is only possible when the firm makes bulk purchases of raw materials and similarly produces high volume of goods. This element in business can only be achieved when the Furniture Supplier Company can reduce its expenses which it incurs from the activities such as manufacturing and delivering of the final product. Economy in business operations ensures that desired outcomes are attained within the specified cost and time (Loosemore and et.al. 2011).
Effectiveness- This element refers to providing effective products to customers so that their needs and wants can be satisfied. Furniture Supplier Company can evaluate the effectiveness on the basis to which it has accomplished its set targets and goals (Boer, 2003).
The above mentioned all the three E’s results in Excellence; it is only possible when the Furniture Supplier Company manufactures its product maintaining economy, efficiency and effectiveness.
Tension between cost minimization and quality maximization
Both cost minimization and quality maximization are important elements that are critical to the success of the business. Furniture Supplier Company needs to maintain the balance between both these factors in order to attain desired objectives. Hence, in order to accomplish this organization faces many problem which results in creating tension for the same (Lao and et.al., 2012). Therefore, it is essential for business to manage its cost in short run and attain the desired goals. It is difficult for the firm to carry out production at high quality in the initial stage. This is so because company is not sure about the acceptance of the product by the customers. Thus, when the small quantity of goods is manufactured then the firm is able to manage the product quality. Hence, quality of products can be maximized but this will increase cost of production.
The Furniture Supplier Company can make production at large scale in long run. Thus, it will result in reducing the quality of the product. Therefore, it is essential for company to incorporate certain technology for carrying out the production process then it will have impact on both the aspect i.e. cost and quality. In order to improve the quality of furniture, cost will also increase at the same time because firm will make use of latest technology (Craighead and Meredith, 2008). Here, tension between cost minimization and quality maximization arises when the available raw materials to business is expensive. Hence, due to this cost of production also increases. Organization is required to hire labor that should possess skills and capabilities so that desired results can be achieved. Such employees will be paid high salaries which would act as a cost to business. Therefore, in order to maintain balance between cost and quality, Furniture Supplier Company is required to make proper allocation of resources.
Evaluation of significance of five performance objectives
The significance of performance objectives such as cost, dependability, flexibility, quality and speed that underpins the operations management which are as follows-
Cost- Under this objective, Furniture Supplier Company is required to minimize its direct and indirect expenses. With the low cost objective, firm can increase its productivity. Also, it will have an impact on its profitability and sales (Pansiri and Temtime, 2008). If firm is able to minimize its expenditure then it would attain desired results within specified time period.
Dependability- It is the most crucial objective of business. It involves the aspect of customer convenience. This performance goal can be attained by Furniture Supplier Company and makes timely delivery of products to clients. It creates a sense of trust and develops a good relation among business and customers (The 4 E's of Excellence. 2013).
Flexibility- This performance objective affects the firm ability to adopt changes. It enhances the potential of operational management system of business. With the change in preference of customer needs, business is required to analyze it and adopt such changes in business so that it can deliver good quality products to clients. Furniture Supplier Company makes alteration in products design and deliver new product so that customers wants can be satisfied.
Quality- This performance objective ensures production of error free products based on specification of customers (Linear programming. 2014). It helps in improving the performance as well as sales of product. Firm should be able to maintain its quality control standards in order to achieve set objectives.
Speed- Business can achieve this performance objective only when it takes short delivery time. The production process of business is required to run smoothly so that need of clients can be satisfied within time. Through this, company will be able to increase its goodwill in market place and also effectively satisfy the needs of target audience.
All the five performance objectives can be improved in business so that effective results can be attained. Business can improve the performance objective through using effective resources in business and it helps them to achieve overall goals and objectives. As per the need to market, business should improve the quality of products and services and attain results.
Linear programming and evaluation of critical path analysis and network planning
Linear programming refers to linear optimization which helps the business in attaining the best results. It includes profit maximization and cost minimization. It is a mathematical model that can be utilized by Furniture Supplier Company in finding the best solutions to the problems that arises at the time of improper allocation of resources (Brown and et. al., 2013). The needs under this technique are demonstrated in linear relationship form. Linear programming technique can be applied when linear relations exist between the different variables. This model helps businesses in optimizing the outcomes on the basis of unambiguous set of constraints. Operational research makes use of linear programming in finding different solution to engineering and business problems.
Critical path analysis
Here, Furniture Supplier Company can schedule its activities with the help of project management technique that is known as critical path analysis. It assists the Furniture Supplier Company to manage the complex business activities (Linear programming. 2014). Critical path method is used by businesses in determining the actions that are essential for completion of any project. Through this, project manager can investigate the longest path that can be taken in order to accomplish the task within shortest time duration. The delay caused by any activity of the project will impact on the overall project completion. Through implying this method, Furniture Supplier Company can make sure that it delivers furniture articles timely to clients.
It is defined as the set of activities that are critical to success of the completion of the project within specified time, cost and other resources. Network planning can be done by using program evaluation and review technique (Boer, 2003). Through using the network planning, Furniture Supplier Company can find out the adequate amount of time and cost allocated to various activities. Hence, through this business can analyze critical path activities.
Need for operational planning and control in producing furniture
Operational planning and control is crucial in producing a product for Furniture Supplier Company for the following reasons-
Planning of inventory- Through operational planning and control, total quantity of stock can be identified by business. Hence, it will facilitate firm to keep a track on its production process and properly managing the inventory (Wilkinson, 2001).
Future forecasting- Firm is required to make an estimation of future demand, quantity of inventory needed and sales through operational planning. Hence, by this Furniture Supplier Company can effectively plan its future strategies (Lao and et.al. 2012).
Project management- It is required by company in order to design its project plans. Firm can effectively manage its resources with the help of this. Project management also helps in allocation of resources in an effective manner. In order to monitor and control the project, the technique of Gantt chart can be used. This will help cited organization to monitor and control its activities that they are on right track or not.
Quality assurance- Proper operational planning and control is required by business to manage quality of the products (Maytorena, 2007). Also, firm uses certain quality control techniques such as balance score card, six sigma and variance analysis in order to maintain proper quality standards of products manufactured within firm.
Capacity planning- It helps firms in managing the inventory as well as resources. Therefore, it will assist business in increasing the production capacity to the desired level. Also, it helps in improving the production capacity so that sales and profitability of business can be increased.
Designing of possible layout for producing furniture and its operational outcomes
The possible layouts available to business are process, product and hybrid layout. In the product layout, the work stations as well as equipments are well designed on the basis of product line that needs to be manufactured. But in hybrid layout, it is the combination of product and process layout. The suitable layout for Furniture Supplier Company is process layout under which similar activities are grouped together. Here, each department requires skilled and talented labors that have expertise in carrying particular activity (Czuchry and Yasin, 2003). Thus, it will ensure quality assurance at each process. Process layout also possesses flexibility attribute which means that change in product line needs to change the process. The manufacturing process for home or business purpose furniture includes sawmilling process, kiln dry process, sploting and cutting process, planning and drilling process, sanding process, assembling process and packaging process. Hence, product needs to pass through several stages so that final goods can be produced.
Identification of approaches for project management and quality control
The approach that can be used for the purpose of quality control can be total quality management. This method is critical in order to improve the ability of business to deliver the products that possess high quality. It focuses on the elements like focused customers; involvement of employees, process centered and integrated system so that quality of product can be maintained. Total quality management approach aims at training the employees so that they can effectively work in the organization with proper standardization (Hazletta, McAdamb and Walkerc, 2013). Furniture Supplier Company can make use of such method, so that it emphasis more on its process. The firm can achieve quality objectives through proper focusing towards vision, mission and goals. Further, continuous improvement in the process is required which will assist business in managing the quality standards within firm. Proper monitoring and control of quality should be done in business so that quality can be assured. It also helps in attaining benchmarking so that quality can be improved so that best results can be attained. Quality assurance is essential in business so that work can be improved and enhance the sales and performance of business.
From the above report, it can be concluded that operational management helps in improving the success of business. It also helps in improving the productivity, efficiency and quality. The elements of three E’s play an effective role in improving the profitability of business. Further, it can be evaluated that five performance objectives underpins the operational management in business. Also, network plan is prepared for packaging process is designed to demonstrate the minimum and maximum time required in order to complete the project.
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