The goal of operations management is to maximize efficiency
while producing goods and services that effectively fulfill customer needs.
Countless operating decisions must be made that have both
long- and short-term impacts on the organization’s ability to produce goods and
services that provide added value to customers. If the organization has made
mostly good operating decisions in designing and executing its transformation
system to meet the needs of customers, its prospects for long-term survival are
The Role of Operations Management in the
Operations is one of the three strategic functions of any
organization. This means that it is a vital part of accomplishing the
organization’s strategy and ensuring its long-term survival. The other two
areas of strategic importance to the organization are marketing and finance.
Strategic Versus Tactical Operations Decisions
Operations decisions include decisions that are strategic in
nature, meaning that they have long-term consequences and often involve a great
deal of expense and resource commitments.
For example, United Parcel Service (UPS), an international
package delivery service, formed a partnership with its customer, Toshiba
computers. Toshiba needs to provide a repair service to its laptop computer
customers. The old approach of providing this service was cumbersome and
UPS picked up the customer computers.
UPS delivered the computers to Toshiba.
Toshiba repaired the computers.
UPS picked up the repaired computers and delivered them back
to the customers.
The traditional approach, the total time to get a laptop
computer repaired was two weeks—a long time for people to be without their
laptop! Then they came up with an innovative idea for Toshiba to provide better
service to its customers.
UPS hired, trained, and certified its own employees to
repair Toshiba laptop computers. The new repair process is much more efficient:
UPS picks up computers from Toshiba owners.
UPS repairs the computers.
UPS delivers the computers back to their owners.
An easy way to
remember what a service is (compared to a product) is through using the ‘5 I’s
Services cannot be touched, shipped, handled, or looked at. They are an
occurrence, not a tangible good.
Inventory – Services
cannot be stored for later use. They occur, or they do not occur.
Services cannot be pulled into different parts or separated (as many tangible
goods can be—which makes operations management quite different for products).
Services tend to be unique. A teacher may teach you a topic, and another
teacher may teach you the same topic in another course. Each teacher will
deliver this topic somewhat differently. This is a good example of service
Consumers are often directly involved in the service delivery. A therapist is a
good example of this. The consumer is the center of the service, and thus each
instance of the service is unique based on the individual involved.
Managing Service Operations
This definition offers
a great deal of insight when applied to the concept of operational management.
Without a tangible good to ship, handle and produce, operational managers are
instead focused on the execution of an activity to fill a consumer need. This
management of an instance is rather different than the management of a product.
Managing operations is
just as critical on the service side as it is on the product side. While there
are countless considerations to be made, many of which are unique to specific
organizations or industries, these core operational decisions are strong
indications of the mentality service management specialists consider:
Choosing where to open
a facility, how to lay out the facility, what size is appropriate, and overall
how efficiently a given space can be used relative to the cost are key
considerations. Consider a car mechanic opening a garage. Depending upon how
many jobs she anticipates having within a given period of time, and how many
employees she expects to be able to manage simultaneously, she may want to open
a facility with three garages or five garages
Just as a product
manufacturing facility will know when a product will be where, so too do
service operators need to know when a given service should start and what
duration of time is required to complete it. Maximizing output through planning
properly can minimize opportunity costs and maximize revenue, and plays an
integral role in operational management of services. Take a doctor’s office.
managers are integral to organizational strategy in many companies and
organizations. The Bureau of Labor Statistics (BLS) reports that over 1.7
million operations and general managers were employed throughout the United
States in 2010 in various industries..
management professionals are responsible for collaborating with other managers
and executives to determine how operational planning can contribute to the
long-term strategy of the organization. They provide the functional component
of the strategic operations of the company by planning the activities that
contribute to the overall goals of the organization. This planning can include
determining goals and policies for logistics management, budget management and
support services management
ensure that planning is carried out, operations management professionals are
also responsible for providing direction to various managers under their watch.
Operations managers ensure that all departments are completing their necessary
function within the organization by meeting productivity goals and budgetary
Operations managers also help in the achievement
of organizational strategy goals by coordinating the activities between various
departments within their companies. They improve efficiency and focus by
facilitating and improving relations between departments, especially those that
often operate independently of one another.
The operations manager is also integral to the
continued strategy and vision of a company in his role as a resource manager.
Operational managers must be able to assess the resources of the organization,
whether they be monetary or otherwise, and ensure that the resources are used
as efficiently as possible
Quality Management Systems
It’s no secret that regulated companies that
fail to embed an automated, effective QMS solution into their manufacturing and
value chain operations expose their brands to increased compliance risks, and
thus weaken their competitive standings in the market. But automating your
quality processes, such as document control, training, corrective action, and
risk management, into one easy-to-use, easy-to-access effective quality
management system can give your regulated organization the competitive edge it
needs to achieve compliance success, and win the race to market.
You’ll save time
You’ll accelerate compliance
You’ll deliver safer, higher quality products
to your customers
Management Systems: Build vs. Buy
advantages of automating your quality processes into an effective QMS are
compelling. Any company that wants to stay competitive and compliant needs an
automated effective quality management system. But should you build your own
homegrown system or buy a proven, validated QMS? Building a homegrown QMS has
its advantages, but it also presents unique challenges and raises important
Effective Quality Management System
is a leading provider of effective quality management systems to regulated
companies worldwide. Unlike other effective QMS solutions, MasterControl been
designed to integrate with other enterprise systems quickly and easily.
Furthermore, MasterControl allows you to create a unified method for
streamlining and managing all of your critical quality processes such as
document control, risk management, audit, training control, quality event
management (complaints, MDR, NCMR, CAPA, deviations, nonconformances), as well
as BOM management, project management, and change control (ECR,ECO). Few other
effective quality management systems offer such one-stop-shopping.
is also web-based, so users can access the system from virtually anywhere in
the world, at any time. Users can also access the system using a tablet or a
smartphone. This capability is a distinct advantage over other less effective
quality management systems. Mobile access is particularly useful to field
employees or those who often travel or work off-siteGill Construction Ltd, is
currently based in Alberta state, and running different construction projects
all over the state.
recent time Mr. Amar Geet Jill believes that it is time for their company to
move on and expand the business to other states and also do more projects in
commercial sector. The current quality systems in place have many loopholes
which allow the wastage of raw materials, high costs, untrained staff and lack
of machinery. Mr Jill believes that before he expands the business he wants to
gain NQI award for excellence in quality, which will add more to the business
reputation and will also help them to improve quality management system and
Participation is very important to improve the quality. Managers need to
encourage workers to take responsibility for the quality they provide, and
meets the customer’s expectations.
TQM is a
philosophy of management, which addresses the means of raising the quality
performance to unprecedented levels. TQM involves the participation from whole
organisation and demands to be implemented in all aspects of the business
Canadian market is very competitive, the new improved processes and systems
will also create a good image for the organisation. With the use of new
machinery and training staff, they will have a competitive advantage. They can
promote their business in a better way.
improvement technique will also help them to get customer satisfaction on a
higer level. They will be able to address their customers’ needs in a more
efficient and effective way. With this they can rebuild customer relation and
help maintain business
Quality Management Principles:
TQM is a
management approach which involves the strategy, data and effective
communication to integrate quality principles into the organisation.
first principle of TQM is to be customer focused. Whatever done for the quality
improvement, is to gain customer satisfaction. If
principle is that managers need to ensure that they have employees on board
involves the complete focus of the management centred towards the process
thinking, so that two key principles can be achieved:
the first step to improve quality is to prevent errors. It is better to train
staff and avoid accidents rather than finding ways out of it
defects: The ultimate aim should be to provide a service with zero defects,
that means no comprise at all. The mortar should be prepared by missing the
correct ratio of cement and sand.
Next step is
to sort the organizational structure according to the action plan and strategy.
It is very important that managers must align the strategy with organizational
structure. They manage the question “Is the organization’s current
structure appropriate to the intended strategy?”
Change Management has evolved over the past several years
with Change Management Models, Processes, and Plans developed to help ease the
impact change can have on organizations.
Change Management Models have been developed
based on research and experience on how to best manage change within an
organization or in your personal life. Most Change Management Models provide a
supporting process that can apply to your organization or personal
Change Management Processes include
a sequence of steps or activities that move a change from inception to
Change Management Plans are developed to
support a project to deliver a change. It is typically created during the
planning stage of a Change Management Process.
8 Essential Steps
for an Effective Change Management Process
Your organization is constantly experiencing change.
Whether caused by new technology implementations, process updates, compliance
initiatives, reorganization, or customer service improvements, change is
constant and necessary for growth and profitability. A consistent change
management process will aid in minimizing the impact it has on your
organization and staff.
1. Identify What Will Be Improved
Since most change occurs to improve a process, a product, or an outcome, it is
critical to identify the focus and to clarify goals. This also involves
identifying the resources and individuals that will facilitate the process and
lead the endeavor
2. Present a Solid Business
Case to Stakeholders
There are several layers of stakeholders that include upper management who both
direct and finance the endeavor, champions of the process, and those who are
directly charged with instituting the new normal.
3 .Plan for the Change
This is the “roadmap” that identifies the beginning, the route to be
taken, and the destination. You will also integrate resources to be leveraged,
the scope or objective, and costs into the plan. A critical element of planning
is providing a multi-step process rather than sudden, unplanned “sweeping”
4. Provide Resources and Use
Data for Evaluation
As part of the planning process, resource identification and funding are
crucial elements. These can include infrastructure, equipment, and software
systems. Also consider the tools needed for re-education, retraining, and
rethinking priorities and practices. Many models identify data gathering and
analysis as an underutilized element. The clarity of clear reporting on
progress allows for better communication, proper and timely distribution of
incentives, and measuring successes and milestones.
This is the “golden thread” that runs through the entire practice of
change management. Identifying, planning, onboarding, and executing a good
change management plan is dependent on good communication. There are
psychological and sociological realities inherent in group cultures. Those
already involved have established skill sets, knowledge, and experiences
6. Monitor and Manage
Resistance, Dependencies, and Anticipating and preparing for resistance
by arming leadership with tools to manage it will aid in a smooth change
7. Celebrate Success
Recognizing milestone achievements is an essential part of any project. When
managing a change through its lifecycle, it’s important to recognize the
success of teams and individuals involved. This will help in the adoption of
both your change management process as well as adoption of the change itself.
8. Review, Revise and
As much as change is difficult and even painful, it is also an ongoing process.
Even change management strategies are commonly adjusted throughout a project.
Like communication, this should be woven through all steps to identify and
8 Essential Steps for an Effective Change Management
Your organization is constantly experiencing change.
Whether caused by new technology implementations, process updates, compliance
initiatives, reorganization, or customer service improvements, change is
constant and necessary for growth and profitability.
Throughout most of modern
business history, corporations have attempted to unlock value by matching their
structures to their strategies. As mass production took hold in the nineteenth
century, for instance, companies generated enormous economies of scale by
centralizing key functions like operations, sales, and finance. A few decades
later, as firms diversified offerings and moved into new regions, a rival model
emerged. Corporations such as General Motors and DuPont created business units
structured around products and geographic markets. The smaller business units
sacrificed some economies of scale but were more flexible and adaptable to
adopted a matrix arrangement in the belief that they could retain both the
economies of scale of centralized functions and the flexibility of their
product-line and geographic business units. But matrix organizations were
difficult to coordinateThe continual search for new organizational forms is
driven by basic changes in the nature of competition and the economy
Corporate synergies can
also be generated by leveraging relationships across multiple business units to
offer common customers lower prices, greater convenience, or solutions more
complete than specialized competitors can provide. For example, Media General
implemented an effective convergence strategy by sharing editorial processes
and advertising content among its regional television stations, newspapers, and
interactive online media properties. This cross-unit integration created a
unique value proposition for the common customers—advertisers and
subscribers—that was better than any single property could offer on its own.
Customer synergies also arise when retail companies like hotel chains, consumer
banks, or quick-service restaurants consistently deliver the same value
proposition across a geographically dispersed network of retail outlets. Hilton
Hotels and McDonald’s are good examples here.
It’s one thing to set down a number of themes on paper, another
to actually use them as the basis for corporate strategy. To do so, the company
follows several implementation steps. First, through the strategic themes on
its corporate-level strategy map, top executives articulate the theory for
corporate advantage—how the whole is more valuable than the sum of the parts.
Toyota Company focused on
its inventory management and quality improvements in its products and
processes. This operational excellence is based in part on tools and quality
improvement methods made famous by Toyota in the manufacturing world such as
Kaizan (continuous improvement), one-piece flow, jidoka (Automation: automation
with human intelligence) and heijunka (production smoothing). These techniques
have helped in spawning down the “Lean Manufacturing” revolution. The TPS
organizes manufacturing and logistics for the automobile manufacturer, together
with communication with suppliers and clients in order to improve the quality
of their products and processes.
With the implementation of
Lean system, kanban pull system and other quality management methods Toyota has
been achieved a significant mile stone in terms of improving the quality of its
output and reducing the cost of the products through elimination of waste.
There are four goals of Lean manufacturing systems. One of the major goals is
to improve quality where as the Elimination of waste, Reduction of time and
Reduction of total costs are the other three. (Steven, 2002)
To stay competitive in
today’s marketplace, a company must understand its customers’ wants and needs
and design processes to meet their expectations and requirements. As such
Toyota has been able to win their customers by providing quality output at a
reasonable price and it has become the leader in the automobile industry at
The fundamentals needed in developing a strategic quality
plan are usually same for all organizations.
Vision – Begins with a customer focussed vision. More broadly
vision aims at the satisfaction of all the stakeholders. Vision should state
the desired future state of the organisation to everyone involved and compel
and share throughout the organisation.
Mission that clarifies the
purpose for organisation’s existence will provide an agreed- upon direction to
the entire organisation and can be used as a basis for decision-making.
Customer satisfaction, loyalty and retention
Costs involve in poor quality products/processes.
Culture of the organisation
Business processes and improvements
Competitive and industry benchmarking
Competitor performance and product performance etc. (Bergman
et al, 1994)
Employee Participation- Build capacity at all
levels understanding the capabilities and the skills of the workforce and
training and development needs in order to execute the strategy.
Strategy evaluation is the final step of strategy
management process. The key strategy evaluation activities are: appraising
internal and external factors that are the root of present strategies,
measuring performance, and taking remedial / corrective actions. Evaluation makes
sure that the organizational strategy as well as it’s implementation meets the
organizational objectives. Strategic Evaluation is defined as the process of
determining the effectiveness of a given
strategy in achieving the organizational objectives and taking corrective
action wherever required.
In the absence of such a mechanism, there would be no means
for strategists to find out whether or not the strategy is producing the desired
effect.q There has to be a way of finding
out whether the strategy being implemented will guide the organisation towards
its intended objectives. Strategic evaluation and control, therefore, performs
the crucial task of keeping the organisation on the right track.q During the strategic management
process, the strategists formulate the strategy to achieve a set of objectives
and then implement the strategy.q Nature of
the strategic evaluation and control process is to test the effectiveness of
strategy.qNature of Strategic Evaluation
The process of strategic evaluation
provides a considerable amount of information and experience to strategists
that can be useful in new strategic planning. Strategic evaluation, through its
process of control, feedback ,rewards, and review, helps in a successful
culmination of the strategic management process. Strategic evaluation can help
to assess whether the decisions match the intended strategy requirements.Importance
of Strategic Evaluation
Middle-level manager Corporate Planning Staff or Department? Audit and Executive CommitteesExternal
and Internal Auditors? Company secretaries? Financial controllers? Profit-centre heads? Chief executives? Board of Directors? Shareholders?Participants in Strategic Evaluation
Quantitative criteria includes determination of net profit,
ROI, earning per share, cost of production, rate of employee turnover etc.
Among the Qualitative factors are subjective evaluation of factors such as –
skills and competencies, risk taking potential, flexibility etc
. The two basis types of
implementation control are: a. Monitoring strategic thrusts (new or key
strategic programs): Two approaches are useful in enacting implementation
controls focused on monitoring strategic thrusts: (1) one way is to agree early
in the planning process on which thrusts are critical factors in the success of
the strategy or of that thrust; (2) the second approach is to use stop/go
assessments linked to a series of meaningful thresholds (time, costs, research
and development, success, etc.) associated with particular thrusts. b.
Milestone Reviews: Milestones are significant points in the development of a
programme , such as points where large commitments of resources must be made. A
milestone review usually involves a full-scale assessment of the strategy and
the advisability of continuing or refocusing the direction of the company.§ Implementing a strategy takes place
) Strategic Surveillance Strategic surveillance appears to
be similar in some way to “environmental scanning.” Strategic
surveillance is designed to safeguard the established strategy on a continuous
basisSuch an event will trigger an immediate and intense reassessment of the
firms strategy. Form crisis teams to handle your companys initial response to