Introduction To Operation Management
Operation management is the part management of organization which deals with the activities of production, designing, managing and controlling of the operational activities of the business to produce products or services. In the present report Harvey a furniture company of UK is chosen as an organization to understand the operation management of business. Harvey is among the leading furniture organization UK and also sells its products at global level market. In first section of the report, emphasis is paid on the operational functions and strategic operation of the business. Further it also includes the process of operation management, planning and controlling and how Harvey can enhance their efficiency and effectiveness in their business operations. In second part of the report effective operation management at Harvey is evaluated and assessed.
Explaining the importance of operation management
Operation management is that practice of the organization which focuses on the delivering high level of efficient and effective products or services to the customers. It can also be termed as a process in which inputs are converted into finished goods (Matsui and Anh, 2011). For example, Operation management of Harvey is comprised of producing furniture, designing and controlling of its process to manufacture best quality of products for its customers. Operation management is comprised of three elements which are input process, transformation stage and stage of final output. For delivery of effective and efficient products and services to customers, it essential that operation management focuses on quality of material, appropriate budget regarding costing and quantitative to be used, management of resources and quality of the output (Understanding operations management, 2013).
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Operation Management is very important for the Harvey as it is based on quality and type of furniture produced for the customers. This function is one of the core operational functions of furniture business as it involves the process of manufacturing, designing, utilization of resources and transformation of raw material into final product. Another importance of the operation management for the Harvey is that this managerial function is also based on the total quality management approach. This approach focuses on continuous improvement in the products which ensures that furniture product will be delivered in effective and efficient manner (Johnston, 2005). This function is also important for the business organization to compete in market and to attain competitive advantage as it is one of the strategic functions of the business in which organization focuses on productivity, quality and efficiency of the furniture in order to satisfy their customers in best possible manner.
Analyzing the operational functions of the Harvey
There are different operational functions which involved in the furniture business of Harvey (Meredith and Craighead, 2008). First function is managing of resources which required in the production of furniture products such as bed, sofas, chairs, table etc. and on the basis of which company produces quality products for its customers. In addition to this it also includes the appropriate delivery of furniture products to its customers. On analyzing the functions of operation management, it was also evaluated that it plays significant role in accomplishment of strategic objectives of the business of Harvey (Little, 2011). It includes the function of implementation, supporting and mobilizing of the resources.
Operation function of Harvey also comprised of activities related to the functional areas of company which are also inter-related with each other. These include the activities of cost effective technique, flexibility in work performance, accuracy and production of right quality of furniture products. All these functions are inter-related with each other and make direct impact on the competitiveness of the business in market (Sheu, 2005). Efficient functioning of all these activities of operational management has leaded the business of Harvey towards success. Decision making is also one of the important functions of the operation management as it is directly concern with the manufacturing function of the business. It also includes the functions of management such as planning for products, organizing of resources, controlling and process of conversion to produce finished products (Jones and Robinson, 2012). In Harvey, operation management also plays important role in utilization of resources in optimum manner so that company can saves the cost and achieve their desire goals and objectives in efficient manner.
Evaluating the operation management of Harvey by using the process model
Process model of operation management includes three main stages which are input stage, transformation stage and output stage.
Input: In the process model of operation management in Harvey, input stage plays very significant role in their furniture business; as entire transformation process and output of the product is depend on these factors. Further the inputs in the Harvey are categorized into different category of resources (Bakliwal, 2011). First is resourced which are to be transformed and second is resources of transforming. In transformed resources, it includes the process through which raw material of furniture of Harvey will be converted into final output and on the other side transforming includes the process through which these process are converted into finished products. Further the main inputs in the process model of Harvey organization are material, information and customers (Render, 2009). These are the part of transformed resources.
- Material: These include the material required for producing furniture which is in physical form.
- Information: It includes the process or designing on the basis of which material are to be converted into finished product.
- Customers: These are those resources which are transformed (Greasley, 2007).
Activities which are involved in the transforming process are:
- Staff: Involves in the stage of transformation process for conversion of finished goods.
- Facilities: It includes the resources through which inputs will be converted by using machineries, equipments, land etc (Theoharakis and et. al., 2007).
Transformation: This stage of the process model of operation management adds value to the output of the Harvey’s furniture business. At this stage, Harvey transforms the final products for their customers and they are in form of sofa, chair, tables, cabinets etc. This stage of the process model includes conversion of raw material, creation of furniture, utilization of resources and many other activities are involved. Through this stage company supplies and offers its valuable furniture products to the customers (Foropon and McLachlin, 2013).
Output: Last stage of the process model is the output which is in the form of final furniture product which is to be delivered to the customers and clients of the company. It is that form of output which is produced after combination of tangible and intangible resources of the organization. This stage of the model is responsible for delivering the products to the customers and satisfying them in efficient manner (Bland, Simmons and Wojciechowski, 2012).
Explanation of three E’s Economy, Efficiency and Effectiveness
In operation management three E’s Economy, Efficiency and Effectiveness plays very significant role in the business organization and also essential for the business of Harvey.
Economy: It explains about the minimization of cost which depicts that the all the operation activities which are to be performed at lower price or at minimize prices. This activity focuses its emphasis on the cost of resources only which makes impact on the cost of the production of business organization. In manufacturing process of Harvey, their operational management functions have to focus on cost minimization by purchasing resources at lower price but of optimum quality (Christopher and Peck, 2004).
Efficiency: This activity in the operation management is based on conducting the activities of business operation in right and accurate manner. Harvey should ensure that efficiency should be in terms of paying reasonable efforts towards manufacturing, designing and controlling process. It also concerns on minimization of waste and performing the activities of operation management in smarter and efficient manner (Fitsimmons, 2009).
Effectiveness: Effectiveness states about meeting the needs and expectations of the customers. Harvey has to ensure that furniture products which are offered by them should accomplish the goals and business objectives of their organization. It depicts about performing the right things. Effectiveness also measured on assessing the operational activities of the company that whether in future they will meet the needs and demands of customers or not (Vaidya and et.al., 2013).
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Explanation of tension between cost minimization and quality maximization
Cost minimization and quality maximum are the two important factors which create the tension for the operation management of the furniture company. In another terms it can also be stated as paradox of thrift versus the quality as thrift states about efficiency and quality is about effectiveness. Issue of cost minimization and quality maximization is also one of the major issues for the furniture business of Harvey (Pitinanondha and Akpolat, 2009). It creates tension for the operation management that if they will maximize the quality of their furniture products then it will make affect the cost of production. On the other side if they minimize the cost of production then it will make impact on quality of furniture. Harvey has to focus on both the factors so that they can satisfy their customers in better manner and also achieve their business objectives in proficient manner. Increase in cost of the production will minimize the profit of the company and maximization in quality will increase the prices (Matsui and Anh, 2011). Company has to effectively use both of these factors so that they can minimize their cost and also maximize the quality of their furniture supplies. To eliminate this tension, operation management function of the organization has to use cost efficient models and techniques through which they minimize the cost of production of furniture. On the other hand the management has to focus on maximizing the quality of product by focusing on key features which enhances the value and maximize the quality of product (Boer, 2003).
Evaluating the significance of five performance objectives which underpins the operations management
Cost, dependability, quality, speed and flexibility are the major five performance objectives of the operation management and these objectives are primarily concern by the Harvey in their furniture business.
Cost: Performance objective of the cost in the operation management depicts about the objective of Harvey to produce furniture products at low cost or to minimize the cost of production. In simple terms it can be termed as achieving the objective of manufacturing the products as at low price (McLachlin and Foropon, 2013).
Dependability: It is one of the important performance objectives of the Harvey as dependability implies about fulfilling the promise of customers. It states that company will undertake the needs, specification and wants of customers in accordance with the type of furniture product required by them. It may be in terms of quality, durability, design, features, functions etc (Process Flow Structures, 2010).
Flexibility: Flexibility is based on different aspects which specifies in terms of varieties of furniture products, scale of production, production of new types of furniture and also introduction of some new features.
Quality: This objective of furniture company states about production of goods with higher quality which meets the expectation of business as well as customers also. for customer loyalty and customer satisfaction it is essential for Harvey to offer quality products in market.
Speed: It concerns on the lead time involved in the production of furniture or the response of operation management towards accomplishing the need of customers within a required time period or lees time. It also shows the capability of the Harvey that how efficiently and speedily they are meeting the demand of their customers (Working With Process Manufacturing, 2014).
Explaining the linear programming and evaluating the critical path analysis and network planning
For furniture supplier business like Harvey, Linear programming plays key role for achieving the objective of maximization of profitability and minimization of cost. This programming is based on the mathematical concept and function of linear relationship. This method helps the furniture company to adopt the best value method in specified conditions where Harvey considers the constraints of resources and achieve the higher level of profits in their business. Linear programming consider the technique of optimization in which different constraints are observed such as labor, raw material, time etc and on the basis of which best optimal technique is examined in which business can earn higher profits (Matsui and Anh, 2011).
Critical Path is comprised of the activities which are involved in the completion of project or any activity. It is work break down structure of the entire activity in which each activity has time duration. In this path all the activities are linked with each other and also they have particular deliverable results.
Network planning is based on the different activities that are included in the task or particular project. It consist of activities that are needed to complete the project on time and successfully (Johnston, 2005). The technique of program evaluation and review is also used for framing and making of network planning. Through this, time, resources and cost that are possessed by a firm are determined. This process of networking planning makes the process of identifying the critical path and activities easily by the company. Apart from this, network planning help the Furniture Supplier Company to evaluate the relationship between dependence and precedence of breakdown structure of various activities in a project (Meredith and Craighead, 2008).
Need of operational planning and control in producing a furniture
Needs for which there is requirement of operational planning and control in production of furniture are as follows –
Assurance of quality – There is the requirement of operational planning so as to evaluate the quality of products that are manufactured by Furniture Supplier Company. For this, the various techniques of ensuring quality during operations are six sigma, total quality management and variance analysis (Little, 2011).
Planning of inventory – There is need for operational planning and control to determine the level of stocks or inventory in order to know the amount of stock available with the furniture company for production and quantity which is required for further manufacturing.
Forecasting for future – Operational planning at Furniture Supplier Company is required in order to estimate the amount of production, demand, stock available and needed as well as future sales of the firm. With this, it can frame proper strategies accordingly (Sheu, 2005).
Project management – Another requirement because of which operational planning is needed to make proper and effective project plans. Operational planning is also required in utilizing the resources in an appropriate manner so that project plan can be controlled.
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Designing and discussing possible layouts for producing furniture and operational outcomes
The main layouts that are available for Furniture Supplier Company for production of furniture and other operational aspects are product, hybrid and process. In product layout, work stations and equipments are on the basis of product line while in process layout, similar activities are grouped together. Hybrid layout includes both process and product layouts. For the furniture company, the best layout will be process layout as it groups similar activities together and is flexible too (Jones and Robinson, 2012). With this, the flow of materials can be changed according to the process that is carried in manufacturing of furniture. This process of manufacturing furniture includes a long process and product being manufactured passes through the process. At each stage of the process, experts are appointed in respective area so that each stage of process is carried in an effective manner. in addition to this, departments are made according to the similar activities which are to be carried during the manufacturing of furniture (Bakliwal, 2011).
From the above study it has been concluded that operation management is one of the important function of the organization which includes the key activities of the business. On achieving the efficiency and effectiveness in the elements of operation management lead the organization towards the edge of success and accomplishment of goals and objectives.
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