Operations Management - Essay Example

Operations Management By Introduction Background A production system is a unit in an organization that comes to help the managers in the strategic planning of processes and procedures to be followed in a specific business. The system usually combines the elements of both the division of labor and the technological aspect of the organization. For effective production, organization ought to be able to combine appropriately the aspects of the business in such a manner that reduces costs while increasing the production levels. Such a process involves rigorous analyses by the managers in order to yield optimum profit for the company through a series of modeling and deigning the system that best fits the business. It would be considered wrong trying to develop a production system of a company, while that very company sources its products from external suppliers (Finch 2004, pp.183-186). Every organization will possess a different production system thanks to its unique traits and capabilities. Besides, the company may use this production mix as a blueprint in order to achieve supernormal profits by enhancing strengths and reducing weaknesses. At this stage, there is the need to distinguish some elements that come with the production system. Identify whether the system is process production or part production. While production systems will entail those items that undergo physical and chemical transformations, the part production system rarely transforms the product. In fact, the part production system is mostly involved with assembly or manufacturing of the product desired by the customer. Nonetheless, both types require a carefully researched production system as the production mix achieved has the same effect on the performance of the company. Now, considering that services present a very different respect on matters of production. The production system developed will thus be investigated on the lengths of service process matrix. This matrix tries to strike a balance between the degrees of labor intensity compared to the degree of labor customization. Analyses of all this respects will help establish a mix on which strategies for the organization will be made. Executive Summary The rising need for companies to establish a production mix that yields a competitive advantage has led to the vast studies on matters of operations management for both service and manufacturing sectors. More than before the area has received much attention due to the vital need for growth among various companies. This paper will seek to review a service production system whose strict observance is set to enhance the probability of success of the business. The production system will thus identify how well the inventories and assets of the company are managed, explain the importance of supply chain management through an illustration and further elaborate how an organization’s delivery system may fail to align properly to its objectives. Adding more to that, a careful description of how the lean approach could be used will be offered, followed up closely by the conclusion, which will serve to confirm whether the objectives of the company and its configuration of the operational process correspond. All this will be carried out by unambiguous arguments, passed across in prose and seeking to enlighten the audience on the matters of effective production system. Keen interest will be given to the restaurant business and thus the explanations offered will directly relate to that part of the service-based system. It is to be noted also that indirectly the issues may arise. Body The restaurant business is a service business orientation. Here the customer receives some form of service at the expense of money. In this case, the consumer will pay money for a given portion of food. Expenditure of the customer at the joint is greatly influenced by the way the services are offered to them. High quality services at the restaurant are sure to woo even more customers while at the same time retaining the old ones. The fact that the service industry is open in the sense that there is a great room for improvement of the customer product makes the business overly dependent on the services offered. Despite there being a series of perspectives for the restaurant in terms of short-term and long-term goals, the manager ought to develop strategies that focus on the customers’ value for the service. For proper assessment of a company’s production system, starting with the management of the assets and inventories of the company is optimum. The mere fact that the restaurant business focuses on eateries implies that the business is relatively short term in respect to satisfying the customers’ desire for eating. This statement can be supported by the observation that most people will visit a restaurant so as to eat. Therefore, there is the need to tally correctly the collectibles coming into the company daily as well as any operational costs that may be involved in the provision of the eateries. This proper accounting helps raise the liquidity ratio, which is important for business. On the same respect, the assets that accrue to a given restaurant company need to be categorized in terms of fixed assets and current assets. Only proceeds in the current account be used in matters of daily operations with long-term deals such as acquisitions being catered for by the fixed assets. Management of the finances and assets are likely to influence the value of services at the restaurant either positively or negatively. For this reason, the assets and inventories of the company need to be correctly outlined. Another key figure in the production system is the supply chain. It involves the series of procedures through which activities of the business flow (Finch, P. 2004, pp.183-186). Usually the process initiates from the introduction of the raw material into the business up to the output when the item is ready for consumption. A number of interconnected networks and channels facilitate the movement of the item and thus concentration is vital to avoid recurrence of errors. In our particular case of study, the supply chain will help highlight the entire process of serving customers. Identifying the various activities that the restaurant undertakes will aid in reducing repetitive processes in the aim of improving efficiency. The supply chain management also boosts the customer services resulting in content customers (Finch 2004, pp.183-186). Furthermore, the supply chain will offer enough insight to the company in order to distinguish the cores services of the company from the peripheral ones. Besides that, proper management of the supply chain will increase cash flow, as fixed assets will not be used in daily transactions. Such insight may prove invaluable to the restaurant as it offers a stable foundation for the management to enforce successful business strategies. Given the nature of the restaurant business, investigation of the individual activities is rigorous, considering that one has to understand the influence of action from all related events. However, only through such an analysis can one identify weak areas to improve efficiency, as well as the customer relations. For a restaurant, the process of dealing with customers usually entails the following events: 1. Order taking 2. Billing 3. Serving 4. Reception 5. Parking services At all of the mentioned events, the value of the product ought to be increased, the company should handle the entire process professionally. At that, the customer will end up receiving a worth for their money. Most companies especially restaurants; tend to have market retention as their major factor for long-term profitability. In turn, market retention is usually influenced by the quality of services and products offered. Customer service is rather a broad term, but it usually refers to how the customer is handled from the time of first contact. Getting the customers state their expectations would be fruitful in establishing the appropriate strategies to be effected in that respect. The internal logistics of the company ought to be figured out, as they are the ones who commence the entire process. The delivery system of organization details the sequence of executing an already conceived strategy. This system focuses on achieving optimum profit for the company by reducing the costs to the least possible. For this reason, the cheapest way of attaining customer satisfaction will be employed. Practical experience has revealed that, at times, the performance objectives of an organization tend to conflict with the delivery system. While the significance of the difference varies, it is important to understand what causes those variations in order to comprehend the scenario fully. Performance objectives of a company usually guide the company to certain set targets and goals. It is through these short-term goals that the company is capable of assessing itself with reference to the desired long-term achievement. A delivery system will conflict with the performance objectives of the company if matters involved entail interfering with the long-term objectives of the company. Such matters tend to change the targets for the sake of satisfying the customer. Nevertheless, when it is difficult to make the decisions regarding the policies to be enacted, the analysis of strengths and weaknesses may be the last resort. The analysis would seek to measure the effectiveness of one system over the other and thus offer direction on the target (Brennan, L. L. 2011, p.1). The Lean Approach The lean approach is a technique of management where the entire benefits accruing from the project are identified. The management of the company seeks to maximize the value for which the customers enjoy. It is thus within the mandate of the company to employ strategies that seek to further that course. In order for the company to experience this form of allowance, it ought to be flexible as well as efficient. Since the restaurant, organizational structure is composed of several interdependent links. It would be important to exercise the lean approach on the restaurant in question. However, there is need to adhere strictly to the specific procedures, which are as follows: 1. The company is modeled as a value stream enterprise that eliminates the complexities of departments. This silo effect changes the operations of the company. Although costly, the new structure that is assumed has a higher probability of success. 2. The company then identifies and eliminates excessive wastages that lower the efficiency of the process. This is usually by way of seeking to join related activities together. For instance, a restaurant may consider joining billing and ordering to reduce delay of service. As a result, the product is value added and of a raised quality compared to before (Brennan 2011, p.1). 3. The company then ensures that the remaining events in the production of the product have a continuous flow. It is that flow that yields increased quality of the product or service that customers will be willing to buy. Steps that could be used to ensure these objective hold are to produce on demand as well as standardizing the level of workloads. 4. The company then makes the operations visible to state the issues that may arise and enable quick resolutions be achieved. It avoids the long tiring procedures that are usually used in arriving at the same destination. Furthermore, correction of highlighted errors at an earlier stage helps generate a reliable model for predicting a certain phenomenon. 5. The management can finally transform the business culture of the organization. An organization has the mindset of serving the customers to the utmost ability. The workers should know that the desires of the customer are highly considered. Use of the lean approach in the organization is set to have a number of effects on the organization. Despite the initial cost being high, the benefits that can be predicted out of use of the approach are several. The approach will raise the productivity levels of the company while reducing the lead-time in delivery of the services. Besides that, the restructuring of the company’s activities is set to reduce the chances of loss by the company, as the errors present in the original structure will be eliminated. Thus, the structure of the company that will result is that of reduced expenses accompanied by high production levels. In simple terms, the company will be cost effective while at the same time enjoying benefits out of maximum production such as economies of scale. Operations management is indeed a hard task that requires strict adherence of the procedures and regulations (Brennan 2011, p.1). In order for a company to yield maximum benefits out of any system, the company must evaluate its activities in a bid to cut off unnecessary steps that may at times be costly. Such moves are meant to combine steps that may be related into one single step. Attention ought to be paid to those vital activities for the company whose failure to provide would result in adverse results from the organization’s yields. The anticipated alignment of performance objectives and the establishment of a perfect production matrix is set to be challenging. Restructuring of the business activities is expected to change the goals of the company. It implies that the initial targets will be abolished at the expense of the evaluated model. However, at this point of decision-making, it is crucial for the management of the company to analyze all the available alternatives as it may lead to losses by the company. The use of any given approach has reasons and objectives that are set to be attained. This implies that the management has to implement the entire process in theory before doing it on the ground. With that being done, insight of the challenges that are expected is shared as well as acknowledgement of the benefits that are expected to accrue from effective implementation of the system. The contentious matters could be solved by the analysis of the costs and benefits resulting from implementation of each. Management of the operations of the company usually involves the designing of policies, controlling production as well as redesigning the business operations (Brennan 2011, p.1). The company can prove the efficiency in terms of input, processing and output. An operational delivery system is a collection of events that support the achievement of certain objective on the delivery of the product or service to the customer. Through this system, the company in question seeks to entice the potential customers as well as produce a series of steps that are efficient. It is the final point of contact between the customer and the company; thus there is the need to ensure high standards are maintained. In order for a company to ensure its delivery system is effective, the management ought to check issues related. As such, it is vital that the number of staff is adequate to serve a predicted number of customers at a given point in time. Failure to meet this threshold will imply that there will be a lag in satisfaction of customer’s interests, which could be dangerous for the restaurant for example. Although the cost of ensuring an adequate number of employees is expensive for the company, the cost of business out of customer dissatisfaction is even higher. When designing the delivery system of a company, consider its efficiency. Emphasis on this term only confirms the worry of many managers. Analysis and logistics need to be carefully carried out in the hope of producing a favorable system that will not only cover the needs of customers; rather it will also seek economic benefits to accrue. Nonetheless, it should be maintained that the customer’s interests deserve preference over other factors. Thus, the strategizing of the companies should be directed at ensuring the customers receive the product on time. The high quality of the goods from the company should be maintained in order for the customer to enjoy the value for their money. The development of a routing system is also important to the delivery system in terms of determining the shortest routes to be employed. This perspective is usually aimed at reducing the overheads that result from implementation of the system. GPS enabled systems could be installed, as they have the ability to automate the process by only feeding the co-ordinates. As a result, the drivers delivering the product will each have uniquely designed routes that minimize the expense of fuel. Besides, using the system, the drivers can be easily reached to attend to urgent points in their way. The ability for the route to plan the schedules prior to the delivery, is advantageous. Such an advantage proves important as emergency issues can be easily attended to whilst effecting the other normal operations. Conclusion The process of designing an effective delivery system is thus challenging, as one has to consider all interdependent factors. However, at such times, preference of core services ought to be maintained as alterations would result in a totally misguided strategy. In general operations management has evolved from the initial definition entailing the management of the staff activities. Researching and investigating on better ways of achieving results with reduced costs, is needed. 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