Theory and Problems of Operations Management - Essay Example

Introduction In the world today, businesses are growing and changing fast and these has called for proper coordination of all the activities being carried out in all departments within an organization. Looking at the activities that are taking place in a supermarket, for instance suppliers delivering their goods and services, staff restocking the shelves, the buildings that are housing the supermarkets and any equipment that are available in the supermarkets it, becomes very evident that all those activities have to be well coordinated so that the supermarket can run efficiently (Monks 1995). Operations management is a science that deals with coordination of all functions of an organization. The major departments within an organization include; accounting, marketing, human resources, information technology departments and purchasing have to be well controlled. The key factors that have led to the development of operations management include; globalization, total quality management, empowerment and techonology.With the world becoming a global village, supermarkets are striving to provide services more efficiently and effectively so as to stay at the top of competition by quickly delivering their services. Operations management is a transformation process that interacts with various departments in an organization. According to Slack “Operations management helps in developing and managing the value chain process and also in supporting it through using different tools, techniques and methods in order for an organization to be in a position to achieve its goals and objectives within a specified period of time. The Total Quality Management is a holistic approach that requires that all the managers and personnel working for supermarkets to be able to handle customers in an appropriate way. The major supermarkets in the United Kingdom also have got a major challenge in ensuring that they empower all their members of staff regardless of their hierarchy in the organization so that they can take part in achieving the company’s goals and objectives. Operations management theory It refers to the process of organizing and controlling the activities of a business so as provide goods and services to the customers at the appropriate time and place. The major functions of any business involve finance, marketing and operations management. Some of the processes involved in the process management theory include forecasting, capacity planning, and management of inventory, quality assurance, motivation and training of the employees. The traditional objective of business’s was to maximize on the share holders wealth but today, businesses are moving into a level where the focus is more on maximizing on the customer’s needs. In supermarkets, it can also be described as a process that ranges from the tactical to the operational level. The tactical level involves the methodology of management while the operational level deals with the management of stocks quality of goods and services for the customers and the facilities that facilitate operations. Strategic issues include the location of the supermarket where they should be located at places that are strategic to the customer (Monks 1995). The models within which the process ensures that activities are carried out in the right way includes quantitative approach, trade off analysis, establishment of organizations priorities,ethics,study revolution, decision models and management science. It also involves the process of determining the disciplines that are meant to transform the raw materials, labour and capital into finished goods and services. The operations management has various major components that any successful supermarket should adopt. They include policies, performance and pratices.Any organization should be able to come up with its basic goals and objectives that it intends to achieve and it should be included in its mission statement, its reasons for existence and what it hopes to achieve in the future. It should also be able to define any processes, systems and procedures used by the organization. The operation management theory tools are being used by organizations in ensuring that the objectives of the organization are met within a specified period of time as it involves software tools such as evolver and risk optimizer that are meant to augment the trends of operations .These tools are considered to solve problems that are related to scheduling and also of performing operational matters within an organization. The activity based measurements and scorecard software tools are said to assist an organization in gathering data on its current condition, analyzing it, predicting its outcome and enhancing ways of ensuring that it attains measures meant to overcome problems within the organization. Other tools that have been used in operations management include brain storming, flow and control charts, bar graphs, problem solving methodology such as Define, Review, Identify, Verify, and Execute (DRIVE), process mapping and Field analysis (Monks 1995). Supermarkets are gradually adopting the problem solving methodology known as Define, Review, Identify, Verify, and Execute (DRIVE) to as assist in solving problems involving their customers, suppliers and staff. The managers must therefore be able to define what the scope of the problem is together with the magnitude of the problem and how it is affecting the operations within the business. In addition, they must be able to identify how the success of solving the problem will be measured. The problem must be reviewed and they must agree on the problem that has occurred, check on the genesis of the problem and collect the relevant information to assist in problem solving. The next step involves trying to provide solutions to the problems that have occurred and desirable changes to avoid similar problems in the future and also how to sustain those improvements. The managers will then verify how the desired improvements can be able to bring about positive changes and finally they must be able to execute their plan of action and initiate a feedback mechanism so as to measure the success of the process. As opposed to the traditional method of Acceptable Quality Level (AQL), successful supermarkets are now approaching the Total Quality Management Technique (TQM). In this technique, supermarkets are using it to create a competitive edge over their competitors by focusing more on the customer’s needs and requirements. It therefore entails understanding what the whole organization should be focused on,wnen meeting the needs of customers to their satisfaction, ensuring that products and services are of very high quality and that the top leadership, the infrastructure together with the available resources are geared towards customer satisfaction. The top leadership must continuously show commitment in provision of quality goods to the customers as the customers’ needs to keep changing with time and also to avoid giving goods and services that are obsolete. Any organization must be having benchmarks so as to be able to measure their performance against other organizations that are operating and competing in the same industry (Leask and Yeoman 2002). Supermarkets are spending huge amounts of money in advertising so as to create the right and positive images of their stores to their customers. By establishing their corporate culture, the supermarkets are trying to give their unique character and trying to pass the message that customers should have a reason for shopping in their stores and not any other store. Supermarkets that have a very good corporate image are usually very strong in the market and the customer’s perception towards it is very high. With a good corporate image, a super market is able to attract a huge number of professionals to run it efficiently and effectively.Tesco supermarket has been able to appeal and maintain most of its loyal customers by including a phrase that says “all inclusive offer” which appeals to all levels of income and thus it has been able to beat its competitors (Leask and Yeoman 2002). Innovation is another area where supermarkets are using so as to stay ahead of their competitors. They have successfully invested in research and design where they are coming up with new ideas of how to attract customers. For Instance, it is possible to find any kind of product under one roof without having to go to various stores as this saves on time and energy. No single organization can conduct its business efficiently without investing in proper communication. Supermarkets have not been left out and they have adopted office automation to run efficiently and effectively. They have also invested in internet communication, word processors, fax machines, computers and other high technology machines to assist in communication. The main importance of office automation is that it offers a common database to the supermarkets, a system of network that links all the departments within the organization, a decentralized work station and software that interlinks all supermarkets if they are located in different geographical locations. In Tesco supermarket, they are centralizing all their sales, Finance and Human Resource departments worldwide by adopting the Oracles Financial software. According to Nick Folkes, the main aim of having a common technology is to assist the supermarket to boost its productivity. Tesco has also invested in the fixed mobile technology that will allow its employees to communicate on their mobile phones both on fixed landlines and roaming networks at a lower cost. This is estimated to save the supermarket over $ 8 million spent on telephone bills annually (Leask and Yeoman 2002). Supermarkets have also engaged in visual management techniques whereby the assumption is that people tend to get attracted to what they see. In this case, they have invested much in advertising in bill boards, notice boards, indication light cards and visual display units in major highways where people are attracted to see products that are being sold in the stores. Customer’s needs and requirements must always be met satisfactorily. In order to achieve this goal, it is important that inventory management is taken into consideration to avoid stock outs. To be able to determine the stocks required at any particular time, the supermarkets must be able to determine the re-order level, the order quantity, the rate of input, the output level, the stock levels and the stock out rate. The United Kingdom’s Supermarkets are slowly adopting the Just-In-Time control system that assists in moving the products and services more quickly to the customers. In this system, stocks arrive just when they are actually needed with the orders are being processed on a computer based application. They have also invested in modern inventory control systems that rely upon bar codes and Radio Frequency Identification (RFID) tags that potentially assist in the automatic identification of stocks. A good example is in the case of Wal-mart whereby they have installed the Radio Frequency Identification (RFID ) tags that have been reducing the stock out rates by over 30%.In this inventory system, the system is able to identify the goods as they are being sold together with collecting additional data from other computers and multiple workstations. Proper inventory management has seen the supermarkets reduce their costs on insurance services,storage,handling and any loss precipitated by some of the goods being non durable (Leask and Yeoman 2002). Supermarkets have also invested heavily in their employees as part of their human resource strategy. Their recruitment strategy requires that the selection and training of new staff should be done on merit so as to have the right people doing the right job. For any organization to function efficiently, they must be able to motivate and reward their employees so that they can boost their morale. In case of Tesco supermarkets, its human resource strategy involves rewarding those employees who have the most contacts with their customers. It thus encourages employees in multi -skilling and specialization as well as giving them opportunities for greater challenges which could lead to their promotions. They have also adopted the Managing By Walking (MBWA) strategy which entails the manager walking around the supermarket so as to keep in touch with the employees, customers and innovation. With this strategy, they are able listen, teach and facilitate any kind of help required within the organization. Conclusions The world is becoming a global village and with the very high competition and technological changes, businesses must be able to keep up with the trend. Businesses must invest heavily in operations management so as to assists in coordinating all the functions of the organization. All departments of any organization are dependent on one another and therefore they must be co-coordinated efficiently and effectively so that the businesses can delivery quality goods and services together with improving their actual performance. Supermarkets will benefit greatly if they adopt the operating techniques and tools by reducing their operating costs, reduce costs associated with poor stock controls, improved customer satisfaction, reduced expediting costs and ultimately improve their sales revenue. The management of the supermarkets should carry out extensive research on the needs and wants of their customers so that they can supply them with the right goods and services thus are in a position to remain in the business for a longer period of time. The adaptation of the operations management within an organization can ensure that all the departments’ activities are coordinated in the right way therefore can lead to the generation of more revenue into their organizations. The growth and development can also be experienced if qualified persons are employed into the organizations so as run the affairs of the organizations in an effective manner. The employees should be remunerated according to their qualifications so that they can be motivated to increase the output of the organization in an effective manner. The competitive advantages of the supermarkets can be achieved through adopting a culture that meets the needs and requirements of the customers so that the companies can remain in business for a longer period of time. References Leask, A and Yeoman I 2002, Heritage visitor attractions: an operations management Perspective edition illustrated, Cengage Learning EMEA, United States of America. Lewis, W W 2004, The power of productivity: wealth, poverty, and the threat to global stability Edition: illustrated, University of Chicago Press, United States of America. Monks, JG 1995, Schaum’s outline of theory and problems of operations management Edition: 2 illustrated, McGraw-Hill Professional, United States of America. Samuel K. M. 1999, Ho - Business & Economics- Website retrieved on March 26, 2009 Read More