The operations concept, its relevance and meaning
The concept of operations lays more emphasis on the effective management of organizational resources and business operations with the main objective of producing and delivering services in an efficient manner that satisfies the customer (Sadler, 2007). The concept of operations significantly entails the management of both human and capital resources needed to facilitate the production and delivery of goods and services.
In addition, the concept of operations management is associated with the management of the business processes that are aimed at driving profitability for the business enterprise.
Business operations are a core element for every firm, and this implies that operations management plays a significant role in fostering its profitability and competitiveness in the service and manufacturing sector that is characterized by intense competition (Johnston & Clark, 2005).
The development of service is an important aspect of the concept of operations that serves to ensure that there is flexibility in the execution of business operations and processes. This is important in reengineering the design of a product/service to suit the requirements of the clients of an organisation.
With regard to this, it is important for firms to conduct an in depth needs analysis of its customer requirements before embarking on service delivery. Operations management ensures that an organisation deploys the concept of flexibility during the execution of business processes in order to accommodate future changes, without having the need to get back to the starting point the development of service (Johnston & Clark, 2005).
The relevance of the concept of operations in the development of service fosters the attainment of quality during service or product delivery (Sadler, 2007). Quality implies that services are developed and delivered in a manner that meets the required standards without underestimating the expectations from the customer.
The concept of operations also plays an integral role in enhancing the speed of service development and delivery (Johnston & Clark, 2005). Speed implies that the needs of the far-reaching customers are met in an efficient and timely manner that is devoid of cases such as production and delivery delays, and delayed product/service release dates.
Cost is also an important element of the concept of operations. Cost implies that the organizations utilises their resources effectively during production in order to enhance their productivity and the quality of service delivered to the customer.
Areas of operations management
The first element of systems and operations management that are beneficial to organizations is the concept of management control and coordination. This aims at ensuring the realisation of organisational goals in an efficient and timely fashion without jeopardizing the overall organisational operations.
Management coordination and control aims at ensuring there is a systematic methodology towards what the organisation wants to develop (Hill, 2000). Management control and coordination entails the deployment of the various administrative controls and evaluations before a major decision is made at the organisational level.
The operations strategy is also another element of operations management that comprises of the decisions that facilitates the realisation of the desirable operations structure and enhancing the competitiveness of the business (Johnston & Clark, 2005). Production delays and unrealized anticipations play a great deal in affecting the way potential customers perceive the effectiveness of a firm.
Therefore, organizations should deploy effective production control approaches in order to eliminate customer dissatisfaction that may be attributed to ineffective production methodologies. This means that the operations strategy is therefore a vital concept that the organization needs to put into consideration in order for the firm to enhance its competitiveness in the current market (Johnston & Clark, 2005).
Integrating the concept of operation with the business plays a significant role in quality management, performance management and the formulation of organisational procedures and policies. Therefore, operations management, through fostering performance management plays a significant role in affecting the overall success of the organisation.
Policies and procedures ensure that the execution of business processes is done in a manner that utilizes minimal resources to develop a service that is more profitable. The realisation of this is through a reduction of the overhead production costs (Sadler, 2007).
Real business situation where the concept is applicable
A real business situation whereby the operations concept is applicable is the case of fast food industry, where time is a critical success factor for the business. The fast food business requires an in depth understanding of the consumer needs in order to be effective (Johnston & Clark, 2005).
This implies that customers visit the fast food outlets basing on the limited time they have and the availability of the outlets in almost geographical locations. Therefore, how the company delivers its meals, costs and how it the needs of customers are met plays an integral role in fostering the profitability of the firm.
In the context of fast food business, consistent operations are a key requirement for business success. This is achievable using speed, reduced costs and embarking on product development in order to address the changes in consumer preferences.
The Role of operations in enhancing organisational-level competitiveness
In the present business world, organizations can rely on the effectiveness of their operations to deploy strategies that can be used in the establishment of a sustainable competitive advantage (Johnston & Clark, 2005). Basing on the competitive priorities such as cost, quality, speed, dependability and flexibility, businesses have the capability of exploiting their position to develop strategies for growth in a competitive environment.
This section of the paper discusses the role of operations in enhancing organizational level competitiveness basing on the identified competitive priorities (Johnston & Clark, 2005).
Operations management lays emphasis on effective utilization of the organizational capital and human resources in order to ensure cost effectiveness during product/service development and delivery. An organization that aims at the realization of the low cost strategy should focus on the use of resources that play an integral role in fostering its efficiency.
The underlying principle is that an organization that has successfully implemented the low cost strategy in its operations can have the lowest costs in comparison to its competitors. Therefore, an organization can use such a position to reduce its prices in order to increase its market share or maintain the current prices and increase its revenue per unit items compared to its competitors (Johnston & Clark, 2005).
The principal idea of the low cost strategy is that cost and prices are not dependent, and the strategy puts a lot more on costs to achieve a status that it can use to foster competitive advantage or use lower costs to increase its profitability.
The aspect of operations also lays emphasis on quality product development and delivery. Quality simply entails being right, which involves the development and delivery of error-free products and services (Johnston & Clark, 2005).
This implies that effective implementation of operations management results to the development of a distinctive product or service or the development of a perception of a distinctive product that consumers are keener to compensate a premium for it.
An effective implementation of this approach requires an organization to exploit the resources that enhance the responsiveness from their customers, quality product development and innovation.
It is important to take into account that costs are a vital issue of concern during quality product development because the costs associated with unique product development may turn out to be higher compared to the premium amount that the consumers are willing to pay for it (Johnston & Clark, 2005).
An indicator that can be used to measure the effectiveness of the quality in operations is the loyalty of a consumer brand, for instance, the case of Rolex versus Casio watches.
The outcome of this the firm can develop few units and gain maximum profits from this, which in turn increases competitiveness and enhances the productivity of the company. Quality product development also enhances customer satisfaction, which the firm can use to establish a sustainable competitive advantage.
Flexibility in operations management implies that there is wider variety, increased innovation and product customization and adaptability to volume fluctuations. Flexibility is crucial for business organizations in weighing up the choice between the flexibility of the product/service and the production capacity (Sadler, 2007).
With respect to this, it is essential for organizations to conduct an in depth needs analysis of its customer requirements before embarking on service or product delivery.
Operations management ensures that an organisation deploys the concept of flexibility during the execution of business processes in order to accommodate future changes, without having the need to get back to the starting point of its service or product development phase (Hill, 2000).
A company can use the aspect of operations flexibility to establish competitive advantage because the product/services are tailored to meet the diverse needs of its customers.
Operations management also plays a significant role in enhancing competitiveness using the concept of dependability, which is effectively achieved using on-time deliveries. Production delays and unrealized anticipations play a great deal in affecting the way potential customers perceive the effectiveness of a firm.
Dependability, as an aspect of operations concept helps in the elimination of time constraints associated with delivery delays, inefficient production and product release delays. This implies that dependability enhances customer satisfaction by meeting their delivery requirements in an efficient and timely manner. This implies that an organization can make use of such strategy to enhance its competitiveness (Gattorna, 2006).
Speed is also an element of the concept of operations that the organization can use to enhance its competiveness. Speed during production entails being fast, and this is integral in enhancing the responsiveness from customers.
In addition, speed serves to enhance the volume of production in terms of units; this is helpful in increasing the business scope and addressing the potential high demands that may be imposed by the customers. Therefore, a company can make use of the aspect of speed in operations management to increase its profitability, its customer scope, which translates to a sustainable competitive advantage (Johnston & Clark, 2005).
Modularization
Modularization entails a reduction of the design complexity with the principal objective of facilitating a timely product/service delivery (Hill, 2000). Modularization is a common phenomenon in the supply chain operations of the manufacturing business, whereby the suppliers usually aim at the delivering the finished products in a short time.
The increase in the complexity and speed of the manufacturing process implies that there is need to create finished products quickly. This is mainly because the manufacturers are supplied with complete subsystems that can be easily fitted to generate the completed products with less complexity and in a less time compared to working with independent parts to come up with a completed product (Johnston & Clark, 2005).
Rapid product development is one of the significant drivers for the deployment of modularization during operations management, which plays an integral role in increasing the demand from consumers and keeping off competitors in the market. Product development is an activity that consumes more resources and increasing the speed of the process implies that the firm will incur increased production costs.
Product modularity serves to increase the speed of the production process in an effective manner since it involves making use of the same components in diverse products. This is an effective approach achieving diversity in product development at relatively low costs.
Modularization can also be applied in the service industry, as in the case of the programme “Art Attack” made for the Disney Channel that broadcasts to a global audience. In the above, the application of the concept of modularization is evident using a common element in 60 percent of the shows in order to meet the regional demands of the viewers.
Modularization in this context implies that the development of the final product is based on the insertion of already completed clips to address the regional needs effectively (Sadler, 2007).
The basic argument is that modularization eliminated the need to repeat the whole procedure of show production in the six different versions; rather, the videos were integrated onto the common elements across all the episodes to reflect the specific versions required for a particular region (Sadler, 2007).
The use of modularization implies that products are developed by integrating the complete subsystems that make up the entire product, which is the case of the Art Attack program. This is because the final product will have the head and shoulders of presenters from the different regions that have been mixed with the same pair of hands used in construction of the final product according to the regional demands (Hill, 2000).
The modular components used in the case have facilitated the reuse of the diverse models in the development of the same products; this has helped in enhancing cost effectiveness and reducing delivery time, while at the same time increasing efficiency for global business operations (Gattorna, 2006).
Contrary to the conventional supply chains approach, whereby the suppliers provide manufactures with the basic components required for product completion, modularization relies on the supply of complete subsystems for product development in order to reduce the manufacturing complexity and reducing the time for product development (Hill, 2000).
This means that the manufacturer is supplied with a complete sub-unit that is ready to install to develop a completed product.
There are various similarities between the approach deployed in “Art Attack” and the design of motor vehicles by automobile industries. With respect to modularization in the context of motor vehicle manufacturers, the suppliers are responsible for the development of a complete subsystem rather than basic raw materials that can be used for assembling the units of the automobile (Sadler, 2007).
This helps in eliminating cases of parallel assembling of the complete automobile while at the same time assembling its components. For example, the suppliers create a complete engine and offer it to the manufacturers completely ready for installation. Modularization implies that suppliers have the scope regarding the design and the required innovation by the manufacturers (Hill, 2000).
Suppliers usually offer the design and a cost effective sub-unit development because of the freedom awarded to them in the production process. Modularization requires long-term commitments and goals aimed at cost reduction; as a result, the suppliers and automobile manufacturers collaborate to enhance product value.
Similarly, the modular components can be used again in diverse models of the same products, resulting to a reduction of the production costs and time for production. Modularization enhances operational efficiency on a global perspective (Hill, 2000).
It can be argued that modularity in the automobile and the larger manufacturing industry serves to reduce significantly the assembly time because of the effects associated with the learning curve. Effective implementation of modularization results to increased market share because of the business advantage that the firm can exploit to increase its competitiveness.
In addition, modularization during the process of product development results to advantages of increased economies of scale, a reduction in the need for support operations and investment in production tools (Harrison & Van Hoek, 2002).
References
Gattorna, J., 2006. Living Supply Chains. Harlow, UK: Prentice Hall.
Harrison, A. & Van Hoek, R., 2002. Logistics Management and Strategy. Harlow, UK: Prentice Hall.
Hill, T., 2000. Manufacturing Strategy, text and cases. New York: Palgrave Macmilan.
Johnston, R. & Clark, G., 2005. Service Operations Managemen. Harlow, UK: Pearson Education.
Sadler, I., 2007. Logistics and Supply Chain Integration. London: Sage.