Executive Summary
Since the onset of man’s industrial ambitions, one reality that has constantly prevailed is that of change which has led to old ways sometimes being dropped for current trends. Current marketing and competition trends have invariably forced organizations to shift from the traditional business patterns to more recent in which management and leadership are core to the success of the business.
As such, businesses in all sectors have been forced to come up with various strategies to address these monumental changes. This study purports to discuss the current trends in the production and marketing processes utilized by various organizations in a bid to remain relevant in a business environment characterized by aggressive competition, technological advancements and socioeconomic challenges.
The most apparent change in the business sector is the shift to a more consumer oriented stance by the key players in the industry. The customer oriented behavior has resulted in a reshaping of the manner in which product and service providers operate and subsequently, there have been massive efforts directed towards customer satisfaction, Forecasting, Capacity planning, Location, Inventory management,
Layout of the store and Scheduling by organizations. It is with these undertones that this study seeks to explore how each of these factors contributes to the successful operation of business entities. In this regard, a detailed analysis shall be carried out to pinpoint various situations whereby the aforementioned concepts have been instrumental in ensuring the success of organizations. To this end, questions regarding to how and why these aspects are important to business management shall be adequately answered.
Introduction
Through out their existence, organizations and businesses are considerably pressured to raise their levels of performance and productivity. This is especially so in the modern day business environment which is characterized by aggression and excessive competition. Businesses are therefore constantly forced to exhibit innovation and enhanced performance so as to remain relevant and profitable in the ever increasingly competitive arena.
To achieve the organizational goals of increased productivity, there are factors that should be considered in order to ensure timely delivery of quality services to the targeted market. As such, factors such as Customer satisfaction Forecasting Capacity planning Location Inventory management Layout of the store and Scheduling play a pivotal role in ensuring that an organization remains relevant and survives the hurdles present at the business environment it ventures in.
However, it should be noted that the successful execution of these concepts relies heavily on the leadership and management system adopted by an organization.
As such, it would be a worthwhile endeavor to understand these two pivotal elements before expounding on the matters at hand. Leadership refers to a process through which one person uses the help and support of others to achieve a particular goal or task. Strong leadership is not only desirable but essential to the success of the business for it is through it that organizational goals are met.
On the other hand, Management is the effective and efficient utilization of resources that are available to an organization. It entails planning, organizing, leading and controlling of the organizations activities and resources with an aim of achieving organizational goals and objectives (Magretta and Stone 14).
All leadership and management activities are channeled towards the growth and expansion of the organization which arises from the organizations profitability. As such, effective management skills make a great impact in ensuring that an organization remains relevant in an economy characterized by stiff competition and dynamicity.
Research methodology
As Kumar contends, the research methodology chosen to address a particular topic depends on the scope of the topic (issues tackled), measurability of the variables and the type of research (qualitative or quantitative) carried out (274).
Since this research deals with socioeconomic aspects, a qualitative research methodology shall be adopted. As such, the choice of sources used to complete this research will be based on credibility, accuracy and applicability of these sources to related researches. Bearing this in mind, this study shall rely on relevant literature as basis for research.
Through the analysis of credible literatures, the study shall in detail analyze how customer satisfaction, forecasting, capacity planning, location, inventory management, layout of the store and scheduling are important factors to the successful operation of an organization. The primary sources of data will include books and journal articles while secondary sources of information will consist of data collected in group discussions, lecture notes and academic website providing valuable insight on these aspects.
Findings
As mentioned earlier, the success of any given organization depends on the leadership and management skills employed during the execution of various operations within the organization.
From the preliminary research, it is evident that these two factors interchangeably play equally important roles in determining Customer satisfaction, Forecasting, Capacity planning, Location, Inventory management, Layout of the store and Scheduling processes in an organization (Stevenson 43). In addition, it is evident that these aspects must work together to gain the expected result.
For example customer satisfaction relies mainly on the ability of an organization to forecast future demands and supplies (Capacity planning) as well as the ease to access their preferred goods and services (location). In addition, effective inventory management relies on store layout and scheduling. From these findings, it can arguably be stated that the success of any organization depends on its leader’s ability to synchronize and intermix these aspects efficiently.
According to Oakland, customer satisfaction has in the recent past proved to be an invaluable tool in tackling competition and improvement of quality (342). According to the author, continuous assessment of consumer needs has been instrumental in ensuring that organizations produce the quality and quantity needed to meet the ever increasing demand of various goods and services (Oakland 343).
In addition, Vanston contends that forecasting has been instrumental in ensuring that organizations make the best out of difficult situations (46). Vanston further asserts that through forecasting, organizations have been able to predict future market and technological trends (47). As such, organizations are able to develop adequate countermeasures and strategies which are later used to avert the many challenges that the future may hold.
However, different scholars have come up with better arguments suggesting that the success of any business does not rely on single concepts but on the ability of organizations to find a mix that best suit their operations and future goals and objectives.
Analysis and Interpretation
Customer satisfaction
Management asserts that in the present day environment, the success of an organization is based on the establishment of a sustained competitive advantage over the other players in the industry (1).
One manner in which this can be achieved is by ensuring customer satisfaction since the customers are the people who possess the power to give the organization a competitive edge over other players in the environment. The need to ensure customer satisfaction is so great in modern day organization and Oakland suggests that all quality initiatives by the organization should be firmly tied to a continuous assessment of customer needs so as to generate greater customer satisfaction (343).
This is because research shows a positive relationship between heightened customer satisfaction to brand loyalty and increased sales for the organization. As such, ensuring customer satisfaction has become a key goal for most organizations as they aim to gain a competitive edge in a market that is increasingly becoming aggressive.
Oakland reveals that measuring, analyzing and re-engineering work process so as to improve customer satisfaction can have numerous pay offs to the organization (194). Customer satisfaction results in customer loyalty and increased retention which are important in the increasingly aggressive market. In addition to this, customer satisfaction increases the responsiveness by customers to advances from the organization in therefore making attempts to sell more products successful by the organization in question.
The average organization spends a significant amount of money in marketing and advertisement costs. This invariably cut into the profit margins of the particular organization. IBF Management indicates that by ensuring customer satisfaction, the organization may experience lowered marketing costs due to consumer loyalty which would result in higher profit margins.
Forecasting
Most organizations operate in an environment where it is desirable to know that the outcome of the decisions of the present will be on the business. For this reason, the organization seeks out to project the future developments so as to prepare itself for any eventualities or adjust its actions according.
These future projections are made by use of forecasting models which vary in terms of complexity as well as validity and accuracy. Forecasting functions by trying to make an estimate of future events by the projection of past data which is already available to the organization. Forecasting varies significantly from prediction since while prediction makes an estimate of the future based on subjective criteria, forecasting estimates the future by use of objective past data
In any organization, the role that decision making plays is significant and it can be authoritatively stated that without sound decision making, the future of the organization cannot be guaranteed. Vanston notes that all important business decisions are based on “how decision-makers foresee developments in market demand, competitive threats, new technologies and a host of other influencing factors” (47).
For sound decisions to be made, a lot of factors in addition to the knowledge and experience of the decision maker have to be taken into consideration. Vanston documents that a good forecast contributes to better decision making by helping the decision maker avoid pitfalls or take advantage or opportunities.
For a forecast to be of any use to the organization, it has to be credible in nature. For this reason, most managers favor forecasts which are valid and based on solid facts since such forecasts have a higher probably of being right and hence can be used to prevent unfavorable actions from occurring (47).Forecasts therefore play a crucial role in the successful operation of a business.
Capacity Planning
According to Wisner, Tan and Leong, capacity refers to the “maximum work load that an organization is capable of completing in a given period of time” while resource planning is “the process of determining the production capacity required to meet demand” (174). A discrepancy between the capacity and demand results in gross inefficiency which may negatively impact on the organization’s ability to satisfy its consumers and therefore remain competitive in the market.
Excess or insufficient capacity will result in an organization not being able to benefit from its resources. Capacity planning is aimed at ensuring that the capacity is not over utilized or underutilized. This results in the organization remaining efficient and therefore competitive in the business environment.
The efficiency that comes about as a result of good capacity planning is beneficial to both the organization and its customers. Capacity planning enables an organization to know whether its resources are capable for satisfying the production plans of the organization within a set period of time.
If the organization is unable to meet its production plans, changes may be made which could involve increasing the resources. In the case where the organization can meet the production plans with an excess of resources, the resources may be reduced therefore reducing on costs for the organization.
By possessing such knowledge, the organization is able to ensure profit maximization by reducing costs and ensuing that the organization is able to satisfy the market. A good capacity plan will also reduce any lost opportunities which may result from demand increasing rapidly and the organization lacking the means to supply the demand. To the consumer, a good capacity plan ensures that there are always goods in the market to suit their demand.
Location
Location is largely dependent on the specific operations of a business but nevertheless, Wisner, Tan and Leong declare that strategic location is the most important decision for many corporate (385). There are many factors that come into play when deciding on the location of the organization.
Access and proximity to market/customers is one of the core factors to be taken into consideration when choosing the location. This assertion is best articulated by Andersen (as cited by Wisner, Tan and Leong) who reveals that manufacturing plants should be “within the delivery proximity of the customers, and in a place that offers lower cost labor and real estate” (385).
For organizations that specialize in service provision, proximity to customers is the most critical factor since few customers will go to a remotely located business to solicit its services. Another consideration when choosing the location is labor issues that the organization may face. For an organization that requires a lot of specialized labor, an urban setting where such labor is abundant may be preferred to a remote area despite the urban area having a high cost or real estate.
Location has a huge bearing on the success of the organization. An organization which has location advantage over its competitors is more likely to capture the market which will result in higher profits for the organization. As a result of the location choice of the organization, the organization can also be able to benefit from many other complementary industries which may be located in its vicinity. The organization can also enjoy the local amenities and infrastructure that may be present in its location.
Inventory Management
Inventory management is defined as “the process of managing inventories in such a way to minimize inventory costs” (Pride, Hughes and Kapoor 417). The problem with inventory is that while there is never enough of it available for the organization’s customer-service managers, there’s usually too much of it for the top managements liking (Wisner, Tan and Leong 215).
These conflicting views are both valid since excessive inventory results in the unnecessary wastage of scarce organizational resources while too little inventory might result in the failure of the organization since it will be unable to cater to the needs of its customers. Striking a balance between the two is therefore mandatory for the successful operation of an organization.
The reason why inventory management is especially significant is because it allows the organization to maximize its profits by minimizing inventory costs. The costs include holding costs which is the cost that the organization incurs for storing products until they are shipped to the customers. Another cost associated with inventory is the stock-out cost which is the cost that the organization incurs as a result of sales lost when the inventory lacks items (Pride, Hughes and Kapoor 417).
An organization must therefore seek to ensure that its inventory is neither excessive nor inadequate. An effective inventory management policy will result in a reduction in the waste that is the consequence of overstocking and a prevention of the losses that will occur as a result of stock outs which result from under stocking. As such, proper inventory management is not only desirable for an organization but may spell out the difference between a successful and a failed organization.
Layout of the store
Store layout refers to the arrangement of goods in a store such that they are easy to locate and consumes the available space maximally. The layout of the store plays a pivotal role in ensuring that stock taking is easy and quicker. In addition, it enables businesses to plan for future demand and supply of goods since the business has an organized store keeping inventory.
The layout of the store is very important especially in chain stores and supermarkets. This is mainly attributed to the fact that the layout attracts the customers and increases the chances of return customers since clients can find whatever they want with ease. In addition, an efficient store layout minimizes the chances of overcrowding in these stores by ensuring that the space provided is fully utilized to display all the goods and services on sale.
Scheduling
One of the most important processes in any business undertaking is scheduling. Scheduling which is defined as the process of ensuring that materials and other necessary resources are at the right place at the right time is mandatory for the effective operations of an organization (Pride, Hughes and Kapoor 232).
It would be impossible to operate any business of non-trivial proportions without the use of scheduling. This is because in most businesses, specific tasks need to be carried out at specific times or in specific order. Scheduling ensures that the timing function is taken into consideration and that operations that can occur concurrently are accounted for hence ensuring efficiency.
Scheduling fulfils various roles which make the scheduling process indispensable to the organization. By use of tools such as the Gantt chart, the scheduling process helps the managers to lay out the order in which tasks need to be completed and determine the resources that are necessary to ensure that the project is successful. Also, scheduling gives the managers a tool through which they can monitor the progress of activities through benchmarks.
This also assists one to know whether there is a delay in the business process and subsequently deal with the same. In today’s business environment, organizations are increasingly forced to work in a collaborative manner so as to fulfill their goals and objectives. Wisner, Tan and Leong reveal that scheduling of operations is of great importance in today’s intensely competitive marketplace where organizations are forced to work in a collaborative manner so as to meet delivery due dates and eliminate waste.
Recommendations
As can be deduced from the discussion above, there are many factors that facilitate the successful execution of operations and guarantee profits.
As such, it is the duty of the managers and supervisors to ensure that the aforementioned concepts are adequately addressed if the organization they represent is to remain profitable.
In order to ensure success, it is recommended that the business owner selects a location that best suits his/her market needs as well as the needs of the consumers. As such, the business location should be selected carefully considering factors such as nearness to the market, nearness to suppliers, availability of the market and good infrastructure to and from the market.
In addition, business owners should invest heavily on quality assurance. While stepping up to the required standards of quality is an expensive ordeal. However, it would be a worthwhile endeavor since it would ensure consumer loyalty and a competitive advantage in a market dealing with substitute and differentiated products. Similarly, business entities should implement a customer care training program for all the existing and new employees.
The implementation of such programs would go a long way in ensuring that client’s needs are understood and addressed in an efficient and effective manner. In addition, such programs would guarantee customer satisfaction since all employees would be well equipped to deal with dissatisfied customers, complains and suggestions without necessarily affecting the quality of services rendered and consumer loyalty.
Conclusion
This paper set out to give an elaborate analysis of several factors which are necessary for the successful operation of an organization. To this end, this paper has highlighted a number of important factors and proceeded to defend why and how they are of significance to the operation of an organization.
From this paper, it is evident that customer satisfaction is a primary objective of organizations and as such, quality assurance must be given primacy in the running of an organization. Forecasting, capacity planning, inventory management and scheduling have been documented to be mandatory in the running of any non-trivial enterprise. Location and layout of the store have been seen to be important but implemented differently depending on the business in which the organization is engaged in.
While the factors contained in this paper are not the only agents that are necessary for the operation of the organization, it can be authoritatively stated from the evidence presented herein that these factors play a critical role in the success of an organization and their absence could invariably result in the failure of the organization.
Works Cited
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