WEEKLY ASSIGNMENT NO.

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Q1. Operations Management has assumed centre stage and is being regarded as a strategic weapon for gaining competitive advantage in the context of Globalization. Elucidate. . Ans. 1 Operations strategy is the development of a long-term plan for using the major resources of the rm for a high degree of compatibility between these resources and the rms long term corporate strategy. Operations strategy addresses very broad questions about how these major resources should be congured to achieve the desired corporate objectives. Some of the major longterm issues addressed in operations strategy include How large do we make our facilities? What type of process(es) do we install to make the products or provide services? What will our supply chain look like? What will be the nature of our workforce? How do we ensure quality? Each of these issues is addressed in greater detail in subsequent chapters. In this chapter we want to take a macroscopic perspective to better understand how these issues are interrelated. The world is quickly becoming a global village, caused in large part by technology. As a result, competition in most industries has intensive signicantly in recent years, and this trend towards hyper-competition is expected to continue. At the same time, globalization provides new opportunities for companies in the form of new, previously untapped markets, for their products as well as new sources for raw materials and components at signicantly lower costs. This movement towards a single world economy has occurred for several reasons,

including (a) continued advances in information technology that facilitate the rapid transfer of data across vast distances, (b) the growing trend to lower trade barriers as evidenced by NAFTA and the formation of the European Union, (c) the trend toward lower transportation costs, and (d) the emergence of high-growth markets with associated high prot margins in newly industrialized countries (NIC). These new markets can be compared to the saturated markets and shrinking prot margins that are being experienced in the more highly developed countries. For example, Jack Smith, the former chairman of General Motors, expects the growing Asian market, especially China, to be key to the companys future. China had a passenger vehicle growth rate of 56 percent in 2002. New vehicle sales in Canada in 2002, in comparison, increased by 8.5 percent. As a result of this globalization of business, managers must extend their vision beyond their own national borders when developing operations strategies. This includes the location of manufacturing plants in Southeast Asia because of low labour rates, or the establishment of call centres in Ireland because of a combination of inexpensive labour, an educated workforce, and the necessary technology infrastructure that exists. In addition to structural strategy decisions, such as where to locate a new plant, infrastructural issues also must be evaluated when looking to expand a companys operations strategy globally. Here the education level of the workforce, the language, and the impact of local laws and customs must be taken into consideration. For example, a major attraction for locating in Ireland is its highly educated workforce. As an another illustration, employees in Germany can work up to 70 hours in some weeks without being paid overtime, and then work as little as 30 hours or less in other weeks, as long as the total hours worked over a given time period (such as 6 or 12 months) meets an agreed-upon amount.

Q2. What are the important trends seen in operations management in recent years? How has this change affected the role of an operations manager in an organization? Ans. 2 RECENT TRENDS IN OPERATIONS MANAGEMENT

The operations management is the process of managing activities that produces goods and services in order to create value to the customer. With recent development the operations management has changed drastically and major changes in operations management are sumerized below:

Global Focus

The geographical limitation of the market has expanded from focusing on local markets to focus on global markets. This has occurred due to the rapid development in communication, globalization and increased mobility of resources among countries. As a result countries focus on producing goods and services at a global scale rather than limiting themselves to geographical boundaries.

Just In Time Production

In past production was carried out in a mass production method where there were batches of goods produced and sold at mass scale generating economies of scale. In the modern operations management era batch production focus has shifted towards Just In Time production where goods and services are produced upon the receipt of order with customizations. It has reduced the inventory cost drastically.

Supply Chain Partnerships

In past the purchasing activities were carried out based on the lowest bid where organizations chose the supplier who provides the lowest bid for a particular order. This was more short term focused and quality and reliability was ignored. In

modern days the low bid purchasing has shifted to supply chain partnerships where companies consider suppliers as a part of their value chain and build long lasting relationships with suppliers rather than focusing on short terms gains with low prices.

Product Development

In past the product life cycle was lengthy and when a product was introduced it stayed in the market for a long time. But with the rapid expansion of technology the product life cycle has become short where every product is replaced by a new product very fast. Due to this reason companies are not able to have lengthy product development processes and the forced to introduce rapid development of new product while encouraging innovation.

Customized Production

In past there was mass production where production was made in large scale with standardized production to gain economies of scale. But with increased flexibility and competition now companies are forced to customize their products based on customer requirement and techniques such as mass customization is used in doing so.

Employee Empowerment

In past employees were treated as just another input to the production process where they were treated like machines. There was specialization and workers concerns were ignored. With the development of Human Resource Management now firms focus on employee empowerment where they treat employees as resources that bring competitive edge to the firm. In this concept the workerc concerns are heard and organizations make arrangements for their welfare and mental/physical fitness.

Green Production manufacturing at the lowest cost ignoring the damage made to

In past the production was focused on obtaining resources at lowest possible cost and the environment. Due to the initiatives by environment pressure groups companies are moving towards green production and green marketing where they carry out business activities without damaging the environment by not destroying natural resources, taking care of forests and wild life and so on. CHANGE AFFECTED THE ROLE OF AN OPERATIONS MANAGER IN AN ORGANIZATION Operations is the process of converting the inputs to output in order to add value to the customer. Operations manager is the in charge of operations of an organization where he holds diversified responsibilities in an organization. Roles and responsibilities of an operations manager can be described as follows:

Manager of cost centers-

Operations generates costs to the organization and managing operations focuses greatly on managing costs of the organization. Managing cost can described in many angles: As the operations manager, s/he needs manage the total labour force related to operations and labour force is directly related to the labour cost of the organization. The amount of labour that is used in operations determines the labour cost of the organization. Therefore manager is responsible for recruiting right number of people with right skills to avoid any over spendings. Operations involves utilizing physical/fixed assets of an organization. (70%-80% of total assets are used in operations) Assets generates cost to the organization in

purchasing the asset and maintaining. As the manager of the operations, the operations manager needs to ensure that assets are well managed in the best interest of the organization. Operations utilizes a major portion of the organization budget The manager has to ensure that the desired output level is achieved within the cost targets. This will support the organization to maintain their cost structure as expected.

Ensure Efficiency and effectiveness-

As the operations manager s/he needs to ensure that daily operations are carried out in an efficient manner. S/he needs to ensure that the desired level of output is achieved with the input added to the process. To ensure the efficiency the operations manager needs to achieve daily operational targets and control over allocation of resources. Effectiveness is doing the right things at the operations. As the operations manager he needs to do the right things about operations focusing on long term effect. Since long term effects can be achieved only after short term revolutions he needs to well manage short term changes and achieve long term revolutions in the organization.

Manage technology-

In the modern world technology changes rapidly and the operations manager needs to identify the desired level of technology in production process. He needs to employ the technology in production process and manage technology changes in the environment to be updated with latest trends.

Overall Manager-

Operations manager holds he responsibility of managing every single thing about operations. He divides the total system of operations in to sub systems. Sub

systems are delegated to functional managers where he manages the overall system of operations.

Interphase-

Operations manager act as a coordinator between the top management (Strategic end) and the operational level (working end). When the top management decides upon what they need to achieve, the operations manager communicate it to operational level staff and implement the strategies. Operations manager can be seen as the middle line between strategic level and operational level.

Managing complexity-

Business operations are complicated with many due to inter relationships, size, large investment, diversification, change and cost structure. Operations manager is responsible for making sense of complications and manage them well.