Sunteți pe pagina 1din 4

Using a theoretical framework, discuss how Operations Management is

relevant today in this dynamic Business Environment.

Operations Management is the design, execution and control of


operations that convert resources into desired goods and services and
implement a companys business strategy. Additionally, it is concerned with
the administration of business practices in order to create the highest level
of efficiency attainable and also to maximize profits. Operations are divided
into two categories which are manufacturing and services operations.
Manufacturing operations deal with tangible products such as agriculture and
automobile plants. As for service operations they also include inputs and
outputs, the outputs are usually satisfied customers. Some service
organizations are school, universities, banks and others.
Operations management is the central core function of every company,
irrespective of the size of the company, whether it is manufacturing or
service or either if it is for profit or non-profit organizations. All firms have
corporate goals that they strive to achieve which is economic efficiency,
sustainable growth, increased productivity and most importantly, profit
maximization. Those goals are not easily accomplished because all firms at
some point come across obstacles in the form of internal factors such as
culture and education. There are also external factors such as P.E.S.T.L.E.
(political, economic, social, technology, legal and environmental issues).
Before we can determine if operations management is relevant today in the
dynamic business environment, we have to understand how it was
accounted in businesses before.
Operations Management began at the time of the Industrialization
Revolution when James Watt applied for the patent for the steam engine and
Eli Whitneys concept of interchangeable parts where identical components
made to specifications such that one part can freely and easily replace
another. Both Watt and Whitney led the way when large manufacturing
factories were powered by steam or water. At some point in the 20th century,
Frederick W. Taylor took what was done by Whitney and furthered the work
by studying labour productivity. He introduced Scientific Management which
was focused on machines and the system of their utilization. From his studies
of stopwatch time and motion, concepts such as workflow and automation
emerged.

American Industrialist and the founder of Ford Motor Company, Henry


Ford applied both interchangeable parts and the scientific management
methods, the startup of the assembly line was introduced in the production
of the Model T in 1913. The technique implemented where instead of moving
men past the car, the car was moved past the men which now set the pace
and speed the labourers had to work. By 1914 the plant had installed a
continuous automatic conveyor in order to meet Fords objectives. By 1980
production ran at 27 cars per day. Here we see that without successful
operations management there would be no efficiency or quality, Ford was
able to achieve maximum output but also to create and implement operating
systems and processes that were quotable, consistent and authentic. Also in
Fords work we saw that the cost of product output was based on the
consumption of inputs. Backward integrated was a result of this because Ford
was able to control and keep down the cost of his output by controlling his
input via his creation of the rubber plant. Fords legacy continues to
dominate the 21st century organizations. It was shown that the world could
be organized to solve problems using closely related concepts and system
and control.
Dr. Edwards Deming, an American statistician considered the father of
the modern quality movement. Deming did further work on the scientific
management theory by establishing that organizational cooperation and
learning can improve manufactured product quality and reduce cost; that
effective process control requires data gathering and measuring; that
production workers should participate in continuous improvement initiatives.
In the early 1950s when Japans economy needed to be rebuilt after the
recession crisis, it was the work of Dr. Deming that helped them get back on
track. He told him that their management was the problem and nothing
would get better until they took personal responsibility for change.
The key characteristics of his fourteen principles were customer driven
focus where the customer was placed at the centre of the universe.
Continuous improvement in all areas, it is a never ending process. Prevention
orientation is where inspection is eliminated. Team approach is when
suppliers, employees, management and customers are all equal partners in
the improvement process. Another key characteristic is employee
empowerment when everyone is involved to get the job done.
Operations Management being relevant in todays dynamic business
environment, keeping in mind the key characteristics of Dr. Demings work,
where the customer is the main focus. Without operations management, in

terms of being efficient and effective, goods and services would be of poor
quality which will result in dissatisfaction of customers. Businesses strive to
meet and exceed the customers needs and expectations, in doing so they
will be able to maximize their profits.
In the dynamic business environment, globalization can be an issue
from all perspectives such as economic, financial, and even cultural because
now firms are extended their supply chain beyond their borders and doing
business with other suppliers and customers around the world. With different
companies manufacturing homogenous products in the same market, this
would be where operation management would play a major role because the
organization will have to come up with a strategy so they will be
distinguished among the other. This is when operation strategies will help in
achieving business goals and gain competitive advantage because the firms
processes will be more efficient and effective by providing customers with
goods at the best quality at the lowest price. This could mean employees
were trained or new technology was introduced or even backward integration
so that way the firms will be able to have increased productivity and
customers may be demanding more of the products. With increased sales
that would mean profit maximization for the firm.
Technology is also a factor where it is changing rapidly and it is
providing new and improved ways to facilitate the planning and control of an
organizations activities. With continuous development in technology is
creating tighter connections in the supply chain, improving the ability to plan
and schedule and increasing productivity. There is also the introduction of ebusiness, the benefits would be direct contact with customers, this way there
is no more guessing about demand is necessary, inventory costs go down,
product and service design improves. Also business processes conducted
online, the impact on operations would mean transactions costs are lower,
customer support costs decrease and e-procurement saves a lot of money.
With an e-business company, they will be able to save on cost and they can
concentrate on the quality of their products which will then result in
increased sales.
Competition is also a factor, time-based it is the ability to deliver
products and services to the market quicker than competitors. It has become
an advantage in markets where low price and high quality have ceased to be
market differentiators. Operations management can contribute to good
corporate practices by controlling the inputs, outputs and technologies used
in the transformation process that would mean the organizations processes,

products and services would be sustainable because of the protocols that it


follows that would be accepted to everyone.
Here we can see from the work of Whitney, Taylor, Ford and Deming
that has created Operations Management so many years ago, it is still
relevant in todays business environment. It may not be the same principles,
because organizations may be modified them so that it will suit their
businesses. It is the same concept. It can be determined that without
operations management, no organization will be successful because their
processes would be able to be efficient and effective. Without operations will
be no outputs that mean there will be no companies. Operations
Management is the heart of every organization.