The Importance of Operations Management in Business Organizations

How Business Organizations Strategize

Operations Management is the branch of an organization that deals with the actual production of goods and services, to be sold in the market. It serves various important functions in an organization like strategizing, planning, coordination, organizing, and controlling the resources and other factors, which are responsible for the successful production of goods and services. Also, Operations management’s primary focus is on the effectiveness of the internal processes of the company. Armistead, & Machin, suggests that Operations management is concerned with the management of the people, technology, IT department, processes, and other resources in order to produce goods and services (1997).

Operations management core concepts include competitiveness, Strategies, productivity, forecasting, supply chain, product and service design, strategic capacity planning, ethics, and reliability to supply products to consumers (Stevenson, 2014). Also, the team members in operations management work very adeptly to meet the needs and demands of consumers in a very timely and effective manner. For example, resources needed for the production of the accurate product, availability of resources, work schedule, and venue of the work needs to be decided upfront to design and deliver the product or service competently.

The concept of Operations management addresses various processes on how business organizations strategize. It includes a complete business plan that describes the opportunity and outlines a strategic methodology to pursue the given opportunity. Becherer, & Helms suggests that cost estimates and profitability projections in the business plan are used to guide business strategy and provide beneficial information to potential partners and investors (2009). In other words, strategic planning in businesses is very critical as it is spontaneously linked with improved performance.

Operations Management Concept

The operations management concept involves the process of planning, scheduling, organizing, and controlling the activities that transform raw materials into fine finished products. It involves set of very well-recognized and well-developed tools and techniques that help in managing the framework of the operations management. Additionally, operations management is the study of operations that hubs on the effective planning, scheduling, use, and control of a manufacturing or service firm and their operations. The field is a mixture of concepts resulting from design engineering, industrial plotting, administration information systems, quality management, accounting, and other functions.

Janel explains that the operations management team has functions that are conjoint with many other operations team like designing, planning, organizing, directing, and controlling (2019). Furthermore, it is the Operations management team that establishes goals and organizes the system in such a manner that if any obstruction arises, necessary planned procedures must be implemented immediately to attain the predetermined goals. Similarly, there are various models that are being used in the everyday business of the organizations like data model, which is used when the data analyst of the company analyzes huge amount of raw data to produce meaningful and advanced products.

Moreover, there are models such as the physical model, which involves real-life scenarios/products, which are more like the abstracts or virtual reality of the counterparts, and mathematical models which are the most abstract and involves mathematical equations. According to Stevenson, “Operations Management is the abstraction of reality, a simplified representation of something that helps the audience to understand the process of operations Management as a whole” (2015).

How Business Organizations Strategize

Frolick & Ariyachandra suggests, “successful execution of business strategy is a well-recognized requirement for an organization’s survival in the hypercompetitive market” (2006). In other words, business organizations' strategies involve intricate processes of planning, development, and implementation, which could be summarized in the business performance management process. Also, the strategic approach of business organizations involves integrated and collaborative processes, which helps to achieve and identify the key performance indicators and ongoing support that is needed to perform those goals. Subsequently, this could lead to effective business strategy implementation throughout the organization.

Business Intelligence and business performance management are the main core strategic approaches that are most widely adopted by organizations in today’s world. However, Business performance management (BPM) has a very broader scope in implementing business organizations' strategies as BPM solution involves timely data that provides support for operational decision-making in addition to the strategic, tactical, and quality decision-making process (Frolick & Ariyachandra, 2006).

The strategic approach of an organization involves steps like the readiness of the business team, availability of resources, primary collection of data, developmental strategy, quality control, and execution of the plan. For instance, Google Analytics has greatly helped organizations to answer the voracious needs and planning approaches of the organizations. Shyandilya, Gupta, & Goud, suggests that various tools in Google Analytics have helped the marketing department of organizations to track production activities, create more marketing campaigns and strategize the demographics which the organization struggles to market (2014).

Product & Service Design And Forecasting

Technology is advancing at a much faster pace that the products and services provided by organizations must be redesigned to gain a competitive advantage over organizations. Stevenson suggests, “product and service design has typically, had strategic implications for the success and prosperity of an organization” (2015). There are various reasons for redesigning and re-engineering the product and services as it impacts every corner of a business organization that involves operations, finances, information technology, and supply chain. Designing a service is a much more complicated process than redesigning a product as it is an intangible asset of the company which involves various generic activities such as problem-solving, idea generation, domain knowledge, requirements elicitation, and re-proposing the solution architecture (Goldkuhl, & Perjons, 2014).

Besides, it is very important to consider ethical aspects when re-designing the products and services as the operations management team should be careful and must look into this concept very profoundly. Niinimäki explains, “ possibilities in the industry to make ecological and ethical choices are limited, designers and producers do what they can and values & ethics are the fundamental ground for sustainability of any organization” (2015). Also, the product owners rush the designers to re-engineer the products and services and in the scurry process ethical obligations are skipped inadvertently. Hence, business organizations must carefully consider ethical obligations, which include the impact on the environment, and government agencies who regulate ethical policies.

Stevenson explains that forecasts include necessary inputs in the decision processes of operations management since it indicates the future value of a variable of interest (2015). In other words, forecasting involves calculating the upcoming value and favorable conditions which could support product marketing. Also, forecasts are very critical in supply chains as inaccurate forecasts can lead to shortages or abundance in the supply chain. For example, if an export business produces 5000 headsets and the market demand of the headsets is increasing enormously, then the forecast must indicate to produce of more headsets in order to meet customer needs. Amsa, Aibinu, Salami, & Balogun, elaborates that the categorization of the processes involved in forecasting are divided mainly into four groups, “input features selection, data processing, forecast model development and performance evaluation” (2012).

Life Cycle Assessment Issues

The life cycle of a product embraces every meticulous step from inception to the actual development of the product and its Cradle to Grave situation. Also, during this lifecycle, several issues like lack of resource, incorrect applicability of the formula, and carelessness in the implementation of the rules and processes governed by regulatory bodies come into the picture. It is necessary to bare in mind the changes that could occur during the process; for instance, the cost of production of the good or the demand of the consumer might change due to the availability of other similar products.

Additionally, it is important to consider the unpredictability of the product as it is challenging for the manufacturers to determine exactly how likely the product will stay in the market. It is product life cycle curve that includes an introduction, Growth, Maturity and decline in the demand of the product. Life cycle curves have helped manufacturers and business owners with the opportunity to be planned ahead and be better prepared for upcoming challenges.

Cradle to Grave assessment is the evaluating and analyzing life cycle of the product and its impact on the environment. Stevenson suggests that this assessment focuses on environmental factors such as global warming, oxygen depletion, solid waste generation and smog formation (2015). The purpose and goal of Cradle to Grave assessment is to minimize the destruction and depletion of natural resources while selecting the products and services that could potentially have less impact on the environment.

Summary and Conclusions

In conclusion, the Operations management team of a business organization entices various core aspects of the organization. These concepts include the various strategies adopted by the organizations, the competitiveness of the products in the market, redesigning and reengineering products and services to meet the needs of consumers, and supply chain management. Also, forecasting involves various qualitative and quantitative approaches to predict the changes and unpredictability of the product base on various factors.

In addition, forecasting plays a very important role to operate the supply chain department as it helps to predict future needs and usage of the product being manufactured. Legal and ethical obligations must be followed to preserve the integrity of the organization as well as of the legal bodies that encompass them. Lastly, the Cradle-to-grave assessment principle must be evaluated very thoroughly to ascertain to use of products and resources that have minimal or no impact on the environment.