Impactof Operations Management to Organizational Success
Impactof Operations Management to Organizational Success
Operationsmanagement is a multidisciplinary field of management that focuses onthe management of the organization’s operations. The scope ofoperations management encompasses various aspects (includingplanning, design, and decision making) of organizational managementthat determine the success of the entire firm (Corbett, 2009).Although human beings have been producing things through history, thefield of operation management gained significance during the periodof industrial engineering when people found the need to enhanceprocess and refine the basic principles that governed massproduction. Some of the key aspects considered in operationsmanagement include the decision on the type of products that shouldbe produced, quantities to be produced, size of production facility,type of equipments and techniques to be used in production, andapproaches that should be used to improve the quality of products.This paper will focus on the ways through which operations managementleads to the success of an organization. The paper will address keyaspects of operations management that are harnessed to improveorganization`s operations and how organizations build success usingoperations management.
Keyaspects of operations management that determine organizationalsuccess
Thefield of operations management should entail three issues thatdetermine the organization’s capacity to develop strategies thatdeal with threats as well as opportunities in the businessenvironment. First, organizations should be able to design systemsthat can produce goods or services in quantities that meet the marketdemand. The design process is one of the vital activities inoperations management because it determines the features,characteristics, and functionality of the target products (Voss,1995). These are the key factors that influence the customer’spurchasing decisions. This implies that the design of a productionsystem determines the success of the organization in selling itsproducts and services in the market.
Secondly,organizations should have plans on how the system can be utilizedmore effectively. System planning is part of operations managementthat involves the description of how the organizational managementexpects to use its resource base created when designing theproduction system. Production planners make decisions that vary onthe basis of time horizon. Long-term planning decisions vary from oneorganization to the other and it depends on the time that theorganization expects to make significant changes in its productionfacility and technology used in the production process (Banker &Khosla, 2000). The medium-term planning decisions involve thedevelopment of staff training programs, determining the size of theworkforce, and material to be ordered. Production or process planningis a crucial aspect of operation management that is responsible forthe efficiency with which an organization can produce goods andservices to meet the market demand. The operations managementpractices that are directed at more efficient planning, controlling,and market-driven production lead to organization’s success amidstthe stiff competition.
Third,the capacity of the organization to manage the main elements ofoperations determines the success of the firm. The process ofmanaging the production system is accomplished by encouragingparticipation of all employees with the objective of enhancingorganizational performance. Currently, operations managers areseeking for continuous improvement as part of their managementpractices. According to Banker & Khosla (2000) continuousimprovement is achieved through participative management, whichensures that employees of all levels take part in the decision makingprocess. Participative management also ensures that the members ofthe frontline workforce are given all information that is relevantfor effective decision making. The key areas of major concern in themanagement of operations’ system include material management andquality management. Material management focuses on decisionspertaining to procurement, handling, control, distribution, andstorage. Quality management, on the other hand, focuses on the keyfeatures of products that build quality of services and products(Banker & Khosla, 2000). Effective management of materials andquality improves organization`s performance and its success in thecompetitive market.
Usingoperations to build success
Firmscan use operations to enhance their competitiveness in the market.This can be achieved by using operations to improve the key factors(including quality, product variety, availability, and features) thatinfluence consumers’ buying decisions. There are three major waysthrough which organizations can use operations to build success.First, establishing the link between the overall organizationalstrategy and operational strategy creates synergy that guaranteesorganization’s success. This is based on the notion that operationsmanagement plays a major role in the process of executing the firm’soverall strategy (Kleindorfer, Singhal & Wassenhove, 2005).Linking operational strategies with the organizational strategiescreates a perception that equipment, employee training, andfacilities are no longer suboptimal objectives of operationsdepartment, but they are means of pursuing organizational goals.
Secondly,operations should be viewed as activities that add-value to productsand services offered by the organization. This is because operationsare used to convert raw materials into finished products that aresold at a higher price, thus increasing organization’sprofitability. Currently, organizations have an option of integratingmodern technology in their operations in order to enhance efficiency.Technological advancement enables the organizations to increase thequality of products and the number of goods produced in a given timeusing lesser quantities of resources (Gunasekaran, Marri, McGuaghey &Nebhwani, 2002). This implies that technology enhances the efficiencyof the organization’s operations, thus increasing itscompetitiveness in the market.
Third,effective management of the supply chain is one of the keyingredients of competition in the contemporary business environment.Many organizations rely on suppliers for the design process andproduction of goods and services, which have forced organizations tomanage supply chains as extensions of their internal productionsystem (Kleindorfer et al., 2005). This implies that the policiesdesigned by organizations to guide internal operations should takeaccount of the implication of the supply chain. However,organizations may not exert direct control or ownership of the supplychain, they can influence suppliers’ decision making by formulatingmechanisms that regulate the supply chain. Effective operationsmanagement enables organizations to establish long-term relationshipwith suppliers, which reduce inefficiencies and supply of substandardmaterials, thus minimizing interference with internal operations.This enhances organization’s competence and productivity.
Operationsmanagement is one of the fields of management that is widely used byorganizations to improve their competence. The effectiveness withwhich organizations manage their operations determines their capacityto address issues within the business environment and produce goodsand services that satisfy consumers. Effectiveness in operationsmanagement is accomplished through the design of effective systems,planning of the system and management of the system. A successfuldesign, planning, and management of systems of production increasethe capacity of the organization to handle threats and exploitopportunities within its business environment. In addition,organizations can build success by linking operational strategieswith the organization wide goals, viewing operations as add-valueactivities, and effective management of the supply chain. Therefore,the capacity of organizations to manage their operations effectivelydetermines their success in a competitive business environment.
Banker,D. & Khosla, S. (2000). Economics of operations management: aresearch perspective. Journal of Operations Management, 12, 423-435.
Corbett,M. (2009). Sustainable operations management: a typological approach.Journalof Industrial Engineering and Management,2 (1), 10-30. doi: 10.3926/jiem.2009.v2n1.p10-30
Gunasekaran,A., Marri, H., McGuaghey, R. & Nebhwani, M. (2002). E-commerceand its impact on operations management. InternationalJournal of Production Economics,75, 185-197.
Kleindorfer,R., Singhal, K., & Wassenhove, N. (2005). Sustainable operationsmanagement. Productionand Operations Management,14 (4), 482-492.
Voss,C. (1995). Operations management: from Taylor to Toyota and beyond?BritishJournal of Management,617-29.