Aspects of Operational Management

Introduction

Operations management refers to the management of resources, goods, and services in an organization with the main aim of ensuring efficient and effective operations. Organizations involve handling resources, goods, and services in the pursuit of achieving their goals and or objectives. As (Robert H. pg. 4) observes, operations management is a vital component of all organizations regardless of the type of activities in which they are engaged. Thus, without operations management, organizations can not be able to realize or achieve their objectives. Handling resources, goods, and services necessitate the need for management of these resources for operations to be effective.

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Aspects

As (Shim and Siegel pg.120) observe, operations management involves several aspects. These include; control of inventories, management of purchases, processing, and storage, quality control, logistics and evaluation, interconnection with other external firms among other aspects. The nature of products and or services that an organization deals with determines how operations management is carried out. For instance, an organization may be engaged in retail, wholesale, or manufacturing activities. A manufacturing organization will have more aspects of operational management than a retail organization. Consequently, operations management can be broken down into several components. These include purchasing or procurement management, management of inventories, product and service management, quality management, logistics, and evaluation practices. All these operations must be effective and efficient for an organization to achieve its goals. Hence operations management comes in handy in ensuring that an organization’s operations run smoothly.

Procurement is the process of acquiring goods or services for use by the organization. This entails transaction processes from purchasing to actual delivery. Procurement must be managed effectively and efficiently to ensure that the right mix of goods and services required by the company is what is purchased and delivered. This is also done to ensure that the organization manages its costs effectively. As (Dimitri, Gustavo, and Spagnolo pg. 7) note, procurement must be managed properly to ensure that an organization gets its value for money the goods and services that it acquires. This should be done by searching for information and choosing the most competitive tender.

Inventories refer to a record or records held by an organization comprising a list of materials and goods that it possesses. Examples of these include both work in process and finished goods and services. These are an important part of an organization since they represent the assets. Management of inventories is thus important because it has financial implications i.e. it is from the sale of finished goods and services that an organization derives its income.

Product and service management refers to managing the actual products and services that an organization deals with (Avlonitis and Paulina pg.121). These may be products like manufactured goods. Handling these products is important in that it determines how they will be received in the market. Product and service management may include manufacturing, packaging, designing, and handling the goods while in transit just to name but a few.

Quality management is another aspect of operational management that is very vital to an organization. The quality of products and services is very important because it has a direct impact on the success of an organization. As (Avlonitis and Paulina pg. 30) note, an organization must put in place quality control measures to ensure that its products and services are of the desired quality. Low-quality products and services may lead to an organization losing out on its customers due to high competition.

Another aspect of operational management is logistics and evaluation. This involves managing aspects like manufacturing, storage, and transportation of the products to the final consumer. This is also an important aspect of operational management.

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Reviewing aspects of operational management in an organization from time to time is important in that it ensures that an organization remains efficient and competitive. There are many reasons why aspects of operational management can be reviewed (Cameron and Green pg.166). Some of these reasons include; when market conditions change or when there is stiff competition from other organizations. This might necessitate a review of one or more aspects of operational management to maintain a competitive edge (Lowson pg. 30). Another reason may be the need for an organization to improve its efficiency and or effectiveness. Launching a new product or service into the market might also require that an organization reviews its management to fit the new product. This can involve changing certain aspects e.g. procurement, quality management e.t.c. The management of an organization influences the way operations are undertaken in that organization therefore a change in the management can lead to the new management reviewing some or all aspects of operational management. As (Cameron and Green pg. 166) note, other factors that might lead to a change in operational management are the need for an organization to cut costs and unforeseen internal or external crises. Building sustainability and cultural changes can also make an organization review its operations.

(Lewis and Slack pg. 412) describe product and service management as one of the aspects of operational management in an organization.

As stated earlier, products or services are the core reason for the existence of organizations. That is, an organization comes into being as a result of it wanting to provide a certain product(s) and/or a service(s). This makes product and service management one of the most important aspects of operational management.

As (Lowson pg.27) observes, an organization may want to review this aspect of operational management for various reasons. The core reason for changing operational management is to enable an organization to maintain its competitive edge over the others. Competition threatens any organization’s existence and therefore to remain competitive, it must change its management procedures. Product and service management include activities like manufacturing, designing, packaging, labeling, blending, branding, storage, handling during transportation, and other value-adding activities.

Product and service management

Product and service management can be reviewed to make changes in the way the products and services are delivered to the final consumer. This can be done by changing the product or design of the service (Cameron and Green pg.172). Improved technology has made it possible for many competing organizations to produce nearly the same products. With the same market to serve, this has made the competition very stiff. Thus to maintain competitiveness, an organization may be forced to change its product line i.e. diversifying or changing the design of service delivery to distinguish them from those of its competitors. Diversifying means that an organization expands its range of products. With the ever-improving technology, product manipulation has to be done from time to time for an organization to remain competitive (Avlonitis and Paullina pg. 2).

To improve its competitiveness, an organization needs to carry out comprehensive market research to find out what the needs and desires of the people are regarding the organization’s products and services. The organization’s management should then go back and effect the necessary changes to fit the consumer demands. As (Philippe pg.54) observes developing the products and services also enables an organization to retain its customers. This is important in that an organization stops worrying about losing its clients and focuses its energies on acquiring new clients. Since there is high competition and market preferences keep on changing, an organization’s clients can change their preferences hence making the organization lose out. Without product development, an organization cannot focus on its client’s needs and thus faces the risk of collapsing. Changing the product line and improving the design may lead to a firm cutting down its costs considerably. This enables an organization to become more efficient and effective. Aggressive marketing strategies like product and service promotion can also be employed to make the products and services more competitive.

Conclusion

In conclusion, a review in operations management is important in organizations in that it enables them to improve their competitiveness. This is particularly important nowadays as technological advancements have made competition move a notch higher. Thus, without reviewing its operations management, an organization might find it extremely difficult to survive. It is recommended that a review of operational management aspects be done from time to time to keep up with the ever-changing consumer tastes and preferences.

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References

Avlonitis, J. George and Paullina Papastathopoulou. Product and Services Management. Sage. 2006.

Cameron, Esther and Mike Green. Making Sense of Change Management. Kogan Page. 2004.

Dimitri, Nicola, Gustavo Piga and Giancarlo Spagnolo. Handbook of Procurement. Cambridge. University Press. 2006.

Lewis, Michael and Nigel Slack. Critical Perspectives in Business. Routledge. 2003.

Lowson, H. Robert. Strategic Operations Management. Routledge. 2002.

Shim, K. Jae and Joel, G. Siegel. Operations Management. Barrons Educational Series. 1999.

Malaval Philippe. Strategy and Management. Springer. 2001.

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