Introduction
Almost every business provides consumers with either a service or a product. In addition to helping a business attract clients, providing high-quality goods and services also fosters customer loyalty, boosts revenue, and offers it a competitive edge in the marketplace. Naturally, an essential component of every business is assuring the high quality of the supplied product or service and its value to clients. The process of planning, controlling, and supervising production, production processes, and service delivery is known as operations management (Erasmus et. al., 2020). In a company organization, operations management is crucial since it aids in the efficient administration, control, and supervision of products, services, and employees.
Operations management is the field in management that oversees the full production schedule of a service or good from the input stage to the finished stage, including the planning, organization, and service delivery. This process is essential to produce the desired outcome in the form of a high-quality good or service that meets the needs of the customers (Brown et al., 2018). The daily operations of an organization that produces recurrent and long-term outcomes, such as the delivery of services or the manufacture of goods, are also included in operational management. As it is in any field, defining operational management for a certain region is crucial. For instance, market giants like Coca Cola devote a lot of efforts in developing proper operations management. The overall goal of operations management is to maintain important quality standards while ensuring the continuity, economy, and timeliness of daily operations (Brown et al., 2018). A number of the size or nature of the business, this crucial aspect of management is frequently employed.
Benefits of Effective Operations Management
Effective operations management offers a number of major advantages. First of all, the company will be equipped with a higher caliber of products. Operations management is the first department in a company to verify the robustness and dependability of a product (Barnes, 2018). Operational management makes sure that the items or commodities are of a caliber that will please clients both before and after delivery. The corporation has the edge over its rivals when a product is of good quality. Operations management makes ensuring that employees are staffed appropriately to optimize performance. For example, appropriate stuffing helped Cadbury to become the second confectionery brand in the world. In reality, effective operations management is the only way to guarantee proper productivity and output.
Increased client satisfaction is a further significant advantage. This is properly ensured through operational management along with a high-quality product. Customers are important to the success of the business and must be taken care of in any way that is required and practical (Erasmus et. al., 2020). Finally, maintaining an efficient operational management procedure will save operating expenses. The expenses connected with product maintenance are kept as low as feasible because of productivity, product quality, and customer happiness (Benjaafar and Hu, 2020). Consequently, revenue rises at the same time, and operations management has the ability to achieve the balance. Moreover, waste is decreased along with operational expenses that are cheaper.
Capacity in Operational Management
The process of matching the demand for an item or service with the capacity of the manufacturer or organization to produce enough to fulfill the demand is known as capacity planning in operations management. Effective operational management is built on effective supply and demand planning, which may also boost delivery capacity, spot gaps, and reduce risks (Barnes, 2018). In the end, recognizing potential and using it wisely might be the difference between a successful and unsuccessful firm. Understanding how many products can be produced in a specific time frame in manufacturing is a key component of capacity planning in operations management. Understanding the scope and timeliness of all current and planned work, as well as the availability and skill set of the individuals who will conduct this work, is necessary for design firms that only have people as their equipment (Erasmus et. al., 2020). As a result, the overarching objective of capacity planning in operations management is to enhance and boost operational efficiency.
There are several techniques of capacity planning in operations management that can act as the cornerstone of broad initiatives. The foundation of a service firm’s understanding of the work that may be sold and delivered is capacity planning. Calculating high-level resource capacity is as easy as multiplying the number of employees by the anticipated billable hours for a particular period (Benjaafar and Hu, 2020). For most firms, a few other factors should be taken into account when planning for optimal resource potential, such as skill set, use goals, work under supervision, and participation in the sales process (Oger et al., 2022). This approach is used by many manufacturers like Daimler. In contrast, project capacity planning takes into account a particular project inside an organization and the time and resources it needs. To balance workloads with project milestones, project managers make an estimate of how much time their assigned team can work in a particular period of time (Oger et al., 2022). Such market giants as LG and Samsung are usually in favor of this approach. Effective resource management must be matched with design capacity planning procedures to prevent staff fatigue or underutilization, which lowers revenues.
Team capacity planning is beneficial for teams that often collaborate. For instance, specialist IT teams may work together on one or many projects. To determine how much work can be made each week and how this effort would affect project timeframes, project managers will employ this type of planning (Oger et al., 2022). Lastly, the HR capacity can be in charge of talent planning, which is similar to resource planning. When assessing potential, the HR team may also consider other aspects of professional growth, the capacity to attract and hire new workers, and the budget for hiring new employees.
The capacity planning procedure that is most successful consists of four basic components. Firstly, it is crucial to comprehend the potential of current operations and projects. At this point, it is important to assess the initiatives that the firm under management is working on and the assistance that they are receiving (Barnes, 2018). In addition, it is important to determine how much more time people have available to do more work. The next step of capacity planning is future demand forecasting. What projects are currently under progress, how far along they are in completion, and when they will begin should all be included in the evaluation at this point. An examination of the skills needed for these projects must be done in conjunction with the prediction.
Identifying potential new capacities is the third phase of the process. Operations management should consider potential sources of this, whether workers can put in more time and learn new skills or whether the business needs to hire more people (Erasmus et. al., 2020). Finally, it is important to evaluate the dangers. It is crucial to determine at this point if individuals will burn out if they are overworked or what will happen if the business cannot satisfy demand. Within these constraints, management must determine and quantify the risk of decreased customer satisfaction if the project is delayed, as well as the expense of employing new staff and retraining existing ones (Oger et al., 2022). The potential cost of not being able to sell services while demand is strong needs to be factored into these calculations.
The capacity planning process is crucial for businesses to prosper. For instance, Intel was able to successfully plan in the unpredictable world of computers by splitting capacity planning into distinct but linked planning processes and assessing the long-range planning process on a quarterly basis. Thus, a thorough examination of capacity planning and its possible advantages and drawbacks is the key to successful operations management.
Conclusions
While taking on more projects, preventing staff burnout, and enhancing customer service in a competitive job market are all advantages of proper capacity planning in operations management, which can also make or break a business. Companies must take the initiative in determining their future workforce needs because recruiting trends continue to show a shortage of competent people and a rise in the demand for their services. The opportunity’s visibility provides more time to make wise plans, such as upskilling current personnel and employing contractors or full-time workers. There is an increasing need for management strategies with substantial expertise in strategy, skills, and awareness as firms shift away from old business models and toward cutting-edge technology at an unprecedented rate. In this sense, operational management offers a solid foundation for the effective running of diverse enterprises, satisfying consumer demand, and maintaining competitiveness and profitability.
Reference List
Barnes, D. (2018) Operations management: An international perspective. Bloomsbury Publishing.
Benjaafar, S. and Hu, M. (2020) ‘Operations management in the age of the sharing economy: What is old and what is new?’, Manufacturing & Service Operations Management, 22(1), pp. 93-101.
Brown, S., Bessant, J. and Jia, F. (2018) Strategic operations management. Routledge.
Erasmus, B., Rudansky-Kloppers, S., and Strydom, J. (2020) Introduction to business management. Oxford University Press.
Oger, R., Lauras, M., Montreuil, B. and Benaben, F. (2022) ‘A decision support system for strategic supply chain capacity planning under uncertainty: Conceptual framework and experiment’, Enterprise Information Systems, 16(5), pp. 179-190.