Operational management plays a critical role in the transformation of organizational inputs into goods and services that add value for the consumer. The main goal of any strategic operations decision is maximization of efficiency, as well as production of goods and services that meet and surpass the expectations of the customer.
Unlike other types of strategic decisions, operational decisions have long-term effects on the performance of the organization meaning the management has to invest significantly in terms of human and capital resources.
The responsibilities in strategic operations management include overseeing the delivery of goods and services, designing the products that meet the demands of customers, and setting up a control mechanism. The objective is always to utilize resources economically in satisfying the clients whereby inputs (labor and energy) are converted into outputs (goods and services) using the available resources.
This paper discusses the ways in which Samba Financial Group apply the ten principles of strategic operations management. The organization is the industry leader in the banking sector in the region because of its unmatched financial and customer stability. The company boasts of the best technology that has always enabled it to be innovative in terms of product design and service delivery.
The company applies strategic operations management, something that has helped it to keep pace with competition and adopt new technologies in the banking sector. The paper goes a notch higher to evaluate whether the company has been successful in applying the ten principles of operational management.
Application of Operational Management Principles at Samba Financial Group
Design of Goods and Services
Due to the changing nature of the market and the complexity of customer needs in the global society, Samba Financial Group makes effective use of computer-aided design and computer aided manufacturing with the main aim of managing competition. The company takes into consideration the existing legal requirements before moving on to introduce a product in the market.
Currently, the company is the best banking institution globally in terms of offering quality internet banking services, something attributed to the designing process that relies on the computer. Whenever the company aspires to design products, it gives priority to standardization by evaluating the values, aspirations, demands, and beliefs of clients keenly.
Therefore, making products that are of similar size, strengths, and quality is critical to serve customers well and meet their expectations. The company has various branches offering specialized services. For instance, it runs a branch that offers products that are consistent to the Islamic teachings on financial matters. In this regard, it operates two sections that give women special considerations to meet their financial services without interfering with their religious beliefs.
The organization manages to offer this service because of mass customization strategy in the designing phase, as it modifies goods and services to suit the needs of specific customers. Regarding service design, the company embarked on restructuring the human resources through improvement of communication and facilitating training to improve delivering of services.
A successful company must enhance interaction between its employees and customers in order to build confidence among clients. The degree of variation, as well as the extent of customer contact accompanies standardization of products. The company has a special philosophy suggesting that increasing customer contact improves sales.
Quality management ensures the organization’s production and service delivery are sustainable in the turbulent market characterized by cutthroat competition. For the company to cope with quality issues it has to plan well, establish controls, set up quality assurance mechanisms, and strategize on how to improve on continuous basis.
The company is aware of the impacts of quality management on the overall performance and it has always facilitated quality improvement in all areas, including the means of attaining it. ISO 9001:2008 is the basis through which the organization aligns its quality principles.
First, the focus is on satisfying customers and the company has always generated strategies to cater for their current and future needs. The organization introduces workers to important customers, both internal and external, including their expectations that have to be met within the specified time.
The second principle is leadership whereby Samba instructs its top managers to establish unity of purpose and ensure they offer direction. They have to facilitate an enabling environment that encourages people to achieve organizational objectives. In order to improve performance, the organization employs a process approach whereby it believes that resources and activities should be managed effectively by applying a top-down approach.
Enabling quality control entails discovering, understanding, and overseeing related processes as a single system. To ensure continuous improvement, the company established process performance measures recently whereby the efficiency of each department, section, and individual employee is measured.
The top management in the company has a clear data gathering and analysis process that informs its decision-making processes meaning it applies the factual approach. Finally, the company appreciates and values the presence of suppliers and has gone a step higher to form a special relationship to facilitate value addition and boost the quality of products and services offered.
Process and Capacity Design
Capacity designing involves determination of the capabilities of the human resources to meet the new requirements of a product. Design capacity is established through identification of the maximum time needed in the organization to develop a high quality product. Due to issues such as quality problems, interruptions, and unavailability of raw materials, the organization has to establish whether it has effective capacity to generate a product.
Therefore, any organization has to come up with a working plan to enable early planning, as far as capacity is concerned. Additionally, an organization has several process and capacity designing strategies to choose from, including lead strategy, lag, match, and adjustment strategy.
Utilization of the various capacities in the organization to improve production of goods and services involves employing various techniques, equipments, and materials, hiring more workers, and bringing in new facilities. Samba Financial Group made a decision to employ the lead strategy in enhancing capacity because it has always anticipated for increased demand given the fact it has sufficient technology that plays a key role in attracting clients towards its services and products.
The strategy is aggressive since it attracts customers through improvement of service delivery. The policy has helped the company achieve its desired objectives in a number of ways. For instance, it has played a major function of ensuring the organization has a highly effective workforce capable of meeting the demands of clients even in times of rapid development.
Recently, the company introduced an ambitious program that allows customers to access its services online. The strategy helps in dealing with a high number of clients by ensuring the needs of each are met. The strategy makes it difficult for competitors to take advantage of the staff shortage to take over a segment of the market.
It entails coming up with a comprehensive plan to obtain an optimal location for an organization through identification of needs and objectives. The location has to be consistent with the general corporate strategy. Several factors influence the choice of locating a company. One of the factors to consider is facilities, which entail determination of the type of space that the company needs to achieve both short and long-term goals.
Feasibility involves reviewing various operational expenses as regards the site. Other factors to take into consideration are logistics, labor, the communal factors, political factors, regulations, and incentives. Before a company decides to take up a premise to set up its operations, it also assesses itself by looking at the size, the financial capability, infrastructure, and available labor.
Samba Financial Group takes an extra step in determining the best location to set up its business by dividing the evaluation process into macro and micro levels. Under the macro examination, it reviews various sites and population while micro level valuation includes assessment of certain sites only.
In macro analysis, the management at Samba carries out factor rating and linear programming. Factor analysis calls for the establishment of the costs for setting up the business in a particular site, including identification of the ethical values.
The organization operates in an environment dominated by Islamic values and consideration of these factors is critical before setting up the operations. In case the costs exceed the benefits, the site is considered unfavorable and a new strategy of finding a new place is set up. Linear programming reinforces the factor rating method by evaluating the costs of prospective locations.
Layout strategies aim at achieving maximum utilization of space, equipment, and human resources. The company has to ensure the space it occupies is not wasted and this is realized through designing. Through planning of effective layout strategies, chances are high that the flow of information would be smooth, something that boasts the moral of workers given the fact they will be working under favorable conditions.
Employees working in squeezed offices are unable to offer quality services, as this interferes with communication seriously. Therefore, proper planning of office space improves customer/client interaction hence facilitating flexibility. Various types of layouts exist, including office, retail, warehouse, fixed-position, process-oriented, and work-cell layout. However, only a few apply to Samba Financial Group, such as office, work-cell, fixed position, and process-oriented.
Regarding office layout, the objectives include locating workers based on their roles, core duties, and responsibilities in the organization. For workers in need of frequent contact, they are placed next to each other to facilitate easier communication and flow of information. An excellent layout plan considers the requirements related to capacity and space, environment, ease of information access, and the costs associated with movement.
At Samba Financial Group, workers and workstations are grouped to offer comfort, safety, and facilitate easier movement of people and information. However, flow of information is given priority and this informs the layout strategy. Whenever a new technology is introduced, changes are introduced in the office.
Human Resources and Job Design
The human resource is in charge of administration of labor whereby it plans jobs to enhance effectual and competent use of people. However, this is not achieved without providing sufficient services to them including training and offering efficient working conditions, as this would ensure commitment and trust.
Human resources globally have failed to achieve their desired goals and objectives because of a number of constraints, one of them being ineffective product strategy where the company lacks sufficient skills, talents, materials, and safety policies. Another problem facing the department is process strategy, as people fail to adopt technology and are unable to use available machines. At Samba Financial Group, these problems are minimized through specification of the tasks constituting the job.
Whenever an employee faces a problem, the organization provides sufficient psychological and financial support, which serve are part of motivational and incentive systems. Specialization and division of labor are principles that have enabled development of specialized tools. Job expansion is also employed as a strategy to improve the capacities of human resources.
Analysts consider this strategy as one way of empowering workers and enabling job enhancement. In job designing, the varieties of skills available, identities of the job, job significance, employee freedom, and feedback in communication are given priority. Employees have failed in delivering the various tasks assigned to them because they have no place to report.
Supply Chain Management
Management of supply chain is about efficient and planned harmonization of conventional business tasks and strategies across these business occupations within a particular organization. It entails inventing, scheduling, implementation, management, observing supply chain activities to create net worth, building competitive systems, leveraging global logistics, and linking supply to demand.
Samba is one of the global organizations that understands the importance of supply chain management and has gone ahead to integrate it into its operations. The organization operates in a complex global economy that is highly reliant on technology hence supply chain management is needed to manage competition.
Since the organization operates in various countries with different taxation systems, it has been forced to employ tax efficient supply chain management model that focuses on the impacts of taxes on the business operations. In countries that the taxation system favors the company, it tends to increase its operations. One of the aspects of supply chain management that Samba focuses on is customer service, which is aimed at strengthening its relationship with clients (Chase, Jacobs, & Aquilano, 2007).
Outsourcing and formation of partnerships is an additional principle that is often utilized at Samba where services are outsourced from different partners and suppliers. For instance, the organization has contracted a private communication company to be in charge of handling issues that customers raise via online forums.
Management of an inventory has never been an easy task, as it entails supervision of the steady flow of units into and out of an existing record. In case the management fails to control the flow of the inventory, it would be too high resulting in difficulty in operation. A well-designed inventory should have the capacity to control the costs, including minimization of tax burden and increasing the total value. In this regard, the organization will have to pay close attention to three major aspects and one of them is time.
The time a supplier takes to generate an order and deliver the product is critical and it has to be included in the inventory. When the exact time the supplier takes to deliver a product is established, production is never interrupted. The second aspect is calculation of the buffer stock, which is an additional stock that is beyond the minimum number needed to sustain production levels. Samba Financial Group keeps accurate records of all financial transactions undertaken, as well as the products ready to be delivered to the market.
Scheduling is concerned with management of time and efficient utilization of resources to beat deadlines. For the organization to realize its objectives, it has to receive products in time, design them in time, and deliver them in time. Scheduling aims at realizing the short-term goals and objectives and it has to be planned well to ensure achievement of long-term goals. An organization might choose to approach the issue of scheduling in two broad ways, including backward and forward scheduling.
However, Samba makes effective use of forward scheduling whereby the management selects a planned action and determines the future date in which the product or program will be accomplished. A number of factors influence the scheduling choice and loading, which entails assigning jobs to various departments and available machines, is one of these factors.
For instance, if a single machine has the capacity to deliver the desired results, the organization will not face any difficulty meeting the deadlines. For Samba, it has never faced any serious challenge in meeting the needs of clients and customers in time because it has sophisticated machines and the best technology to handle all the issues as per the scheduled time. Another factor considered is sequencing where the order in which jobs are processed is given special consideration.
The organization is likely to face a number of problems whenever the work centers are under pressure to deliver results. Time might be lost waiting for results hence the organization is expected to employ the various sequence tactics. For Samba, the technique applied is simple because it is based on the first come first served principle. Whenever the company sets up a project, Gantt charts are used to ensure deadlines are met (Heizer, & Render, 2014).
Any organization is faced with an uphill task of ensuring it remains competitive in the global market. For instance, a company has to ensure all its departments are functional and will serve the organization for several years. Establishment of a business is not difficult to many people, but maintaining it is an issue that has threaten many executives. At Samba, assessment of the performance of various departments, processes, individuals, and structures is often carried out to ensure they are functional with the sole purpose of facilitating sustainability.
The organization cannot afford to lose any of its clients because they provide the much-needed support to drive the company’s agenda. Capital flow has to be maintained, human resources must be retained, and the company structures, including machines should be maintained to facilitate growth and sustainability. Therefore, continuous assessment and examination of the organization is the strategy that Samba employs in facilitating sustainability.
Operations management plays a critical role in improving the performance of the organization. Indeed, senior managers and chief executives have backgrounds in operations management. Unfortunately, institutions of learning do not offer specialized courses on operations management, but instead people acquire these skills through experience.
At Samba Financial Group, the operations management is a valued resource that is relied upon in executing important functions. As discussed in this paper, the company has a unique way of handling each principle of operations management.
Chase, R.B., Jacobs, F.R. Aquilano, L. (2007). Operations Management for Competitive Advantage. New York: McGraw-Hill.
Heizer, J. H., & Render, B. (2014). Principles of operations management: Sustainability and supply chain management. New York: McGraw.