Why Operations Management Is Important for Companies?

Introduction

The area of operations management involves designing, planning, and supervising organizational production, manufacturing, or the offering of services. In particular, operations management concentrates on the integration of approaches that facilitate the efficient transformation of inputs to outputs with the view of fostering the success of an organization (Heizer 76). Different inputs that an organization can focus on transforming to desirable outputs include human resources, materials, and technology among other inputs.

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The outputs that operations management seeks to deliver effectively and efficiently may include the goods or services the organization offers to its target market. Important to note, operations management mainly facilitates the functionality of a company’s supply chain management, including any other logistical issues (Slack et al. 21). In this view, the field of operations management seeks to ensure that an organization embraces a delivery-focused strategy in the implementation of its actions (Slack et al. 78).

For example, ensuring effective use of resources to foster the performance of an organization denotes an aspect of operations management. As revealed in this paper, the concept of operations management offers an array of benefits to an organization since it is focused on the efficiency and effectiveness of service and product delivery. Importantly, it fosters the improvement of productivity besides enhancing the capability of a company to fulfill the competitive priorities of consumers.

How Operations Management is Important for Companies

Operations management is one of the three fundamental functions of companies besides the management of finance and marketing. Thus, the concept is very important in facilitating the success of a company in the wake of the increased competitiveness in various industries. Therefore, for a company to attain a competitive edge, it is important for it to enhance the efficiency and effectiveness of the operations it executes to deliver goods and services to customers (Heizer 17). For this reason, operations management is a crucial aspect of a company since it influences business success to a considerable extent. The need for identifying the different ways in which operations management promotes the competitiveness and success of a company is relevant in the context of this paper.

The Influence of Operations Management in Products and Services Management

Product or service management is an integral aspect of business operations since it facilitates the designing of commodities or technologies to offer to customers for internal application. The product manager is mandated with the responsibility of ensuring that the company develops the necessary products that meet the competitive priorities of consumers (Gmelin and Seuring 3). In this respect, product management entails activities that range from the development of product idea to the offering of support to customers who seek to acquire the products or services offered by a given company. Since operations management is important in facilitating the efficiency and effectiveness of transforming inputs into outputs, it affects product management to a considerable extent.

The development of a product idea is an input that seeks to turn the idea into reality by availing the actual item to the customer as an output. Operations management allows the product manager to take the necessary approaches required to develop commodities that can bolster the competitiveness of the company in the industry (Gmelin and Seuring 5). For instance, the product manager needs to undertake an in-depth analysis of the market, including an assessment of the prevailing competitive conditions in the industry as a way of ensuring the efficient and effective development of merchandise. As such, the product manager incorporates the principles of operations management to foster the changing of inputs to outputs that enhance the competitiveness of a company.

Important to note, the nature of an organization influences the product management approach it embraces. In this respect, companies in the manufacturing and service industries, for instance, General Motors, need to integrate unique product or service management strategies that foster their production, branding, and marketing aspects. Importantly, operations management streamlines the activities involved in the development of a product and the delivery of support structures for customers to access the item or service easily (Heizer 112). Thus, operations management plays a considerable role in fostering the efficiency and effectiveness of product management in a company, thereby enhancing the competitiveness of the business.

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The Influence of Operation Management on Quality Control

Operations management influences the element of quality control in a company. In particular, total quality management (TQM) in an organization entails the integration of an unceasing process of lessening or eradicating errors in the area of manufacturing, smoothening supply chain management, enhancing customer satisfaction, and promoting human resource development (Dale 26). Therefore, an organization needs to put in place measures that streamline the functionality of quality control as a crucial element of business operations. As such, operations management is important towards bolstering the effectiveness of quality control since it provides the framework for the continuous improvement of processes that facilitate the production and delivery of products and services to customers.

Operations management ensures that an organization upholds the integral elements of TQM, including ethics, integrity, and trust (Heizer 134). For example, operations management upholds the essence of carrying out business activities within the required ethical standards, as well as legal provisions, to win the trust of customers, thus enhancing a company’s competitive edge. It is necessary for an organization to engage in activities that promote its brand image as a crucial strategy for improving its performance in the industry in which it operates (Mitra 33).

In this respect, operations management supports the function of TQM in a company by facilitating the transformation of inputs to outputs through the required ethical and legal standards. As such, a company that values the essence of ethics and integrity goes a long way in securing the trust and loyalty of customers, thereby fostering its competitiveness.

Furthermore, operations management underlines the essence of effective leadership and teamwork in an organization. Notably, leadership and teamwork make part of the key elements of TQM since they facilitate the continuous improvement of business processes (Dale 47). It is crucial for leaders in an organization to continuously influence teams in a way that encourages the realization of business objectives and goals in a collective and collaborative approach.

For instance, a team leader who instills the value of commitment among team members demonstrates an aspect of quality control that is geared towards enhancing the efficiency and effectiveness of its human resources. Notably, operations management underscores the relevance of incorporating the appropriate human resource management strategies required bolster the productivity of inputs in the form of employees. In this respect, operations management inspires a company to establish measures that foster the productivity of its human resources, hence facilitating the desirable execution of the set TQM initiatives.

Operations management also influences positively the aspect of communication in TQM (Mitra 102). The area of TQM requires a company to engage in communication strategies that foster the effective and efficient exchange of information necessary for decision-making. Important to note, operations management supports the integration of technology systems that improve business processes, as well as the products and services it delivers to customers (Dale 143).

For example, an international company such as General Electric can develop and implement a technology system such as communication software to streamline the flow of company-based information across it branches that are spread in different regions around the globe. As such, the operations manager supporting the design and integration of the technology system in this company also influences the element of quality of management by fostering the unceasing improvement of upward and downward communication.

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The Influence of Operations Management on Logistics and Supply Chain Management

Operations management relates closely to logistics and supply chain management (SCM) processes, which significantly influence the performance a company. The logistics element of business processes concentrates on streamlining the movement of goods from the point of origin to the consumption position. Operations management influences the logistics of an organization by creating an environment that upholds the significance of meeting the requirements of customers (Jacobs and Chase 57). The extent to which an organization fulfills customers’ demands is influenced by the operations management of logistics.

The operations management of logistics reinforces a company’s inventory and transportation management. Inventory management ensures that the company has the required quantity of inputs besides determining when to re-order (Heizer 99). The inventory management of perishable goods is one of the areas that operations management has influenced considerably. Controlling the inventory of perishable products requires a logistics manager to guarantee timely procurement, transportation, and storage of such goods.

Operations management improves the inventory management of perishable goods by ensuring apt movement of the goods from the source to the customer (Slack et al. 120). For example, a company that needs to deliver a perishable product to a customer situated in a distant geographical location can secure courier services of a company such as DHL to foster the speedy delivery of the ordered item. Therefore, operations management is key in logistics area since it enhances the performance of inventory and transportation administration.

The SCM function ensures that a company acquires a multidimensional understanding of its supplier ecosystem. Importantly, SCM ensures that an organization obtains the necessary raw materials and other inputs required for the production of goods that fulfill the needs of its customers. Timeliness and quality aspects influence the success of a company’s SCM to a considerable extent (Jacobs and Chase 82). Given that operations management reinforces the elements of speed and quality in a company, it goes a long way in streamlining the efficiency of SCM.

Notably, operations management considers time as a form of input that facilitates the production and provision of products that fulfill the competitive priorities of customers. Thus, the apt transformation of inputs into goods and services is crucial towards improving customer experience (Khanna 201). In this light, the operations manager expects staff members in the supply chain department to engage in activities that favor the speedy acquisition of inputs such as raw materials and equipment from suppliers.

For example, a company in the construction industry that recently secured a tender to construct a building is required to engage in procurement activities that uphold the essence of timeliness to ensure that it meets project deadlines. Thus, integrating the aspect of speed in SCM through operations management enhances the competitiveness of a company by delivering the expectations of the customer in time.

Besides, operations management improves the functionality of SCM by streamlining the internal management of supplies. Operations management helps in the identification of inputs that the company requires at a given time of the year. As such, operations management helps a company to determine the volume of supplies it requires at a particular time in line with the demand patterns. For example, during peak seasons, the operations manager can facilitate the procurement of abundant supplies that meet the high demand for the associated products in the market (Heizer 39). Therefore, the operations management is integral in bolstering the management of supply chain in a way that fosters the success of a company in transforming inputs to outputs.

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Moreover, quality is also an important part of operations management. A company needs to provide quality goods and services to customers as an important strategy for fulfilling their demands. In this respect, the SCM department needs to ensure that it procures raw materials or equipment of high quality to facilitate the production of superior goods or services (Jacobs and Chase 129).

For instance, a company specializing in the manufacture of fashionable women handbags such as GFG Bags needs to ensure that materials such as leather meet the quality standards. Therefore, since operations management upholds the importance of quality, it fosters the efficiency and effectiveness of SCM, thus resulting in the production and provision of worthy products to customers. By so doing, the business organization extends its competitive edge in the market.

The Influence of Operation Management on Accounting and Finance

Operations management contributes to the effective functioning of a company’s accounting and finance functions. In the accounting department, operations management facilitates the promptness of payments by underlining the relevance of planning (Fullerton et al. 416). For instance, an operations manager collaborates with the accountant to guarantee timely payment of bills for materials and supplies. The promptness of payments that a company makes is one of the portrayals of the impact of operations management on accounting.

Additionally, operations management enhances the ease of handling the payroll besides enabling the forecast of all associated costs. As such, there is the need for efficiency and effectiveness in handling information regarding employees’ salaries and the tax payable by a company. The failure of handle the payroll perfectly can expose workers and a company to significant risks (Fullerton et al. 419). The need to mitigate such accounting risks calls for the integration of operations management. The predictability of payroll costs goes a long way in improving the decision-making processes undertaken by accountants.

The smooth-running of the finance department of a company is also essential towards promoting the effective management of capital. Importantly, different strategies for acquiring capital, including credit and equity financing, benefit from heightened efficiency and effectiveness through the integration of operations management (Fullerton et al. 423). Therefore, by streamlining the operations of the financial departments, a company enhances its performance by heightening productivity, lessening costs, and enhancing scheduling to satisfy demand. Conversely, the absence of operations management in a company can expose it to significant obstacles in raising capital, owing to the underlying inventory imbalances and uneven productivity.

The Influence of Operations Management on Facility Planning and Management

The concept of facility planning and management performs an integral role in the incorporation of human resources and work processes, as well as job locations in line with the production system of an organization. The need to streamline facility planning and management is a priority since it promotes the realization of high productivity and customer-oriented production. For example, a manufacturing plant needs to guarantee the strategic location of the equipment used in the production process to trim the wastage of resources arising from the overlap of processes.

Furthermore, a smooth management of facilities ensures that a company enhances its access to customers, assets, and utilities (Heizer 179). Importantly, in laying out facilities to foster accessibility, operations management takes into account the nature of the company, the system of production, and the processes applied in the development of products or services.

The need for improving customers’ experience when they visit the company premises is a notable consideration of facility planning and management. In this view, the corporation needs to ensure that the layout of its facilities is customer-oriented. As such, operations management comes in since it is delivery-focused (Khanna 201). For example, retailers such as supermarkets ensure that customers enjoy their shopping experiences by easily accessing the products they intend to purchase. Thus, focusing on the delivery of desirable customer experiences is attainable through the integration of operations management in the area of facility planning and management.

Additionally, the incorporation of operations management in facility planning and management plays a notable role in boosting the interaction of various resources in the organization. Given that operations management is concerned with improving the relationship between different resources such as workers and information technologies to foster the production of quality outputs, it influences the facility management to a considerable extent. For example, an organization that integrates technological equipment needs to train its employees on how to operate it, thus maximizing its productivity. Therefore, operations management is important in promoting the effective and efficient interaction of human resources and facilities in a company.

Moreover, thanks to operations management, a company can use its facilities to meet the product demands in the market (Slack et al. 165). For example, the need for engaging the mass production of products during the peak season can prompt a company to consider installing additional production equipment to increase the volume of goods it produces. In this view, a company that integrates effective and efficient facility planning and management is poised to realize a greater profitability by responding accordingly to the demand for its products in the market.

Conclusion

Operations management concentrates on enhancing the smoothness of the processes associated with the turning of inputs into outputs. Notably, operations management fosters the management of products and services by streamlining the development of competitive products and services that meet customers’ needs. Furthermore, the quality control aspect of operations management ensures that a company engages in quality processes to deliver superior products or services to the targeted consumers.

Additionally, the smooth running of logistics and supply chain management enables a company to effectively and efficiently manage the flow of goods from the source to the end. Besides, the accounting and finance departments of a company realize greater efficiency and effectiveness in the aspects of managing payments, forecasting costs, and sourcing capital by incorporating the principles of operations management. Moreover, the strategic layout of facilities in the organization improves the experiences of employees, as well as customers.

Works Cited

Dale, Barrie. Total Quality Management. John Wiley & Sons, 2015.

Fullerton, Rosemary, et al. “Lean Manufacturing and Firm Performance: The Incremental Contribution of Lean Management Accounting Practices.” Journal of Operations Management, vol. 32, no. 7, 2014, pp. 414-428.

Gmelin, Harald, and Stefan Seuring.”Determinants of a Sustainable New Product Development.” Journal of Cleaner Production, vol. 69, 2014, pp. 1-9.

Heizer, Jay. Operations Management. 11ed., Pearson Education India, 2016.

Jacobs, Robert, and Richard Chase. Operations and Supply Chain Management. McGraw-Hill Higher Education, 2013.

Khanna, Raymond. Production and Operations Management. PHI Learning Pvt. Ltd., 2015.

Mitra, Amitava. Fundamentals of Quality Control and Improvement. John Wiley & Sons, 2016.

Slack, Nigel, et al. Operations Management. Pearson, 2013.

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