Project: The Effectiveness of the Operational Management on the Managing Development

Module Name: Operational Management in Business Student Name:

Group:

Su mission Deadline:

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E#ecutive Summar$ Operation management is an area of management concerned with managing the operational activities. Here the importance of Operation management has been discussed as Operation management is a vital methodology for present perspective industrial organization. Operation management helps an organization to produce goods or services on time and to cost. It designs Produce system and sub system Diagram for operation processes. Assessing the performance objectives of operation anagement is very for any organization. Operation management re!uires how !uality can be defined and maintained.

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Ta le of the &ontent
&ontent Title
Introduction #as$%& 'i( A definition of Operations anagement 'O ( and e)plain its importance anagement 'ii( #he *ey elements of Operation 'iv( #he role of Operational #as$%/ and economy of operation

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" " " + , , 0 anagement. #he implementation of 314s in business helps the 0 anagement7 &8 &8 && &3 &" &+

'iii( #he need to produce goods or services on time and to cost with right !uality and law + anagement in achieving strategic objectives 'v( Produce system and sub system Diagram for any -.H .mith operation processes

'i( 1)plain the implements of 2314s in -.H. .mith 314s refers to the effectiveness5 1fficiency managers to measure the performance of operational productivity and improve performance0 'ii( 6ritically review the tannin between cost minimization 'iii( Assess the importance of five performance objectives that under operation #as$%3 'i( . 6omment briefly on the importance of operational planning and control operation of -.H smith smith 'iv( 1)plain how !uality can be defined and maintained 6onclusion

'ii( 1)plain what linear programming and give an e)ample in relation to any party of the iii. Produce a networ$ plan and indicate the resultant critical path for any operation in -.H

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(ntroduction Operations management is the management of the process that transforms inputs 'raw materials5 labor5 capital and land( into outputs 'finished goods or services(. It is a part of management involved designing5 and controlling operational activities and redesigning the operational activities in to produce the right of goods or services. It incurs the responsibility of ensuring the operational activities are performing efficiently. It ensures that desired production is possible by proper utilization of few resources. It plays a significant role effective production to meet up customer necessities through cutting e)cessive cost of production and to amplify the profitability through maintaining right !uality. Operations management includes manufacturing and operating systems5 production control 5factory management5 labor relations and supervision5 manufacturing policy and cost control5 and materials arrangement '9in and 6hai5 /8&/(. Tas)*! +i, - definition of Operations Management +OM, and e#plain its importance. Definition: Operation anagement is the method used for converting inputs into outputting within a anagement is concerned the management designs industrious organization. #he term of inputs refers to the raw materials5 capital5 land and labor5 when output refers to goods or services. Operation of the organization '9in and 6hai5 /8&/(. operating methods that re!uire applying the imports efficiently to ma)imize the profitability Operation operational:functional strategy for producing effectively5 controls the operational actions5 implement the suitable techni!ues for converting inputs into outputs in a business organization. (mportance of Operation Management: ;or maintaining the optimum !uality of product of a firm5 the firm should use strategic issues that are related to operating system. Operation anagement is the management anagement has become a finding out the strategic issues. #he study of operation /88,(< =educing cost< #o reduce the production cost of an organization5 Operation anagement *eep a great contribution. Page / of !"

integral part for every large Organization for the following reasons 'Haapasalo et al.5

=educing 6apital Investment< #hrough effective >tilization of financial resources5 Operation anagement can reduce the capital investment in terms of productions. ?alancing cost and =evenue< At the age of globalization5 ?alancing cost and revenue in terms of production has become a major concern for large organizations operation management helps the management body to balance between cost and revenue of an organization.

Innovation production< Operation

anagement .tudy in an organization helps to

increase more and more innovative production. Increasing Profitability< #hough reducing production cost5 and utilizing the e)isting resources efficiently. Operation management can increase profitability of a large firm 'Haapasalo et al.5 /88,(. ;rom the above discussion5 It is clear to us that each productive organization has operational:functional activities. #herefore5 O organization. is very important for decision ma$ing in terms of cost reduction profitability growth and balancing cost and revenue for large

+ii, The 0e$ elements of Operation Management: #he $ey elements of operation anagement are as following (nputs: Inputs are the raw materials and subsidiaries to produce the goods:services such as% papers%spins%@lue%capital% wor$ers Adata A 1lectrics%Instruments. Process: Process refers the tas$ involved in transforming inputs into outputs. Outputs: Outputs are finished goods or services resulted from processing such as boo$s and newspaper. +iii, The need to produce goods or services on time and to cost 1ith right 2ualit$ and la1: Producing goods or services on time and to cost is a major issue for the present perspective of completive business world. On the other hand5 the organization needs to maintain the !uality of goods or services in terms of law. 1)istence of large organization li$e -.H. .mith most upon depends on in%time production and !uality of goods or services through saving cost. #he management body of organizations needs to maintain right !uality to increase the sales and demand of their products. Operational management is needed to meet up these issues. Page 3 of !"

aintaining high !uality in products may be time consuming and high cost.

anagement

should over loo$ the whole producing system for improving operational efficiency. Operational efficiency helps the organizations to produce within and to be more attractive price for customers. Buality of goods or services helps the organization to get reputation and sustainability. .o aintain right !uality is large part of production system of an organization. #he best position in terms of low cost5 high !uality and in time production contributes greatly to increase profit and get the customer satisfaction. +iv, The role of Operational Management in achieving strategic o jectives: #here are three roles of Operation management in achieving strategic objectives. #hey are given bellow< &. Implementer of the designed strategy. /. .upporter of the designed strategy. 3. 6ontrolling or driving the designed strategy. #he role of O in achieving strategic objectives is notable. Operation management4s first job is implementing the designed strategy in the production system. Implementation of the strategy has a great influence on producing products time to time5 getting right !uality and saving the cost through operational efficiency. Operational management improves the operational efficiency. #he more the operational efficiency is increased5 the more the strategy is easily implacable. Operational management plays ... roles supporting organization. It inspires the personnel to do their responsibilities and regularizes to support the strategic objectives 'Cattem and Proveniers5 /8&/(. +v, Produce s$stem and su s$stem Diagram for an$ 4.5 Smith operation processes Produce system is the main tas$ for operation management. .ystems and subsystem diagrams for Cewspaper Operation process of -.H. .mith. Produce system Diagram

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Information

#ransformation process .ubsystem Diagram

;inished goods

=eceive !uantitative !ualitative data from the uses Data Information a$ing them suitable for transformation >sing machines5 electricity and instruments #ransformation onitoring before converting into finished goods Outputs resulted from transformation process. Publishing the outputs in time with !uality

;inished @oods

7igure: ! - rief Description: &. Data refers to receiving data information as raw materials and converting them into inputs so that they can use for transformation process. /. #ransformation process< In this term5 operation management uses machines and instruments for converting the data as finished goods. anagement needs to monitor the whole process to reduce cost5 to increase profitability and to maintain !uality. 3. ;inished goods< ;inished goods are the outputs from transformation process.

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Tas)*% +i, E#plain the implements of 8'E9s in 4.5. Smith 'E9s refers to the effectiveness: Efficienc$ and econom$ of operation Management. The implementation of 'E9s in usiness helps the managers to measure the performance of operational productivit$ and improve performance. Effectiveness: !. 1ffectiveness is performing the jobs effectively in -.H. .mith. Operation managers of -.H. .mith are always responsible for measuring that right things are done. -.H. .mith can measure effectiveness by evaluating achieved results from operation anagers for a period. It the Objectives of -.H. .mith are met up from the measurement. It can be defined individuals are performing effectively. %. Efficienc$: 1fficiency refers to defining re!uired raw materials and utilizing those best in operation process. -.H. .mith can measure its operational efficiency regarding inputs to produce the targeted outputs. 1fficiency is a method used for the reduction of waste and to increase profitability of -.H. .mith. #he former 61O of -.H .mith might have used operation efficiency. '. Econom$: #he third step 314s is 1conomy. -.H. .mith can reduce its cost of production and improved profitability though 1conomy process 1conomy is a process that helps in financing and cost minimization. +ii, &riticall$ revie1 the tannin et1een cost minimi;ation and &. #he former 61O *ate swan turned -.H. .mith from D &3+ losses to D &8, in a decade applying operation management '-hipp5 &700(. /. *ate .wann focused on profitable sales5 cut cost relentless and boosted profit margins an almost incredible &+ percent. 3. -.H. .mith succeeds to generate right !uality products with estimated production cost and minimum inputs. ". =esources are used to minimize cost and ma)imize !uality within schedule time utilizing money5 materials5 manpower and machineries '"m4s(. +. -hile super mar$ets have to tread carefully in the products5 they offer and have been targeted for displaying sweets at the chec$ out smiths has sold stationery aimed at teenagers and young women. profit

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,. *ate .wann achieved remar$able feat '>*4s most highly regarded and highly paid% retailers( by brea$ing many E=ulesF of turning a successful high street retain business in -.H. .mith. G. *ate swam announced she was pulling out of selling music and DHD4s because profit margins were thin and getting thinner. 0. .wam favors the old retails adge< E.ales are verity5 profits are sanityF. 7. -hile other retainers have been pouring resources in the digital world5 swam plans to open more shops even though they are5 to be frame5 deeply unpleasant places to shop5 stuffed with stoc$ and screaming promotional banners. &8. Profit was ma)imized in -.H smith through cost minimization and ma)imization. &&. -.H .mith ma)imizes the total service !uality through increasing shops. +iii, -ssess the importance of five performance o jectives that under operation Management '&( =ualit$: Buality is considered the most important performance objective of an operation management as it is highly related with the profitability of a business organization. If the consumers of the products or services do not find any fault. It is assumed that the products or services of the operation maintaining the right !uality. Buality is the internal attributes of products or services. If the !uality is high of the products or services of operation process5 the consumer will get interest to buy again the products or services. Buality refers to ensuring the product is the best all above. '/( &ost: 6ost is the second significant performance objective of operation management cost of producing products or providing services underpin the operation management related with the pricing strategy of an organization. On the other hand5 managers need to cut cost regarding !uality of the products or services. 6ost structures are varied from organization to organization. Operation anagement performs in reducing cost of production $eeping high !uality of the products or services. '3( Speediness: .peed is related with responding the customers by the reduction of cost and in time speed of response of a business organization has a positive impact on its success. .o it is necessary to respond the customers !uic$ly so that they ta$e it positively.

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'"( Dependa ilit$: 6ustomers li$e to get their products on time. #hey li$e to depend on their reliable sources. Dependability is a practice of providing goods or services on time to their customers. It is related with getting more customers of their products or services. Operation anagement can measure dependability regarding its operational productivity. How much the organization is able to response to their customers is a vital performance objective of operation management. It not only contributes to increase the speed of response of organization but also improves the efficiencies of the organization. '+( 7le#i ilit$: ;le)ibility is providing various choices to the customers of an organization. ;le)ibility may different types li$e as product fle)ibility5 mi) fle)ibility5 volume fle)ibility5 service fle)ibility and delivery fle)ibility. Different customers li$e different fle)ibilities from the organization. Operation management has an important affect of fle)ibility. Product fle)ibility helps the organization to innovate new products and ideas for its customers. i) fle)ibility refers to a wide of goods or service offering to its customers. Holume fle)ibility offers a wide variety of goods to the customers. Delivery fle)ibility is providing facilities in terms of dithering the products or services. Tas)*' +i, . &omment riefl$ on the importance of operational planning and control (mportance of Operational planning: Operational planning describes the frame of wor$s that are to be done for converting the inputs into outputs. Operational planning focuses on the strategy to be applied to perform the production activities. It defines who5 why and how will do the jobs for getting e)pected production. It is an important part of operation management. It is important for deigning the strategies how the tas$s are to be performed '-hipp5 &700(< It needs to define following items '&( 6ustomers information4s '/( >tilization process '3( anufacturing process5 '"( -or$ing schedules '+( Hours of operation ',( 9ocation of factory:wor$ing place. ;rom the above it is clear to us that operational planning is very important to get the tas$ done with right !uality. Operational planning focuses on the performance the daily tas$ of an Page !? of !"

organization. Operation planning allows the organization want to achieve5 how it is going to done5 what are essentials to achieve it who will perform it. -hen it is going to start and when it will be finished. (mportance of Operational &ontrolling: Operational controlling involves with monitoring that the tas$s are performing in the way as the tas$ is planned. It is one of major activities of operation management to get effective production. If the organization is not able to control it operational activities5 it may be failed to achieve its goals and objectives. It may also causes diversity to manufacture effective production. At this competitive age of business5 organization needs to complete by right !uality products in time production with attractive price. .o it is very important for an organization to control its planning activities for reducing its production cost and for ma)imizing its profitability. Operation controlling ensures the organization is going to achieve its desired objectives. +ii, E#plain 1hat linear programming and give an e#ample in relation to an$ part$ of the operation of 4.5 smith. 9inear programming is an arithmetic method for shaping the best allocation of resource and ac!uiring a particular objective when there are different uses of the resources< capital5 manpower5 material5 machine and other amenities. #he objective 9inear programming in resource allocation may well be cost minimization or conversely profit ma)imization. #he method of linear programming is appropriate to problems in which the entire efficiency can be articulated as a linear job of person allocations and the restrictions on resources offer increase to linear e!ualities or ine!ualities of the person allocations. #he method of ma)imizing for minimizing a linear job of several variables 'objective function( subject to the condition that the variables are non%negative and satisfy a set of linear e!uations and:or in e!uations '9inear 6onstraints( is given the name 9IC1A= P=O@=A IC@.

#he term linear implies that all the numerical relations used in the problem are linear relations5 while the term programming refers to the method of determining a particular programme or plan of action. #he two together have the technical meaning stated above '-hipp5 &700(< Page !! of !"

#hus 9inear Programming is arithmetical method of setting up5 which involves three ladders. &. Identify the objective function and shaping all the restrictions on resources. /. Applying arithmetical techni!ues to get all potential sets of values of the variables to satisfy the constraints. 3. .elect the particular set of values of the variables obtained in '/( that lead to our objective%ma)imum profit5 least cost5 etc. 1IA P91< -.H smith produces two types4 boo$s A and ? during a certain time period. 1ach one of these products needs four different manufacturing operationsJ ?inding5 #urning5 Arranging and 6hec$ing. #he mechanized re!uirements in hours per unit of product are given below for A and ?. A ?inding #urning Arranging 6hec$ing / & 3 " ? & 3 , +

#he e)isting capacities of these operations in hours for the given time period are< ?inding /85 #urning 38J Arranging5 &88J #esting5 &88. #he contribution to profit is K / for each unit of A and K 3 for each unit of ?. #he firm can sell all that it produces at the prevailing mar$et price. ;ormulate the problem as a linear programming model to ma)imize profit. Solution: Steps!: #he $ey decision to be made is to determine the number of units of product A and ? to be produced by the company. &. 9et )& be the number of units of product A and )/5 the number of units of product ? which the company fi)es on to produce. /. Also5 since it is not li$ely for the produce negative number of the products5 it is obvious that we must also have )& L 8 and )/ L 8. 3. Cow5 in order to produce these two products A and ? 5 the total number of hours re!uired at the ?inding centre is set by /) & M )/. #he total number of hours re!uired at Page !% of !"

turning centre is )& M &)/ and the total number of hours re!uired at Arranging and testing centers are 3)& M ,)/ and ")& M +)/ .ince the manufacturer does not have more than /8 hours available in ?inding centre5 38 hours available in turning centre5 &88 hours available in Arranging centre and &88 hours in 6hec$ing centre5 we must have /)& M )/ N /8J )& M3)/ N 38J 3)& M ,)/ N &88J ")& M+)/ N &88 +. #he objective is to ma)imize the total profit that the manufacturer gets after selling the products A and ? which is given by a)imize 'total profit( O P /)& M 3)/ ,. #he above allocation problem of the manufacturer can be e)pressed in linear )& and )/ such that /)& M )/ N /8 &)& M 3/ N 38 3)& M ,)/ N &88 ")& M +)/ N &88 )&5 )/ L 8 And for which the appearance 'objective function( O P /)& M 3)/ ' a)imum(

programming format as follows< Determine two number5

iii. Produce a net1or) plan and indicate the resultant critical path for an$ operation in 4.5 smith A networ$ plan that indicates the resultant critical path for any producing boo$s in -.H smith has given bellow<

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/ 7 &3

& 8 8

" + &0 &0 /8 /8

3 0 0 7igure: % The critical path is !*'*/*3.

+iv, . E#plain ho1 2ualit$ can e defined and maintained Buality can be defined as the fundamental things implied of products or services. Buality is a constant route for building and sustaining relationships with consumers by fulfilling customers4 needs. Buality is the e)pression of implied attributes of goods or services. Buality refers to the customersQ insight of the internal value of used products or services. Buality is a highly sensitive issue which is related with customers4 feelings and emotions. It is !ualitative data collected from consumers. Buality can be maintained as followings given '-hipp5 &700(< Producing !uality products as e)pected by consumers. onitoring the operational actions to be sure that activities are being performed according to the designed way. 6ontrolling the diversities to the operational activities. #esting the sample products or services before selling or providing in mar$etplace. ;inding out errors5 defects and deficiencies of products or services. Identifying the ran$ of designed !uality for the goods or services. Designing usability5 ease and strength of products effectively. Page !/ of !"

Herifying and maintaining a desired level of !uality in products or services. #a$ing effective actions based on the data and information analysis. Applying $nowledge and e)pertise to guide improvement !uality of products or services. Implementing new changes to allow the Improvement of !uality. Identifying5 understanding and managing all issues processes Buality 6ontrol .ystem such as .i) .igma5 I.O 788&</880 and I.O 788"</880 etc.

&onclusion: Operations management is essential to the managers of business organizations for improving productivity and profitability. It also helps business organizations to meet up customers4 competitive precedence. Operations to success in any organization. anagement can be used as the $ey tool

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@eferences: Haapasalo et al.5 '/88,(5 29in$ing strategy into operational management< A survey of ?.6 implementation in ;innish energy sector45 Benchmarking: An International Journal5 Hol. &35 Iss< ,5 pp.G8& A G&G 9in5 6. and 6hai5 -.-. '/8&/(5 21)ploration of the $ey evolutionary operational improvement activities45 Industrial Management & Data Systems5 Hol. &&/5 Iss< G5 pp.&&/3 A &&"&

ichael5 ;. '/88/(5 2Operational ris$ management for financial institutions45 Journal of Financial Regulation and Com liance5 Hol. &8 Iss< "5 pp.3&3 A 3&,

Cattem5 =. H. and Proveniers5 H. '/8&/(5 21ntrepreneurial cooperation< A model for 6=1 in times of economic crisisR A case study at 1indhoven >niversity of #echnology45 Journal of Cor orate Real !state5 Hol. &"5 Iss< /5 pp.&/& A &33

.$ipton5

.D. '&703(5 2.trategic%Operational Approach to

anagement45 Management

Research "e#s5 Hol. , Iss< "5 pp.G A &+

-hipp5 =. '&700(5 2#he

anagement of .trategic and Operational 6hange45 Management

Research "e#s5 Hol. &&5 Iss< &:/5 pp./G A /0

-alton5

. '&70/(5 2 anagement Development< An Operational =eality45 Journal of

!uro ean Industrial $raining5 Hol. ,5 Iss< ,5 pp.// A /,

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-eb =eference< - H .mith5 on operational management5 cited date /3:8&: /8&"5 >=9 from Nhttp<::www.whsmith.co.u$L

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