A Series of Operations Management Questions Term Paper

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operations management and operations strategy.

Using an example of your own, explain how operations performance objectives can change over time.

Explain which factors that influence the timing of capacity change.

Explain how developments in process technology can change trade-offs in the product-process matrix.

Explain the main differences between continuous and breakthrough improvements.

Describe a typical stage gate model of the product and service development process.

Describe the different ways in which headquarter operations staff can act to create value for their company and its individual operations.

Explain the difference between pure risk and speculative risk.

Question 1 -- Brintons Carpets Ltd.

Question 2 -- Operations Strategy analysis of IKEA

Question 3 -- Hagen Style

Differences between operations management and operations strategy.

the systematic approach to address the challenges and the issues that relate to the transformation of raw materials or any other form of input into output so that the output is useful for the customers and which can be sold against a price to generate revenues for the respective organization is described as operations management. The aim of operations management is to create a balance between the input and production costs and the revenue generated in such a way so that the organization gets the maximum operating profits possible. In other words, the responsibility of operations management is to create and design processes so that inputs get converted in to outputs in a manner which is the most beneficial for a company. The process of operations management includes development of a systematic approach in order to understand the problems, collection of relevant data and the development of solutions that are effective and efficient.

The process that helps in taking decision about the key operations in a process where input is transformed into outputs and which are in line with the ultimate strategic objectives of the company is defined as operations strategy. The formulation of operations strategy involves finding the answers to 'how' of reconciling with the market requirements with the help of operations resources that gives advantage to the organization over the long-term. It is also defined as the process that gathers collective and concrete actions that are mandated or guided by the corporate strategy of the firm. It is within the realm of operations functions and binds the different operations decisions as a response to the competitive forces and priorities of the organization as well as the external forces in the market.

2) Using an example of your own, explain how operations performance objectives can change over time.

Companies and firms generally try and satisfy its customers' needs and wants through fast and dependable delivery of goods and services at prices that are reasonable while maintaining a good quality of the products and services. The companies also organize their operations in such a manner that they can incorporate any changes in the external business environment as well as in its supply chain. This is done with the five basic performance objectives that companies look to achieve in order to satisfy its customers and to gain market share thus. These are quality, speed, dependability, flexibility and cost.

We take the example of Toyota that has changed its operations performance objectives over time. It started off with making expensive cars primarily for the home market in Japan with quality and speed of delivery being primary operational performance objectives. However, as the company grew it expanded its market and became a global player in competition, it changed its priorities and started to adapt to the global competition and catering to the global market needs. The company began making cars that were affordable thus focusing on costs of products. Another aspect that gained predominance for the company over the years was to be able to deliver products as and when the customers needed thus enhancing the speed of delivery. However, the global customers required cars that catered to local needs and hence the company production process incorporated various changes in car characteristics like added safety and enhanced after sale service. Toyota incorporated these aspects in its operations thus also giving importance to flexibility in operations performance objectives. This exemplifies the changes that Toyota underwent with respect to its operational performance objectives over time.

3) Explain which factors that influence the timing of capacity change.

The competitiveness and the profitability of a company is dependent on successful timing of moves and measures. Waiting too long to take a decision and moving too slow can result in companies losing momentum.

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Hence companies need to either follow a proactive or a reactive strategy which is applicable for capacity building strategies also.

Capacity building is the alteration in the production and supply capacity of companies that firms decide on depending on predicted and historic demand statistics and data. Building of capacity -- especially augmentation of capacity, involves extensive planning, data collection anticipation and financial commitments and investment. Since a lot remains at stake while companies augment or bring in changes in capacity, the accurate timing of such a strategy is critical in the company achieving the desired goals and objectives from the measure. It can be for short-term or long-term periods.

The factors that are critical to determine the timing of capacity change include the determination and calculation of the long-term and short-term demand forecasts. Seasonal factors are important consideration for timing of capacity change. For example, power generation companies need to augment their capacity generation in the extreme cold and hot months in the anticipation that consumption would be high during these seasons. However, the timing of capacity change -- specifically capacity augmentation also depends on the cost of building the change and the operating costs of the facilities, the technological changes that are required and competitive factors like the behavior of competitors. The availability of the capital and other inputs for production, flexibility in the production process and the potential benefits against the costs of capacity change are also important considerations that determine the timing of a change in capacity building.

4) Explain how developments in process technology can change trade-offs in the product-process matrix.

A tool that analyses the relationship between the life cycle of a product and the technological life cycle is described by the term product-process matrix. This matrix is used to examine market-manufacturing resemblance issues which in turn help in understanding the strategic options that are available to a company in terms of the production process. There is a series of stages that the manufacturing of production of a product or a service that it moves through. These are the job shop, batch, assembly line and continuous flow. The stages begin with a very flexible but high-cost process and moves towards an increasing level of standardization, mechanization, and automation. Ultimately the process culminates in an inflexible yet cost-effective process. At the base of the matrix, smaller but unique products are produced with human skills. As the demand for products increases and with the availability of the right technology, the process slowly moves to the next stage where products are produced in greater volumes utilizing both human skills and technology known as batch production. With further augmentation in demand of products and available technology greater volumes need to be produced and the process of production becomes repetitive. The same steps in the production process have to be done over and over again and simply using human skills and labor would make the production process slow and expensive and thereby unable to meet the market demands. With greater automation and repetitiveness, the production process further graduates towards the use of an assembly line. While uniqueness of products decreases in this technology-based process of production, the volumes of products produced increases and the cost of production, helped by economies of scale, decreases. Greater technological development and conducive capital costs finally results in a production stage that is known as a continuous flow where the very high volumes are produced at very high standardization. This is the stage where uniqueness of products is the lowest, technological assistance is the highest and costs of production are the lowest. This transformation of the production process that changes along with change in technology and demand volume gives a competitive edge to companies.

5) Explain the main differences between continuous and breakthrough improvements.

As the name suggests, continuous improvement refers to the small, numerous and incremental steps of improvement in business processes and production process that are implement in a continuous manner over a long period of time. This can be implemented by anyone and everyone within a company with the aim of improvement of quality of the products, the work processes and the practices at work and the business processes. This process is something that comes from within the individual employees in a company indicating that the company possess a corporate culture of quality improvement and innovation. This is an ever going process and often is follows a four step quality model involving planning, doing, checking and acting. This.....

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