Operations Managment

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Source: Honda Motor Company
Introduction
If any operation wants to understand its strategic contribution it must answer two questions. First, what part is it expected to play within the business - that is, its role in the business? Second, what are its specific performance objectives? Both these issues are vital to any operation. Without an appreciation of its role within the business, the people who manage the operation can never be sure that they really are contributing to the long-term success of the business. At a more practical level, it is impossible to know whether an operation is succeeding or not if the specific performance objectives against which its success is measured are not clearly spelt out. This chapter deals with both these issues. On our general model of operations management they are represented by the areas marked on Figure 2.1.

Figure 2.1 This chapter covers the role and strategic objectives of operations management

1.
Chapter 2 The strategic role and objectives of operations
Key questions m
What role should the operations function play in achieving strategic success? What are the performance objectives of operations and what are the internal and external benefits which derive from excelling in each of them?

Operations management can 'make or break' any business. Not just because the operations function is large and for most businesses, represents the bulk of the assets and the majority of the people, but because it makes the business competitive by providing the ability to respond to customers and by developing the capabilities that will keep it ahead of its competitors in the future. For example, the role and performance of the company's operations function is hugely important to TNT Express. It is able to maintain its reputation largely because of the performance of its operations processes. But if an operations function cannot produce its products and services effectively, it could 'break' the business by handicapping its performance no matter how it positions itself in its markets. Figure 2.2 illustrates just some of the positive and the negative effects that operations management can have. TNT Express is the world's leading business-to-business express delivery company, delivering 3.5 million items a week to over 200 countries using its network of nearly 900 depots, hubs and sortation centres. It employs over 48,000 staff worldwide, operates over 19,000 road vehicles and 43 aircraft and has the biggest door-to-door air and road express delivery infrastructure in Europe. A pioneer in reliable next-day door-to-door and same-day deliveries, TNT has maintained its track record for innovation. Its aim, says Managing Director Alan Jones, is to 'provide the fastest and most reliable express delivery service. We want to be recognized as the best company in the door-to-door express delivery industry. That is why we are passionate about continuous improvement and we're totally committed to providing ever-higher levels of customer care. It is also why we continue to outperform the opposition in an extremely competitive and fastchanging market'.

The company sees the most important elements of the strategy as providing the fastest and most reliable express delivery services, giving outstanding levels of customer satisfaction, equipping employees fully to satisfy customer needs, adopting a 'right-first-time' approach in every part of the business, offering later collection and earlier delivery times and providing valueadded for customers. All of which means that TNT

Operations management is a 'make or break' activity

2A

Express must continually update its network of air, road and sortation facilities and perfect the seamless integration of all its processes. This, in turn, means investing in and managing some major operations projects. For example, even though the company already offered the fastest transit times by road in Europe, investment in new facilities and...
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