OPERATIONS MANAGEMENT 2
This assignment will define operations management and explore the various bodies of knowledge and practices that have led to operations management as it is currently known today. Additionally, this paper will focus on topic areas such as supply chain management, total quality management (TQM), reengineering, theory of constraints (TOC), Alfred P. Sloan’s contributions to TQM, JIT, and reengineering in relation to Sloan’s organizational success, and Toyota’s production system, also known as Just in Time (JIT). Lastly, this paper will summarize the highlights of each topic area and its contribution to operations management.
Definition of Operations Management
Operations management is the process through which goods and services are supplied to end-users. However, in order to understand the functions of operations management, a closer emphasis on the term operations is necessary. The term operations, covers both production operations and service operations. The common characteristic of those two types of operations is that both of them are simply transformation processes (CIO.com). In both of the processes, certain inputs are transformed into different types of outputs. Therefore, operations management has a crucial duty of planning and controlling the transformation process. Operations managers must also consider the general strategies of the organization, the external environment, and the four decision making domains which are process, quality, capacity, and inventory (CIO.com).
Supply Chain Management
Supply chain management is a process whereby suppliers work in unison to provide end-users with goods and services. The supply chain may consist of suppliers of raw materials, manufacturers, logistics companies, wholesalers, and retailers. However, the end-user is the person that makes the decision whether or not to purchase the product or service. As a result,
OPERATIONS MANAGEMENT 3
each process either internally or externally must add value to the product (Harrison, 2001, p. 1).
Exacerbating the problem of attracting and retaining customers is that global competition has provided a myriad of choices for the consumer. This has resulted in an ever-increasing focus on product quality for internal as well as external supply chains (Harrison, 2001, p. 2). Moreover it requires five times as much effort to attract a new customer than to retain a current customer. In addition to the cost of acquiring new customers, the new customers have a tendency to purchase less frequently (Harrison, 2001, p. 3). Consequently, supply chain management seeks to create a high level of satisfaction so that the customer will not pursue other suppliers.
Yet, considering the high costs of attracting and retaining a satisfied customer base, there exists a great deal of distrust among some external supply partners. Distrust may be caused by the following: lack of knowledge about what services or components should cost, lack of awareness of what causes waste, narrowly focused objectives, and short-term business horizons among others (Harrison, 2001, p. 6). Therefore, if supply chain management is to be implemented successfully, it requires the full cooperation of all partners within the chain. Likewise, the concept of supplier partnering is one of mutual dependence, trust and choice (Harrison, 2001, p. 73).
Therefore, although the companies operate as independent entities, they are dependent upon each other because they must share the same values and visions to remain successful in the marketplace. Consequently, trust is the key component in supply chain management;...
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Champy, J. & Hammer, M. (1994). Reengineering the corporation. New York: Harper Collins Business.
CIO Website. Supply chain management definition and solutions. Retrieved August 16, 2011 from:http://www.cio.com/article/40940/Supply_Chain_Management_Definition_and Solutions
Goldratt. E. (1992). The goal. Great Barrington, MA: The North River Press Publishing Corporation.
Harrison, F. (2001). Supply chain management workbook. Burlington, MA: Elsevier Buttersworth Heinemann.
Liker, J. (2004). The Toyota way. New York: McGraw-Hill.
Morris, P. & Oakland, J. (1997). TQM, a pictoral guide for managers. Woburn, MA: Elsevier Buttersworth Heinemann.
Sloan, A.P. (1990). My years with general motors. New York: Bantam Doubleday Dell.
Rockford Consulting Group Website. Theory of constraints. Retrieved August 16, 2011 from: http://rockfordconsulting.com/toc.htm
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