The Nature and Importance of Operation Management

Topics: Management, Strategic management, Project management Pages: 9 (2698 words) Published: March 29, 2014

Word Count- 3019 words

Table of Contents

Chapter 1 - The Nature and Importance of Operation Management and its Key Elements WH Smith is a British retailer, well-known and publically-quoted book retailer, and newsagent and entertainment product in the UK. Recently it was reported how Kate Swann, the former CEO for the last 10 years, has turned the company around from £135m losses to £106m profit in a decade (Holland). The reason behind this profit is the right decision of Kate Swann. Now let’s see what she did to make WH Smith profitable (Creevy). 1.1 Operation Management and its Importance

In recent years, the scope of operation management has broadened considerably. Production concepts and techniques are applied to wide range of activities and situations outside manufacturing; that is, in service, such as health care, food service, recreation, banking, hotel management, retail sales etc. the operational function consists of all activities directly related to producing goods or providing services. Operation is a function or system that transforms inputs into outputs of greater value. To ensure that the desire output is obtained, measurements are taken at various points in the transformation process and then compared with previously established standards to determine whether corrective action is needed. The essence of the operations function is to add value during the transformation process. Operation management designs the system and controls it; this includes arranging facilities, scheduling tasks, developing procedures for inventory acquisition and turnover, as well as providing corrective actions to insure that changes are made whenever it is necessary to do so (Harris, 1990, (Reprint from 1913)). So, it is easily untestable the importance of the operation management in an organization. The importance operation management is given below: 1.1.1 Understanding Tactical Purposes:

As a book retailer must clearly understand the goals of the organization. Make a clear vision how company will achieve the customer satisfaction. This also involves translating these goals in the operation functions. The functions of operation are: objective, quality, speed, flexibility, dependability and cost. 1.1.2 Constructing an Operations Strategy:

There are numerous decision making involves in operating product development department. Therefore, it is quite difficult to have clear cut guidelines with the long term goals. 1.1.3 Scheming the Operations Products, Service and Process: Scheming or designing involves the physical form of the product. This phase elaborate the shape of the product and composition of its service and process. 1.1.4 Planning and Controlling:

Planning and controlling includes what the resources collected from the customer (which are collected from the customer, like their choices, demand, expectations) should be doing. Making sure collected resources are implemented in the plan. 1.1.5 Enlightening the Performance of Operation:

To satisfy the customer expectations, it is mandatory to continuously monitor and improve the overall fixtures of the product. 1.2 Key Elements of Operation Management
There are three vital elements of operation management. Those are discussed below: 1.2.1 Customer
A manager will be able to describe the customer accurately, if he or she has the accurate knowledge about the customer. The information that helps a manager to design and run the operation management system is what the customer wants, how much they are able to pay and what is their consideration level. This information actually helps the manager to identify order winners, order qualifiers and order losers. This benefits the manager to run the operation management systems smoothly. Order winners and order qualifiers are from the basic of the customers’ expectations. Order losers can be finding out by finding the gap between firm delivers...
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