TO WHAT EXTEND IS OPERATIONS MANAGEMENT A STRATEGIC ACTIVITY? Be sure to give examples and views of literature. Paton, Clegg, Hsuan and Pilkington, (2011), defined Operation management as the activity of managing the resources of the organization that deliver goods and services. The activity is mainly to implement system and processes that are repeatable, consistent and reliable. Process design was first introduce by Frederick Taylor, who believe in rationalism and who wrote rules and procedures for unskilled workers to follow so as to replace uncertainty with predictability. All operations have similarities; they all transform input resources into output products, and however they differ in their characteristics which are; the volume of the output, the variety of the offering, the variation and the degree of visibility. Operation management is in everyday life and is said to be a strategic activity as it has to do with the creation of product and services, which is the core competence area of any businesses. It covers such a wide range of activities that the performance of any businesses, depends on it, this no matter if in the manufacturing or in services activities. It is for this reason that operation management is seen as being at the heart of the competitive strategy, thus a strategic activity. In the next paragraphs I will talk about how the factors; competences, quality and Cost have vital contribution to operation management making it a strategic activity.
Competitive advantage is important for the success of a company and this depends on the competences possessed by the company. Key competences are the minimum competences that a company needs to have to compete in its industry and core competences are these competences that the company is good at doing. The core competences of a company are what make it different from its rivals and thus gain competitive advantage. Let’s take the car industry, their product is the same but the difference lies in their operation. “however important production design and performance may be, highly efficient operations are the key to keeping costs down and achieving high levels of quality”. (Pilkington, 2007). Actually the competences which are present in the operations are determinant for the success of a strategy. An example in the manufacturing sector is Toyota, which created the Just in Time system, to face uncertain supply of materials, thus saving cost on inventory and created a high-quality production system. QUALITY
Quality is a measurable feature to show reliability, consistency, fitness, conformity to standards. Juran (1988) defined quality as ‘fitness for purpose or use’, which is meets specific objectives that needs to be achieved. Quality is important to sustain business activities as an unsatisfactory product is equal to Bad reputation for the firm. There are many management approaches to quality; all having different philosophies and one of them is TQM. TQM – Total quality management is a collection of approaches from Japanese firms and different quality gurus to make a quality strategy. TQM is the creation of quality culture within the firm, having as main goal performance improvement.
It has a Management led approach, aiming at getting things right at the first time by eliminating variations. Quality control is a very important process for products where specifications are important. The traditional approach to quality control was to produce, then check and then sell products meeting specifications and rejects those not meeting the specifications. The TQM approach to quality control aim for zero defects, this by reducing variation from the production process. To maximize quality, variation should be minimized. Variation is sometimes called the fundamental cause of poor quality (Evans, 1989). By minimizing variations, quality is thus being increase and production cost is also optimize as there are less rejects, thus helping essentially for the...
References: Juran, J.M (1988), Quality control handbook, 4th edition, Mc grawhill, New York
Pilkington (2010), Production and operation management guide book, university of London press, UK.
Steve Paton, Ben Clegg, Juliana Hsuan and Alan Pilkington(2011), Operations Management, Mc Grawhill, UK
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