operation department

operation department

The operation department in any organisation is among the most vital organ. It essentially tells the value the organisation put in the customer in the products and services they offer. It is the core of the organisation and the reason why it exists. Everything else in an organisation degenerates from the activities or functions of this department (McGraw 2009, p. 22)http://writers-corp.net. The operation functions in one way or another contribute highly to the competitiveness of the organisation in its industry of operations. This is because the department usually incorporates consumer needs in developing a product or service in order to satisfy the consumer as well as make profit. In some industries like the transport industry, the operations interact with the consumer hence being in a pole position to make or break the relationship between a consumer and the organisation (Ray 2005, p. 15)

Competitiveness in business is the ability to gain an upper hand over others in satisfying consumer needs and getting a positive feedback for it through loyalty. In most cases, being competitive is associated with success in the area of operation (McGraw 2009, p. 35). This is the reason why success in the operations functions will translate to the overall success of the organisation in achieving and surpassing set goals. This topic will compare the service industry and the products industry operations functions and their effect on the organizations’ competitiveness.

There is an argument that services should be treated differently from manufacturing largely relies on service’s unique characteristics (Ray 2005, p. 28). These include customer inseparability, consumption and production, intensity of labour; perish ability, heterogeneity, intangibility and influence. The combination of these characteristics makes service industry unique and management of service operations difficult. Intangibility is usually recognized as an important comparison between services and goods (McGraw 2009, p. 47). This also makes the manner in which the operations departments in the respective industries function differently.

Virgin Airways versus Toyota Automobile

Virgin Airlines is a firm in the service industry offering travel services using airplanes to various destinations in the world. The firm competes with various organizations even state owned corporations. This puts it in a tight spot where it has to ensure that it retains its customer and adds more in order to remain in business. Toyota automobile on the other hand, is a product selling organisation that makes automobiles and sells to its customer to satisfy their needs as well as make profit. The automobile industry is highly competitive, and with many alternatives around, only the best remain in business. Toyota has managed to lead this industry for quite some time mainly because of the close cooperation between research and development department and the operations department.

The Effective Product/Service Design Model (EPSD)

The EPSD model formulation integrates customer preferences and the elements of ensuring that the production process is implemented within the set framework of identifying profit maximizing product profiles, which can be produced at a different operating difficulty level. An overview is presented in the figure below. The formulation builds on the choice patterns of customers from one more market segments. The market share of each product or service offered is a function of customer choice patterns, product/service attributes, and the attributes of those offered by competitors (Ray 2005, p. 34). The diagram also shows that the production cost can be thought to be a function of the product or service and process attributes. In addition, the product/service and process attributes together determine operating difficulty level, which is an aggregate measure of production capability. For instance reducing the number of skilled workers can reduce production cost. However, this could result into the making of products that do not satisfy consumer needs thus reducing profit. Similarly, increasing product variety can impact both cost and production complexity, thereby making it relatively difficult to meet market needs.

The effective product/service design model: Figure 1

Competitors Product/Service

Competitors Utilities

Figure 1

Toyota Automobile

Developing and sustaining supplier relationships

Toyota automobile depends on suppliers to produce high quality products on short notice and deliver them reliably on point of use. The company enjoys significant competitive advantages from their established networks of superb supplier relationships (Schneider 2003, p. 29) The effectiveness of a reputable supplier relationship is that it helps reduces the cost of ownership. This represents the total cost of acquiring goods, materials, and services. The firm operations functions include, performing design and engineering work to determine material specifications, ordering materials, inspect materials, store materials and pay for materials among other activities. Toyota automobile depends on its suppliers for product innovation (Chambers 2008, p. 21). This is another function of operations as it has to ensure they get the exact results for maximum customer satisfaction.

Produce products

At the core of the operations management are the efficient, high quality and responsive operating processes the produce goods used by Toyota’s customers. Toyota believes on improving quality, process cost and cycle times (Chambers 2008, p. 53). The firm's operation has to ensure that the products for customers have been prepared and delivered in reasonable time. Toyota’s products are manufactured in such a way that they satisfy consumer needs at a reduced cost.

Distribute Products to Consumers

This is the third process, and another function of the firm is to deliver the product to the customer. The aim is that the version that is downstream which is responsible for the reduction of costs when it comes to working with suppliers.  In the case of the previous suppliers within the operational process of management, the goal of achieving a proper distribution process entails that factors such as performance, quality and cost be carefully considered.  The goods get to move faster if a proper distribution channel put in place. Toyota has unusually many distribution joints all over the world the same reason why the firm is the most popular in the world today.

Risk Management

            Every investment has some risks tagged along. This means attention required to ensure that losses do not occur as a result of ignoring risks. Credit operations, interest rates movements and technical malfunctions of a certain fleet of automobiles are some of the risks Toyota may face while doing business. A comprehensive risk management process that also relies on research and development is usually in place to help in managing risks. The mitigation of risk increases the probability of attaining goals.

Virgin Airlines

Providing services

The major function of the Airline is to ensure the services are there for the customer. From seats in the airplane and tickets all the ways to taxis wait to take customers to their next destination (Shaw 2011, p. 27). These services may be the difference required in satisfying consumer needs. This function is essentially the reason why the department exists and contributes directly to the overall success of the organisation. This is because the execution of these functions keeps the consumer satisfied and loyal.  Initiatives such as reengineering, business process and time based management are examples of programs applied to eliminate complacency in providing services.

Risk management

Although there is a department for managing risks, the operating department has to be involved by all means as it has the deepest knowledge of the risks surrounding the organisation and can contribute significantly in mitigation efforts (Shaw 2011, p. 65). For instance legal risks as a result of suits, insuring consumer’s luggage against burglary and other risks. This can be highly involving and requires a lot of time and management skills to be successful otherwise it would end up in losses.

Developing and sustaining supplier relationships

Virgin airlines does not  make airplanes but needs to satisfy consumer needs by bringing air busses that make them comfortable. The operations department charged with the responsibility of forging a strong relationship with a supplier or manufacturer to ensure that the airbus manufactured is in line with customer needs.

Safety Services

Airplanes are risky to fly as the react to weather changes which are sometimes exceedingly unpredictable. This also means that regular maintenance required and replacement of worn-out parts. The Operations department has the responsibility to ensure all this happens smoothly without affecting the schedule. The safety of an airline is what gives a consumer the confidence to travel by its airplanes otherwise no one wants to die.

Conclusion

The above firms are among the biggest multinationals in the world, and as depicted, their operations departments are crucial in the achievement of the goals each company has set successfully. It is therefore, crucial that the department is given as much attention as possible. The functions in the service industry are different from those in the product industry however; these functions are the basis on which the road to success starts which makes it an extremely crucial process. It is therefore, easy to state that the functions of the operations department have a direct impact on the overall success of the organisation.

Reference

Chambers, D 2008, ‘Toyota’, Westport, Greenwood Press

Johnston, R & Clark, G 2008, ‘Service Operations Management’, Englewood Cliffs, Prentice Hall

McGraw, F 2009, ‘Operations Management’, City: Global India Publications Pvt Ltd.

Ray, F 2005, ‘Comprehensive Production and Operations Management’, City, Laxmi Publications

Schneider, M 2003, ‘Automotive Service Management: Operations Management’, City: Cengage Delmar Learning

Shaw, S 2011, ‘Airline Marketing and Management’, Aldershot, Ashgate