Nature and importance of operational management in furniture supply organisations

Question:

Describe importance of operational management, operational function analysis for the furniture supplier organisation and tension between cost minimisation and quality maximisation?

Operation management is a part of management that only works to develop the operation strategy and monitoring the operation strategy as well. Operation management’s main area is related with evaluation, design and controls the production process and redesign the production in order to develop the operation process. It helps the organisation to run the operation process accordingly and monitor the progress of the operation and compare the progress with organisation’s budgeted progress as well.

This assignment has done on a furniture supplier organisation. Main aim of this assignment is to find out new ideas which would be helpful to develop efficiency and effectiveness of the business. Therefore first part of this assignment will show the nature and importance of operational management of that furniture supplier organisation and the link between strategic planning and operational management. Second part of this assignment will show the way the organisation can organise a typical production process and finally this report will show the techniques that organisation can adopt to develop their production.

Operation management of an organisation helps that organisation by monitoring the process of the production, by taking steps to develop the progress of the organisation and by implementing their strategy which is related to the organisation’s strategy. Mainly operation management set up the strategy by looking at the organisation’s strategy which helps the organisation to reach to their goals. Organisation gives priority to their operation management department’s decisions at the time of decision making process as the organisation’s main outcome comes from production department which is controlled by operation department. Following points would be helpful to understand the operation department’s contribution for the organisation:

At the time of setting up the strategy the operation department provides their opinion for that strategy. Those opinions include the requirement of resources of production for the new project, the availability of part of the resources, the ability of the organisation to produce for the new project etc.

Operation department helps the organisation to allocate the resources. They collect materials, labour, machinery etc for production and allocate those to get standard outcome from those resources. It helps organisation to saving extra costs of production (Slack et al, 2013).

Operation department monitors the production process of the organisation. In this part they measure the resources that is using for production and compare the actual resources with budgeted resources. It helps the organisation to produce their products within their budgeted limit and it also helps them to produce standard products by using appropriate resources (Slack et al, 2013).

Operation department does research of the production and try to find out other ways of production which would be helpful for the organisation to save the resources by maintaining their standard quality. It helps the organisation to develop their net profit as well (Slack et al, 2013).

In a furniture supplier organisation, operation management plays an important role to operate the production unit. Verities of functions involve in operation management and operation management daily work includes those functions as well. There are mainly eight functions that operation management operates daily in a furniture supplier organisation. Those are as follows,

Link between strategic planning and operational management

Operation management need to know their customer organisation’s requirement and on the base of that the management of the organisation will select the design of the furniture to produce (Slack et al, 2013).

The operational management will plan to determine about the process of the production. In that situation they can determine about the resources that they can use for the production. For example, they can increase or decrease the uses of labour and machinery at this time (Slack et al, 2013).

Operation management will determine unit of furniture they can maximum produce by using their labour and machinery.

At this point the operational management can make a time scale sheet and on the base of that they can plan for the production. It would be helpful for them finish the work on time (Slack et al, 2013).

The furniture supplier needs to produce the furniture on the base of their demand. Otherwise over production could cause them to increase their storage costs.

Operation department always try to control the costs of production by keeping the standard of quality of production. It helps them the organisation to increase their profit (Slack et al, 2013).

Inventory overstock could cause them to increase their stock costs and falling of price could cause them to decrease the profit as well. By looking at that situation operation management controls the inventory of the organisation and produce on the base of their customer’s demand.

Operation management control the maintenance of machinery and they replace faulty or backdated machinery to increase the ability of production. It helps organisation to keep balance on demand and supply. In addition modern machinery helps the organisation to develop the production and to motivate their employees (Slack et al, 2013).

It is important for the furniture supplier organisation’s operation management to follow a formalized process model which would be helpful for them to produce the furniture appropriately for the customers. Therefore the organisation can use the following process model which would be helpful for them to determine the accuracy of the furniture quality and quantity.

Process model for the furniture supplier could be the following model,

According to the diagram the furniture supplier organisation put raw materials by using technology or labours for the transformation process. In their transformed resources means change in materials on the base of customers’ order. In that situation the change could be change of physical characteristics of materials, location of materials, ownership of materials etc. It also changes on the base of their customer organisation’s feedback and returns (masterclassmanagement, 2014).

At the time of transformation process, the organisation needs to design their process and implement the improvement of the process. Finally operation management can planning and control the process as of producing furniture. Finally with the help of operation management’s plan, the organisation delivers the furniture to their customers and provides the excellent customer services as well. However after delivering products and services their customers provide their opinion and on the base of that opinion operation management improve their production process (masterclassmanagement, 2014).

Functions of operation management in furniture supply organisations

Operating management of the organisation can evaluate their performance by using Three Es theory and on the base of that they can take steps to improve their strategy. It would be helpful for them to develop organisation’s objectives and it would be helpful to achieve competitive advantages as well. Main target of Operation management is to produce standard quality products by controlling the cost. Therefore Three Es helps them to achieve the target. Full meaning of Three E’s is Economy, Efficiency and Effectiveness.

On the base of economy the furniture organisation’s operating management will evaluate the costs of the production. In that situation they can review their raw material prices, labour costs, technological costs etc. Main target of this part is to reduce the costs of production and increase the quality of the production as well. Nowadays operation management of furniture manufacturing organisation try to use modern technologies to reduce their labour costs and increase production as well (Hill and Hill, 2012).

In the efficiency part operation management evaluate their performances with other organisation’s performance. Efficiency part could be divided by two groups. Those are inter-authority comparison and inter comparison. Into inter-authority comparison, operation management compare their performance of production like operating expenses, number of employer, labour skills etc with other similar types of organisations. On the other hand inter comparison system helps organisation to compare costs of productions with other similar types of organisations (Hill and Hill, 2012).

Efficiency part helps operational management to determine their objectives and achievement of the organisation. In this point operational management compare the objectives that whether the objectives are practical and precise or not. On the base of that they takes steps do develop their activities (Hill and Hill, 2012).

Organisation’s operation management always try to set up the strategy which would be helpful to minimise the costs of the production and develop the quality of the productions as well. It helps the organisation to achieve competitive advantages in terms of cost leadership and customers become have by getting good quality products. With the help of that the organisation can provide low costs products with good quality which always the customers look for (Hill and Hill, 2012).

The furniture supplier organisation’s operational management can mainly look on the quality of the products and after that they can review the costs of the production. Therefore it could be said that, the organisation can give first priority on the quality of the products and second priority is the costs of the products. In terms of profit maximisation the organisation need to look on the cost of the production as well. Therefore operation management of the organisation always review the segments of the production to control the costs of the production (Hill and Hill, 2012).

Operation management mainly looks on five objectives in terms of running the production procedure appropriately which would be meeting to the organisation’s requirement. Mainly operation management set up their strategy which meets to the organisation’s strategy as well and their main target is to deliver quality products with lower prices as well. Those five objectives are as follows,

Formalized process model for furniture production

It has already been explained that, operation management of the organisation always try to minimize their costs. Therefore in some situation they move their manufacturing areas in other locations or they set up their manufacturing areas where they can get cheap labour, raw materials etc. Low casts help the organisation to maximise the profit (Hill and Hill, 2012).

In terms of getting loyal customers, it is important for the organisation to maintain the quality of the products. It helps the organisation to increase their revenue and earning goodwill as well. Therefore operation management always maintain their quality of the products. In some situation they try to improve the quality of the products by keeping the same costs of the products. It helps them to get competitive advantages (Hill and Hill, 2012).

It is operation management’s responsibility is to maintain the speed of the products. Operation management try to find out the ways to speed up the productions and in some situation they control the speed of the productions as well to maintain the quality of the products. The furniture supplier only supplies their production to a particular organisation therefore they control their speed on the base of the organisation’s demand (Hill and Hill, 2012).

Operation management try to become flexible with their daily works. It helps them to develop their strategy. In this point flexibility means operation management’s power to change the products and production process. However at the time of changing the production procedure the operation management looks on their customer’s requirements and organisation’s objectives (Hill and Hill, 2012).

Dependability is to deliver the furniture to their customers on time. It helps to gain goodwill and the customers become happy to get delivery on time. Operational management always do research to improve their services and try to find out the ways that they can use to deliver their products more accurate time (Hill and Hill, 2012).

Liner programming is a mathematical technique that helps the organisation to maximise or minimize a linear function of several variables. Liner programme is helpful for operation management of the furniture supplier organisation. It helps the operational management to make the best possible use of available productive resources. In some situation the operational management may face the problem of bottle neck in production process. In that situation Liner programme helps the organisation to calculate the bottle neck, it highlights the bottle neck resources and suggests possible steps that the organisation can take to overcome that problem (IBM, 2014).

It is important for operational management to follow formalized procedure to determine the need for operational planning and the steps to control in producing the furniture. In this time they need to take some steps which would be helpful to set up their strategy and into their strategy they can include these steps as well. Those points would be as follows,

• They need to review all activities which are related with the production of furniture.
• They need to order and collect all the resources that they need to run their production procedure.
• They have to determine about the activities that they can run smoothly or they have to wait for other activities.
• In addition finally they have to determine about the time when they need other activities to take place (Heizer and Render, 2014).

Planning and the operation of producing the furniture and control the production procedure is mainly depend on the demand and supply of the products. Demand into the market could go down and therefore on the base of that the customer organisation may reduce the supply of furniture. However into the furniture market, it is unlikely reduces the demand of the furniture. However demand of a particular design may reduce and on the base of that customer organisation may ask to change the model of the furniture. In that situation it is important for the operation management to redesign the furniture production plan and implement the plan to provide furniture on their customer’s demand (Heizer and Render, 2014).

Importance of quality and quantity accuracy in furniture production

On the other hand, furniture manufacturers’ would have to make plan by considering their situation as well. It is because they get delivery of raw materials from their suppliers. In some situation suppliers might renegotiate the price of raw materials, or they might start reducing the quality of the products. In that situation it is important for the operational management to redesign the production model and implement the production model to continue their production process by keeping their standard qualities (Heizer and Render, 2014).

Moreover the supplier would have to consider other resources to run their production process. Other resources include labour, machinery etc. They need to look on their labour qualities, availability of the labour, costs of the labour. In addition, machinery availability, latest machinery uses, decision making whether they should use machinery or labour for production is also important work for the operation management of the organisation (Heizer and Render, 2014).

It is noted that being a supplier of furniture, the organization needs to set in motion with pre-assessment scheduling, followed by the supplier evaluation as well as the operational outcomes assessment. Below are the essential operational outcomes for the selected business organization:

Operational planning	Conversions	Expected benefit
Forecasting demand	The demand for the particular furniture  is forecasted by the company or assess the demand of the product and accordingly order the wood	High
Assemble stock	Assembling the stock like wood, nails, paints, steel and adhesive	low
Cutting the wood	Items are being machine rather than assemble from the parts. Manufacturing as per the order of the clients (Apte et al. 2011).	Low
Designing and using adhesive and various other materials	Innovating the style of furniture along with selecting the design, greasing and polishing the furniture	High
Checking the quality	Quality controller check the quality by assessing the furniture strength and weight and size as per the client demands (Trietsch and Baker, 2012).	High
Inventory	Entire finished product are being keep for the dispatch by using the batch processing’s.	Low
Logistics	Final send into the stores and from there to consumers.	Medium

Network planning helps to reduce the complexity of task. In this study, implementation of TQM within the existing supply chain system of the furniture company, network diagram will give the time of the project which will help in scheduling of the project. Below are the details of the network plan for the selected business organization.

Activities	Predecessor	DAYS
A	–	2
B	–	3
C	B	1
D	A,C	3
E	D	8
F	C	1
G	F	6
H	F	3
I	B	7
J	H,E,G	2

Here,

A = Preparing the technical’s specifications

B = Tender processing

C = Work orders

D = Supply of equipments

E = Supply of TQM

F = Supply of fittings

G = Civil work

H = Installations

I = Monitoring

J = Dummy testing

The below mentioned figure explores the critical path of the network:

Figure: Network of the project

So, the critical path is

It is important for the operational management to control the quality of the furniture for sales, stock, and purchases process. It helps the organisation to gain goodwill and to run the business successfully. Therefore project management of the furniture supplier organisation can use different tools to control the quality of the furniture for sales, stock and purchase process. Those tools are as follows,

This diagram is helpful to examine the reasons of something happens or might happen in operational process. It helps the process management to identify the gaps of production and on the base of that process management can take steps to fulfil the gaps.

(pumhut, 2014)

Into the furniture manufacturing organisation control chart would be helpful to find out normal distribution and allows the organisation to track trends and adjust the process mean when the organisation reach goals and need to set new goals. Main reason of using control chart is the organisation can track trends overtime (pumhut, 2014).

Conclusion:

Finally it could be said that, operation management plays one of the most important roles within an organisation. With the help of operational management the organisation can reach to their goals easily and it helps them to develop the business by gaining goodwill as well. On the other hand, operational management need to follow formalized process to overcome their challenges and to run their daily works. It would be helpful for the operational management to reach to their target easily.

After executing this study, it is now clear to me that operation management is part of strategic importance to every organisation and it plays very important role in reducing the company cost and the increase in production of the company. In order to execute this research work, as I choose a furniture supplier organization as the case organization, it helped me to understand the aspect related to manufacturing and innovating design for the furniture. This study at the same time helped me to understand how the business attains the supply and demand balance in the marketplace.  During the study, I also understood that company takes too much long process of manufacturing the furniture because of the large part of the time is taken in the production planning and strategy.

References:

1. masterclassmanagement, 2014. Information obtained from https://www.masterclassmanagement.com/BusinessManagementCourse-DayToDayRunning.html . Last viewed 23/06/2014

2. Slack N. Brandon-johns A. Johnston R. 2013. Operational management, 7th London: Pearson

3. IBM, 2014. Information obtained from https://www-01.ibm.com/software/commerce/optimization/linear-programming/ . Last visited 27/06/2014

4. Hill, T. Hill, A, 2012. Operational management. 7th London: Palgrave McMillion

5. Heizer, J. Render B, 2014. Operational management. 11th London: Pearson

6. CNX, 2014. Information obtained from https://cnx.org/content/m32170/latest/. Last visited 28/06/2014

7. Pmhut, 2014. Information obtained from https://www.pmhut.com/quality-control-in-project-management . Last visited 28/06/2014