Essay about Operations Concept and its Application to a Business Situ

Question: Write an essay about your research into an operations concept and its application to a business situation. The aim of the essay is to explain to an intelligent person, with no specialised knowledge of operations management, the concept on which your research was based and the extent of its application to the operations tasks in a manufacturing or service organisation. Answer: Introduction The concept of operations management deals with the systematic designing, process formulation and direction which deal with transformation of the inputs into appropriate products and services for both internal and external customers. A process is defined as an activity that takes into consideration the input and caters to the transformation process to provide the outputs to its customers. The external customers are the ones who is an end user or an intermediary (these include retailers, financial setups and manufacturers). The internal customers are the ones who rely on the inputs drawn from the processes in order to perform a certain task. The main relevance of the concept lies in inputs, processing the operations and formulation of the desired outputs. The inputs of the operations processes include energy, workers, managers, equipment, facilities, materials and land. The operations processes are further dependant on the external environment and information on performance. The outpu t of the operational process is to produce the intended goods and service (Collier and Evans 2014). General discussion According to Chaudhari (2013), two important areas where this concept can be applied are in service and manufacturing processes. Manufacturing characteristics define the physical durability, inventorying, capital intensive techniques and quality measurement. Some of the important characteristics of operations management in services include intangible, labor-intensive techniques and shortening of response time. The transformation of various manufacturing processes takes into consideration the changing physical properties, size, shape and the final product. The overall output of the various processes involved in manufacturing can be further used for transportation purposes, storage and anticipation of future demand. If the processes doesnt change the physical properties, shape or size of the product then it is considered under Service category. The processes related to service are intangible and perishable in nature. Unlike the manufacturing outputs the service outputs cannot be stored in the inventory. The main difference between the processes related service and manufacturing is the level of customer contact. The service processes shows a higher degree with customer response and thus customers may take an active participation in the process. On the other hand manufacturing process tend to have a lesser customer participation. This particular process does not need to keep a direct contact with the consumers. The managers should be able to recognize that event of customer response which is required while designing up the process in the respective areas (Amit and Zott 2012). The concept of implementation of operations management in service process has been studied through a real-life practical scenario of a Progressive Insurance business started in the year 1937. The company earned $ 1.3 billion as revenue in 1991 and by 2011 it was further able to earn $14 billion as annual premiums. This was possible due to operations innovation which led to designing of the entire process from scratch. The innovation process included strategies for customer satisfaction and retention. The website of the progressive insurance company enables the agents to quickly access payments, viewing of policy, information related to claims and thereby send quotation directly to the customers via email. This immense procedure to settle the claims allowed the customers and the claimants to contact the progressive representatives via telephonic conversation 24 hours a day. Thus several other operational innovations assisted the company in terms of customer relationship order fulfillm ent. In this way the claimants received a faster service thereby retaining the old customers. The shortening of the cycle time of the operations reduced the costs associated with the process. The operational plan implemented in progressive insurance had the ability to detect fraud by quickly arriving at the accident scene and minimizing the payouts as claimants are often content with lesser money if the payout processes quick, easy and a hassle free. An example of the same can be seen in manufacturing industry related to tailor production such as Urban outfitters use operational management in their procure to pay cycle. The order cycle is improved through economic ordering quantity and this allows the company to order products based on the demand and available capacity of the inventory. The application of EOQ significantly brought down the holding cost of the items. Hence the manufacturing process was able to get a boost through appropriate ordering of raw materials (Willis et al. 2 013). Conclusion The most important management task for the service process was to add value to its products and linking of the various operations processes, competitive goals and marketing of the services. Thus the net effect of progressive insurance was that the company maximized its value and advertised its popular products. The second important management tasks related to manufacturing processes was aimed to reduce the lead time of the inventory management and improved ordering of the products. The net result of urban outfitters was a reduced carrying cost and efficient procurement of the raw materials. Reference List Amit, R. and Zott, C., 2012. Creating value through business model innovation. MIT Sloan Management Review, 53(3), p.41. Chaudhari, B.R. 2013, Operations Management Delivers Dividends, Penton Media, Inc., Penton Business Media, Inc. and their subsidiaries, Overland Park. Collier, D.A. Evans, J.R. 2014, OM: operations management, 5th ; student 5. edn, Cengage Learning Australia, South Melbourne, Vic. Willis, D., Rolnik, D., Renwick, G., Michael, D., Ling, R., Gehrmann, D., Chiang, F., Callahan, P. and Alfred, T., Progressive Casualty Insurance Company, 2013. Customizable insurance system. U.S. Patent 8,433,588.