Operation Management in Business

This document provides an introduction to operation management in a furniture supplier company. It discusses the importance of operation management for the Global furniture supplier and its impact on other departments. The document explores the functions of operation management and evaluates its significance in the company. It also explains the concepts of linear programming, critical path analysis, and network planning in operation management. Additionally, it discusses the need for operation planning and control in producing furniture and suggests possible layouts for production. Lastly, it explores the approaches that can be used for project management and quality control in the sales, stock, or purchase process.

Operation Management in Business/thinking-
studying-law
Introduction to Operation Management in Business
Operation management is one of the most important department of an organization which plays an
important role in producing goods and services for its customers. It has significant impact on other
departments of the organization (Bakliwal, 2011). The current study also focuses on operation
management in a furniture supplier company. Research will try to understand the concepts of operation
management and its associated functions which are significant for success of the company. Further, it
shed lights on relationship between operation management and strategic planning of the company. It
comprises production process of different products of furniture supplier using different tools and
techniques of operation management. Along with this, relevant techniques to the production of an
operational plan for a furniture supplier is also describing in the following paragraphs of the report. The
present study has chosen Global furniture supplier company for entire investigation which is one of the
leading organization of the furniture organization of UK. It offers different furniture products to retailers
and uses appropriate techniques for managing its operations of production departments.
TASK 1
1.1 Importance of operation management for Global furniture supplier
Operation management department of Global furniture supplier company influences the other
departments of the company such as, finance, marketing and production also. Major importance of
operation management for organization is described as follows:
Reducing costs: Operation management department is beneficial for reducing cost of the company by
deleting unnecessary activities of Global furniture Supplier
Managing inventory: It is helpful for managing inventory of the company as well as assist in maintaining
economic order quantity and reducing ordering, holding and total cost of inventory of furniture production
Optimum allocation of resources: Operation management of Global furniture supplier organization is
important for optimum allocation of resources of the company using different mathematical and statistical
techniques such as Linear programming, assignment and transportation, etc (Vaidya and et al, 2013).
Attaining aim and objectives of organization: Management of different operations are also important for
attaining all aims and objectives of the firm such as time and cost and success of the company, etc.
Others: It is also important for designing production process, layout and deciding location and pounding
furniture goods and services to furniture retailers. Therefore, operation management of the Global
furniture supplier is important for managing different functions of the com[any from converting input to
output (Simmons, Bland and Wojciechowski, 2012).

1.2 Operation functions of Global furniture supplier
Major functions of operation management of global Furniture supplier company are as follows:
Selection of production process: Major function of the operation management department of the
Global furniture supplier company is selection of an appropriate production process for producing goods
and services for customers of the company which satisfy their needs and requirements. In addition this
function is also helpful for increasing the value of money of customers of the organization (Anand and
Ward, 2004).
Capacity planning: In this function global furniture supplier company tries to manage demand and
supply of the furniture retailers by appropriate planning of capacity. This function plays an important role
in maximizing the utilization of available resources for increasing the capacity of organization.
Quality and cost management: It is included in the most important function of the Global furniture
supplier organization (Johnston, 2005). Operation management of company focuses on total quality
management of entire production and operational process of association. It also tries to do sufficient
effort to reduce defects and increase the quality of furniture products and services of organization.
Management of inventory: For managing contingency situations Global furniture supplier keeps
sufficient stock of raw material. So, management of inventory is also one of the important function of
operation management of organization. In this function association focuses on maintaining holding,
ordering and totals cost of the inventory. Further, this function also include different activities for
managing safety stock, reorder level and lead time for inventory management of the company (Foss and
Knudsen, 2013).
1.3 Evaluation of operation management of Global furniture supplier using
process model
After evaluating the operation management it has been reflected that Global furniture supplier is
accomplishing all functions of this department in effective way but it is very complected task for company.
There are different systems and models for evaluating the performance of operation management function
of the company; these are open and close ended system, random theory, probabilistic method and
deterministic theory, etc (Prahalad and Krishnan, 2002).
Evaluation of operation management using process model has reflected that company is operating
different functions using open and close ended system. In this system different functions are incorporated
because company needs to interact with the different elements of external and internal environment of
organization. Production process of the company also include the functions of assessment of demand,
needs and requirements of furniture retailers, current market trend of furniture industry of UK. Further,
evaluation of operations has reflected that production process of organization has probabilistic nature
because company can forecast the future requirements of products and services using past records and
results. It can be done by using simulation and other operation management tools. Therefore, all these
functions of the production process of the company has reflected that global furniture supplier is
managing its operation management department effectively (Young, 2009.).

1.4 Explanation of three Es of operation management (economy, efficiency and
effectiveness)
Three E's analysis is a very important tool for determining health of the operation management of the
Global Furniture supplier. These elements are very efficient for improving the overall quality of production
by which company can provide appropriate value for money to furniture retailers. Three E's include
economy, efficiency and effectiveness of the operation management department of the company.
Economic elements focuses on the reducing cost of the furniture products of the company with required
quality of products. Low cost products lead low sales price which help in increasing satisfaction level of
furniture retailers who are the major customers of Global furniture supplier. Further, this element also
assists in saving the money at different operations of production process (The 4 E's of Excellence, 2013).
Efficiency reflects the smarter way of company to accomplish different operations. In addition it also
focuses on reducing the total number of defects from production process of the organization. Further,
efficiency also differentiate products and services of Global furniture supplier to its leading competitors
which leads effective competitive advantages of the company.
Effectiveness focuses on the different operations of production process and different aspects of
effectiveness help in producing those products and services which satisfy the expectations of all furniture
retailers who purchase products to Global furniture supplier. Including this, effectiveness is also significant
for developing position of the company to meet the future requirements of all customers
(Slack, Chambers and Johnston, 2007).
STRIP4
1.5 Impact of tension between cost minimization and quality maximization on
Global furniture supplier
According to the above discussion economic analysis of Global furniture supplier focuses on reducing the
overall cost of the company. But, on the other hand both efficiency and effectiveness elements shed
lights on the quality management of production process of the organization. Global furniture supplier
focuses on both cost and quality but sometimes it creates tension for production process which has some
negative impact on organization. At the time of cost minimization operation planning includes the low
investment in the latest technologies and uses the existing machinery and equipment because it helps in
minimizing the total cost of technological investment. But, on other hand it reduce the quality of products
and services of the company because of the poor and old technological equipment (Lowson, 2004). In
contrast wen company focuses on the quality improvement than operation financial and operation planning
includes high investment of financial resources in latest technological equipment because it is necessary
to follow the market trends of furniture industry of UK. But, it has negative impact on the
budget and future cash flow of the organization because it increases the total cost of the products and
services. Therefore, tension between cost minimization and quality maximization has negative impact on
Global furniture supplier (Anh and Matsui, 2011).
1.6 Evaluation of the significance of the five performance objectives that
underpin operations management
There are five performance objectives of the Global furniture supplier those are underpin operation

management of the organization such as cos, dependability, flexibility, quality and speed. Significance of
all these objectives are described as under:
Cost: Minimization of cost of products and services is considered as a major objectives of Global
Furniture supplier. This objective is significant for organization because it attracts large number of
customers as well as assist in improving profitability, financial performance and total income of the
association (Olhager, Rudberg and Wikner, 2001).
Quality: Production of qualitative products and services is also one of the important objectives of Global
furniture supplier. It is important for organization because is improves efficiency and effectiveness of the
entire production process of the furniture supplier company. Further, it is significant for company because
it increases the satisfaction level of customers as well as augments the value of purchase money of
furniture retailers.
Speed: Management of the speed in production process is also essential for accomplishing different
operations of process on time. Further, it is significant for managing demand of products and services on
time with any delay.
Dependability: It is also included in the major objectives of company because large number of operations
and activities of production process depend on other activities. So, accomplishment of each dependent
activity is necessary for completing entire project on time and cost. This objectives helps in augmenting
overall performance of operation management of Global furniture supplier (Anh and Matsui,
2011).
Flexibility: Developing a flexible production system is also included in the major objectives of Global
furniture supplier. It is important for organization because it helps in changing time and cost of each and
every activity of production process as per the needs and requirements of products.
TASK 2
2.1 Explanation of linear programming and evaluation of critical path analysis
and network planning
Liner Programming:
It is one of the important mathematical technique for minimizing and maximizing the company objectives.
As per the above objectives Global furniture supplier wants to increase its profitability and minimize cost
of products and services (Linear Programming: Introduction, 2012.). At present organization is offering
three types of furniture products to furniture retailers; these are chairs, bed and tables and company is
earning sufficient amount of profit from these products 12,14 and 17 pounds respectively. Production
process of these products includes four stages; forming, machining, assessing and testing.
As per the above calculation maximum profit for the Global furniture supplier is 265 pound which can be
earned by company by producing 5, 3 and 10 units of chair, bed and tables. Linear programming has
also reflected that Global furniture supplier is earning maximum profit from production of tables.
Critical path analysis:
It is one of the best technique of operation management for identifying the lengthy path for completing the
project of Global furniture supplier with minimum duration or accomplishment time. It provides assistance

in managing the entire project and different activities in effective manner (Stevenson and Hojati, 2007).
Network planning:
According to the above discussion of the objectives cost minimization and profit maximization Global
furniture supplier needs to focus on appropriate network planning. It includes time, cost, activities and
their relationship with other operations. 2.2 Need for operation planning and control in producing a
furniture
Operation planning is estimating future demand of furniture products and services of the Global furniture
supplier. Further, it is necessitate for identifying the needs and requirements of customers as well as
future market trends of the organization. Including this, it is needed for estimating volume of sales,
inventory and purchase of furniture products and services. Along with this it is necessary for optimum
allocation of resources of the organization on different activities of production process (Gadde,
Håkansson and Persson, 2010).
On other hand operation control includes appropriate monitoring of project progress of the Global
furniture supplier. It is needed for supervising that each and every task will be completed on specified
time and cost. Operation control is also essential for maintaining quality and inventory of furniture
products and services of the organization. Gnatt chart is one of the important tool for operation
monitoring which helps in completing each activity of project one time (Olhager, Rudberg and Wikner,
2001). Gantt chart for the above discussed network planning is as follows:
2.3 Possible layouts (Product category) for producing furniture and outcomes
For Global furniture supplier company process based layout will be best for producing the tables. In this
layout organization will arrange all functions of production process as per the requirements of the
process. It is important for producing tables because in this layout there is no needs to move tables from
one place to another for different functions. In process based layout production process starts with the
input and end with the outcomes. In this manufacturing process if any function is required two times for
producing tables then company will include two functions at different stages (Gadde, Håkansson and
Persson, 2010). So, it is appropriate because it will help in reducing defects and improving outcomes. As
per this production layout, outcome of Global furniture supplier company will include the production of
qualitative goods and services which help in attracting large number of customers. Outcomes also
include increment in profitability and overall income of the Global furniture supplier.
2.4 Network plan and Critical Path Method
As per the above calculation of critical path the entire project will be completed in 50 days and it is the
maximum duration of completing the project on time. Along with this, it also provide the longest path for
accomplishment of project on minimum duration. As per the network planning estimated time for project
completion was 58 days and critical path has reflected that this project of Global company will be
completed on time (Foss and Knudsen, 2013). Critical path for the project is as follows:
A+B+C+D+F+G+I+J= 5+15+15+10+10+12+16+5=50 Days

2.5 Approaches can be used for project management and quality control in sales,
stock or purchase process
There are different approaches for quality control and project management of Global furniture supplier. In
which Six Sigma analysis and Total quality management will be appropriate for managing project and
quality. Explanation of these two approaches are discussed as follows:
Six Sigma analysis: It is helpful for getting the defects per million opportunities as well as assist
organization in analyzing the quality of their products and services. Six Sigma analysis has reflected that
company is producing total 10000 units of furniture products and in which 200 products has some
different kinds of defects. Company has taken 8 trials for testing their products. As per these data sigma
level of Global furniture supplier is 4.31 which shows the medium quality of production of the
company(Prahalad and Krishnan, 2002). So, company should focus on improvement in the quality of
finished goods. Organization should also needs to pay attention towards reducing the total defects in
production process of the company.
Total Quality management: Total quality management is also one of the significant approach for
managing quality and project management of Global furniture supplier. It includes quality analysis, control
and improvement. Thus, it helps in improving the overall quality of furniture products of the organization
(Total Quality Management (TQM), 2014).
CONCLUSION
The current research report has concluded that Global furniture supplier is managing all functions of
operation management department in effective manner but it needs to focus on improving the quality of
products and services of the company. Along with this, report has also found that operation management
department of the company provides assistance in attaining all objectives of furniture supplier such as
cost and time minimization, maintenance of speed, quality improvement and profit maximization, etc.
Further, study has described six sigma analysis and total quality management for quality control and
project management of organization.
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