Operational Management and Its Significance

The assignment report highlights the importance of operational management in converting raw materials into finished goods. It discusses three main approaches to operational management: just-in-time, six sigma, and total quality management. The document also emphasizes the significance of operational management in achieving firm goals and objectives. Additionally, it identifies internal and external factors that can affect decision-making processes in businesses like Starbucks.

Management
operations
(Project 2)

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Key approaches of operation management ..........................................................................1
1.2 Significance and value of operation management for accomplishing business objectives ..2
1.3 Improving efficiencies of leaders and managers ..................................................................3
TASK 2............................................................................................................................................3
2.1 Factors which can affect operation management.................................................................3
2.2 Factors can affect business environment...............................................................................6
2.3 Critical evaluation of operational management ...................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The term operational management includes planning, organising, controlling and
directing the all activities which are involved in production process. It also ensures about proper
allocation of resources so that company can achieve its goals and objectives of the company in a
certain time period (Karlsson, 2010). The present assignment is based upon Starbucks is the
chosen organisation in this present assignment; it is multinational coffee industry. The prime
vision and mission of the company is to provide delicious taste of coffee for attaining and
retaining them long term period. Various approaches of operational management will be also
defined in this assignment. Furthermore, future impact of factors will be also enlighten.
TASK 1
1.1 Key approaches of operation management
Operation management is one of the imperative function for every business organisation.
In this, administration implement plans and actions for producing goods and services. OM also
consists to generate raw material into finished goods. There are defined various approaches of
operation management, such are stated as under: -
Just in time- JIT is a manufacturing philosophy involving an integrated set of activities
which are designed in order to achieve a volume of higher production by utilising minimal
inventories (Krajewski, Ritzman and Malhotra, 2013). Along with this, just in time a well
coordinated processing system in which products are moved through the system and then
services are perform as per the requirements.
Total quality management – TQM emphasis on modifications in internal operations of
the firm; it sets quality standards that must be achieved in a certain time period. Total quality
management implies that every one is linked within organisation and committed towards
continuous improvements so as to give higher satisfaction level to customers. In other words,
TQM emphasized on boost up the quality of workforce as well as products. In this relation, firm
needs to adopt problem solving methodology for getting better outcomes.
Lean production – This approach to mainly about- completion of simple tasks in well
manner, making things better and include all staff members for continuous improvement
activities. Along with this, lean production also focuses on reducing wastage through optimum
utilisation of available resources (Kuruppuarachchi and Perera, 2010). It involves all aspects
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manufacturing, i.e. from designing to implementation. It is a cost cutting method which makes
business organization more economically strong as well as respond to external market.
1.2 Significance and value of operation management for accomplishing business objectives
Operation management is the set of activities which create value for the process of
converting raw material into finished goods. It focuses on proper allocation of resources and
minimise the cost of labour. OM aids in determining as well as removes work based issues so as
to deal with external environment and getting better outcomes. The operation management
department of Starbucks design, operate and improvise the production system of the company. It
also focuses on producing new and innovative products for customers (Naphade and et. al.,
2011). For this purpose, it gives importance to market research so as to find out customers' needs
and wants.
There are different types of operational strategics which aids value for customers as they
can willing to purchase firm's products and services. For instance – Starbucks is using qualitative
and value added products in order to attract customers; the operation department of the company
always analyse market trends and customers desires so as to deliver the same. If a firm conducts
then it can easily achieve its goals and objectives in a certain time period.
Operation management also provides benefits to financial and human resource management. For
example- when business entities managed their resources; it decreases the overall costs and
Starbucks will be gain ignitable and intangible benefits in a significant manner. Firms achieve
their objectives through proper implementation of working activities and operations. It can grab
market opportunity and generate large output through less utilisation of available resources.
Operation managements also aids a company to complete all tasks and activities before or
on their given time schedule. It also contributes in planning activities, such as- which kind of
goods are manufactured, location of plant and certain major tools which are needed in
completion of tasks (Parsanezhad and Dimyadi, 2013). Afterwards, once the production begin,
operation management assistive in regularly evaluate as well as scheduled all in a well planned
way. Apart from this, operation management also helps a firm to take important business
decisions, likewise site selection, forecasting, availability & appointment of skilled workers,
capacity planning etc. Another benefit of operation management it improves products' quality
and maximise flexibility by booming of all business activities
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For maximise the potency of operation management, there should be considered certain
major things that are stated as under: -
Value proposition System design Planning and control
 Develop a suitable
strategy for operations
 Demonstrate priorities
Quality
Delivery
Cost
Service
Innovation
Flexibility
 Planning of products
and services.
 Analyse and chose the
process.
 Lean production
 TQM
 Inventory system and
project management
 Time scheduling
 Strategical process
control system.
1.3 Improving efficiencies of leaders and managers
It is essential for managers and leaders of Starbucks to boost up the efficiencies of
operation management in order to achieve better future outcomes. In this perspective, managers
are required to provide training and development assistance to employees as they can perform in
an effective manner (Song and Parola, 2015). Training programmes also improves existing
workers' skills and capabilities which also extends their performance level. If the production
criteria of Starbucks is remain high then firm will attain its goals and objectives in a minimum
time limit.
TASK 2
2.1 Factors which can affect operation management
Every business organisation operates in a specific environment, it is known as business
environment. Business environment is an amalgamation of different factors, i.e. internal and
external which can hamper its business activities and functions in an effectiveness (Stadtler,
2015). It can also hit the decision making process of the company. Therefore, it is essential for
operation managers of Starbucks to examine these factors through SWOT and PESTLE analysis.
Below mentioned is the brief description of all these factors, such as-
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(Source: External environmental factors, 2015)
Internal factors: -
Value system – The value system of Starbucks refers the ethical beliefs is assistive in
accomplishing high market growth and share. It also determines firm's behaviour for its
employees, buyers as well as overall society. Along with this, value system refuse to distribute
liquor; it should be ethical and highly contributes in growth and prestige of the company (Wang
and et. al., 2010). In context of Starbucks, the value system of the company bears it corporate
cultural, it involves fairness, courtesy and transparency within business organisation.
Mission and objectives – The prime objective of Starbucks is to establish The firm as a
most reliable, respected and recognised brand over the world whereas is Mission is to be the
premier purveyor of the finest coffee by fulfilling all principles. On the other hand, mission of
the business organisation is totally differentiate from its objectives. Therefore, it is fundamental
for managers and leaders to work effectively or properly in order to achieve mission and
objectives of the company. Sometimes both aspects also affect the operation management.
Quality of human resources – Employees are the most valuable asset of the firm. The
growth and success of a firm is totally rely upon to the great extent of the skills and capabilities
of employees. Sometimes, it is really difficult for top management to interact with employees
directly. Furthermore, proper management of human resources aids in classifying staff members
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Illustration 1: Factors of business environment

in various groups. So that managers of Starbucks have to give proper attention to its employees
by proving them training assistance for getting better future outcomes.
External factors: -
Political factors – In UK, political environment involves government implications,
various laws, regulations and codes. If the political condition of the country is stable and
companies does not need to follow any strict laws in order to run a business organisation (Yang,
Hong and Modi, 2011). Afterwards, certain changes in government laws, i.e. funding as well as
taxation policies can affect business organisation and it cannot perform effectively at global
level.
Economical factors – The economic condition of the country also plays an eminent role
in operational management. Due to economic recession, customers are not capable to spend high
amount on getting luxurious products. Economic factors involves income level, unemployment,
poverty, interest rates and bank rates. Furthermore, sometimes governments are in under pressure
to reduces prices or taxes on qualitative coffee beans.
Social factors – In this over dynamic environment, needs and preferences of customers
are changing day by day. It is essential for business organisations to understand market trends
and provide products accordingly. It helps Starbucks to increases sales as well as profitability in
a minimum time period.
Technological factors – In this modern era, there is huge change between technology and
innovation. Now these days, companies are adopting new and innovative tools of production so
as to gain high market growth and success. In context of Starbucks, the firm is providing home
delivery option to its customers by ordering online. Beside this, in order to communicate with
customers, Starbucks has to choose social media platforms, i.e. Facebook and Twitter.
Legal factors – Changes in taxation policies also affect an organisation. On the other
hand, there are several laws and legislation which must followed by company, such as- consumer
protection laws and environmental laws (Zurich, 2017). If Starbucks fulfil these laws and
legislation in an effective manner then it can perform in an ethical manner; it also helps company
to win customers' trusts or faith towards its products.
Environmental factors – It states that business organisations need to fulfil its corporate
social responsibilities. It is necessary for Starbucks to endorse legal process procedure while
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manufacturing products and services. Managers need to contribute in producing eco friendly
goodies and generate environmental awareness among people.
2.2 Factors can affect business environment
In a business environment, there are several factors which can hamper the overall,
organisation in direct and indirect manner. These factors are – value system, mission and
objectives, technology, quality of workforce, customers, suppliers, political, economical, legal
and social factors. For instance – political aspects gives shape to the business; it involves
political stability, government laws and administration. If a business organisation fulfils all these
laws then it can easily perform at marketplace. Therefore, it is fundamental for management of
Starbucks to examine the future impact of all these factors and then prepare business strategies
accordingly. It aids company to gain high competitive advantage and market growth in a certain
time period.
2.3 Critical evaluation of operational management
Operation management is a procedure of transmitting inputs into outputs in order to
achieve goals and objectives of the company in a certain time period. It encompasses with
services as well as manufacturing which aids in efficiently managing production. Furthermore,
operation management plays a strategic role in Starbucks growth and success. But in this
competitive era, there are several factors, i.e. internal and external which can affect firm's
growth. So that, operational managers are required to monitor the future impact of these elements
before taking any business decision.
CONCLUSION
From the above mentioned report, operation management is the process of improving the
quality of products or designing the new one so as to achieve firm's goals and objectives. There
main approaches of operational management are – just in time, six sigma and total quality
management. The major significance of operation management is, it aids in converting raw
material in to finished goods. At last, there are different types of factors, such as- internal and
external that can affect decision making process of Starbucks; it can be analysed through SWOT
and PESTLE analysis.
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REFERENCES
Books and Journal
Karlsson, C. ed., 2010. Researching operations management. Routledge.
Krajewski, L. J., Ritzman, L. P. and Malhotra, M.K., 2013. Operations management: processes
and supply chains (Vol. 1). New York, NY: Pearson.
Kuruppuarachchi, D. and Perera, H. S. C., 2010. Impact of TQM and technology management on
operations performance. IUP Journal of Operations Management.9(3). p.23.
Naphade, M. and et. al., 2011. Smarter cities and their innovation challenges.Computer.44(6).
pp.32-39.
Parsanezhad, P. and Dimyadi, J., 2013. Effective facility management and operations via a BIM-
based integrated information system.
Song, D. W. and Parola, F., 2015. Strategising port logistics management and operations for
value creation in global supply chains.
Stadtler, H., 2015. Supply chain management: An overview. InSupply chain management and
advanced planning (pp. 3-28). Springer Berlin Heidelberg.
Wang, X. and et. al., 2010. A production planning model to reduce risk and improve operations
management. International Journal of Production Economics.124(2). pp.463-474.
Yang, M. G. M., Hong, P. and Modi, S. B., 2011. Impact of lean manufacturing and
environmental management on business performance: An empirical study of
manufacturing firms. International Journal of Production Economics.129(2). pp.251-261.
Zurich, L. B., 2017. Service Operations and Management.
Online
External environmental factors, 2015. [Online]. Available through:
<http://rezahaghighi.blogspot.in/2015/09/diagram-of-external-environmental.html>.
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