Operation Management in Business: Eden Furniture Report Analysis

This report delves into the core concepts of operation management, using Eden Furniture as a practical case study. It begins by emphasizing the importance of operation management and outlines the operational functions within Eden Furniture, including its process model. The report then explores key elements such as the significance of the three E's (economy, efficiency, and effectiveness) in operation management, the impact of balancing cost minimization and quality maximization, and the importance of five performance indicators. Furthermore, the report provides practical applications by examining linear programming, critical path analysis, and the need for operational planning and control in furniture production. It concludes with a discussion of operational outcomes, a network plan, and quality management techniques to improve operations, offering a comprehensive analysis of operational strategies within the furniture industry.

Operation Management In
Business
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TABLE OF CONTENTS
INTRODUCTION................................................................................................................................3
TASK 1.................................................................................................................................................3
1.1 Importance of operation management.......................................................................................3
1.2 Operations functions of Eden Furniture.....................................................................................4
1.3 Process model of Eden Furniture...............................................................................................4
2.1 Importance of three E's for operation management of Eden Furniture......................................5
2.2 Impact of the tension between cost minimization and quality maximization in organization...5
2.3 Significance of five performance indicators or operation management....................................6
TASK 2.................................................................................................................................................6
3.1 Linear Programming..................................................................................................................6
3.2 Critical path analysis and network planning .............................................................................7
3.3 Need for operational planning and control in producing furniture............................................8
4.1 Operational outcomes for a Eden Furniture...............................................................................8
4.2 Network plan and critical path...................................................................................................9
4.3 Quality management techniques to improve operations in Eden Furniture...............................9
CONCLUSION..................................................................................................................................10
REFERENCES...................................................................................................................................11
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INTRODUCTION
Operation management is an essential part of managerial activities in which management
reflects its concern towards planning, organizing and controlling of diverse processes that are related
with the production. It is necessary for every business firm to meet the standards in the context of
operation management so that production process can be accomplished in a better way (Fitsimmons,
2009). In current market scenario, it is essential for business to have modernization in its operations in
order to have significant benefits.
In this report, learning will focus on work culture of Eden furniture in order to understand the
concept of operation management. It will provide better understanding regarding the nature and
importance of operational management. It will also have spot light on the relation between operation
management and strategic planning. It will also provide information about the key factors that relate
with the production process. Furthermore, it will also focus on various relevant techniques which
render support to operational plan of the organisation.
TASK 1
1.1 Importance of operation management
Operation management is considered as a process that facilitates business firm to control
diverse functions in an effective manner and transform resources in the final goods as per the need and
demand of market or consumer. With an assistance of operation management, e Eden Furniture can
easily manage its operational activities and lead business to the impressive success (Nagarajan, 2004).
It is also beneficial for the promotion of integrated work culture which provides capability to gain
better competitive advantage against its competitors in the same industry. It also assists business firm
to gain various benefits which can lead business to impressive opportunities in the global market.
Other than this, operation management is also significant for furniture firm because it allows
management to manage diverse activities in a better way such as manufacturing and rendering services.
It also provides better opportunities to business by offering economic growth. With an assistance of
operation management, business firm can also manage its productivity in an efficient and effective
manner (Theoharakis and et. al., 2007). Improvement in productivity is also beneficial for the
advancement in profit margin ratio. With effective management of diverse operational activities,
furniture firm can easily bring differentiation in its services as compared to other competitors in the
market. It also allows workforce to have effective development in skills which may also boost their
career opportunities (Massis, 2010). Operation management also provides great support to production,
distribution, monitoring, etc.
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1.2 Operations functions of Eden Furniture
It has been spotted that operation management plays a critical role in the success of every
organisation and it facilitates management of Eden Furniture to accomplish diverse operational
activities. It improves operational effectiveness and efficiency with the help of appropriate
management of activities.
Efficiency and effectiveness: In order to have better development opportunities, it is essential
for management of Eden Furniture to maintain efficiency and effectiveness within operational
activities. With an assistance of operation management, business firm can easily have effective
allocation of resources which is beneficial for low cost operations (Neave, 2013). Human resource
skills can also be improved with an assistance of operation management. These kinds of improvements
are advantageous for the effective accomplishment of organisational gaols.
Relationship management: In order to have effective production of furniture, it is necessary for
management of Eden Furniture to maintain good relations with its suppliers. It is essential because
there are number of local furniture firms in UK market who can attract suppliers towards their services
which may influence operational activities of Eden Furniture (Acton, 2013). Improper relationship with
suppliers can also boost dissatisfaction among suppliers and force them to shift to another organisation.
With an assistance of operation management, business firm can improve its relationship with suppliers
and provide better support to diverse operational activities. Company can take feedbacks from the
suppliers in order to identify the key issues and needs (Ahire, 2001).
Other than this, resource management is also one of key factors which can reduce the wastage
of resources and lead business to impressive success. Number of other issues can also be overcome
with an assistance of operation management in order to improve operational effectiveness.
1.3 Process model of Eden Furniture
As per the structured study of process model, it can be said that Eden Furniture is effectively
managing its business activities but it is one of critical tasks for the production department. In this
support, it can be said that evaluation of process can be taken into account with an assistance of diverse
models and theories (Bardhan, 2006). Classification of models can be as random system analysis,
probabilistic methods, deterministic theory as well as open and closed system model.
In the support of above statement, it can be stated that management of Eden Furniture is mainly
focusing on open and closed system model in order to manage diverse operational functions. In order
to have continuous access to customer needs and demands, it is necessary for management to have
regular interaction with diverse factors of external environment. It provides effective identification of
needs and evaluation of current trends in furniture industry (Dantzig, 2002). Moreover, improved
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focus on production process also indicates that nature of business is probabilistic and its future
production needs can be estimated by analysing former results and other operational activities.
However, in other aspect, it can be stated that production process of Eden Furniture is effective and
management designs activities as per the future demand and outcomes of business (Gass, 2002). It
facilitates business firm to manage activities in an effective manner and lead business to impressive
success.
2.1 Importance of three E's for operation management of Eden Furniture
It has been identified that three E's are classified as economy, efficiency and effectiveness.
These factors are considered as the most significant aspect for the impressive operation management of
Eden Furniture. With an improved focus on these factors, management of business firm can easily
amend the value of money and organisational performance as well (Ho, 2004). It is also beneficial for
the effective evaluation of organisational performance and other operational activities of the company.
With an assistance of economic factor, business firm can easily acquire products and services at
economical cost which is beneficial for the improvement in operational cost as well as quality of
furniture products. It reduces the cost of operations that is advantageous for the low cost furniture
production and enhanced customer satisfaction by providing better value to money. Moreover,
efficiency factor provides better opportunity to accomplish production by offering diverse innovative
ways (Ahire, 2001). With an assistance of diverse innovative ways, management of Eden Furniture can
easily reduce the wastage of raw materials within production process. It facilitates business firm to
provide goods in a better way as compared to other competitors in the market. It also helps in gaining
better competitive advantage in the market.
Other than this, effectiveness factor assists in the effective identification of customer
expectations by allowing business to provide customized furniture products. Improved focus on
product customization is also beneficial to meet customer’s need in a better way and improve
effectiveness in the market (Winter, 2006). In this respect, it is also necessary for the management of
Eden Furniture to meet the customer’s future needs.
2.2 Impact of the tension between cost minimization and quality maximization in organization
Cost minimisation and quality maximisation are the critical needs of every business
organisation. In this respect, it is necessary for the management of Eden Furniture to offer best quality
of products at very low price in order to have better success. Improved quality production at low cost
will attract more customers and provide better sustainability for the long time period. It is also
beneficial for gaining better competitive advantage in the market (Bayraktar and et. al., 2007). In order
to have better profit and resolve diverse quality issues, management of Eden Furniture must design
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diverse standards in production process. In current market scenario, every business is facing high ratio
of competition and they are more attracted towards continuous improvement in terms of quality
products to earn better profit.
In this respect, management of Eden Furniture can focus on effective selection of suppliers
which can provide high quality of raw material at low cost for the better production. Reduction in cost
of production process also improves productivity and quality of goods (Garcia, 2014). But, most of
times company is not able to maintain the balance between cost minimisation and quality maximisation
as improvement in quality influences cost in a negative manner. It reduces the organisational
effectiveness and impacts business negatively (Jones, 2012). In order to maintain balance, management
of Eden Furniture can use various new equipment which can improve production quality at low cost.
2.3 Significance of five performance indicators or operation management
There are number of factors that every organisation needs to be followed for the effective
operation management. Classification of factors can be as quality, dependability, flexibility, speed and
cost.
Quality: With an assistance of improved level of quality, business firm can easily improve its
brand image in the market and lead business to impressive success. It also facilitates business firm to
produce reliable and durable products which are beneficial for the long term sustainability.
Dependability: It assists business firm to improve efficiency which is beneficial for the
advancement in production process. With an assistance of dependability, company can easily
manufacture furniture goods as per the client’s needs and expectations (Lagrosen, 2003). It is also
beneficial for improving skills of workforce and leading business to impressive success.
Flexibility: It is beneficial for the improvement in product line as per the needs of market so
that market share of company can be enhanced in this competitive market. With an improved focus on
flexibility, management of Eden Furniture can easily adopt changes in products as per the needs and
demands of customers.
Speed: It means the ratio of time that is consumed by business firm in the production and
delivery of product to the end customers. With an improved speed in production process, management
can easily reduce the lag time within process (Leseure, 2010).
Cost: It is the cost that company invests on the production and delivery of products and
services. It is necessary for the management of Eden Furniture to minimize the cost of operations as it
helps in generating more profit.
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TASK 2
3.1 Linear Programming
It has been spotted that during production process business organization faces number of issues
such as production mix, combination, production planning, transportation and resources flow. In other
aspect, it can be stated that linear programming is considered as a mathematical tool which can be
used by business firm to spot out diverse ways that can overcome issues in a better way. This kind of
technique is famous among business firms as it provides quick and accurate outcome which is
beneficial for the effective decision making process (Operations Management. 2011). In the support of
this, it can be stated that linear programming can facilitate management of Eden Furniture to reduce
their expenses and amend profit margin ratio (Leseure, 2010). With the help of mathematical equation,
company tries to get optimal solution while using these all resources in an effective way.
Other than this, linear programming also facilitates in effective planning so that resources can
be used in an appropriate manner in order to improve productivity. It also allows business firm to use
resources in an optimal manner in order to lead business to impressive success (Lagrosen, 2003). With
an improved focus on linear programming, management of Eden Furniture can amend the quality of
decision making process. It also facilitates in overcome number of issues that company faces in
production process which is beneficial for improving services. It also provides various practical
implementations which are related to the organisational issues so that identified problems can be
overcome in a better way.
3.2 Critical path analysis and network planning
Critical path analysis and network planning are the methods which are mostly used by company
in order to adjust activities of a task. In support of this, it can be said that critical path analysis is one of
essential sections of any decision making process as it provides effective evaluation of all the activities.
With an assistance of critical path analysis, business firm can have effective monitoring of diverse
operational activities (Jones, 2012). It also facilitates business firm to allocate proper time to single
activity so that task can be accomplished in a proper way. It is also beneficial for the effective
evaluation of diverse problems while preparing activities and allocating time. Moreover, with an
assistance of CPA, Eden Furniture can easily allot time and resources which is beneficial for the better
accomplishment of manufacturing process.
Other than this, network planning is a technique which can be adopted by management of Eden
Furniture to create a suitable path for various diverse tasks. It allows business firm to select optimal
path from the various alternatives available. It facilitates in maintaining balance between various
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factors such as inventory, transportation and manufacturing cost (Garcia, 2014). With an assistance of
network plan, management can also manage supply and demand in an effective manner. Eden Furniture
can have effective utilization of resources in an effective manner by sourcing goods from the most
appropriate facilities.
3.3 Need for operational planning and control in producing furniture
Operational planning and control are considered as the most essential sections of manufacturing
process. In order to have better accomplishment, it is necessary for management to focus on planning.
Effective Planning is a technique which facilitates business firm to take suitable decisions which can
lead business to impressive success (Bayraktar and et. al., 2007). With an assistance of operation
planning, management of Eden furniture can easily identify the key factors which are essential for the
completion of production process. Moreover, it also allows company to access diverse actions which
can provide support to the completion of manufacturing process. In order to have effective production
of furniture, business firm needs various resources as per the type of product (Winter, 2006). Location
also needs to be chosen in an appropriate manner as heavy rains can impact production process in a
negative manner.
Other than this, it is also necessary for business firm to determine issues as per the future needs
so that production process activities can be designed in a proper way. It is also essential for company to
set some standards in the production process as per the needs of ongoing orders and future demands. In
support of this, proper availability of finance is also essential because it will assist in effective
allocation of resources (Ahire, 2001). Moreover, management of Eden furniture can also focus on
TQM technique to boost the quality of furniture goods. Company can also focus on the identification
of key trends and technology in order to gain success.
4.1 Operational outcomes for a Eden Furniture
As per the above study, it can be said that Eden Furniture is a business firm which offers a wide
range of furniture products to the customers such as fabricated chairs, table and other furniture.
Organisational production process provides various long term benefits which can lead business to
impressive success.
Minimizing cost: It has been spotted that key motive of operational management is to cut down
the total cost of production by effective controlling and managing of diverse activities. Company can
use cost benefit analysis for this purpose so that they can make feasible decisions related to future
functioning (Leseure, 2010). It is necessary for the management of Eden Furniture to reduce its
expenditure in order to minimize the operational cost.
Quality control and availability of products: Improvement in the quality of product is also one
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of the critical aspects for every business as it plays a significant role in operational management
(Lagrosen, 2003). With an improvement in control system, business firm can easily improve the quality
of products and services. In order to have long term sustainability, it is necessary for the management
of Eden Furniture to maintain the quality of products and services. It also facilitates in gaining better
competitive advantage by effective management of activities as per the needs and demand of
customers.
4.2 Network plan and critical path
Network plan
Tasks Activities Preceding activities Time duration (In
Days)
New product planning A - 3
Market research B A 5
Segmentation and
targeting
C A 4
Production mix D B 6
Marketing mix E C 7
Selling F D, E 10
After sales services G F 2
Critical path is considered as a shortest path in overall project. As per the consideration of
above network diagram, it can be said that A-B-D-F-G is critical path. It is also feasible path for the
business organisation and it covers 22 days to accomplish all the activities. As per the network table, it
can be said that there are seven activities which are required to accomplish the project of launching
new set of dining table for the market.
4.3 Quality management techniques to improve operations in Eden Furniture
It has been spotted that there are number of quality management techniques which can be
adopted by the management of Eden Furniture in order to improve quality of products. In support of
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this, it can be said that quality can be termed as a measure of excellence without any defects and
variations in the product. Total quality management is one of most commonly used techniques which
facilitates business firm to control quality of products and operations (Jones, 2012). With an assistance
of total quality management approach, management of Eden Furniture can set some standards which
can improve organisational productivity. Classification of total quality management tools can be as pie
charts, bar graphs, histograms, run chart, force field analysis, focus groups, brainstorming, tree
diagram, scatter diagrams etc (Garcia, 2014). With an effective evaluation of all these activities,
business firm can identify issues and overcome problems in a better way.
Other than this, management of Eden Furniture can also focus on continuous monitoring
process. It helps in effective identification of issues and allows management to interact with diverse
members in order to identify ways that can resolve issues. Company can use meeting and conferences
as a medium to discuss with all the members in order to improve quality.
CONCLUSION
As per the above study, it can be concluded that operation management is considered as one of
most essential aspects in organisational success. With an improved focus on effective management of
diverse activities, business firm can have diverse developments. It has been identified that in order to
have better accomplishment, it is necessary for management to focus on planning. Reduction in the
cost of production process also improves productivity and quality of goods. With an improved focus
on three E's, management of business firm can easily amend the value of money and organisational
performance.
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REFERENCES
Books and Journals
Acton, A., 2013. Amino Acids—Advances in Research and Application. Scholarly Editions.
Ahire, L. S., 2001. Linking Operations Management Students Directly to the Real World. Interfaces.
31(5). pp.104-120.
Ahire, L. S., 2001. Special Issue on Marketing and Operations Management Interfaces and
Coordination. Operations Research. pp.429-430.
Bardhan, I., 2006. Information Technology, Production Process Outsourcing, and Manufacturing Plant
Performance. Journal of Management Information Systems. 23(2). pp.13-40.
Bayraktar, E. and et. al., 2007. Evolution of operations management: past, present and future.
Management Research News. 30(11). pp.843 – 871.
Dantzig, B. G., 2002. Linear Programming. Operations Research. 50(1). 50th Anniversary Issue. pp.
42-47.
Fitsimmons, G., 2009. Resource management: materials, equipment, facilities. Bottom Line: Managing
Library Finances. 22(3). pp.86 -88.
Garcia, A. J., 2014. Action-Based Quality Management: Strategy and Tools for Continuous
Improvement. Springer.
Gass, I. S., 2002. The First Linear-Programming Shoppe. Operations Research. 50(1). 50th
Anniversary Issue. pp.61-68.
Ho, H. T., 2004. Introduction to the Special Issue on Marketing and Operations Management
Interfaces and Coordination. Management Science. 50(4). pp.429-430.
Jones, P., 2012. Operations management. Oxford University Press.
Lagrosen, S., 2003. Exploring the impact of culture on quality management. International Journal of
Quality & Reliability Management. 20(4). pp.473 – 487.
Leseure, M., 2010. Key Concepts in Operations Management. SAGE.
Massis, E. B., 2010. Project management in the library. New Library World. 111(11/12). pp.526 – 529.
Nagarajan, K., 2004. Project Management. New Age International.
Neave, R. H., 2013. Statistics Tables: For Mathematicians, Engineers, Economists and the
Behavioural and Management Sciences. Routhledge.
Theoharakis and et. al., 2007. Insights into factors affecting production and operations management
(POM) journal evaluation. Journal of operations management. 25(4). pp.932-955.
Winter, E., 2006. Optimal Incentives for Sequential Production Processes. The RAND Journal of
Economics. 37(2). pp. 376-390.
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Online
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programs/specializations/operations-management/what-operations-management-mba-
specialization>. [Accessed on 29th December, 2014].
Process Classifications for Operations Management. 2014. [Online]. Available through:
<http://www.dummies.com/how-to/content/process-classifications-for-operations-
management.html>. [Accessed on 29th December, 2014].
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