Review of Operations Management Theories and Practices

This assignment reviews various operations management theories and practices, including process theory, resource-based theory, and business process management. It also examines the application of project management methods, such as Six Sigma and the project management toolbox. The review provides a comprehensive overview of key concepts, models, and frameworks in operations management, making it an essential resource for students and professionals in the field.

Operations and Project Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
ACTIVITY 1....................................................................................................................................1
Critically Evaluate the appropriate theories and concepts of Operations Management.........1
ACTIVITY 2....................................................................................................................................3
The effectiveness of the continuous improvement plan by using principles of operations
management in XYZ..............................................................................................................3
ACTIVITY 3 ...................................................................................................................................5
Critical evaluation of product life cycle and preparation of necessary supporting documents5
ACTIVITY 4..................................................................................................................................10
Critically analysing the theories, concepts, and models that will differentiate between large
and small scale projects........................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Operations Management is very important. It is concerned with creating as well as
delivering the services and products. It is significant for all type of organisations whether it is
large or small, service or manufacturing, public or private for profit or not for profit. Operation
management is important as they are responsible from managing resources till the products and
services are delivered to the customers in order to raise the profitability of the company
(Devalkar, Anupindi and Sinha, 2018.).
This present report is context to XYZ company which operates in home appliances. The
main product of the company Fridges and Freezers, Gas and Electric Cookers, Washing and
Electric Friars. The company is going to introduce LED screens and Stadium Screens in the
market. Thus, Operations management plays a vital role in launching of new product of the
company.
This report will critically evaluate theories and concept of operations management. The
effectiveness of continuous improvement by using operation management principles will also
include in this assessment.
ACTIVITY 1
Critically Evaluate the appropriate theories and concepts of Operations Management.
Operation management is the heart of organisation. The main function of operations
management is planning, organising, coordinating and controlling the resources needed to
produce a products and services of company. It is the activity of managing the resources which
creates as well as deliver products and services to the end users. There are various theories and
concept of operation management that plays an efficient role in bringing efficiency the
operations and function of the company. XYZ company is also used the various theories and
concept so that the product they are launching will successfully introduce in the market
(Haksever and Render, 2018).
Here are various theories and concept of operations management that XYZ company use-
Six Sigma Methodology- This is one of the most important approach of operation
management that is used to improve current processes, goods or services by discovering as well
as eliminating defects, saving time and minimizing cost. This approach was founded by
Motorola in 1986. This approach gain popularity by Jack Welch who incorporated the strategy in
its business process at General Electric. Six Sigma Approach came into existence when the senor
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manager of Motorola complied for the bad quality. The main purpose of using six sigma
approach is to streamline the quality control in manufacturing or production of the businesses.
This approach is very helpful in the development of the entire activities of the operations. It is
the methodology of quality management. This approach is very expensive in implementation but
if it is done systematically that it pays for itself and make organisation into industry leaders as
well as centre of excellence. With the use of six sigma approach, XYZ company can improve its
position in the home appliance industry more as well as become one the best business leader. It is
fact that no any company can ignore the quality of the product because customers are now
become highly concern about the quality of the products company is offering in the market. XYZ
company is going to introduce LED of big screens for stadiums and grounds, so it is very
important that the quality of display should be amazing (What is Six Sigma in Operations
Managemen, .2017).
Six Sigma DMADV involves this stages which XYZ will use in the production of LED screens
and stadium screens. DMADV is also called as the Design For Six Sigma. Here are the staged
which are as follows-
Define: It is very important that the goal of the company should be realistic which can
able to suits the requirements of customers as well as strategy of business.
Measure- It is very important measure as well as identify the requirements of quality as
well as interpret them into lucid project goals.
Analyse- Operation manager of XYZ company should analyse alternatives and multiple
option for the consumers along with the estimated project total life cycle.
Design- Operation manager should design the entire process at top level before moving
forward to elaborate version which become the epitome in order to determine errors as well as
make modifications.
Verify- Operation manager verify the final loop of the product and procedure is
sanctioned by all customers and clients either it is internal or external.
Lean Principles- lean principle of continuous improvement is one the best model for
creating an efficient as well as effective organisation. There are five principles in lean principles
which operation manager will use observe inefficiencies in the company and renders amended
and finer quality to consumers. By using the five principle of lean, a culture of continuous
improvement will be developed in XYZ company as well as it also brings effective flow of work.
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According this five principles it is very important that the product they are offering should create
value to what customers are paying for. It is very important that product should bring continuous
improvement so that it can satisfy the needs and wants of customers regularly (Hitt, Xu and
Carnes, 2016).
ACTIVITY 2
The effectiveness of the continuous improvement plan by using principles of operations
management in XYZ.
There are different principles of operations management by operation manager of XYZ
company can devise its continuous improvement plan, namely principles of inventory,
distribution and logistics, operations planning, manufacturing management etc. A brief
description about how these principles can help the company in managing its operations
efficiently.
Principle of inventory management : Inventory plays a great role in determining the
efficiency of operations in the company. Th objective of this principle is to make the inventory
related concerns such as timing of acquiring needed inventory, maintaining the minimum level of
inventory so that stoppage of production of LEDs does not occur, accurate valuation of inventory
periodically or perpetually organised and managed in the organisation.
For instance, the operations' manager can apply this principle for managing its inventory
such as all time availability of raw materials, valuation of its closing stock of proposed products
such as LEDs and stadium screenings. The unnecessary cost of maintaining and handling
inventory would be eliminated by this application of the principle of inventory management.
Principle of Operations planning : This principle states that operational activities needs
to be planned in advanced and a proper alternative must be prepared in case the executed actions
deviates from its original track. The operations' manager of XYZ company can prepare a outline
regarding the production of LEDs and stadium screening according to the market demand, as per
the requirements of the target customers. It needs to outline what the course of action will be
used for manufacturing the products which would the highest cost efficiency in operations. The
operation manager will also calculate the cost of its proposed goods in its operational planning
stage (Spring, M and et.al., 2017).
Application of this principle by the company will help it in conducting operations in a
more précised manner. The different approaches of operation management could be used by
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manager such as six sigma approach or lean production while designing its manufacturing
process in the planning stage of the production. The lean production approach in the production
process would help the manager in minimising the wastage in manufacturing process of LEDs,
elimination of unnecessary movements of man, machine and material would be possible. The six
sigma approach application will help the operation manger in improving the quality of products
by eliminating the probability of defects in the production of LEDs.
All these factors will be critically evaluated under the operation planning and the best
course of action will be chosen by the manager for making the operations cost effective and
efficient. This will ensure continuous flow of work within the organisation as each activity
would be specifically organised in this planned documents (Holweg and et.al., 2018).
Principle of Distribution and Logistics : The principle of Logistics states that there
must be continuous and seamless flow of goods or materials between the initiation point of
product to the consumption point of product for duly meeting the needs and requirements of the
target customers. It basically involves the integration of different functions such as information
flow of packaging, handling, production, inventory, transportation etc. For instance, manager's
problems of distributing goods could be solved by applying this principle. This principle deals
with the management of distribution channels and logistics of the company in the most effective
and efficient manner.
The principle of Distribution states that goods produced of XYZ company that are LEDs
and Stadium screenings must be made available to its end users by using the most appropriate
distribution channels. The Operation manager of company can make use of the direct and
indirect channels for distributing its products in the target market. Direct selling by sales team,
internet, website could be used by company in selling its products. It can also evaluate different
indirect methods such as selling through intermediaries, retailers etc (Schönsleben, 2016).
Principles of Warehouse management : Warehouse management is the planning,
organising, monitoring and controlling the warehousing department of the XYZ company.
Warehouse is the planned place in the factory or outside the production area for handling and
maintaining the finished goods that are meant for the final consumption. The operation manager
can apply this principle in overseeing the activities carrying out in this area of the manufacturing
unit.
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Application of these principles in dealing the different aspects of the operation
management will help the company in continuous improvement in its production activities. This
is possible as each principle deals with management of inventory, warehouse, operational
planning which is concerned with planning, organising, monitoring and controlling the activities
respectively. Effectiveness of operations will be enhanced because of proper management of
these factors leading to better development and introduction of new products such as LEDs in the
market (Kenworthy and Balakrishnan, 2016).
ACTIVITY 3
Critical evaluation of product life cycle and preparation of necessary supporting documents
Product life cycle is a concept that provides various phases which every product have to
go though out its life. It consists of four stages in its cycle that are discussed below :
Introduction : This is introductory phase of a product where products are launched by
XYZ company after all its research and development process. This stage is characterised by huge
costs that company have to incur on initial promotions and distribution.
The XYZ company will prepare different supporting documents for dealing efficiently with
stages of product life cycle:
Growth: This stage is reflects that demand for the products LED and stadium screens is
growing and the profits here are generated at increasing rate. This shows that target audience has
given their acceptance.
Maturity : This stage defines that products of company are mature enough to provide
stable returns but at the decreasing rate. This states that no further growth is possible and it has
reached to its saturation points. This could be due to entry of new firms in markets.
Decline : This is last stage in product life cycle where the profits of XYZ will be declined
and after a time it would result in losses. The reasons could be decrease in sales because of
innovative substitutes, declined demand, inability of handling competition in market.
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Illustration 1: Product life cycle
(Source : Selecting the Promotion Mix for a Particular Product, 2019)
Documents that are needed to be prepared for for executing a project of developing
LED and Stadium Screens
Business case: It is basically the reasoning and justification of the project of developing LED
and stadium. It has following components:
 Executive summary which has the overview of project and its activities. The project
manager will include action plans, workflow charts, costs, team responsibilities in
executive summary.
 Goals of XYZ such as providing quality products to customers and marking a place in
market will be defined by project manager. Challenges such as high competition, high
cost of R&D, setting prices of the proposed products etc., will have to be overcome by
forming appropriate strategies. For example, launching products at low cost initially will
help in coping up with intense competition (Papke-Shields and Boyer-Wright, 2017).
 Determining and breaking costs for developing and launching LEDs and stadium
screens. Cost needs to be determined and have to be optimally allocated in different
departments such as marketing, finance, R&D, production, sales etc.
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 Then benefits of producing products will be matched against the costs incurred for
manufacturing by the project manager. Benefits will be in form of quality products, high
profitability and better meeting of customer expectations.
 Setting execution timeline for developing the products. For instance, for developing
these products and making it available in market would be six months.
Project planning : When the project of developing stadium screens and LED's is
approved by undertaking preparation of business case, the project will move ahead towards
planning stage. Here, the project is divided or segregated in the small tasks and building teams
for assigning those tasks. A schedule will be prepared for the completing the tasks that are
allotted to different teams in XYZ company (Kerzner and Kerzner, 2017). For examples,
preparing checklists, work flow charts, building teams in company that will perform different
tasks such as R&D, marketing, testing the products, etc. It will include the details such as how
the activities will be carried out, training required for team members, setting of deadlines for
each tasks, cost of each activity etc.
A Project plan is prepared below:
Task Mode Task Name Duration Start Finish Predecessors
Auto
Scheduled Task Name 1 day Mon 04-02-
19
Mon 04-02-
19
Auto
Scheduled Market identification 5 wks Mon 04-02-
19 Fri 08-03-19
Auto
Scheduled Market selection 4 wks Tue 05-02-19 Mon 04-03-
19 1
Auto
Scheduled
Undertaking market
research 3 wks Mon 11-03-
19 Fri 29-03-19 2,1
Auto
Scheduled
Defining goals and
objectives 5 wks Mon 01-04-
19 Fri 03-05-19 4
Auto
Scheduled
Identification of Target
customer 2 wks Mon 06-05-
19 Fri 17-05-19 5,4
Auto
Scheduled
Developing a marketing
plan 2 wks Mon 20-05-
19 Fri 31-05-19 6
Auto
Scheduled
Execution of marketing
plan 1 wk Mon 03-06-
19 Fri 07-06-19 7
Auto
Scheduled Testing of product 2 wks Mon 03-06-
19 Fri 14-06-19 6,7
Auto
Scheduled
Launch of LEDs and
Stadium screenings in
target market
1 wk Mon 17-06-
19 Fri 21-06-19 8,9
Gantt chart:
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Critical path:
Methodologies of project management : The project manager in XYZ could apply
scrum methodology for executing the project. This supports the ideas, principles and processes
that focuses on quick delivery of performances of teams in company. The benefits, company will
have from this methodology will better communication, efficiency in teamwork and
enhancement in speed of development of LED and stadium screens.
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The other one is Kanban methodology of project management which could be
considered by project manager as this focuses on improving and enhancing the speed, quality of
TV products and delivery time. This is done by increasing a focus on particular task and limiting
the multi tasking in the company. It uses lean production principles and defined process for
increasing efficiency. The core activities in this methodology are limiting and restricting extra
work in progress, measuring lead time, workflow visualization, creating a clear and definite
policies of process and a system of continuous evaluation of performances of different teams in
company XYZ (Project Management Methods, Methodologies, and Frameworks — A Guide for
Beginners, 2018).
Work breakdown structure : Preparation of this document shows the proper
arrangement of division of work in a team. The project manager of XYZ will design a work
breakdown structure that will be hierarchical in nature stating the duties performed by each level.
This is done for allocating optimum cost, for preparing budgets, for making understand
employees their jobs and authority within which they have to operate and to whom they have to
report (Rosemann and vom Brocke, 2015). This WBS is in accordance with the above prepared
project plan.
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ACTIVITY 4
Critically analysing the theories, concepts, and models that will differentiate between large and
small scale projects
The different theories of operation management were proposed for the development of
new products which were LEDs and Stadium screenings. Six sigma was included in the product
development planning. A critical analysis of six sigma is done below:
The theory is appropriate for the company XYZ because of the following reasons :
 It is best suited for the manufacturing unit which are involved in the electronic
equipments. LEDs are prone to technical defects which could be there at the time of its
production. As this approach focuses on improving the quality of goods by eliminating
the defects at the production stage only, so higher customer satisfaction can be achieved
by supplying zero defect products to them.
 It leads to faster delivery of LEDs to the end consumers as the aim of six sigma process is
to reduce the defective pieces in the production (Maylor and et.al., 2018).
 Time management would be improved by applying of six sigma in the production process
of LEDs in XYZ company. The manager with the help of this theory prepares SMART
goals upon which the principles and rules of this theory are applied for achieving them.
Proper action plans are formulated in which the deadlines for attaining the goals are
mentioned along with the strategies. By this way, overall efficiency would be increased.
However, there are some issues in implementation this theory of operation management which
are :
 For small scale projects, this theory is quite expensive. This is suited for large
organisations. Cost of training employees for its execution is the root cause of being
expensive.
 It hinders the creativity level of company. Since it is applied throughout the XYZ, its
rigid process leads to delays and problems in organisations.
The project planning stage in project life cycle discussed two methodologies of project
management. These were scrum and Kanban. The project manager could use Kanban
methodology in its operation because :
 It increases the level of flexibility in the production process
 It fastens the pace of delivery of good produced
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 It focuses on reducing time in production life cycle
 It aims to reduce wastage during the manufacturing process (Serra and Kunc, 2015).
However, this methodology have certain limitations:
 Outdated and old Kanban board acts as hindrance in the development process of new
product.
 It leads to complexities in operations.
 It does not consider time frame which are attached with each phase. This creates mess in
company.
Kanban, an agile method is suitable for the large scale projects of software development
but it is also used in marketing, human resources, in executive leadership and organisational
strategies' formulation (Martinelli and Milosevic, 2016).
CONCLUSION
From the above report, it can be summarised that for making operations effective in
company XYZ, it is important to apply the operation management. This is because application of
operation management in organisation directly relates to efficiency, productivity and
profitability. Use of six sigma theory by project manager would help in developing LEDs and
stadium screenings with minimum defects. This would result into better serving of products to
customers. The other section of the project report concluded that different methodologies of
project management could be used by the project manager such as scrum, Kanban in its
development process. Critical analysis showed six sigma is not suitable for small scale projects
as huge costs are involved in implementing this process. Also. Kanban is appropriate for large
scale projects like of XYZ of entering into whole new market.
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REFERENCES
Books and Journals
Devalkar, S., Anupindi, R. and Sinha, A., 2018. Dynamic risk management of commodity
operations: Model and analysis. Manufacturing and Service Operations
Management. 20(2). pp.317-332.
Haksever, C. and Render, B., 2018. Service and Operations Management. World Scientific
Books.
Hitt, M. A., Xu, K. and Carnes, C. M., 2016. Resource based theory in operations management
research. Journal of Operations Management. 41. pp.77-94.
Holweg, M and et.al., 2018. Process theory: the principles of operations management. Oxford
University Press.
Kenworthy, T. and Balakrishnan, J., 2016. Theory usage in empirical operations management
research: a review and discussion. Management Decision. 54(10). pp.2413-2432.
Kerzner, H. and Kerzner, H. R., 2017. Project management: a systems approach to planning,
scheduling, and controlling. John Wiley & Sons.
Martinelli, R. J. and Milosevic, D. Z., 2016. Project management toolbox: tools and techniques
for the practicing project manager. John Wiley & Sons.
Maylor, H and et.al., 2018. Old theories, new contexts: extending operations management
theories to projects. International Journal of Operations & Production Management. 38(6).
pp.1274-1288.
Papke-Shields, K. E. and Boyer-Wright, K. M., 2017. Strategic planning characteristics applied
to project management. International Journal of Project Management. 35(2). pp.169-179.
Rosemann, M. and vom Brocke, J., 2015. The six core elements of business process
management. In Handbook on business process management. 1 (pp. 105-122). Springer,
Berlin, Heidelberg.
Schönsleben, P., 2016. Integral logistics management: operations and supply chain management
within and across companies. CRC Press.
Serra, C. E. M. and Kunc, M., 2015. Benefits realisation management and its influence on project
success and on the execution of business strategies. International Journal of Project
Management. 33(1). pp.53-66.
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Spring, M and et.al., 2017. Creating the competitive edge: A new relationship between
operations management and industrial policy. Journal of Operations Management. 49.
pp.6-19.
Online
Project Management Methods, Methodologies, and Frameworks — A Guide for Beginners. 2018.
[Online]. Available through <https://medium.com/paymo/project-management-methodologies-
the-complete-guide-fba376ef288a>
Selecting the Promotion Mix for a Particular Product. 2019. [Online]. Available through
<https://courses.lumenlearning.com/boundless-marketing/chapter/selecting-the-promotion-
mix-for-a-particular-product/>
What is Six Sigma in Operations Management.2017. [Online]. Available through
<https://toughnickel.com/business/What-is-Six-Sigma-in-Operations-Management>
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