Implementation of Strategic Tools in Operations Management

OPERATIONS MANAGEMENT
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Table of Contents
Introduction...................................................................................................................3
History of Six Sigma and Lean.....................................................................................3
Implementation of strategic tools in supply chain and business operations in service
sector............................................................................................................................4
Application of strategic tools in manufacturing industry...............................................6
Conclusion....................................................................................................................8
Reference list..............................................................................................................10
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Introduction
Strategic tools are essential part of business as it helps management of companies
to manage business operations. Strategic management tools are integrating day by
day and application of these tools are helping organizations to earn maximum
revenue through their business operations. This study focuses on evaluation of
stages of evolution of strategic management tools such as lean and six sigma.
Implementation of strategic tools in managing business operations as well as supply
chain is being discussed. In addition, this study is focusing on importance of applying
strategic tools in manufacturing industry. Discussion over this topic is capable to help
in understand role of strategic tools in business in today’s business era.
History of Six Sigma and Lean
Lean strategy is not a new concept and it is derived from Toyota production system.
This concept was derived in 1940 during the period of second world war. At Toyota
Motor Company, Taichii Ohno and Shigeo Shingo began to incorporate Ford
production and other techniques into an approach called Toyota Production System
or Just In Time. Toyota adopted the strategy of producing low volume products but
offering a larger variety. On another hand, ford theory of production accommodates
only one variety of products. Hence, a customer-centric approach was taken by this
firm that has helped them to meet different needs of customers in a proper way.
Strategy of Toyota is also known as Just in Time. as discussed by Verrier et al.
(2016), this proposed model of Toyota was contradictory to that of ford. Ford has
adopted the strategy of mass production that can impact on quality of products. In
1990, many American manufacturers have adopted this strategy of Toyota. Lean
manufacturing has attracted attention of many manufacturers in different countries.
In the 1980s, employees of Motorola Inc in the USA have used six sigma theories in
order to reduce defects in their production process. This has helped them to provide
high-level quality to customers. As stated by Omogbai and Salonitis (2016), six
sigma is an essential tool includes different characters of earlier systems and is
effective to mitigate defects in production process. In 1991, allied signals have also
used this tool, which has helped them to achieve cost control and quality
improvement within six months. On another hand, Cortes et al. (2016) argued that
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six sigma is also considered as a methodology, which helps to encourage teams and
helps to increase responsibility. There are two methodologies of six sigma tool that
includes DMAIC and DMADV. DMAIC methodology reminds every person of a team
regarding their roles and responsibilities.
Figure 1: DMAIC methodology
(Source: Influenced by Cortes et al. 2016)
Implementation of strategic tools in supply chain and business operations in
service sector
Service sector has become one of the important industries in every country as it is
able to contribute to the economy of countries. As argued by Habidin et al. (2016),
this sector uses strategic management tools such as Six Sigma, lean and others in
order to manage operations and supply chain. Organizations under this service
sector are aware of beneficial aspects of implementing strategic tools and are
successfully generating revenues. For example, DHL uses lean strategies in order to
manage business operations (Annualreport2017.dpdhl.com, 2017). In the last two
years, DHL has invested its time and cost in strategic management by following the
principles of Lean. Lean process has helped this organization in managing change,
implementation of productivity management tools and in resource management. This
approach of this company is helping them to maintain continuous improvement of
business process.
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DefineMeasureAnalyzeImproveControl