When we think of operation management, we imagine a manufacturing plant. Some may work in a manufacturing plant. But most of the people are working for service and retails organizations.
The operation management is to think of the way that can encompass all of the operational activities like manufacturing, distribution, sales, and income.
Let us discuss Zara’s retail management. Zara differentiates itself from its competitors in speed. They hit their new fashion ideas to the shop. The store managers send feedback to Zara’s head office. it helps them fine-tune their ideas.
Top priorities of Operation Management:
As per an article published by the Wall Street Journal, on Oct 18, 2020, the average time patients spend waiting to see a healthcare provider is 22 minutes, and some waits stretch for hours. The report also noted that patient satisfaction dropped significantly with every five minutes of waiting time. Therefore, time plays a major role in all sectors, from waiting in a queue to the delivery of a product. So, let us discuss all methods below:
The first and fast delivery is the time elapsed between receiving a customer’s order and filling it. It is often called as lead time.
An acceptable delivery time can be 2-3 days, weeks, or months if it was a complex and customized machine.
That is to say, manufacturers can shorten delivery times by storing inventory. Service providers can do so by having excess capacity.
2. Low-cost operation:
Lowering prices can increase the demand for the product or service. But it also reduces the profit margin. However, if the production charges are high, lowering the retailing cost may result in losses.
To compete based on cost, operation managers must address labor, materials, scrap, overhead, and other costs to design a system. It lowers the per-unit cost of the product or service.
Often lowering costs needs additional investment in automated facilities and equipment.
3. High-Performance Product Design:
High-performance product design includes superior features, greater durability, helpfulness, convenience, the safety of products, etc.
It determines the level of operations performed in making a product or performing a service.
4. Consistent Quality:
Consistent quality measures the frequency with which the product or service meets design specifications.
Customers want products or services that consistently meet specifications they contracted, expected, or saw advertised.
For instance, bank customers expect that the banks won’t make errors when recording customer account numbers.
To compete on the basis of consistent quality, managers need to design and monitor operations to reduce errors.
Moreover, it is increasingly expected by customers that you produce consistent quality in your products or service.
A firm that does not have consistent quality doesn’t last long in a competitive global marketplace.
5. Development speed:
Development speed measures how quickly you can introduce a new product or service. It covers the time elapsed from idea generation to the final design and production.
Getting the new product or service to market is given a firm edge on the competition, which is difficult to overcome in a rapidly changing business environment.
Moreover, development speed is especially important in the apparel industry. Many companies focus on the competitive priorities of development speed and fast delivery time.
With time-based competition managers carefully define the steps and time need to deliver a product or service, and critically each step to analyze whether time can be saved without affecting quality.
Therefore, adopting a process where design engineers, manufacturers, marketers, quality specialists work jointly to design a product or service.
Customization is the ability to satisfy the unique needs of each customer by changing the product or service designs.
However, products or services tailored to individual preferences may not have long lives.
For instance, a hairdresser works with the customer to design a hairstyle that may be unique to the individual, but the life of that service may not be longer than a week.
In contrast, a customized tumbler may last for years. Customization typically implies that the operating system should be flexible to handle specific customer needs and changes in designs.
7. Production Flexibility:
Production flexibility is defined as the quick and easy to handle large production fluctuations in terms of accelerating or decelerating the production rate.
Moreover, it is an important operating capability that often supports the achievement of other competing priorities.
A customer-driven operation strategy reflects a clear understanding of the long-term goals, of the organization.
Also, it requires a cross-functional effort by marketing and operations to follow the needs of each market segment and translate those needs into desired capabilities.
Finally, translate these needs into desired capabilities for each of the functional areas of the firm.