To understand the
importance of operations management IKEA is taken as an example.
IKEA is a Swedish company. It
sells ready to assemble furniture, appliances and home accessories. Its net
income is 3.202 Euros. It is one of the biggest firms in the world. It gets the
products and furniture designed in parts of Sweden but its manufacturing is done probably in the
developing countries in order to keep the costs down. It has suppliers from almost 50 countries. The
biggest of the entire supplier for the IKEA is China
The case of IKEA is perfect
to explain why Operations Management is important to all types of business, at
the production or manufacturing section the company aims to reduce the
wastages, increase productivity and time and resources management in order to
make sure that the production cost is low and at the stores the company aims to
make sure that they warehouse is utilised properly, customers are explained the
details and finally the product is delivered without issues so that the
shifting cost is low. Also the stores have to take care of marketing and sales
which involves their own process.Hence this indicates that there will always be
set of operations irrespective of what field a business is in and at the end of
the day successful businesses are those which manage their operations
effectively and efficiently.
Objectives of Operations
The operations management
has two primary objectives that needs to achieve and in many ways it can be
said that both these objectives are interrelated. The objectives are resource
utilization and customers service.
The customer service is the
main objective any company because at the end of the day irrespective of all
the strategy, marketing and operations management if the customer is not happy
with the product or the service then the purpose of the entire enterprise is
fallen. So the operations management makes sure that all the customers’ needs
and demands are met and do that the company also has to make sure that it makes
use of the resources effectively.
Secondly if the resources are not used carefully then
there are chances that the production cost will increase and hence the overall
profit margin will reduce and the enterprise objective has failed. So both the
objectives must be met in a complementary way so that the company benefits out
The objectives of the IKEA
are to make sure that the quality is managed at all times and also making sure
that the operations are done effectively to save the resources so that the
company can benefit out of it.
All operations managers
manage processes:So from this it can be understood that the strategic decision
of the company are all considered as the process and because the strategic
decisions are all made by the managers it can be said that all operations
managers manage processes.
ng processes require new
roles, tasks, skills and expertise, often organized around teams. There are a
number of things to consider. Training and development of new skills for individuals
and of the team will bring with it a change in the culture of your
A quality management system
(QMS) is a formalized system that documents processes, procedures, and
responsibilities for achieving quality policies and objectives. A QMS helps
coordinate and direct an organization’s activities to meet customer and
regulatory requirements and improve its effectiveness and efficiency on a
The documents only serve to
describe the system.
Quality management systems
serve many purposes, including:
identifying training opportunities
Benefits of quality management systems
Implementing a quality
management system affects every aspect of an organization’s internal and external
Two overarching benefits to
the design and implementation of ocumented quality management systems include:
1) Meeting the
organization’s requirements, which ensures compliance with regulations and
provision of products and services in the most cost- and resource-efficient
manner, creating room for expansion, growth, and profit
2)Meeting the customer’s
requirements, which helps to instill confidence in the organization, in turn
leading to more customers, more sales, and more repeat business
The organization’s quality
policy and quality objectives
Customer satisfaction from
Each element of a quality
management system serves a purpose toward the overall goals of meeting the
customers’ and organization’s requirements
Establishing and implementing a QMS
Establishing a quality
management system helps organizations run effectively. Before establishing a
quality management system, the organization must identify and manage various
connected, multi-functional processes to ensure customer satisfaction is always
the target achieved.
The basic steps to implementing a quality
management system are as follows:
The design and build
portions serve to develop the structure of a QMS, its processes, and plans for
implementation. Senior management must oversee this portion to ensure the needs
of the organization and the needs of its customers
Deployment is best served
in a granular fashion via breaking each process down into subprocesses, and
educating staff on documentation, education, training tools, and metrics. Control and measure
Control and measurement are
two areas of establishing a QMS that are largely accomplished through routine,
Review and improvement deal
with how the results of an audit are handled. The goals are to determine the
effectiveness and efficiency of each process toward its objectives, to
communicate these findings to the employees, and to develop new best practices
and processes based on the data collected during the audit.
The development of a
strategic quality plan is the key to determining the right quality initiatives,
ideas and steps for your organization. Without it, you’ll just move from one
fad to the next. First step is to create a team of quality professionals holding
statuary degree who are responsible for ensuring the delivery of quality
products and services to the organization’s customers. Some members of this
strategic quality planning team might not be involved in the regular
responsibility of managing quality. Rather, they are impacted by quality and
therefore have an important stake in the successful outcome of the strategic
quality plan. If there is only one person designated with the responsibility
for quality within the organization, they will need to create a team of
individuals who have some responsibility for the management of quality within
their own jobs.
The Strategic Quality
Planning process consists of two phases:
Research Phase which includes everything required to collect and analyze the
data required before strategic quality planning can begin.
Every quality management initiative can, and must be tied to key business
process performance indicators in order to have any real impact on productivity
and the bottom-line. However, Strategic Plans are rarely translated into the
quality strategies needed to ensure overall performance improvement gains.
The first task of the
Strategic Quality Planning team is to examine the Strategic Plan and to
identify and become familiar with all of the identified corporate strategies.
They must ensure the quality strategies they develop align with and support the
realization of these corporate strategies.
The Strategic Quality Planning team will spend time analyzing all of the
various quality initiatives that their organization has used in the past as
well as continuing to use in the present. For example, ? Quality Function
Deployment? Six Sigma? Lean? Quality Awards Or Project management?
has the organization used
or continuing to use Kaizen? Reengineering? Cost of Quality
Questions they must ask
include; What have we used before? What was successful and wasn’t successful?
Why were some of these initiatives successful and others not
Organizational and customer
requirements are the factors that will drive Strategic Quality Plans. The
quality strategies must address the organizational needs. They must also address
the customer needs. The Strategic Quality Planning process ensures these two
results can be used to identify problems and opportunities, measure the
performance of managers, executives and employees and reveal relative
competitive performance. These can be obtained through customer surveys,
interviews, etc. The results will help drive the right Quality Strategies which
will in turn help drive new product and service development, manufacturing
quality, product and service delivery and competitive positioning.
It is essential to involve employees in the development of the quality
strategies. Employee’s input will:
Provide insight into issues, challenges, concerns, and opportunities which may
not have been known.
We often miss the opportunity to go outside our organization to learn what
others are doing so that we can incorporate these lessons learned into the
development of our quality strategies. Benchmarking is highly beneficial and
helps provide the Strategic Quality Planning team with ideas on how to improve
their internal quality processes, products, processes, structures, etc.
In working with
organizations over the years, we’ve observed a leadership pattern that
sabotages change. It occurs when senior leaders, who have been thinking,
exploring, and debating about a particular change for a while, finally announce
plans for a new initiative. Forgetting that others in the organization haven’t
been a part of the discussions and are not as familiar with all of the reasons
for the change, leaders are surprised by the amount of resistance the new
When change is first announced,
people will have information concerns. Often, leaders will want to explain why
the organization is moving in a certain direction and why the change is a good
idea. This is a mistake. People don’t want to be told the change is good until
they understand it. Instead, leaders should share information as plainly and as
completely as possible. In the absence of clear, factual communication, people
tend to create their own information about the change, and rumors become facts.
Leaders should prepare to answer
questions such as: What is the change? Why is it needed? What’s wrong with the
way things are now? How much and how fast does the organization need to change?
Plan your action
If leaders address the
first two concerns effectively, people will be ready to hear information on the
details involved in implementing the change. At this stage they will be
interested to hear how the thinking behind the change has been tested. They
will also want to know where to go for technical assistance and solutions to
problems that might arise.
Sell the change
questions are answered, people tend to raise impact concerns. For example: Is
the effort worth it? Is the change making a difference? Are we making progress?
Are things getting better?
People with impact concerns
are interested in the change’s relevance and payoff. The focus is on
evaluation. Be prepared to share early wins and proof that the change is making
a positive difference. If the change does not positively impact results–or
people don’t know how to measure success–it will be more difficult to keep the
change initiative moving forward.
Once information concerns
are satisfied, people will want to know how the change will affect them
personally. The following questions, even though not always expressed openly,
are common: What’s in it for me to change? Will I win or lose? Will I look
good? How will I find the time to implement this change? Will I have to learn
new skills? Can I do it?
People with personal
concerns want to know how the change will play out for them. They wonder if
they have the skills and resources to implement the change.
With some evidence that the
change is moving the organization in the right direction, momentum starts to
build. Leaders can look forward to questions and ideas focused on coordination
and cooperation with others. A solid nucleus of people in the company will want
to get everyone on board because they are convinced the change is making a
At this stage, leaders can look
forward to questions such as: Who else should be involved? How can we work with
others to get them involved in what we are doing? How do we spread the word?
Refine for success
Once a change effort is
well on its way toward complete adoption, leaders can expect to hear others
begin asking about how the change can be refined. For example: How can we
improve on our original idea? How do we make the change even better?
Refinement questions are a
good sign and show that the people in the organization are focused on
continuous improvement. During the course of any organizational change, a
number of learnings usually occur. Take advantage of new opportunities for
organizational improvement that often come to the surface at this stage.
Give your next change initiative its
Take time with your next
change initiative. Do it right and you can drastically increase your chances of
success. But rush through the early stages and, like so many others, you might
find yourself derailed as many of these concerns surface later in the project,
killing momentum when it is needed most.
You’ve probably heard this
before, but it’s worth repeating here: People who help to plan the battle
rarely battle the plan. While dealing with people’s concerns about change may
seem like a lot of hand-holding, it’s important for leaders to remember that
they too had to process information and personal concerns before they were
ready to discuss impact and implementation.
Great Value from Monitoring
for Monitoring and Evaluation
The strategic plan document
should specify who is responsible for the overall implementation of the plan,
and also who is response
ble for achieving each goal
The document should also
specify who is responsible to monitor the implementation of the plan and made
decisions based on the results. For example, the board might expect the chief
executive to regularly report to the full board about the status of
implementation, including progress toward each of the overall strategic goals.
In turn, the chief executive might expect regular status reports from middle
managers regarding the status toward their achieving the goals and objectives
assigned to them.
Questions While Monitoring and Evaluating
Status of Implementation of the Plan
1. Are goals and objectives
being achieved or not? If they are, then acknowledge, reward and communicate
the progress. If not, then consider the following questions.
2. Will the goals be
achieved according to the timelines specified in the plan? If not, then why?
3. Should the deadlines for
completion be changed (be careful about making these changes — know why
efforts are behind schedule before times are changed)?
4. Do personnel have
adequate resources (money, equipment, facilities, training, etc.) to achieve
5. Are the goals and
objectives still realistic?
6. Should priorities be
changed to put more focus on achieving the goals?
7. Should the goals be
changed (be careful about making these changes — know why efforts are not
achieving the goals before changing the goals)?
8. What can be learned from
our monitoring and evaluation in order to improve future planning activities
and also to improve future monitoring and evaluation efforts?
of Monitoring and Evaluation
The frequency of reviews
depends on the nature of the organization and the environment in which it’s
operating. Organizations experiencing rapid change from inside and/or outside
the organization may want to monitor implementation of the plan at least on a
Boards of directors should
see status of implementation at least on a quarterly basis.
Chief executives should see
status at least on a monthly basis.
Results of Monitoring and Evaluation
Always write down the
status reports. In the reports, describe:
1. Answers to the above key questions while monitoring implementation.
2. Trends regarding the
progress (or lack thereof) toward goals, including which goals and objectives
3. Recommendations about
4. Any actions needed by
It’s OK do deviate from the
plan. The plan is only a guideline, not a strict roadmap which must be
Usually the organization
ends up changing its direction somewhat as it proceeds through the coming
years. Changes in the plan usually result from changes in the organization’s
external environment and/or client needs result in different organizational
goals, changes in the availability of resources to carry out the original plan,
The most important aspect
of deviating from the plan is knowing why you’re deviating from the plan, i.e.,
having a solid understanding of what’s going on and why.
Be sure some mechanism is
identified for changing the plan, if necessary.
measurement and feedback are involved and linking individual people with the
directions of the organisation. Change processes are about goal achievement and
may be people-focused, including training and working alongside individuals and
teams to get them involved. Measurement and feedback about goal achievement and
encouraging participation are the roles of leaders in these change approaches
The evolutionary change
approach was briefly outlined in Chapter 1 in regard to involving interaction across
organisations and the environment and change being consistent and cumulative
rather than intentional and infrequent as occurs within the strategic approach.
Complexity Theory and Social Worlds or constructive conflict models were
previously presented. In the evolutionary approach, multiple approaches and
letting directions arise gradually over time or working through conflicting
ideas and creating new directions are the change processes involved. The
leader’s role becomes one of working with others and interpreting the emerging
change and taking a strategic view of all the different agendas underway.
A key difference from the
previously-outlined strategic approach is that the change is recognised as
happening within a wider two-way context, with those other influences and
knowledge having an impact. Secondly rather than being top down, the generation
of new ideas can come from anyone and may simply evolve in the course of
routine work for a few people and then become more widely adopted across the organisation
and across other organisations.