Analysis of Operations Strategy in Operation mamagement.docx
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AnalysisofOperationsStrategyinOperationmamagement
Contents
1.0Introduction1
2.0LiteratureReview2
2.1Standardization2
2.2DivisionofLabor2
3.0BackgroundofOrganization3
4.0AnalysisofOperationsStrategy4
4.1Lowcost4
4.2Standardization5
4.3QuickResponse7
5.0Recommendations7
5.1CustomizedServices7
5.2InteractingwithCustomers8
6.0PossibleOrganisationalBarriers9
6.1RisingCosts9
6.2TeamIssues9
7.0PersonalReflection10
8.0Conclusions11
Bibliography12
Appendices14
AppendixA:
photosatLAMS14
AppendixB:
InterviewwithMrs.FRENDAANG15
1.0Introduction
OperationsManagementistheprocessofoperationalplanning,scheduling,design,controlandlayout.Theseactivitiesarecloselyrelatedtothevaluecreationofproductsandservices.Themainobjectiveofenterpriseoperationsmanagementistocontrolquality,cost,timeandflexibility(Gaither,1996).Theyarethefundamentalsourcesofcorporatecompetitiveness.Therefore,operationsmanagementplaysanimportantroleinthebusiness.Particularlyintherecentthreedecades,productionscalecontinuestoexpand;theproceduresofproducingproductsandservicesbecomemorecomplex;marketdemandsincreasinglydiversifyandvary.Besides,competitionworldwidehasgrownfiercerthaneverbefore.Allofthesefactorsmakeoperationsmanagementconstantlychanges.
Withsophisticatedprocessdesign,LAMSCorporateAdvisorySDNBHD(LAMS)canprovidecustomerswithsatisfactoryservices,suchasaudit,tax,corporatesecretarial,accountingandconsultancy(LAMSn,d.).Asforaservicecompany,themainstrategiesadoptedbyLAMSarelowcost,standardizationandquickresponse.Inordertoachievecompetitiveadvantage,thecompanyhasredesignedtheserviceprocessandstandardizedalltheprocedures.ThroughofferingProfessionaltraining,LAMSneedslessemployeesandimprovetheproductivity.Thus,itcanminimizethecostandclientsenjoylow-priceservicesaswellashigh-qualitywork.
However,theseoperationsstrategieshelpLAMStoenhancethecapabilityofcompetition,buttheyalsobringsomesetbacks.Enterprisesshouldbeclearabouttheirdistinctivecompetencieswhichdeterminethesuccessofoperationsstrategies(Harrison,1993).Therefore,It’snecessarytounderstandtheconsequencesofeachchoiceincompetitivefactors,andthenmaketrade-offs.Besides,corporationshavetoadjusttheiroperationsstrategies,accordingtomarketchanges.
2.0LiteratureReview
2.1Standardization
Essentiallyspeaking,standardizationisapublicawarenessofreachingsimplification.Itisnotonlyasocialbehavior,butalsoaneconomicactivity.Sander,T.R.B.(1972)believesthatinthedevelopmentofstandards,thebasicactivityistoselectandfixthem.Standardsshouldbereviewedwithinaspecifiedperiodoftimeandrevisedifnecessary.Whenstandardsareexecutedinlegalform,legislatorsshouldtakenatureofstandards,degreeofindustrializationandexistinglawsintoconsideration(Sander,1972).
ShiroMatsurastatesthesimilarviewsinhisbook-PrinciplesofShiroMatsura.Standardizationisasocialactivityandneedsmutualcooperationtopromoteitsdevelopment.Standardizationcannotonlysimplifythecurrentcomplexity,butalsopreventfutureunnecessarycomplexity(Matsura,1972).Theselectionoftopicsandcontentsofstandardizationmustbebasedondifferentpointsofviewandtheirprioritiesshouldbeconsideredcarefully.
EliWhitneyisfamousforcottongin,butwhathecontributesmostistheinnovationofinterchangeableparts.In1800,WhitneyacceptedtheUSgovernment’scommissiontoproduce10,000to15,000rifles.Basedonthesizeofrifleparts,hedevelopedasetofspecializedequipmentandprocesses.Byusingtheequipmentandprocesses,workerscouldproducesamesize,butdifferentparts.Anypartscouldbeappliedtoanyrifle.Theinnovationofinterchangeablepartsrevolutionizedthemanufacturingindustryandlaidafoundationforstandardization.
2.2DivisionofLabor
PrinciplesofAdamSmithindivisionoflaborarebasedonabsoluteadvantage.Smith,A.(1776)mentionsthatthedivisionoflaborcangreatlyimproveproductivity,soeveryoneshouldspecializesintheproductionofhismostadvantageousproducts.Andthentheyexchangewithothers.Thiscouldbenefiteveryone.Iflittlemoneyisspentonasmallproduct,donotproduceitathome(Smith,1776).Everyshrewdparentknowsthatmotto.InSmith'sview,principlesofdivisionoflaborsuitabletoindividualsandhouseholdsalsocanbeappliedtocountries.Hebelievesthateverycountryhasitsownadvantagetoproducesomecertaingoods.Ifeachcountryengagesinspecializedproductionandexchangeswitheachother,it’sbeneficialtoallofthem.
In1852,CharlesBabbagefurtherdevelopedtheideaofAdamSmithonthedivisionoflaborandanalyzedthereasonwhydivisionoflaborcouldimprovelaborproductivity.Besides,henotedthathighlyskilledworkersspentsomeoftheirtimeindoing"lessthan"theirskillleveltasks.Ifthesetaskscouldbeassignedtolower-skilledworkersandcomplextaskswereonlyarrangedtohighlyskilledworkers,thefactorycouldcutlaborcosts(Babbage,1852).Inhisbook-OntheEconomyofMachineryandManufactures,Mr.BabbagealsostatedthetheoryonMentalandphysicaldivisionoflabor.
3.0BackgroundofOrganization
LAMSCorporateAdvisorySDNBHD(LAMS),locatedinSelangor,Malaysia,isanintegratedservicecompany.Itcanprovidefinancialservicesaswellasbusinessadvisoryservices.Afteryears’development,LAMShasestablishedaprofessionalteamandisdedicatedtoprovideclientswithonlythebestofservicesintermsofqualityandprofessionalism,adoptingapersonalized,practicalandproactiveapproachtoallassignments.LimChuanAik,thefounderofLAMS,alwaysbelievesthatthecompany’ssuccessisentertainedwiththesuccessofitsclients,soLAMStrieseveryefforttohelpclients’companiestosurviveandprosperinachallengingglobalenvironment(LAMSn,d.).
Byredesigningtheprocess,LAMShaslaunchedthestandardizedservices.Ontheassumptionofthequalityofserviceunchanged,itstandardizestheprocessandremovessomeunnecessaryproceduresinternally.EveryserviceLAMSprovideshasastandardizedprocesstofollow.Aslongasstaffsarefamiliarwiththeguidebook,high-qualityservicescanbedeliveredtocustomers.Fileformat,classificationandlocationhavealreadybeenstandardizedintheguidebook.Besides,LAMSoffersprofessionaltrainingforemployees.Everyoneshouldnotonlyknowthespecializedfinancialknowledgeandskills,butalsounderstandthebusinessconsulting.Afterthetraining,theywillbeassignedtodifferentgroupsaccordingtotheirabilities.Allthegroupsworktogethertofinishatask.Withinthegroup,membershaveknowledgeoffinanceandconsulting.Thus,LAMScanhirelessstaffsandcutlaborcosts.Throughstandardizationanddivisionoflabor,thecompanyachieveslowcostandfastservice.
4.0AnalysisofOperationsStrategy
Theoperationsfunctionofabusinessisthekeytosuccessfulperformancebecauseitproduceswhatthebusinesssells.Inmanycompanies,operationsconsumealargepartofthecompanyresourcesandgeneratemostoftherevenue(Carlborg,2014,p315).Thestrategicimportanceofoperationsmeansthatananalysisofoperationsstrategyiscritical.Theoperationsstrategymustsupporttheoverallcompanygoals,supplyoperationaltargetsthatarerealisticandproposeaplanthatthecompanycanimplementtoachievethegoalsandreachthetargets(Newton,2014).Asthecompanycarriesouttheplan,itmustcontinuallyevaluatetheoperationsstrategyintermsofperformance.Ifoperationdoesn'tmeetitsperformancegoals,thestrategyhastobeupdatedwithcorrectiveactiontoputitbackontrack.
4.1Lowcost
Low-coststrategypresentstherelativelowpricecomparedwithrivals.Thatdoesnotmeanonlyashort-termadvantageorcostcutting,buta"controllablelowcost"concept(Chapman,2000).Thekeytothesuccessofthisstrategyistoguaranteehigh-qualityworkandexcellentservicestosatisfycustomers’needs,andthensustainablelowcostisobtainedinrelationtocompetitors’costadvantages.Inotherwords,corporationsthatimplementlow-coststrategymustidentifythesourceofongoingcostadvantageandmaintainabarriertopreventcompetitorstoimitatetheadvantages,sothatthelowcoststrategycouldlastlonger.
Sincelarge-scalestandardizationisadoptedwithinLAMS,costsbecomeverylow.It’seasytooutputhigh-qualityservices,iftheyfollowtheguidebook.Althoughthecompanyprovidesdifferentkindsofservices,alloftheitemshavealmostthesameprocedures.Accordingtotheprocedure,staffsaredividedintoseveralgroups.Eachgroupcanofferfinancialservicesandadvisoryservices.Theyworktogethertofinishonetask.Besides,allthestaffshavereceivedspecializedstraining.Anyofthemcanoperateonanyprocedures,buttheyareonlyassignedtodowhattheyaregoodat.Therefore,LAMSdoesn’tneedmanystaffsintheoffice.Eachgrouphasfivepersonsandithassixgroups.Surely,thecostsonhumanresourcecanbecut.Standardizationiseasilytoimitate,butprofessionaltrainingandcoordinatedteamcan’tbecopiedbyanyone(Jurevicius,2013).ThesearethesourceofLAMS’ongoingcostadvantage.Inaword,thestandardizationandprofessionaltrainingsensurethehigh-qualityoutputs,aswellasimprovetheproductivity.
4.2Standardization
Competencesarevitaltoorganizations’survivalanddevelopment.Whileintheserviceindustry,competitiveelementsincludingquality,priceanddeliveryarecloselyrelatedtostandardi