Operations Management Essay Example | Topics and Well Written Essays - 2500 words - 1

Operations Management - Essay Example The researcher states that in order to achieve and sustain a competitive edge in the market environment, every firm must attempt to achieve consistency in its manufacturing or service delivery in all aspects. Therefore, the firm must identify areas that are necessary for inclusion in the operations management plan; plan on the approach to take in order to achieve the stated objectives; implement the strategy in accordance to the guidelines formulated in the planning stage; monitor the process; and improve by making corrections and adjustments to the process. If a firm can succeed in maintaining the operations management cycle for a sustained long period, then the firm is likely to achieve long term success due to preparedness to keep up and cope with market changes. Market changes include both macroeconomic and microeconomic market changes, both of which have an effect on a firm’s operations. Macroeconomic factors include changes in the aggregate economy of a vast geographical region including political changes; economic changes; social changes; technological changes; ethical changes and legal changes. Economic factors include the effects of the economy on business; social factors include changes in beliefs and perceptions as they relate to the business; technological factors centre the changes that affect the production process. Ethical factors include changes in perceptions of the difference between moral rights or wrongs; and legal factors are aspects of policy and legislation that have direct or indirect effects on the market. Microeconomic factors are the changes that occur in the market or industry and involve stakeholders like customers, suppliers, competitors and the public (Wong and Wong, 2007). A company must endeavour to satisfy the needs of customers, who are the core source of revenue for business; and attract and retain the attention of the public, which is composed of potential customers and investors. In addition, a company should build i ts credit worth to increase the likelihood of obtaining credit from suppliers even in the absence of funds to make cash purchases (Grafton, Lillis and Widener, 2010). The general idea is that a company should strive to align its inner environment with the changes in the outer environment. According to Slack, Chambers and Johnston (2007), a company should identify its level of success in the five main performance indicators including price, quality, speed, dependability and flexibility. This essay highlights the advantages and disadvantages of basing a performance management system on these five operations objectives. Implementation The first step towards implementation of a performance management system based on the five core performance indicators is an analysis of a company’s current performance against the expected performance. The aim of implementing such a system is to narrow down or close the gap between these two phenomena; the strategy being the use of these indicator s to achieve and retain a competitive edge in the face of a rapidly changing market. However, many scholars argue that the system should not be geared on achieving full functionality but a firm should focus on one aspect and do it to its best capacity. Specialisation enables a firm to perfect one aspect of its performance and uses it to outdo the competition in the market; especially by having a competitive edge derived from its effectiveness to achieve the optimal result in a performance indicator. However, using price, quality, speed, dependability and flexibility has merits and demerits (Zeydan and Colpan, 2009). Cost Optimisation of the performance indicator of cost has direct monetary benefits to a firm, as it enables the firm to reduce the cost of production by cutting down on inputs, mainly by adopting the use of cheaper alternatives or by reducing the quantity of input but maintaining the production output. In this case, the firm has the capacity to achieve high profit margi ns due to a higher difference between revenue and expenditure. Moreover, it has