An operational approach is a set of operational procedures for achieving operational objectives. It is an operational concept that can be applied to any organization or business, which looks at the way it does things and evaluates whether there are better ways of doing them. This post will cover what operational approaches are, how they can help your business grow, and how you might go about implementing one in your organization.
Goals of managers
Managers are always trying to improve the number of goals they are able to complete. As a result, they must create an environment that encourages more achievements for more objectives with the available financial, time, and labor resources. Such managers are referred to as strategic managers (Megginson et al. 256). Managers should be more productive, and any company strives towards this goal as soon as possible.
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Another approach to maximizing productivity is through effectiveness, efficiency, and other terms that imply the same thing. An effective manager strives to achieve objectives while an efficient manager strives for goals while employing the fewest feasible resources. As a result, managers should first state their intentions before working with the accessible resources to achieve them.
Importance of managers
Managers have a duty to persuade people to contribute to a group’s or organization’s goals. This implies that management is applicable to both small and large businesses, as well as manufacturing and service industries, profit-making, and non-profit organizations (Mondy and Premeaux 379).
However, in an organization or a business, there may be differences in scope as well as difficulties at various levels of management. Managers who apply the operational approach in their organizations or environments obtain outstanding results by creating an environment that is conducive to the group’s or company’s success. All managers, regardless of level or kind, execute managerial activities; nevertheless, each function is unique owing to the need for greater time (Megginson et al. 512).
Managers at the top run the majority of their time planning and organizing, whereas managers in lower levels of management devote considerably less time to these activities. When it comes to leading, first-line supervisors utilize most of their time, as opposed to second-line supervisors. The controlling function of managers varies somewhat depending on the management level.
It is a dynamic institution that gives life to business organizations or enterprises because a lack of managerial leadership makes resources non-productive, regardless of the amount. As well, in an environment characterized by intense competition, an organization requires competent management services in order to survive and thrive (Megginson et al. 612).
Roles that define an individual’s role in the business are essential in today’s environment; rather than capital and labor, today’s business folks discuss management and labor. Also, each entrepreneur who wants to succeed in his or her company uses the phrase “management responsibilities.”
Managers require a wide range of talents, including organizational and managerial skills, as well as technical and cognitive abilities. Technical skills include information on processes, methods, and operations involved in production; this ability aids in the learning process by teaching the manager to work with technologies as well as particular methods or techniques.
Managers also require human competencies in order to fulfill their duties; they must learn to work with people and collaborate as a team. Managers should also establish an atmosphere that allows individuals to feel secure and willing to express their thoughts openly. A further important ability is a cognitive skill, which demonstrates the capacity of a manager to perceive aspects of a situation as well as have an excellent grasp on the relationships between them.
Design skill is a managerial competence that will assist a manager in dealing effectively with difficulties or situations. Managers are frequently called on to deal with issues and conditions in order for the company to prosper, and they need design ability in order to do so; they must have the debility to identify an issue and more (Koontz 278). This talent will enable them to come up with creative answers to real-world challenges. At various management levels, each of these talents plays a distinct role.
Managerial abilities are critical at all levels of management since each manager regularly deals with his or her juniors and seniors. Managerial skills emphasize the ability to think analytically and solve problems. Human abilities, on the other hand, are required at all levels of management because managers frequently interact with their juniors and seniors (Koontz 322). The ability to conceive ideas is not particularly important for supervisory managers but becomes more so as one progresses through middle management up to the top level. At the top echelon of leadership, design talents must be combined with cognitive strengths.
The operational approach is regarded as a cutting-edge management technique. The management has various responsibilities and duties, and it is through these roles and tasks, such as planning, leading, coordination, staffing, organizing, among others that contribute to the success of an organization.
The scarcity of resources necessitates that someone be in charge. These resources need someone who can plan for them and arrange them in a way that they become useful, and to do so, one must have skills that will assist him use the existing assets more efficiently and productively. This is where managers in their operations utilize their natural and acquired talents to complete their tasks.
Management may use operational approaches to respond to a more globalized business environment by adopting strategies of operational approach. The methods used in the transition from raw materials to finished goods (inputs to outputs) are referred on as operational strategies. Supply chain management, inventory management, outsourcing, quality management, technology, and international circumstances are just a few of the options available.
In which globalization is discussed or aided. Globalization is the reduction of trade barriers between nations. Integration in the form of capital, labour, financial resources, and technology. This essay will look at how outsourcing, technology, and global factors have affected Tesla, Inc.’s and Apple Inc.’s adaptation to globalization with respect to Tesla, Inc. and Apple Inc., respectively.
Outsourcing is a business management technique that can be used to tackle an ever more globalized corporate environment. Outsourcing refers to the use of outside experts to execute one or more critical business activities, often referred to as “outsourcing.” This provides businesses with benefits such as lower operating costs, expertise, and efficiency, but it might also result in reduced quality, delayed completion dates, and hidden expenses.
Despite this, globalization is increased due to the outsourcing of activities internationally, which helps economies around the world by promoting trade. The use of foreign manufacturing and labour as a consequence of cheaper labour costs in another country is an example of globalization integrating with outsourcing. This allows firms to stay competitive by offering products at a lower price point. This is demonstrated by Apple.
The majority of Apple’s product line is made in China, which is due to the fact that most components used in Apple devices are sourced from China, lowering logistical transport expenditures. This is one of the reasons why Apple relies on Foxconn for its Chinese operations. Another reason is that China has fewer labor rights and lower salaries, which lowers manufacturing costs and improves Apple’s profit margins while lowering prices for customers.
The similarities between Tesla and conventional businesses stem from the fact that, unlike labor, there is no capital. To address this issue, they attempted international partnerships. Outsourcing Design’s body panels and assembly line for their first car, the ‘Roadster,’ which utilized Lotus Engineering’s Hethel facility (United Kingdom).
This increased the design, staffing, and purchase of a factory and assembly line for the new firm, which saved money on all three. This allowed consumers to acquire what may be considered the world’s first electric sports car at an affordable price with high-quality finishes. Outsourcing business operations increase globalization by trading people, technology, and finance across borders. Apple’s and Tesla’s decision to produce abroad in order to decrease expenses while maintaining supply and quality are examples of this phenomenon.
Another operational technique that management may use to react to globalization is technology. Technology refers to the creation, installation, and/or usage of innovative equipment, procedures, and machinery in operations processes. This relates to globalization since technology is a type of operational strategy that has aided the growth of worldwide trade by developing in transportation and communication technologies. Developments in technology can improve company efficiency at both the administrative and operational levels. Tesla is an example of a production-level innovation, with The Tesla Factory in Fremont California being one of the world’s most technologically advanced manufacturing facilities.
Tesla Motors is the world’s largest maker of robots, with over 160 robots and 10 of which are the world’s biggest. Tesla holds the key to effective manufacturing in the electric vehicle market because it restricts output to just under 40 stages. This improves productivity and reduces the margin for error, as international competitors like the Volkswagen group copy both Tesla’s EV technology and seek more efficient production processes.
This raises international competition since their products are narrow because of it, but they’re global. Efficiency in manufacturing for both car manufacturers is important to their success as the most cost-effective is the most cost-effective to export from a commercial and retail standpoint owing to import duties and taxes. This implies that technology is a significant and influential operational strategy for businesses to use to overcome globalization’s challenges.
The last approach in the operational approach to deal with globalization is global factors. This is because using globalization as a defense mechanism is an effective strategy. To stay competitive, a firm may use global sourcing, scale economies, scanning and learning, and research and development methods.
The cost of production is determined by the quantity produced. The larger the amount demanded, the lower the cost of production, while the smaller the quantity, the more expensive it is to produce a product per unit. In today’s EV market, Tesla employs this technique to sell their most recent vehicle at such a low price.
This is due to Tesla expanding and increasing their assembly line in order to meet the growing demand for more and more automobiles, which enables them to become more standardized and allows for larger volumes of third-party components purchases. This boosts their profit margins over time and/or lowers the prices of their vehicles, allowing Tesla to gain a competitive advantage against other global manufacturers.
Global factors may be classified as Global Sourcing, which is the process of sourcing items and resources from other geopolitical locations or nations in order to save money. This is mostly comparable to outsourcing since it can rely on international manufacturing to reduce costs in a rapidly changing market due to globalization. This is seen in the cases of Apple and Tesla, two prominent examples of outsourcing. Global Factors are a sort of Globalisation that enables domestically based firms to look for financial opportunities in cost savings, allowing them to stay competitive in their industries.
In conclusion, Apple and Tesla use worldwide elements, technology, and outsourcing to overcome the growing competition as a result of globalization. Technologically improving the production process to be more efficient and take advantage of the principle of scale in order to lower manufacturing costs in order to maintain competitiveness or gain a competitive edge.
Operations management is a crucial function in the management of a company. It refers to business process design and operation in the production of goods or services. In a nutshell, it’s about turning resources into products and/or services as shown in figure 1. A firm’s competitive advantage is directly affected by how efficiently available resources are put to use to fulfill customer demand. (Slack et al 1995, Voss, 1995)
Operations management is concerned with managing the process of converting “inputs” such as materials, labor, and energy into “outputs” such as products and/or services. It’s critical to ensure that the company’s strategic direction is followed by carrying out tactical resource decisions in order to maintain competitive advantage (Schmenner et al, 1998)..
Apple Inc. is a good example of effective operations management. Apple is a multinational company that develops and sells computers as well as related products and services. The company manages its operations in such a way that demand is met by supply, while at the same time avoiding the need to keep large amounts of items in warehouses (figure 2). That is because Apple has an excellent inventory turnover rate. (Gamet, 2009)
Within and across organizations, the concepts of suitability and application of which vary (Figure 3). Capacity planning, inventory management, supply chain design, performance metrics, and total quality management are some of the key elements. The concepts of inventory, supply chain, quality, and capacity planning are particularly significant in companies that operate on a product basis.
In service-based businesses, factors such as personnel, performance, and quality management have a high position. (Bayraktar et al, 2007) The idea of operational strategies includes strategies for ordering raw materials, transforming them into finished goods, storing and selling to the consumer. In today’s fast-changing market environment with a highly globalized economy, implementation is frequently mishandled.
The problems in operations management include quantitative, social, and technological concerns and their complex mixtures (Liet al., 2000). Planning, critical path analysis, supply chain management, and so on are examples of quantitative difficulties. Optimization, scheduling, and other technical issues may all be present. Human resources management, outsourcing, and so on are examples of social challenges.
These difficulties are not isolated and unrelated to one another, but they all have an effect on the company’s overall operations management. As a result, it’s critical to address these problem areas in order to ensure that the company’s overall operations management isn’t harmed by them. A firm must change in order to stay competitive and manage change (Volberda, 1999).
Human resources, also known as employees in an organization, are critical to operations, process, and performance management. An organization’s success is almost entirely dependent on the success and contentment of its staff. As a result, it is critical for a business to hire and retain the appropriate people for growth, profitability, and long-term sustainability.
Analysis of operations process in different types of Organizations
The case of an aircraft manufacturer versus an airline operator is used to illustrate the differences in operations between various types of businesses. Competitive priority and marketing strategy are used as the starting point for this study. The various sorts of operations will be identified, as well as their capacity to satisfy consumers’ demands, in order to evaluate the key elements of operations management.
The first and most apparent distinction between the firms selected in this case study is that the aircraft manufacturer specializes in the production of aircraft and associated services for clients, while the airline company just provides logistics services. To make a clear distinction between product-based and service-based companies, only the manufacturing of aircraft and provision of logistics has been considered. To maintain a competitive advantage, both types of firms must ensure that their operations are well-managed in order to keep costs low and provide their products and services at a reasonable price while still generating the greatest profit.
Although its success may be a matter of chance, a firm’s methods for achieving it will almost certainly not. The aircraft manufacturer invests a significant amount of money in research and development since the company “wants to get it right the first time.” Because of the size of the operation, various operations are sent all around the world, necessitating effective inventory management, capacity, and supply chain management. Total quality management and performance are also required to maintain winning positions in both competitive and commercial arenas (Chow, 2002).
The aircraft manufacturer, on the other hand, is reliant on the airline to provide service to its passengers. The operator does not need to maintain an inventory of planes, but it must ensure that it maximizes the usage of its capacity in order to offer low fares to customers. The airline’s performance measures are distinct since it must guarantee timely flight operation, which is critical from the marketing standpoint (Rae, 2001). The next section of this case study looks at how the adequacy and suitability of key theoretical principles and concepts in operations management were addressed.
In any firm, whether it deals in products or services, operations management is an essential business process. The principles and techniques of operations management vary across these sectors. To innovate, preserve competitive position, and protect sustainability, manufacturing businesses use inventory management, capacity planning, and production optimization methods.
The service industry emphasizes more on efficient use of its personnel and technology backbone for operations management techniques. It’s been noticed in recent years that the distinction between goods and service companies is fading, with most firms now offering a combination of items and services to their clients.
Even in more traditional industries like Rolls-Royce, which is turning away from selling goods and instead of providing ‘power by hour’ leases. As a result, “integrated products and services” are clearly being recognized as a whole entity. In these rapidly changing times, operations management will be an important business process and a difference-maker between leaders and followers.