The purpose of this paper is to analyze various operations management concepts and evaluate them through analytical research and determine whether and how they can be applied.
There are two different models in Quality Management, the Japanese and the Western, both having different approaches in various quality issues. The Western model has a static approach on quality concept, while the Japanese model focuses on continuous monitoring and improvement. The Western model mainly relies on product inspection, while the Japanese model gives value to customers and workers for improving the organisational processes, as they believe that those using and providing the service are more suitable to handle it. This results in producing high quality products at a lower price, offering benefits to the consumers (Ho, 1999).
Quality management refers to the management methods that ensure that the products or services are maintained at the desired high level (Slack et al., 2010).
Quality Management consists of four main components:
- quality planning
- quality control
- quality assurance
- quality improvement
Quality planning is the first step, where all the requirements need to be identified and the criteria should be set. Quality control is a set of actions used to inspect whether the desired quality has been achieved (Jain, 2001). Various quality elements exist, i.e. ISO, in order to state whether the product fulfils the quality requirements (Waters, 1999).
Although quality accreditation provides a clear quality management system and ensures quality commitment, some believe that such systems are difficult and quite expensive to develop and they do not really guarantee quality products. Quality assurance detects any mistakes on delivering products or service in order to avoid them and finally, quality improvement assesses the results and points out any possible quality improvements (Slack et al., 2010).
The origin of lean management can be found in the manufacturing and production sector where Henry Ford in the 20’s first integrated the whole production process using special-purpose machines to line-side the different stages, managing to gain time in the production process (Womack et al, 2007).
By doing that, he realised that this system although it was fast, it was unable to produce a variety of products, while the others could produce a variety of products, but it was time consuming. In the 30’s, Kiichiro Toyota revised Ford’s thinking and introduced the right-sizing machines according to the volume, ensuring quality, fast production and less production cost (Womack and Jones, 2003).
Over the years, it was proven that selecting the best possible approach to run the organisation, having continuous support and improvement reduces waste, improves efficiency and provides high quality of services (Bicheno and Elliott, 1997).
The lean management approach aims to eliminate any waste by defining each step in the business process and revising the steps that create value (Slack et al., 2010). Waste elimination can be achieved by controlling the production or service overproduction, decreasing time, reducing movement and by improving the procedures.
Risk management is the procedure of identifying unfortunate events and either accept them or explore ways to prevent them in order to minimise the negative impact (Hubbard, 2009). It is well known that every business is daily exposed to many random risks (human, customer, environment, technology, organisational and product) which, according to Slack et al. (2010), can vary depending on the activities of each organisation.
The majority of these failures can be avoided but in case they are not, we always need to understand why the failure occurred. Berk (2009) points out five steps for the post-failure analysis activity:
- Defining the problem
- Unearthing potential failure
- Managing the failure analysis
- Evaluating potential failure causes
- Selecting the appropriate corrective action
Risks should be always assessed, measured and evaluated. The risk is evaluated by the combination of the probability to happen and the consequences expected to occur because of the event (Hopkin, 2010). According to Spedding and Rose (2008), the most common approach to measure the risk is to use a matrix table to combine the above factors. Further actions will be determined according to the final impact.
Corporate social responsibility
Corporate Social Responsibility (CSR) is about how organisations manage their business activities to produce an overall positive impact on society (Slack et al., 2010). Idowu et al. (2014) state that CSR involves a large range of stakeholders’ interests and it expands in both the internal and external business environments. Internally it covers many aspects such as health, safety, working conditions, business ethics, etc. For the external environment there are five different dimensions:
- the environmental dimension
- the social dimension
- the economic dimension
- the stakeholder dimension
- the voluntariness dimension
According to Dahlsrud (2008), these dimensions not only reflect on the organisation’s image, they reflect on their profits as well.
However, beyond the economic responsibilities, every organisation has ethical and societal responsibilities that mainly concern their employees, their customers, their suppliers, and the local community. Ethics is a crucial element of CSR and it may sometimes be treated as a possible risk for every organisation (Rowe, 2006).
Russo and Perrini (2009) believe that organisations build their social capital through CSR orientation and if the local community is not part of this or not taken into consideration, or even if organisations abuse their corporate power, the stakeholders can affect their social capital and the success of their strategy.
Capacity forecasting and planning
Customer demand for services and products changes rapidly. Slack et al. (2010), define forecasting and capacity planning as the procedure to estimate and ensure that the organisation is managing its resources in a way that satisfies customer demand in the right amount, at the right time, with the right quality.
Forecasting is the first step and a key element for managing planning with minimum decision risk. According to Shim and Siegel (1999), managers have a wide range of forecasting techniques, all allocated under the following two approaches:
- Qualitative approach - i.e. Experts opinions, Delphi technique, Scenario planning, Consumer surveys, etc.
- Quantitative approach - i.e. Time series analysis, Simple or Multiple regressions, Moving averages, etc.
The right technique is selected according to the product or service product life cycle (Shim and Siegel, 1999). Various forecasting problems and issues may occur due to minimum or old information, historic patterns that may not exist anymore, random variations etc. (Slack et al. 2010). Normally, managers will come across a forecast demand which will allow them to estimate the future demand and be able to react to it.
Capacity planning is the task that sets the operation’s effective capacity, so as to be able to respond to the demand and to any fluctuations and it could either be a long-term, a medium- term or a short-term planning. The capacity can be increased by either tactical or operational decisions such as extra manpower, space rental, overtime working etc. These decisions may affect the product or service cost, the organisation’s revenues, the quality of goods, the response speed to customers demand, etc. (Kerzen, 2009).
Management information systems (MIS)
An information system (IS) records, monitors, evaluates and analyses the day-to-day organisation’s transactions, aiming to provide efficient support to the management (Stair and Reynolds, 2003). According to Bulgacs (2013), the use of IS improves the quality of operations and management’s decisions, contributes to products and service enhancements, and reduces operational costs.
Data and information are collected and processed in order to become useful, while the final form of information is evaluated, filtered and distributed in different access levels, according to the strategic importance (Curtis and Cobham, 2008).
According to Collins (2008), organisations have different functional and information needs and therefore, they select the appropriate IS accordingly. The main information systems are:
- Information Technology Systems (ITS)
- Transaction Processing Systems (TPS)
- Management Information Systems (MIS)
- Executive Information Systems (EIS)