Business Functions and Processes - Case Study Example

Business functions and processes Table of Contents Introduction to business chosen businessfunction 3 Value addition or improvement through operation management 4 Operation management tools used for improving business 5 Total Quality management 5 Six sigma 7 Kaizen 9 Just-in-time 10 Poka-Yoke 11 Business process reengineering (BPR) 12 Conclusion 12 Reference list 14 Introduction to business chosen business function Operation management concentrates on management of internal process, which aims at producing and distributing services and products (Horváthová and Davidová, 2011). Companies such as small and medium sized enterprises (SME) do not have any well defined operation management system. The activities include development and distribution of new products and product creation. Moreover, it is significant to mention that operation management is useful to every firm across the world. Hence, it can be stated that operation management focuses on the supervision of the sources that are required for the manufacturing of products and services by the firms. These methods are employed in order to achieve the strategic goals of firms. Here, the sources are technology, materials, people, and information (Horváthová and Davidová, 2011; Slack, Chambers and Johnston, 2007). The application of operation management in the manufacturing industry is known as manufacturing operation management (MOM) (Horváthová and Davidová, 2011). The manufacturers aim at performing their basic function of transforming resources to finished products. In order to do so, the manufactures have to improve their efficiency at a regular basis in the contemporary business environment. The manufacturers concentrate on the production processes so as to improve the quality of the products and reduce the cost of labour and material. The reduction of the expenses adds value to the company directly (Slack, Chambers and Johnston, 2007; Horváthová and Davidová, 2011). The main responsibilities of the operation managers in the manufacturing companies are product planning and control along with quality control (New Charter University, 2015; Horváthová and Davidová, 2011). The relevance of operation management in the manufacturing companies lies in the fact that it aims at producing tangible, physical items that are stored as inventories and later delivered to the customer (Barnes, 2008; Slack and Lewis, 2011). The operation management plays a pivotal role in the manufacturing companies as it enhances productivity that adds value to the company in terms of finance. It also assists the operation managers to meet the demand and needs of the customers (Slack and Lewis, 2011). Value addition or improvement through operation management Operation management aims at improving and re-engineering the processes that are employed in the business through value addition. It is done by examining the processes that are used in all business areas in the organisation. It also helps the business to identify the present business situation along with the status of the individual department, which are significant in the business. The following processes are used for improving the operation and add value to the organisation: 1) Cost: If improvements are made in the production processes, the organisation can save enough cash and use them for satisfying the end-consumers and strengthening competitive position (Russel and Taylor, 2009). 2) Time: If the processes are streamlined efficiently, which helps in producing or manufacturing products or services for the end-consumers, the time of delivery of the same is maintained. In order to do so, efficient programming or planning along with designing of the products is significant. Timely delivery of products or services is observed to add value to the organisational goal (Chowdary and Damian, 2011; Russel and Taylor, 2009). 3) Quality: Quality of products and services plays an important role to any organisation. Hence, quality control and management is highly needed by the firms, so as to improve and enhance the business operations, which in turn add value (Hill, 2005). 4) Service: If the service quality of an organisation increases over the years, it helps in adding value to the organisation; hence it is a significant determinant for considering value addition to a product (Chowdary and Damian, 2011; Russel and Taylor, 2009). Operation management tools used for improving business The manufacturing companies have concentrated on achieving higher growth through expansion of markets worldwide. For fulfilling the goal, they need to improve the manufacturing processes at a continuous basis while enhancing operational efficiency and capabilities. The tools and techniques of operation management that are used for improving any particular business are discussed henceforth: Total Quality management Total Quality management (TQM) is employed by the managers and employees for improving the quality of services and products. It generally aims at enhancing the efficiency of the management and reduces the loss that occurs due to wasteful practices. It integrates all the organisational functions such as finance, marketing, design, production, engineering, customer’s service for recuperating customer services and meets their demand. However, through this integration the organisation aims at meeting its objective in the long run. The techniques are frequently adopted by firms in order to identify its strengths and weakness in several areas (Russel and Taylor, 2009). According to Garvin (1988), TQM has evolved over 4 eras of development. The author had pointed towards the fact that the evolutionary process had moved from initial stage (i.e. sorting, inspecting and correcting standards) to an era of standard that are defined for examining the quality of a product or service. The quality manuals are developed in order to evaluate whether the production process had been successful. Moreover, Sink (1986) had identified the main factors that are responsible for the development of TQM: dynamic and complex resources and technology; customer expectation and orientation; feasible solutions for critical issues and opportunities that exists in the present scenario ((Morrill, 2007; Mullins, 2010; Nohria and Khurana, 2010). Garvin (1986) had stated that TQM can be identified to have brought fundamental shift to the traditional thinking process. In this process, the preplanning, systematic analysis and blueprint of operations are very important. However, the focus is observed to have shifted from a process driven method that is control by the external elements (Garvin, 1986). This is accomplished with the help of procedures that comply with the habitual improvement. Here, the control is embedded and driven through culture of the organisation. Sink (1986) had described five checkpoints from where TQM is evolved: 1) Management and selection of upstream systems. 2) Incoming quality assurance 3) Process quality management and assurance. 4) Outgoing quality assurance 5) Identify the proactive assurance, which are associated with fulfilling or exceeding needs and specification of customer. Henceforth, he stated that if the organisational system assures that the above mentioned checkpoints are considered then it is expected that the quality of the products or services are maintained. Nessa L’Abbe (1991) had identified that methodology, integrity and humanity are the main features for the evolution of TQM. Here, integrity relates to the management philosophy, which aims at focusing on the quality of products or services; this is also associated with vertical and horizontal integrity. The methodology takes into account applications of scientific methods for data processing and lastly, humanity describes that people are generally creative participants, who work in teams and quality control circles (Nessa L’Abbe, 1991). TQM in manufacturing companies The Japanese manufacturing firms succeeded in implementing TQM technique to their business, as the tool is used by the employees consistently and efficiently at all levels of management. Presently, the American manufacturing firms are also adopting the techniques as they have exported it from Japan during 1950s. According to the survey conducted by Ansari and Modarress (1989) on 285 US companies revealed that, majority of them have adopted TQM tool and they are in the preliminary stage of quality control (Abdullah, 2000). This technique is employed extensively in the manufacturing industry; however, there are many companies who are not using the techniques for improving the quality of products and services (Abdullah, 2000). Six sigma The concept of six sigma was proposed and developed by Bill Smith, who worked with Motorola as an engineer. The term six sigma is employed for defining statistical quantification that measures the defect rate in an existing system. The concept is fortified by statistical methods, which presents a structured and systematic approach. This process is used for improving the work process and reduces the defect rate of 3.4 defects from about millions (Davig, et al., 2003). The implementation of the method is disruptive in nature at first as it requires a senior management. It also includes crucial role of management in defining the project and its resource allocation. The process is implemented only after extensive training of the talented one present in the organisation. These employees have to devote 100% for deploying six sigma activities (Vokurka, 2003; Davig, et al., 2003). The activities of the projects are defined by critical paths, which have the ability to affect the foundation of organisation. The training is provided to the individuals in the organisation for implementing six sigma successfully. The training includes process mapping, hypothesis testing, designed experiments, process modelling and metrics. The green belt training is extensive that includes statistical analysis of the data that is obtained in one week. Along with that, the training also takes into account SPC and analysis of measurement systems. Moreover, the black belt training is given over one month. This takes into account game theory, ANOVA and multivariate regression (Vokurka, 2003; Davig, et al., 2003). Six sigma in Manufacturing Industry The workers in the manufacturing companies are trained in such a manner that their abilities can be compared with that of internal SWAT teams. They have the capability to solve specific problems by dividing the work and achieve the results that are desired at that situation. The methodologies that are applied in solving each problem are taken a set of standard methodologies; henceforth they are also tailored for specific projects. The methodologies do not involve any high quality widgets rather it focuses on the processes of the manufacturing company, which are robust in nature and are not subject to errors. The methods are also applicable to the areas outside the manufacturing firms. The concept is employed by Motorola and General Electric. Few factors like management commitment and open communication plays a pivotal role in the effective six sigma process (Bai and Lee, 2003). It attempts at bringing unbroken improvement in work flow process. It provides organisational management by concentrating on the financial returns that are obtained from a disciplined manner. Kaizen Kaizen was proposed by Japanese for combating against inferior quality of goods at the end of Second World War. The meaning of Kai is change and zen means good. Hence, combining it stands for continuous improvement (Galloway, Rowbotham, Azhashemi, 2005). The way of characterising Kaizen is to define defined in term of process. The management style applied in the western culture is result oriented; however, Kaizen is process oriented and it also focuses on the small continuous improvements. The main aim of Kaizen is to eliminate or reduce waste from a process i.e. MUDA in Japanese (Galloway, Rowbotham, Azhashemi, 2005). The basic examples of MUDA are overproduction tasks or motions, scrap and breakdown of processes. There are few Kaizen techniques that help in dealing with Takt time; apart from that single minute exchange of dies (SMED) is also considered. Takt time is defined as the time taken by the worker for performing his/her job that is measured in one unit of goods. Moreover, SMED is referred as tear down of the tools that are configured. The tear down is performed in order to set another configuration in a separate part on same machine (Galloway, Rowbotham, Azhashemi, 2005). Kaizen in manufacturing company Kaizen helped in eliminating the problems experienced by car manufacturer, Toyota on the production line. The method used clamping mechanisms on the tool head instead of application of bolt. This assisted in reducing the time for re-configuring the tools to smaller time interval. Other contributions of the method include zero quality control and just in time. The process is developed by joint effort with Mitsubishi and Toyota (Galloway, Rowbotham, Azhashemi, 2005). Just-in-time The concept was first established in Japan and this method became famous with Toyota. JIT is a system, which starts manufacturing once the customers have ordered effectively; hence there is zero wastage and inventories. According to JIT system, the materials are purchased in the first place and later it is produced when the customer orders are received. The concept can be differentiated from the conventional production systems with the help of pull vs push systems of production (Galloway, Rowbotham, Azhashemi, 2005). The push system pushes the materials to next stage of production and it does not include resources and time that are needed in the next level of production. However, it is observed that the conventional manufacturing firms prefer to adopt push system, where inventory and work-in-progress are considered important. In the pull system, materials are pulled to the next level of manufacturing after receiving signal from the earlier stage and henceforth proceed towards the next stage of production. Hence, it reduces the inventory as there is not work-in-progress (Galloway, Rowbotham, Azhashemi, 2005). JIT in manufacturing companies JIT management can be applied in manufacturing companies. Apart from manufacturing, the tool is also applied in service industry. If the JIT is implemented successfully by the manufacturing firms, it experiences contingency against the economic condition. Researchers had suggested that a firm can achieve competitive advantage by differentiating themselves in terms of service, quality and cost (Davig, et al., 2003). This helps in distinguishing from its competitors and sets of products that are produced by the same. JIT permits the companies for filtering the wastes in any production process. It also helps in improving the quality of the products that aims at satisfying the customer demands in an efficient manner. Nevertheless, there are three manufacturing goals for the JIT system. The goals are homogeneous or universal in nature i.e. the processes can be adopted or applied to a diversified organisation (Kumar, 2010; Padukone and Subba, 1993; Schonberger and Ebrahimpour, 1984). The manufacturing environments can be altered for making definite plans and controlling systems in a much simplified manner. As for example, the products in the manufacturing company are designed for gaining similarity in the process. This process is combined with the production line, which thus produce negligible set-ups. Hence, the lead times are shortened and in turn make-to-stock products are converted to make-to-order. The just-in-time approach is not regarded as the control technique; however, it allows a way for improving manufacturing environment. The JIT control systems become effective only when the JIT environments are favourable (Kumar, 2010; Padukone and Subba, 1993; Schonberger and Ebrahimpour, 1984). Poka-Yoke Poke-Yoke is defined as a technique, which is generally employed for quality assurance; it was first developed by the Japanese manufacturing engineer named Shigeo Shingo. The main aim of the method is to eradicate the defects that exist in a product; it prevents or corrects the mistakes that are visible at the early stage of manufacturing. The technique is generally used by the manufacturing firms (Shigeo, 2005). The devices related to Poke-Yoke have two categories such as detection and prevention. A device for prevention ensures that there is no mistake in the process (Shigeo, 2005). It removes the need for correcting any mistake and hence, there is no mistake at the first stage. However, the detection device aims at signalling users when there are mistakes in the process. It enables the users to rectify the mistake and correct it as soon as possible. It identifies the problem but cannot enforce any correction (Shigeo, 2005). Business process reengineering (BPR) BPR takes into account processes that are associated with discovery of specific ways in which an organization is operating in the business environment. It enables a company for redesigning the activities that has the goal of eliminating any wasted or redundant efforts. The method makes effort to enhance the efficiency of the process (Davig, et al., 2003). Hence, it provides the companies for implementing changes in the process and it also serves as an efficient foundation, which acts as the competitive advantage. It can be obtained by devising new strategies for scheduling tasks, organising people and remodelling IT system. This is the business process that provides guidelines for achieving the organisational objectives (Davig, et al., 2003). Conclusion The operation management tool and techniques have gained prominence in four few decades due to its immense success in all the areas. The techniques have enabled the organisations to meet the demand of the customers by providing high quality products or services. Apart from that, the techniques have also ensured that the process of production does not have any wastage. Hence, it can be stated that the tools have helped the firms to enhance their efficiency and is regarded as the best tool in the organisation. The implementation of the tools is dependent on the organisational objectives that are performed within the organisations. It can be concluded that the techniques of operation management have successfully improved the business functioning by providing innovative ideas for increasing its overall efficiency. Reference list Abdullah, M., 2000. Total quality management practices in manufacturing companies in Malaysia: An exploratory analysis. Total Quality Management, 11(8), pp. 1041-1051. Ansari, A. and Modarress, B., 1989. Quality Control Techniques in US Firms: A Survey. 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