Operational and strategic issues facing Terror TubesOperations management is concerned with the careful management of the processes of production and distribution of products and services. These are processes that change inputs for example raw materials, energy and labour into outputs in form of goods and services. Some of the activities related to operations management include inventory control, management of purchases, storage, quality control, logistics and evaluations. Operational management deals with substantial analysis and measurement of internal processes focussing on effectiveness and efficiency of the processes. It ensures that business operations are effective in terms of meeting all customers requirements and efficient in terms of using few resources as possible (Beer 1984).
The main purpose of operational management is to improve the content of value-added activities in the given processes whereby the added-value activities are supposed to be linked with market opportunity which is meant for satisfying enterprise performance. Each organization has its own nature of operational management depending on the nature of products and services. Terror Tubes is facing some operational and strategic issues which include marketing issues, limited capacity, inadequate facilities, and financial problems. Transformational processes include the activities that are involved in converting inputs such as labour, land, entrepreneur and capital into tangible goods and services.
The transformational processes include changes in the physical characteristics, location, ownership, storage or accommodation and purpose or form of materials, information or customers (Dess 1990). The input value is mostly measured in financial terms whereby organizations purpose is to make profit. Profit is made when the cost of production is less than the revenue generated by sales. Other indicators are used in case of non profit making organizations to measure the value added.
Value adding is the perception of the customer to the contribution made by the process to the product or service. The diagram below explains the transformational process. The input resources used by Terror Tubes are qualified workers, one high tech equipment, single facilities, materials, services, ideas, energy and land among others. These inputs are then converted into outputs in terms of goods, that is, custom and standard systems, and services. The transformation used by Terror Tubes currently can be put into various categories.
First is manufacturing which is the creation of physical products such as custom and standardized systems (Dennis 1993). Terror Tubes company uses batch production system which is a manufacturing technique that involves creation of components at a workstation then moving them to the next processing step in production. This method requires that a group of items go through the production process together each stage at a time. Terror Tubes uses batch production whereby the only equipment and the same workforce is used for the production of custom and standardized systems.
The first step is setting up the production line. One task is completed by each worker and passes it to the next worker in the production line. These workers are known as flexible workforce whereby they switch from one production line to the next. Depending on the customer needs, one line runs for a specific period of time and then change of the product is done. The quality of the products here depends on the design and the skills of the craftsmen (Doyle 1994) whereby the only equipment they have in nature is designed for production of custom systems and also the craftsmen are skilled for the same.
This indicates that, the quality of standardized systems is not satisfying to the customers hence the low sales.