Essay, Pages 6 (1329 words)
Global businesses are influenced by effective operations strategies involving operations management. These strategies and management effect on the progression of being successful. Operations refer to the business processes that involve transformation or, more generally, “production”. It is a crucial key business function and is essential to business success. New product and design is an operation strategy involving influences such as technology, quality expectation and government policies. Another operation strategy is performance objectives outlining influences such as globalisation, cost-based competition and quality expectation.
Inventory management is another operation strategy associated influences such as globalisation, technology and quality expectation. New product and design is one of the operation strategies operated by global businesses. It involves the process of creation, design and development of new products to achieve customer satisfaction. To achieve this purpose, businesses need to design products that are appealing and also have great functionality because of advanced technology. Technology is an influence within the new product and design strategy.
There is the potential for technology to be applied to improve efficiency and quality, such as using machines to make manufacturing more accurate.
Therefore businesses achieve the aspect of quality expectations. It is about reliability, durability, functionality and price that will satisfy the desires of its customers. There would be a certain level of quality for the price consumers would pay. If a business sets a price to a certain level, it would attain price advantage because it creates competition amongst its competitors in the market.
This is known as cost-based competition.
The product would need to retain all the quality expectations and design along with a certain price consumers would pay. If a price is too high, the business would lose potential customers and therefore lose profit. As a result, new product and design is one of the operation strategies operated by global businesses. Apple is an American multinational corporation that designs, develops, and sells consumer products varying from electronics, computer software, and personal computers.
In the new product and design strategy, Apple has improved efficiency of many products such as using less harmful raw materials; improve durability and less energy assumption. Some electronics are now solely based on touch screens to create enhanced functionality because of the advances of technology that has progressed over the past century. The 5th Generation iPhone is an example of an Apple product. It has become more durable in terms of having impact on surfaces compared to the previous generations.
The design looks appealing and the reliability and functionality have appreciated consumers fulfilling the desires of customer satisfaction. This is seen as a success because a majority of phone users now own an iPhone. The success can also be seen through the market share Apple has gained over the year due to their new releases of their electronic products. Supply chain management is another operation strategy carried out by global businesses. It involves integrating and managing the flow of supplies throughout the inputs, transformation processes and outputs in order to best meet the needs for customers.
Businesses execute this strategy because it gives the advantage of a business to become more efficient, productive and profitable. Globalisation is an influence under supply chain management. It gives the opportunity for an Australian business to expand overseas such as use of third-world employees. This is efficient for businesses to gain more profit and sell their products at a high price compared to the wages third-world employees receive. This would affect the quality of a product because of the raw materials used to create the product may not retain its durability.
Therefore quality expectation is another influence within the supply chain management. The inputs such as raw materials must be used to produce a product capable to achieve customer satisfaction regardless of the quality the business had planned to use. A business must consider the value the final product holds from inputs to outputs. Distribution in the output sector needs to be allocated to where retailers have customer advantage. If this process is not approached appropriately, a business would not be competitive against the market. Hence cost-based competition is another influence affecting supply chain management.
As a result, supply chain management is one of the operation strategies operated by global businesses. Woolworths is a global supermarket/grocery business widely operated in Australia; it is also served in New Zealand and India. It is a superior example for its supply and chain management strategy. Woolworths strongly advertise their products on many media formats such as television, radio and newspapers. In their advertisement they state that all products are fresh gaining customer advantage; hence their motto “The Fresh Food People”.
That is, their inputs operate only on fresh products to satisfy customer satisfaction because of the quality expectations the grocery store present. During the distribution process, delivery is done through the trucks owned by Woolworths. It delivers finished products manufactured from various businesses to Woolworths supermarkets. The global supermarket does not only provide goods but it also provides services such as online customer services available on the official website. Woolworths present this strategy effectively because it wants to remain competitive in the market.
The business is competing against the commonly known supermarket “Coles”. Cost-based competition impacts on the business significantly because consumers have the aspiration to spend less. Inventory or stock refers to the amount of raw materials, work-in-progress and finished goods that a business has on hand at any particular point in time. Inventory management is the dealing and controlling amount of raw materials throughout the production to be made into finished products. It is one of the operation strategies global businesses use to achieve business goals.
This particular strategy is carried out overseas for many businesses. Third-world employees are those who apply raw materials into finished goods. Therefore globalisation is an influence towards inventory management because of the cheap labour from the employees overseas. They must be familiar with the technology available to produce specific products. If there is a lack of knowledge from the employees, the business would lose profit. Accordingly, technology is another influence affecting inventory management.
The manager must rely on the technology and assess its application to the business. Technology has certain functions to make goods. If products are made non-according to the design and development, there would be a demand of refund from customers because of low quality expectations. That is, the quality of the product is poor due to poor manufacturing methods resulting to the matter of consequences. Therefore quality expectation is another inventory management. As a result, inventory management is one of the operation strategies operated by global businesses.
IKEA is an international business that sells furniture such as beds, chairs, desks, appliances and home accessories. The business has became successful because of the operation strategies the business have approached carefully analysing different aspects of the operations management. IKEA products are made overseas because of the cheap labour for third-world employees resulting to a profit increase for the business. However, IKEA relies on machinery to manufacturer parts to a particular product. Employment rate has decreased because of the increase of machinery.
On the other hand, this has helped the business improve its efficiency being able to manage more sectors of the business while the production process is completed overseas. The inventory is stored in a warehouse before distribution to IKEA stores. Therefore customers cannot receive their goods once purchased because of shipment to the country and transportation to the specific retailer. This business is successful because of the amount of products IKEA sell in a year and the customer feedbacks they receive are positive.
Effective operation strategies impacted by operations management have influenced global businesses. These operation strategies included new product and design, supply chain management and inventory management. They have affected many global businesses significantly because of the quality expectations businesses valued for their goods and services and therefore became a big success in the global market today. This has created competition against competitors associated in the same industry sector.