The Concept of Operations Management
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1. The concept of operations management in Wal-Mart. The role of operations management in the company.
One crucial aspect of any successful organization is the presence of an excellent operations management. Operations management is concerned with the organization’s entire operations that are directly related to delivering goods and services to customers.
Wal-Mart is a chain store that offers goods and services at a discount. The company operates globally and relates to customers by offering the reduced product prices and high quality of service. It tries to maintain reliable service by making adjustments according to the market situation. The key driver of this strategy is the constant change management (Wal-Mart Stores, 2011).
In spite of the company’s success, an attempt to integrate information technology in the management of foreign retails and procurement systems is not an easy task, because of the wide span of control that affects its management framework.
Operations in a key functional area contain finance, marketing, operations, and human resources management as main components of operations management. Wal-Mart has a systematic approach to conducting its operations.
Operations management focuses on design and management of the process, service, product, and various chains of supply. It involves development, acquisition and utilization of the available resources necessary for delivery of products and services required by consumers. Operations management also supports and develops the organization’s strategic goals. It is concerned with design and operation of the organizational systems for the purpose of production and service delivery. Thus, the concept of operations management can be viewed in the manufacturing industry as well as in the service sector.
Marketing is the critical aspect that is linked to operations management of Wal-Mart as it helps to meet the demands of the consumers. Market requirements are considered even before the presentation of goods and services. Much attention is paid to efficient and effective processes, because efficiency and productivity of work is determined by the efficient system of operations.
It is extremely important that operations management is well understood in its scope at Wal-Mart. As a result, the company is able to achieve its goals and objectives.
2. The role of an operations manager in the company.
An operations manager has several responsibilities that cut across the whole company. He is concerned with establishing the systems that create the organizations products and services. Typical responsibilities include service, inventory and quality control, plan layout, and site selection. However, the principal role of the operations manager in Wal-Mart is to resolve daily issues for customer service improving. The operations of the materials and consumers are highly different issues. In order to complete this task, team building, communication, and conflict resolution skills are highly appreciated.
The operations manager should be qualified and organized in order to identify and plan the organizational goals and lay down mechanisms or strategies of meeting those goals. The operations manager must come with a strategy on how to add value in various departments. He has close relationships with the people directly involved in adding value, such as the distributors and suppliers. The operations manager also keeps in touch with respective customers of the company. He is in charge of the team and directs it through dialogue initiation and cooperation among team members. The operations manager in Wal-Mart also exercises control in order to ensure the achievement of the plans for the operations subsystem. Costs control, quality, and schedules are at the core part of his functions.
In executing planning, organizing, and controlling functions, operations managers are clearly concerned with the way their actions affect human behavior. At the same time, they want to know how the behavior of the subordinates influences their actions. The necessity of working together with other people outside the organization is determined by its nature. That is why a solid reputation of the company as well as an effective work of the operations manager are extremely important aspects.
3. The competitive strategy of the company.
The company is faced with threats and weaknesses all the time. Consequently, impressive competition is the most notable fact that must be taken into account. It influences company’s products as well as its organizational structure and strategic plans. Thus, the Corporation develops competitive strategies in order to remain one of the leaders in the global market.
Good strategic choices together with effective ways of putting them into practice have played a vital role in the success of the company. Wal-Mart positions itself in strategic policymaking initiatives through collaboration with other stakeholders. However, the company manages its relationship with key stakeholders in a way that maximizes its tactical advantage. The competitive strategy of Wal-Mart is the expansion of its products through a wide network of stores together with the highest customer satisfaction (Wal-Mart Stores Inc., 2012).
Wal-Mart relies on product focus strategy in its operation. Product focus strategy or continuous production is the most suitable strategy employed by the leading retail outfits. It is capable of yielding improved productivity, which benefits the company by the use of its production economies of scale. As a result, the variable cost per unit of output is extremely low.
The strategy increases the competitive power of the company, as it guarantees the customer satisfaction. Consequently, the customers build trust in the company’s products. Planning and production control are easy to operate. Hence, there is no need for the company to employ high-qualified personnel to set these goals. Wal-Mart also invests less in hiring the production-planning personnel because of the easy production planning process. The result is the availability of goods and services throughout the chain’s stores. Finally, product focus strategy ensures the optimal utilization of the capital as it allows massive production of less differentiated products. Therefore, the efficient production capacity is attained.
Product focus strategy is essential in meeting the Wal-Mart’s mission and objectives, while location strategy is necessary for the Wal-Mart’s survival. Since the company has many branches in foreign countries, it is necessary to analyze the location concern of its headquarters. The location in downtown Bentonville, Arkansas is a favorable one, because the available airstrips make the mobility easy. However, there is a need to consider transport cost as a determining factor of the headquarters setting in order to ensure the competitiveness of the company. The location is a central factor among the chain stores all over the world as it plays a vital role in the improvement of the company’s operational efficiency.
Chain stores or distribution channels should be located near the potential customers. This will increase the sales volume and profit margin, as demand of goods and services becomes higher. As a final point, the security is crucial in location of the distribution channel, because the chain stores are vulnerable to all manner of security threats. Consequently, locating a distribution channel security measure is needed in line for deliberation (Wal-Mart Stores, 2011).
Strategic plan is a central issue of every extremely effective competitive strategy. It provides course for the internal organizational departments, such as accounting, finance, operations, purchasing, human resources, and information systems as well as for external partners. In such a way, it optimizes the efficiency of the entire company.
To conclude, processes of strategy adoption and location consideration are principal to the efficient operation of the company because of cost considerations and efficiency matters. Wal-Mart has the optimal process strategy and locations of its distribution channels. These strategies are effective, and they improve the performance of the company to the great extend. Nevertheless, the company should always keep focus on service along with lower price and high quality products.