Efficiency, Accuracy and Cost Effectiveness of Core Business Activities, Essay Example

The purpose of operations management is to ensure that the systems within the organization are working as effectively as possible. There are several operations management methods that are designed to eliminate waste, reduce production cost, increase profit margins, and improve the overall performance of the organization. Further, operations management has an impact on company reputation and customer satisfaction.

A recent IBM research paper (IBM Software, 2011) concludes that operations management is responsible for improving the performance, efficiency, and cost effectiveness of the operations within the organization. There are several methods that can be used to complete the above task, such as: employee and product/service lifecycle management, project and asset management, and customer lifecycle management.

The Office of Planning and Institutional Assessment (2009) features the benefits of implementing Lean principles in operations management, defined as a tool to maximize customer value and minimize waste. Lean is an effective method to eliminate common problems within organization, such as overproduction, excess inventory, high cost of transportation, storage, and defects. While Lean was initially created for manufacturing firms, it is also applicable for service firms. Optimizing production or service availability to match market demand while reducing the cost of production and speeding up the process can result in higher customer value, as clients would be more satisfied with the service or product. Capacity planning is an important aspect of successful Lean implementation.

As an example of successful operations management innovation, Dell has implemented Lean principles. The company increased its flexibility, reduced delivery time, and eliminated error through implementing a multiple-step quality control system. The introduction of just-in-time operations, quality and inventory management systems have proven to be profitable for the company.

References

IBM Software. (2011) Improving the efficiency, accuracy and cost effectiveness of core business activities. Thought Leadership White Paper. Retrieved from https://www-07.ibm.com/sg/manufacturing/pdf/manufacturing/ECM.pdf

Office of Planning and Institutional Assessment (2009) Increasing efficiency and effectiveness through Lean. Innovation Insight Series Number 23. Retrieved from http://www.psu.edu/president/pia/innovation/insights023.pdf