The importance of Operational Management.
When discuss the importance of operational management, it should concern on main two aspects. rest of how operations management contribute to the business success and second what would happen if operations managers failed to be effective in charring out any operations management activity.( Taylor, 2008)
The way that operations management contributes to the business success can be discussed by understanding the meaning of the operations management in broad terms.
Operations management can be given very broad definition according to many scholars. In this broad definition operations management address all areas which have any connection with the production of goods and services. In here operations management include activities such as engineering, marketing, purchasing, accounting and finance, personnel, product/service development. So importance of operations management to an organization can be discussed related to all those areas. (Womack, Jones, Roos, 2005)
Operations management refers to the administration of business practices to create the highest level of efficiency possible within an organization. Operations Management has been described as a business function, analogous to accounting, marketing and finance for operations management to be successful, it must add value during the transformation process, the term Value added, operations describes the net increase between the final value of the product and the value of all input. In addition to value added, operations must be efficient, efficiency means being able to perform activities well and at lowest possible cost. An important role of operations is to analyze all activities, increase competitiveness by improving value added and efficiency (Reid, 2010)
When discuss the marketing aspect of IKEA, it has developed its own way of selling furniture. It has achieved high level of growth through online sales through the multichannel investment. It has improved the in store shopping experience. IKEAIKEA’s supply chain has a global spread with growing sales and purchasing in all major regions of the world. Product development is the major functional area to be considered in IKEA because it highlights the importance of operations management. Product planning scheme is one of the main tasks of IKEA’s Operations Manager. This includes choosing the production product strategy, the production structure and the inventory strategy for finished goods.
Second, what would happen if operations managers failed to be effective in caring out any operations management activities?
If any operational manager fails to perform key functional activities, it may result in huge organizational problems.
In the context of IKEA, Some customers frustrated with overcrowding and long waiting times. This was occurred as a result of failure in effective capacity management. In response IKEA in the UK had to launch £150 m programme to ‘design out ‘the bottlenecks including changes such as express checkout tills, extra help staff, redesign of the car park, a new warehouse system, more children’s play areas. (Womack, Jones, Roos, 2005)