Production Operation Management
In the history of operational management, some of the key persons who have contributed to the philosophies and methods of operations management are; Smith, Babbage, Whitney, Gantt, Gilbreth, Taylor, Ford, Sorcensens. Although, you may have never heard of them Smith and Babbage developed early concentrations of labor specialization. They had the idea to have a person specialize in a small part of the overall craftsmanship. Whitney worked on standardized parts. With the idea of using the same part in as many products as possible you can inventory less and buy in higher quantities of the same part. For example, in a car a cup holder is a cup holder. Originally every car manufacturer designed a custom solution for each of their car models. Today, many manufacturers either use a standard design in most of their vehicles or use a drop in design that multiple manufacturers are using.
Gantt worked on the idea of scientific management with Gilbreth developing motion and time studies and Taylor developing process analysis. While Ford and Sorensen pioneered the idea of the assembly line. Ford’s assembly line would not have been possible or maybe even a thought without those who came before him. The assembly line changed products and has changed the world forever. With each worker or work station focusing on one specific small part of an assembly the skill level of each worker does not need to be as advanced. With a person completing the same task over and over again they can become more efficient and less likely to make a mistake.
Without the assembly line modern products such as the iPhone would most likely not be possible. The complexity of such a product is almost impossible for a person to master other then the designer. If only a few could master the entire assembly of a complex product, then very few units would be able to be produced. With the modern assembly line workers sit at a station with a conveyor belt and they install their one part to the overall complex product. The assembly line simply makes the complex simple and the time consuming efficient. It is important to note, our modern day life style and world were made possible by these men who one small step at a time made it possible for the most complex items to be produced by unskilled labor and at a lower materials cost.
How Do Services Differ from Goods?
Surprisingly, many do not understand the difference between a service and a good. Lets dive in.
First, services are not tangible and goods are. Goods are a physical item or at least a digital file such as software. An example, of service would be the post office delivering your mail. They might deliver a tangible item but the act of transporting the item is a service. At the same time, the act of creating software can be described as a service while the software itself is a good.
Second, services typically require some degree of interaction. For example, if you would like someone to create a website or software for you you will need to talk to them and describe what you want. While many products can be found complete, as is, in brick and mortar stores such as Walmart or an ecommerce stores such as Amazon. Someone, such as a car manufacturer can create a product without ever discussing it with you or any customer and then put that product on the market for you to buy assuming you like the product that was created. This is mostly how Apple Inc. founder Steve Jobs operated. He viewed his products as works of art. He made his art and you either liked it or you did not. Jobs had no placed for focus groups or reviews of his products. He simply made what he thought was a perfect piece of art and history shows most of his art was wildly successful.
Third, much like the end of our second point, services vary to the customer’s needs while goods are created to fit specific needs or a market. When a service is being preformed most likely that service will provide the purchaser exactly what they need or requested. While a good would have been created to fill a market in the assumption of a need to be filled.
There are more points that can be made distinguishing the difference between a service and a good. Some have suggested a service appeals to the five senses but this can also be said about many goods. For example, a candy apple is a good, but it appeals to my eyes it is attractiveness, the smell of all the sugar as I approach, taste as I bite into it, hearing as it makes the desired crunch sound, and feeling as I struggle to crack the candy coating. Most importantly, typically a service is an intangible while a good is a tangible item.
Areas that are Significant to Improving Labor Relations and Productivity
Senator Bernie Sanders would be proud to see the points talked about in this article on improving labor relations. Many of the things he talks about are indeed the cornerstones to improving labor productivity, relations and the quality of a laborer’s life. The main difference between how Senator Sanders views this subject and how I view it is how these items play out and the role of government in effecting change in these items.
The first, item to improve a labor’s life and productivity is, basic education. The more educated our work force is the more competent it is and therefore ideally the more capable it is. This is why the United States of America has free government provided schooling until 12th grade. By the time someone graduates high school they should have all the basic education they need to live a happy and productive life. This might not be the case at every school district but the basic education in the USA allows every child to learn how to balance a checkbook, read and write and hopefully communicate properly. Often, the issue is not the content but the person’s understanding of how to apply the knowledge they received. Indeed, if you know how to balance your checkbook but choose to ignore the lack of funds and spend beyond your means, well then, there is little an education could have done for you.
Once you are past basic education, there are those who wish to continue to improve themselves and seek a higher level of education and skill. This is where college, workplace training and employer supported college programs come into play. Workers who are working to better themselves typically are happier and more productive because they can always see a next step and a future. Workers who are not working on self improvement often times become boxed in and feel there is no where to go as they have no new marketable skills. Without a desire for constant growth employment becomes fruitless and routine.
Second, has been talked about in our country on and off over the years. It is usually talked about in social conversations and as a sales tool to market items and services to consumers. The diet of our labor force plays a large role in the health and improvement of the happiness and productivity of that labor force. The healthier someone is, the more likely they will be able to wake up and arrive to work on time, the easier their work duties will be physically and mentally, the less likely they are to be stressed and the more confident they will feel about their body. Diet is important, as the healthier someone feels the more likely they are to focus and enjoy what they are doing.
Third, the available labor force is able to make an impact in their company, market, world. This is a complicated issue. If there are too many workers on the market with the required skill sets the laborer’s will suffer as they become less important to the company and less competitive while applying for new positions. If there are too few then those who have the required skills may be over worked and become less productive due to fatigue. For example, the idea of everyone going to college is a job and society killer. If everyone has a college degree then those degrees no longer matter. If everyone has a college diploma, having a diploma becomes the standard level of entry. Ideally, our labor force needs to be 30% college educated, 30% skilled labor such as carpenters and welders and 40% unskilled labor those who work in retail, food service and so on. In modern times, we have been pushing everyone to go to college which is destroying our society. We have less craftsman and we have people flipping burgers with $100,000 in college debt for a degree they will never use. Self improvement and sharpening one’s skills does not necessarily mean a college degree.
The idea of labor relations and productivity are very complicated and not nearly as simple as persons such as Senator Sanders and Secretary Clinton would have you believe. Upward mobility within your current company is becoming almost impossible and generation Z and millennials are being forced to jump from company to company to increase their job title and salary. This is the most obvious issue business could correct if we wanted to improve the labor force in this country. Companies should always, look inside first. Higher everyone on the ground and then train and move them up. Offer serious retirement programs not unproductive basic 401Ks that have become the standard.
There are a few key things we can do to improve each and every worker’s success. The first is to value our employees, second require appropriate not bloated qualifications, third create systems for worker’s personal and professional growth. Lastly, we need to always recognize our labor force are real people not numbers. There is a human behind every job who has personal issues, bills to pay and things to accomplish. We can not leave the human aspect out of employment and how we interact with our labor force.
What are the three conceptual ways to competitive advantage proposed by the authors?
1 Differentiation
2 Experience differentiation
3 Low cost leadership
How do goods and services differ with regard to handling the quality decision?
Good and services differ in handling quality in that good are a physical item where quality is controlled by producing a proper product. While quality of a service is controlled by meeting the customer’s specific needs and through customer service.
Why Would an Organization Want to Internationalize Operations?
There are many reasons why an organization would want to internalize operations and many reasons why they would outsource. A few arguments for internalization are;
1 Expand customer demographic
2 Expand available labor force
3 Diversify company’s footprint to increase stability
4 Increase bottom line
5 Expand brand recognition
6 Expand market share
No matter, an organization’s reasoning for internalizing operations typically control increases, along with the cost and the responsibility now lies completely on the organization rather than a contract with another organization that specializes in such operations. It is wise to consider the benefits of internalization and outsourcing carefully.
How must an operations strategy integrate with marketing and accounting?
An operations strategy must integrate with marketing and accounting completely. You cannot have an international strategy without a marking plan or an accounting approach.