Identify how changes in the external environment may affect the OM strategy for a company
The two main factors affecting operations management are changes in external and internal environments. External changes are factors beyond management’s control which affect operations by causing loss in profits, high employee turnover rates and restricted access to markets. Storms and terrorist attacks are examples of these external factors. In reference to this, operations managers are required to develop strategies such as providing psychological support to the people affected and obtaining insurance policies so that they can avert major losses in both human resource and property. Decrease in the quality of education, as has been experienced in the recent past, is another external factor to consider in operations management since it affects quality of employees being hired. Management needs to prioritize training to compensate the inadequacies in education systems. Trade legislations and changes in tariffs and quotas affect exports and imports and should be provided for in the operations management strategic plan. For organizations depending on export market, there should be a provision for the local market as a substitute. Increase in health insurance affects operations management since it increases operation costs hence cost cutting measures need to be put in place to counter this. The Internet is another important factor since it is no longer possible to carry out business with technological advancements without internet connection. As part of the organization’s cost head, it must be managed appropriately since it affects operations directly.
Identify how the changes in the internal environment affect the OM strategy for a company
Changes in internal environment affect operations management strategies and unlike external factors, internal factors can be manipulated to improve efficiency in the organization. Increased use of local area networks increases effectiveness in internal communication and saves the time required to convene meetings hence reducing the turnaround time of service delivery. Wide area networks, on the other hand, increase effectiveness in communication with clients and suppliers and this, in return, increases competitive advantage. Increased emphasis on service is another internal factor that affects operations management in the sense that it aims at ensuring service delivery and will not be compromised from the moment the customer steps into the organization to the time they leave. Increased role of women in the work place is also a factor that greatly affects operation management strategies. Women are believed to be more dedicated and passionate about their work and this means they are more productive. This is therefore a factor that operations managers should consider when planning for the human resource. Finally, it is the increasing rate of change in both internal and external factors. This affects the operation management strategies since they have to be dynamic and flexible. These are not the days when organizations were managed using a set of rules developed at start up. Changes have become very dynamic and this calls for the management to be up to date with technology and the industry’s trends.
Operations managers are called upon to support the organization’s strategy. OM does this with some combination of one of three strategies.
The three main strategies used by operations managers are cost management, time management and quality management. These elements are the most important in an organization since they affect all the processes from procurement, production and distribution. Cost management ensures that production is done at a sensible cost in relation to returns such that the organization is able to make profits at the end of the day. Quality management on the hand protects customers’ interests by making sure they get value for their money, and proper time management prevents delays in delivery of goods and services.