Operation and Production management
Operations and product management are essential aspects of any business enterprise, as they are the key drivers in any business. Operation refers to all the production activities that a given enterprise is involved in during the production process. This may include; acquisition of raw materials and all other steps that are implemented to the final stage of obtaining the finished product. On the other hand, production management refers to the series of action steps taken to ensure that the production process is viable and profitable for the institution. This is attained through various managerial measures such as task delegation, project management, and supervision, among other vital approaches. Operation and production management are essential business aspects that are instrumental in the realization of an organization’s goals and objectives.
Question 1
- Critically discuss how the ISO9000 approach to quality control can transform profitability for a multinational company.
Answer
The ISO 9000 family of quality management systems (QMS) is a set of standards that helps organizations ensure they meet customers and other stakeholder needs within statutory and regulatory requirements related to a product or service (Buttle, 1997). As the production sectors become more advanced and competitive, the need to protect the customers’ and stakeholders’ interests has been realized. For consumers, quality, as well as user-friendly products, have been identified to be among the critical agenda for the ISO 9000 standards. For the stakeholders, on the other hand, the ISO 9000 standards have been identified to protect stakeholders by ensuring that there are the development and implementation of better management systems that provide the stakeholders’ interests are not only protected but also realized.
First published in the year 1987, the ISO 9000 was aimed at ensuring that large organizations, as well as procurement agencies that supplied the government and other organizations with various products, complied with a variety of quality assurance requirements for each contract award. Given that the ISO 9000 was more comprehensive, industries adopted the act, which ensured that the contractors were able to comply with the set-out quality control guidelines, as stated in the ISO 9000. The law is now used as the basis of contractual agreements between service consumers and suppliers. Contractors and suppliers were able to save on costs throughout the supply chain by adopting the act as the primary quality assurance requirement. Globally, the increase in the number of countries that are ISO 9000 certified has increased, thereby facilitating open and transparent business transactions on the global platform.
As identified earlier, the ISO 9000 management system was developed to ensure that there is the development of a managerial system that would ensure that quality is maintained between the suppliers and contractors. As more and more nations globally continue to attain the ISO 9000 certification, quality control for any given institution is becoming more simplified. For multinational companies, ISO 9000 certification in various countries is expected to increase profitability in a variety of ways. In states that were not certified before, these international companies have often been forced to adopt alternative quality control measures that not only add to the production cost but also do not guarantee the degree of quality as expected from the ISO 9000s. However, with other nations such as; China, Italy, Germany, Japan, France Australia among other countries continue to attain this certification, multinational companies are expected to increase their profitability given that they can now adopt a single reliable quality assurance approach that will enable them to save on the costs of hiring multiple quality assurance teams.
The ISO 9000 approach to quality control can also transform multinational companies’ profitability by ensuring that the supplies provide the contractors with quality goods and raw materials following the ISO 9000 management system standards. In return, this will enable the industries to offer their consumers quality finished products as the raw materials used for the production process were able to meet the required quality. Companies with high-quality products have been identified to have a more significant market dominance, which can also be attributed to higher levels of customer trust and market controls. This has been evidenced by companies such as Apple, Microsoft, among other service providers in the tech world. As a result, adherence to the ISO 9000 management system requirements by international companies will improve product and production quality, which will, in turn, translate into more purchases and thus transform profitability for these multinational companies.
ISO 9000 certification is therefore expected to become a necessity for other countries that intend to participate in multinational business activities. This is because most companies that are interested in the protection of their consumer rights and stakeholder interests will only be willing to get involved in business practices with other certified nations. As a result, more companies are expected to ensure that they get certified to increase their likelihood of getting contracts with other international companies. The overall effect of this is likely to result in more companies complying with the ISO 9000 requirements, which are expected to increase the overall quality of production globally, resulting in company profitability based on the quality of goods and services provided by a given company.
Question 2
- Evaluate how the simultaneous engineering approach has changed the new product development process.
Answer
The Simultaneous engineering method is part of the time-based management approach. It is a project management approach that helps firms develop and launch new products more quickly (Eversheim, Bochtler, Gräβler & Kölscheid, 1997). The ability of a given organization to develop new and improved products is essential to maintain the competitive advantage of the given institution in the market. However, there are a variety of factors that need to be taken into consideration before putting a new product line in the market for consumers. For instance, consumer responsiveness must be accurately assessed to ensure that the product can thrive well under the prevailing market conditions. As a result, user-friendly products that maintain consumer trust must be availed to ensure that the company manages to venture into the new desired market. Another factor that must be considered is the production cost associated with the desired new product line. By taking into account these aspects of production, companies can attain profitability by taking into account the simultaneous engineering approach.
The simultaneous engineering process has had a profound impact on new product development processes. This is because, in an attempt to come up with a new line of products, a new product development process is required to be developed. Some of the most evident effects of the simultaneous engineering approach on the new product development processes include;
- The introduction of new management methods to cater to modern production methods. The introduction of a new line of products by a given company in the market within a short time duration requires a certain level of managerial approaches. As a result, project managers and other essential project teams have to be formed for the operation and production management process. The project management body is required to assess the feasibility of the new production aspect concerning the simultaneous engineering process.
- Adjustments in the mechanical production aspects of the company to meet the new simultaneous engineering production methods. A new line of products requires different production methods to incorporate the desired changes in the new commodity. Concurrent engineering introduces changes in the production line and also requires skilled labor or training for employees to ensure that they are in a position to meet the new production methods training that provides the new commodity with the specified requirements.
- Simultaneous engineering results in an increase in production and operation costs. A new line of products has been identified to come with an original associated production cost. As a result, companies are required to conduct a feasibility study that ensures that there is a proper assessment of the profitability of the new simultaneous engineering process to be implemented.
- The introduction of new associated risks is another effect that comes along with contemporary engineering production approaches. This is because the market surveys conducted are not an accurate depiction of the prevailing market conditions. There is a vast difference between marketing surveys and actual commodity purchases. Although the marketing surveys give an arbitrary representation of the current market conditions, the actual consumer response can only be determined once the product is made available to consumers in the market.
Despite the risks that have been associated with the simultaneous engineering approach in operation and production management, there is still the need for companies to come up with new and better-improved products while maintaining profitability and reducing the associated risk. Concerning this, the ISO 9000 management system could help companies minimize the scale of risk, which is likely to translate into a higher profit margin. As a result, companies that endeavor to undertake new production measures should ensure that the end products meet the desired quality standards. This could get facilitated through the ISO 9000 management system, which provides the observation and maintenance of quality standards between the contractors and suppliers. Simultaneous engineering is an essential aspect of production that plays a massive role in maintaining a company’s competitiveness in the market and also helps to keep the customer base satisfied. As a result, company managers and other relevant stakeholders are charged with the primary task of ensuring that they can come up with simultaneous engineering practices that are sustainable for their companies, thereby promoting sustainable development approaches.
References
Buttle, F. (1997). ISO 9000: marketing motivations and benefits. International journal of quality & reliability management.
Eversheim, W., Bochtler, W., Gräβler, R., & Kölscheid, W. (1997). The simultaneous engineering approach to an integrated design and process planning. European Journal of Operational Research, 100(2), 327-337.