Apeejay Institute of Management &

Engineering Technical Campus

Assignment: - I
TOPIC: - Role of Operations Management in
corporate profitability and competitiveness
Submitted by: - Submitted to: -
Deepak Dhiman Dr. Anu Sahi
MBA 2A ASSISTANT PROFESSOR
221108 SCHOOL OF MANAGEMENT

[2022-2024]
 Operations Management

Introduction
Operations management is a business area that implements practices
ensuring the conversion of inputs into goods and services with
maximum efficiency. The goal is to increase an organization’s income
by improving its operations and maximizing the use of existing
resources. It also includes the provision and delivery of excellent

customer service.

Meaning
Operation management means the administration of business activities for
attaining higher efficiency. It is a process of planning, organizing, and
supervising the operations of the business for better productivity. Operation
management aims at reducing the cost to business by avoiding any wastage
of resources.
How operation managers can increase
the profitability in your business?

1.    They improve organizational design

An operations manager integrates the vision of the CEO.
Organizational design is about understanding where a company is
going and who needs to be on the team to get them there and
what those roles entail. By designing and documenting the
business functions such as sales processes, IT management,
project management, to name a few, the more streamlined the
company.
2.    Through operational strategy
An operations manager delivers on product or service to the
customer, whether organizing a specific project or managing the
entire operations department. Operations strategy is the how-to
on any given product or service, resulting in excellent customer
service delivery.

3.    By having project management skills

Any project must be delivered on time and under budget, and
having strong organizational skills is part of being an effective
operations manager. There are many steps needed to be taken
and many moving parts to coordinate in a project, and having a
skilled operations manager on your team will help with a smooth
delivery.

4.    Monitoring key performance indicators

Operations managers need to measure meaningful KPIs to
measure efficiencies, productivity, metrics related to the sales
cycle and whatever is essential. Knowing which KPIs are
important to measure in your business and having a strategy to
keep them at the maximized efficiency level will help grow and
advance your business.
5.    Having a solid financial acumen
An operations manager must understand the financial aspect of
running a business. This includes monitoring the financial data of
a company, including budgets. The projects taken on by a
business need to be profitable, and managing that profitability is
essential.

The bottom line is that a good operations manager and Director

of Operations is a valuable asset to the business who manages
the back office activity efficiently and effectively. They reduce
waste by tightening up processes and procedures and overseeing
workflows effectively. A must-have member of your team that will
increase the profitability of your business and help the company
run smoothly.

Competitiveness
We have all competed in various types of activities, perhaps in
sports, or school. There may have been prizes or rewards for
ranking high in these competitions. Business is no different.

We define competitiveness as the ability and performance of a

firm to sell and supply goods and services in a given market, in
relation to the ability and performance of other firms. In other
words, how will one firm win over customers in order to become
the product or service of choice.
 Competitive Priorities

The competitive priorities are the ways in which the Operations

Management function focuses on the characteristics of cost,
quality, flexibility and speed. The firm’s customers will determine
which of the competitive priorities are emphasized.

Cost – Firms whose customers prioritize price will be very

interested in having processes that enable them to keep their
costs low. These companies are typically paying close attention to
identifying and eliminating waste within their operations. By
reducing defects, they will reduce costs. These firms will closely
monitor and seek to improve their productivity. Factors such as
resource utilization and efficiency will be important.

Quality – Firms whose customers prioritize quality focus on creating

both excellent product and process design. Marketing and
Engineering collaborate to design products that meet customers’
requirements.  Manufacturing must ensure that the process is
able to produce the products defect-free. It is only by having
excellent design quality and excellent process quality that the
organization can ensure that customers will have their
expectations satisfied.

For example, the aim of fast-food company McDonald’s is related to

maximizing the quality of its products within the available resources or
constraints like price and cost constraints. To maintain the consistency
level of quality of its products, a production line method is used in
McDonald’s.  Through this consistency level of quality, the expectations of
customers are satisfied.

Flexibility – Firms whose customers prioritize variety must prioritize

the ability to change rapidly. Firms who value flexibility usually do
so by carefully choosing equipment that is general-purpose and
able to perform multiple functions. They will often strive to keep a
small amount of spare capacity in case it is needed.  Multi-skilled
employees who are able to work in various areas of the firm or
operate multiple types of technology are valued. These firms
want to ensure that they can get new products to market quickly
and transition from making one product to another quickly.
Keeping machine set-ups fast  is a critical way to do this. They
also strive to be able to abruptly modify the volume of their
output in case the need or opportunity arises.
For example, while handling growth-related strategies like expanding
into new markets; expansion flexibility connects marketing and operations
strategy.

Delivery (reliability and speed) – Firms whose customers prioritize speed

of product/service delivery must be very efficient and quick at
providing their products and services.

For example, companies such as Amazon and Flipkart, Dominos and

Pizza Hut, etc. compete on a delivery time basis because customers prefer
fast delivery nowadays and organizations that are able to fulfill their
requirements of fast delivery/ service are emerging as industry leaders
Below is a table summarizing the relationship
between a customer’s priority and a firm’s
strategy.

Customer’s Firm’s strategy

priority

Cost Minimizing product costs and waste, maximizing productivity

Quality Designing superior, durable products, minimizing defects

Adaptability in product design and output, utilizing general-purpose

Flexibility machinery and multi-skilled workers

Delivery Maintaining reliable and speedy delivery services

It is a long-held understanding that each major decision

that needs to be made within the operations of an organization
will include a trade-off because it is impossible for any one
organization to excel on all the competitive priorities at once! An
example is a manufacturer who competes on the basis of cost. In
order to reduce defects, they may choose to change one of their
input components for one with a better quality. This however will
increase their costs.  Cost and quality are common trade-offs. 
Flexibility and speed are also considered trade-offs. When
organizations increase their number of options and varieties, it
adds operational complexity. This will slow down their operations.

Conclusion
Hence, in a broader sense, competitiveness can e defined as “The
degree to which a nation can produce goods and services which
meet the test of international markets while simultaneously
maintaining or expanding the real incomes of its citizens.

The most common measure of competitiveness at the national

level is productivity. Increases in productivity allow wages to grow
without causing inflation and thus raising the standard of living of
the people of a nation.

Productivity growth is a true indicator of how quickly an economy

can expand its capacity to produce goods and services and meet
customer demand both within the countries well as in the global
market.

The dimensions of competitiveness that measure the

effectiveness of the production function of a manufacturing firm
are discussed briefly in the following one. In the context of
individual firms, competitiveness refers to “how effectively an
organization meets the needs of customers relative to other firms
which offer similar goods and services.
References
1. T. Hill, Manufacturing Strategy-Text and Cases, 3rd ed. Mc-Graw Hill 2000
2. ^ Grando A., Organizzazione e Gestione della Produzione Industriale, Egea 1993
3. ^ Taft, E. W. "The most economical production lot." Iron Age 101.18 (1918):
1410-1412.
4. ^ W. Hopp, M. Spearman, Factory Physics, 3rd ed. Waveland Press, 2011
5. ^ "Factory Physics for Managers", E. S. Pound, J. H. Bell, and M. L. Spearman,
McGraw-Hill, 2014, p 47    
6. ^ "New Era of Project Delivery – Project as Production System", R. G. Shenoy
and T. R. Zabelle, Journal of Project Production Management, Vol 1,  pp Nov
2016, pp 13-
24 https://www.researchgate.net/publication/312602707_New_Era_of_Project_
Delivery_-_Project_as_Production_System