Operations Management

Operations Management

Operational management is all activities related to the deliberate transformation of materials, information or customers. Operating function includes activities that result in manufactured goods and services supplied by the organization to the external environment. Organization may vary greatly in nature operating functions. For example, in industrial raw materials are processed, and the first from the raw produce individual parts and components, then assemble them into finished products.

Operations management is the area of Business Administration dedicated to both research and the implementation of all these actions tend to generate greater value added through the planning , organization , direction and control in the production of both goods and of services , all aimed at increasing quality , productivity , improve customer satisfaction for customers and reduce costs. At the strategic level the objective of the Directors of Operations is involved in finding a sustainable competitive advantage for the company.

The paper aims to evaluate and critically the processes relating under the umbrella of operations management such as design, flows, data capture, interactions between departments, resource allocation, process technologies, and supply chain.

Tesco

Tesco is a Distribution Group UK operates internationally. This is the first distribution group in the country, with more than two thousand retail outlets and one of the largest in Europe. Tesco activities are based on three poles: distribution in the United Kingdom, international distribution and financial services (Simms, Andrew, 2007, p. 37-45).

Operational Areas (Supply Chain Management)

The supply chain management strategy of an organization should be determined by the strategic goals and objectives of that organization. In return, the SCM strategy finds out the manner in which the supply chain will execute with respect to effectiveness and efficiency. There are four primary drivers of supply chain that Tesco is utilizing that include:

Facilities.

Inventories.

Transportation.

Information (Simms, Andrew, 2007, p. 37-45).

Tesco uses the above mentioned four drivers in varying measure to push it toward either a supply chain strategy that focuses on the effectiveness or a supply chain strategy that focuses on efficiency (Simms, Andrew, 2007, p. 37-45). The organization must decide on the trade-off ft desires between efficiency and effectiveness for each driver. The selected, combined impact of the various drivers then determines the efficiency and effectiveness of the entire supply chain (Simms, Andrew, 2007, p. 37-45).

Facilities Driver

A facility transforms or processes inventory into another product, or it stocks up the inventory before delivering it to the closest facility. There are three primary components that Tesco should consider when determining its facilities strategy:

Location.

Capacity.

Operational design (Nash, Bethany, 2006, p. 58).

Location

Tesco must determine where it will locate its facilities, an important decision that constitutes a large part of its supply chain strategy. There are two primary options when determining facilities location:

Centralize the location to gain economies of scale, which increases efficiency or,

Decentralize the locations to be closer to the customers, which increase effectiveness.

Tesco can gain economies of scale when it centralizes its facilities. However, the cost reduction decreases the company's effectiveness, since many of its customers may be located far away from the facility ...