Operations Management Strategies

‘Operations Management is just necessary as that Marketing, Finance or Human Resource Management.’

Operations Management (OM) is the set of activities that relate to the creation of good and services through the transformation of inputs to outputs. Activities creating good and services take place in all organizations. To create good and services, all organization perform three functions. These functions are the necessary ingredients not only for production but also for an organization’s survival. They are:

• Marketing, which generates the demand.
• Production/Operations, which creates the product.
• Finance/accounting, pays the bills and collects the money.

There are ten OM Strategies:

Design of Goods and Services

‘The selection, definition, and design of products.’

Managing Quality

‘Quality is the ability of a product or service to meet customer needs.’

Process Strategy

‘Process strategy is an organization’s approach to transform resources into goods and services.’

Location Strategy

‘The objective of location strategy is to maximize the benefits of location to a firm. There are many factors which affect the location strategies like labor productivity, costs, attitudes and proximity to supplier and markets.’

Layout Strategy

‘The objective of layout strategy is to develop a cost-effective layout that meets the firm’s competitive needs. An effective layout facilitates the flow of materials, people, and information within and between areas.’

Human Resources

‘The objective of a human resource strategy is to manage labor and design jobs so people are effectively and efficiently utilized.’

Supply Chain Management

‘Management of activities that procure materials and services, transforming them into intermediate goods and final products, and delivering the products through a distribution system’

Inventory Management

There are four functions of inventory:

1. To separate various parts of the production process
2. To separate the firm from fluctuation in demand
3. To take advantage of inventory discounts.
4. To hedge against inflation and upward price changes.

Scheduling

‘Making plans that match production to changes in demand’

There are two types of scheduling:

1. Aggregate
2. Short-term

Maintenance

'All activities involved in keeping a system’s equipment in working order. The objective of maintenance and reliability is to maintain the capability of the system while controlling cost’

Operations Management Strategies

Source: Available on Request

An Overview of Pakistan Automobile Industry

For the past couple of years there has been a turning point in the Pakistani automobile sector on the whole. Where in 1999 - 2000 it suffered negative growth of a drastic 24 per cent owing to tax demand, in the years to follow it has developed to an extent that in 2004-2005 consumer demand has surpassed the available production capacities.

At present Pakistan’s automobile industry is mostly dominated by foreign assemblers. It dates back to 1953 when the US General Motors set up its first plant. But things really took off in the 1980s and 1990s when the Korean & Japanese giants moved in.

Pak Suzuki was the first, and is still the market leader. Apart from Pak Suzuki industry constitutes of several other joint venture companies, some domestic firms and leading automobile manufacturers from Japan and South Korea namely Toyota, Nissan, Mazda, Honda, Yamaha and Kia.

Pakistan lacks research and development facilities therefore local manufacturers can only copy and not tailor-make when developing an automobile. Unlike the west Pakistan’s a third world country where fuel is as expensive as Rs58 per liter hence development of an underpowered, fuel efficient car is required. This would not only require lesser fuel intake but will also be comparatively cheaper.

University level education in Pakistan is not up to the mark. There is no specific engineering branch for automobile engineering or production engineering. At present the industry requires innovative thinking professionals and entrepreneurs. Good professionals aren’t available owing to the brain drain, and those present are very few in number to meet the market demand.

To sum it up automobile industry can ascertain sustained growth as there is a growing demand from local consumers coupled with a growing economy and consumption as well as a potential to export in foreign markets.

In Pakistan the population of cars per 1000 person is 5.5 and in India it is 7.7. The future of this ‘Industry of Industries’ can be quite promising for the overall economy provided that there is:

• Political stability
• A balance between production levels of vendors and assemblers
• Continuity of governmental assistance in financing investment
• Innovation
• Rationalization of taxation