Influences on operations management have a dual effect on the businesses. They can cause the business to undergo change and to adjust to external factors, as responsiveness to change is a constant issue. The second effect is the threats and opportunities influences present. An understanding of these external influences can help a business be able to manage and respond to them in an efficient manner by implementing various strategies. As such, this will contribute to the success of the business.
Influences on operations management include: Globalisation, quality expectations, Cost- based competition, technology, government policies, legal regulations and environment sustainability.
One of the main influences on operations management is globalisation. Globalisation refers to the removal of trade barriers between nations, and is defined as the integration and interdependence of national economies forming a global economy. Free trade and the ability to transfer goods, services finance and labour between counties allow businesses to produce in one country and sell n another.
Integration means joining together through trade, deregulation and technology.
The reasons for this are that businesses can drive costs down and exploit the competitive advantage each region has to offer. Another significant influence on operations management arises from the expectations of customers. Quality may refer to how well designed, made and functional a product is, and the expectation that people have of a business will determine the way that the products are designed, created and delivered to customers.
And yet, what customers’ certain belief is that: durability which is how long the product last given a reasonable amount of use, how long the product functions without needing maintenance or repair and how well the product actually does all the things advertising claims. Usually business that fail in customer expectations even not too many but they will suffer long-term damage to its goodwill and reputation in the market, therefore the business must be organised to maximise customers satisfaction.
E. g. Australia post must maintain quality standards in speed and the quality of the service it offers including professionalism and customisation Cost –based competition is where the business trying to gain a cost advantage over competitors, this can be achieved by using operational strategies that lower cost, such as reducing costs within operations including inputs, processing and outputs. E. g. bulk buy inputs eliminate waste, produce at high volume.
These method is used through the cost leadership, this influence may force a business to seek its own cost advantages through updating technology or outsourcing. Government policies and methods used by the government that encourage the operations function of a business to be more innovative and competitive. Government decisions affect the business rules and regulations, which directly affects the management of various key business functions. Government policies are a notable source of change and a significant influence on the operations management.
Policies such as taxation rates, OHS, training and rules, public health policies, environmental policies, employment relations, trade and industry policies all impact on operations. Other government policies involve reducing the amount of protection certain industries receive from overseas businesses. A very significant external factor that affects operations function of a business is that of laws and regulations. The aim of government regulation of business is to promote safety and fair business conduct.
In Australia, over recent years laws have undergone many amendments though parliament and change in the common law judicial system. If a business does not comply with such laws and regulations, then they could potentially face financial and legal problems, which could give the business a bad reputation and there would be immense costs associated with facing the problem. The natural environment must be protected from resource depletion and pollution.
More importantly, managers have a responsibility to protect the natural environment and ensure that their methods of production incorporate sustainable resource use. The impact resource depletion, the site of resource removal, pollution cause by machinery from manufacturing and the removal and storage of waste need to be taken into account. As business become more sustainable, cost may be greater for inputs, e,g, electricity from renewable sources. Businesses today are increasingly aware of the impact their decisions have on society and the environment.
Some example socially responsible decisions including Schools and businesses that are appointing specialist sustainability experts to implement environmentally sustainable practices and policies, more and more businesses are increasingly transparent about the way they make decision. To minimise these unwanted expect, the manager must use strategy of flexibility where they will be able to change and adapt to the new model or different business plan that will be carry in the short period of term. Technology is also an important influence as globalisation has spread technological development worldwide.
Which lead to new technologies, design, construction, methods and innovation devices as the business move into a new stage. New technologies have in the past replaced workers especially in manufacturing. Technology can transform the way a business operates and even the products it produces. To achieve the customer demand in technology, the business must ensure that the speed of change taking place in the area of technology, the technology must be unique comparing to competitors that are using and whether staff will need to be retained or possibly made redundant.
Cite this Business Operation Influences
Business Operation Influences. (2016, Nov 16). Retrieved from https://graduateway.com/business-operation-influences/