Importance of Operations Management in Organizations

Importance of work operations counselling in OrganizationsManagers be also responsible for critical activities such as tonicity precaution and control, capacity planning, materials focusing, purchasing, and scheduling. The importance of trading operations management has change magnitude dramatic completelyy in recent years. Signifi corporationt foreign competition, shorter product and divine service life-cycles, better-educated and bore-conscious consumers, and the capabilities of rising- do technology get placed increasing pressures on the operations function to advance productivity while providing a grander array of superior- character products and services. With the globalisation of foodstuffs, firms argon recognizing that the operations function can be work out(p)d to beef up their position in the market place. Managers in operations management wanton a strategicalal and tactical role in satisfying customer needs and making their firms strong internationa l competitors.The role of operations management is to transform a fel sm every last(predicate)ships inputs into the finished well-behaveds or services. Inputs include human resources (such as kick the bucketers and managers), facilities and processes (such as buildings and equipment), as well as materials, technology, and information. Outputs be the goods and services a company produces.Basic either(a)y, Operations management has an impact on the five broad categories of stakeholders in any organisation. The five groups arCustomers These be the most unmistakable people who will be affected by any disdain enterprise.Suppliers Operations can have a major impact on suppliers, twain on how they prosper themselves, and on how sound they are at bequeath the operation.Shareholders clear, the better an operation is at producing goods and services, the to a greater extent likely the whole logical argument is to prosper and shareholders will be wizard of the major benefici aries of this.Employees Similarly, employees will be generally better off if the company is prosperous if only beca procedure they are more than likely to be employed in the prospective.Society Although often having no direct economic connection with the company, individuals and groups in society at large can be impacted by the way its operations managers behave. The most obvious example is in the environmental responsibility exhibited by operations managers.Company ProfileCRH plc, the international building materials group, has its headquarters in Ireland and operates in 22 countries in three closely related union businessesPrimary materialsValue-added building productsSpecialist building materials distri notwithstandingion.Listed on the Irish and non bad(p) of the United Kingdom Stock Exchanges and on the NASDAQ in the US, CRH consistently delivers massive-term ingathering in total shareholder return, averaging over 18% per annum since the group was formed in 1970. CRH maintains a rigorous focus on improving lively operations by dint of feeld topical anesthetic management teams.These regional platforms and management structures soften the profits, silver flow and organisational strength to endure CRHs ongoing course of study of suppuration. CRH grows by investment in new capacity, developing new products and markets and by fareting and growing medium-sized companies. This long-term festering scheme is fill-ined by casual larger acquisitions that extend the concourses geographic reach or product head for the hills and state new strategic platforms for futurity crop.Strategic VisionCRHs strategic vision is to be an international leader in building materials, delivering top-notch doing and growth.Current strategic objectives and appropriate musical instruments to analyze themMost of strategic objectives are directed toward generating greater profits and returns for the owners of the business, others are directed at customers or society at large. In the case study CRH plcs eventual(prenominal) objective is to deliver superior instruction execution and growth to its customers and stakeholders in all aspects. Any strategic objectives generally measured by the following toolsMeasurable. in that location mustiness be at least one indicator (or yardstick) that measures give against fulfilling the objective.Specific. This reserves a clear message as to what needs to be accomplished.Appropriate. It must be consistent with the vision and mission of the nerve.naturalistic. It must be an realizable target apt(p) the organizations capabilities and opportunities in the environment. In essence, it must be dispute but doable.Timely, there needs to be a time clay for accomplishing the objective. After all, as the economist John Maynard Keynes once said, In the long run, we are all deadWhen objectives satisfy the above criteria, there are many benefits for the organization.First, they hold up to channel e mployees passim the organization toward common goals. This helps to stand and conserve valuable resources in the organization and to work collectively in a timelier manner.Second, repugn objectives can help to motivate and inspire employees without the organization to in high spirits levels of commitment and effort. A great deal of look for has hold outed the notion that individuals work harder when they are striving toward specific goals kinda of macrocosm asked simply to do their best.Third, there is always the possible for diametrical parts of an organization to pursue their own goals rather than boilers suit company goals. Although well intentioned, these may work at cross purposes to the organization as a whole. Meaningful objectives thus help to resolve conflicts when they arise.Finally, proper objectives go out a yardstick for rewards and incentives. Not only will they lead to high levels of motivation by employees but also they will help to discover a greater sense of equity or fairness when regards are allocated.There are, of course, still other objectives that are even more specific. These are often referred to as short-term objectives-essential components of action plans that are critical in implementing a firms chosen strategy.Operation objectives of the Company and its success in brush strategic objectivesKey components of the strategy to achieve the set objectives are pee-peely understand the incumbent and potential future requirements and expectations of our customers-work closely with our customers, suppliers and partners to achieve note objectivesDeliver services of market-leading quality, reliability and consistency that ache our customers requirementsImplement quality management in a systematic and planned way by dint of the application of management systems that support the delivery of the business plan work and train our people and partners, to support the delivery of high quality workEstablish and measure surgical pr ocess and customer satisfaction against appropriate quality objectives and/or targetsMeasure service performance and customer satisfaction at an appropriate levelContinually review and cleanse our processes and levels of serviceCRHs one of the objectives is to remain the employer of choice for all employees and to exceed the expectations of all our stakeholders. This implementation can be doneCRH believes that continued business success is rooted in good employee, customer and supplier relations. This is particularly true in a decentralised organisation, where management responsibility is delegated as far as possible to the local level.Company Managing Directors/Presidents are responsible for the implementation of CRH employment policies, guidelines and objectives in their areas of responsibility. They are supported in this role and in reporting at Group level by their Human Resources (HR) teams.Human Resource has a functional reporting line through Product Group and divisional HR Directors to the Group Human Resources Director. Data is proposed below on the geographic employee footprint of the Group emphasising the increasingly global reach of CRH.Shortly afterward CRHs foundation in 1970 the Board set a clear strategy for the development of the Group which, while it has evolved over the years, is still broadly applicable today. CRHs development strategy is based on the followingStick to centre businesses in building materials enclothe at home be the low exist market leaderDevelop overseas create platforms for future growthNegotiate deals that assure the sellers and CRHs needsDevolved development teams reporting to regional and product group managersRigorous attempt to evaluation, approval and review broadly speaking mid-sized deals augmented from time to time with some larger transactions fair game is to maintain and develop a balanced portfolio across regions, products and gimmick sectors digest on performance and growthThe resources, systems and too ls used in the organization to support its Business Process.CRH has a three-part strategic objective for fostering new growth across its operations.Invest in new capacityDevelop new products and marketsAcquire and grow mid-sized companiesInvestment is central to growth. CRH is making four key types of investments that will make continued growth possibleInvest in its employees cost emergence production facilitiesImprove capacityManage performanceInvest in people The success of CRH is very much due to having talented, committed, dotty and well- adapted people throughout the Group. They encourage and support the continuous master copy development of the CRH team and its members. What attracts people to CRH? A competitive pay package, the fortune to travel, a good working environment, the team school of thought, flat organisation structure, challenging work assignments and internal training programmes to prepare the next genesis of leaders.Upgrade production facilities CRH re -invests slap-up in their existing facilities to alter nothing and functional efficiency to meet future demand growth. In other words, a plant producing 500 tonnes of cement a day could easily meet local demand , but years later, the demand could skyrocket due to a building boom. If the plant does not upgrade to increase its capacity, thusly competitors will. Like all other technologies, methods of production can become obsolete. It takes positive capital to re-tool an entire factory with newer, better machines, but regular upgrading is needful to maintain and improve competitiveness.Improve efficiency One way to get more out of existing factories is to make sure they are being used to the maximum. A low capacity manipulation results in higher fixed cost per unit, which means lower profitability. Low capacity utilisation can be a result of over-supply in the market or seasonal fluctuations of demand. In Portugal, for example, the economy is going through a strong period wi th construction down approximately 3.9% for 2007, reflecting lowerd activity in housing and a important reduction in public capital consumption. However, all three of CRHs Portugese cement plants operated at full capacity by taking benefit of strong export markets. Investment in efficiency and environmental improvement programmes, to offset higher input be and improve performance, continued at all three locations.Manage performance A strong focus on achievement against targets is part of CRHs objective of performance and growth. The ability of key players to deliver is definitive. CRH has implemented a strong performance management system and appraisal process.The key elements includePlanning Clear expectations and goals are set and so plans develop to achieve these. Jobs, and how they relate to the strategic objectives of CRH, are looked at. These plans set out key steps and measures for staff. The A-SMART criteria are used, i.e. Aligned, Specific, Measurable, Action-oriente d, Realistic and Time-bound.Coaching Observing and documenting performance, conducting reviews, as well as identifying training and development needs all provide feedback and support, and ultimately promote better performance achievement and growth. Having a mentor or coach can help staff to learn and develop, and reinforces effective and active communication and performance.Reviewing Getting results is a crucial factor of CRHs high-performance polish. What the individual achieves as well as How, are assessed and reviewed. Self-assessment, collection of information, appraisal and a review meeting all drive performance improvement. Employees have an opportunity to respond to feedback. Regular musket ball reviews of management development strategy are conducted by each component with the guidance and support of the Group Human Resources DepartmentDeveloping new products and markets CRH has activities in 28 countries but there is still plenty of manner for expansion within those markets, and in neighbouring regions. The Groups wide spread across countries, regions and construction sectors helps to smooth the effects of industry and economic cycles. That wide spread of activities creates opportunities for kick upstairs growth. Each of the Groups diverse operations across three continents is seen as a platform on which to build. CRH tailors its strategy to suit each country it operates from. An organic part of CRHs development is its investment in four fundamental areas people, market leading, the environment and technology.Investment in people consists of training and development to provide all employees with a platform for progress, a best practice programme to guarantee an efficient, safe and level-headed place to work, and a market-based remuneration insurance policy to attract, retain and motivate the right people.While investing in acquisitions and development projects is important to attain market leadership, being the leading producer with the worst costs is also critical. This is achieved by investing in those existing businesses which offer a strong foundation for sustained and profitable organic growth while driving continuous improvement in products, processes and strong regional brands.Environmental investments programmes help us to improve optimise our use of heftiness and resources, and to be good neighbours in the communities in which we operate. Environmental investment includes projects to reduce dust and noise, minimise effluent and waste, improve energy efficiency, increase the use of recyc lead materials, and to restore worked-out facilities through extensive tree and shrub planting.Investment in technology enables us to run more efficient plants to create more effective processes to develop innovative products to offer better and more focus service to customers and to measure and communicate international best practice throughout the Group.CRH continues to invest in a wide weave of projects which contri bute to overall profitability, drive continuous improvement of products and processes to deliver long-term performance and strongly underpin the future development of the Group. attribute canvass and review systemsEvans Parker (2008) suck auditing as one of the most powerful safety monitoring techniques and an effective way to avoid complacency and highlight slowly deteriorating conditions, especially when the auditing focuses not just on compliance but effectivenessQuality audit is the process of systematic examination of a quality system carried out by an internal or external quality auditor or an audit team. It is an important part of organizations quality management system and is a key element in the ISO quality system standard, ISO 9001.Quality audits are typically performed at predefined time intervals and ensure that the institution has clearly-defined internal quality monitoring procedures linked to effective action. This can help determine if the organization complies w ith the defined quality system processes and can involve procedural or results-based assessment criteria.With the upgrade of the ISO9001 series of standards from the 1994 to 2008 series, the focus of the audits has shifted from purely procedural bond certificate towards measurement of the actual effectiveness of the Quality Management System (QMS) and the results that have been achieved through the implementation of a QMS.Audits are an essential management tool to be used for verifying objective evidence of processes, to assess how successfully processes have been implemented, for judging the effectiveness of achieving any defined target levels, to provide evidence concerning reduction and elimination of problem areas. For the benefit of the organisation, quality auditing should not only report non-conformances and corrective actions, but also highlight areas of good practice. In this way other departments may share information and amend their working practices as a result, also co ntributing to continual improvement.Quality cultivationWhat is Culture?Basically, organizational gardening is the personality of the organization. Culture is comprised of the assumptions, values, norms and evident signs (artefacts) of organization members and their behaviours. Members of an organization soon come to sense the particular culture of an organization. Culture is one of those terms that are difficult to express distinctly, but everyone k at one times it when they sense it. For example, the culture of a large, for-profit corporation is quite different than that of a hospital which is quite different that of a university.CRH Corporate Culturelocal anesthetic autonomy Experienced operational management is given a high degree of individual autonomy and responsibility to accommodate national and heathen needs and to leverage local market knowledge, all in conformism with key centrally defined governance, fiscal and CSR operating requirementsGlobal merely local There i s strong management commitment to both the local company and to the CRH Group, supported by best practice teams that share go steady and know-how across products and regions. This dual citizenship motivates local entrepreneurship, while maintaining and benefiting from Group synergies. Our management philosophy could be described as global yet local.Mix of skills CRHs market-driven approach attracts, retains and motivates exceptional management including internally real operational managers, highly qualified business professionals and owner-entrepreneurs who join on acquisition. This provides a healthy mix and perspicaciousness of skills with many managers having experience of previous economic cycles. Our succession planning focuses on sharing this wealth of experience with the next propagation of CRH managementPerpetuating CRH culture As the Group grows, CRH make considerable efforts to ensure that the unique CRH culture is propagated into the new acquisitions, while simultan eously preserving their identity, so that the Group culture thrives from generation to generation. These efforts include training programmes, seminars, newsletters, the CSR Report and many other activities that span country, regional, international, heathen and language boundaries. These are of increasing importance as the company now grow into developing regions.Monitor systems and work activities of CRH Plc and identify the major problems change the systems. Also identify the opportunities your company can avail to improve business processManaging operationsCRHs success as a global business depends, on its ability to face fast-changing economic conditions. CRH is a decentralised Group with many subsidiary companies operating under a wide range of local and regional brand /trade names.CRHs strategy is to build leadership positions in regional and local markets. This is done by delegating indorsement to the local managers. So that decisions can be made promptly by those most fami liar with local economic conditions, while central support from CRH Group ensures that sustainable growth is gained in line with the Groups strategic goals. profound functions consist of the Board that sets the strategic direction for the Group, and Human Resources, Finance and IT which support the implementation of day-to-day management policy.Finally, CRHs vision can be place as to focus globally yet manage locally.During a recession, it is important for businesses to look for new ways to maximise performance. One method is to improve efficiency across operations. Another way is to reinvest capital through the use of retained earnings/revenue reserves in its existing facilities. This helps to improve energy and operational efficiency while matching capacity to meet current and future demand.Managing suppliersIndividual operating companies generate raw materials in the region in which they operate. Most of these suppliers are based in europium or North America. Deteriorating dem and in these markets needs strict outlay controls.Managements current aim is on sourcing quality supplies to gain cost reductions and to increase efficiency. Central sourcing functions have been setup in key markets to take advantage of economies of scale and reduce the cost of purchased goods.Managing financesRecession strategies The recent banking crisis made more difficult for companies to obtain finance. Maintaining the business with liquidity and adequate cash flow is very important. However, current market conditions have made it more expensive to get financing for operations, therefore the costs of running a business is expensive and non profitable. Like other companies, CRH is focusing on maximize cash flow from operations and reducing working capital.Budgeting Cost savings Year 2008 indicates major changes in the fiscal, economic and business climate worldwide. Declining markets led to wide ranging cutbacks across CRHs businesses in the world. The company showed its ra te of acquisition and its capital expenditure to improve liquidity and take advantage of possible further reductions in the price of assets. CRH management has also implemented other energy and cost reduction to limit the decrease in profit marginsDivision-wide procurance strategies and purchasing Company targets at purchasing amterials at lower cost and supply its productions in economies of scale to get the operational efficiency in its operations. Operational Excellence procedures have helped to reduce both labour and equipment costs while eliminating and minimising the waste.Reductions in fixed overhead staffing and other fixed costs have been implemented to maintain a strong balance planer position.Raising Capital Sources of finance -CRH management undertook a successful rights issue. This allowed existing ordinary shareholders to buy more shares as a way of re-investing back into the business. The funds rose used for further acquisitions challenging industry players. In 20 09, despite the very challenging trading backdrop, CRH is operating a healthy cash flow. The Group continues to identify new measures to deal with the evolving trading conditions. CRH believes that its current cash flows, together with the recent rights issue and funds raised through its borrowing facilities, are more than sufficient to meet its expenditure requirements for the predictable future.Financial reporting It is essential that IT systems give prompt, consistent and reliable financial reporting from the local operating units to the central Group management. Accurate financial reporting is paramount importance for management especially during difficult economic circumstances. Decisions on budgeting, raising capital and sourcing of finance all rely on accurate financial reporting.Managing people CRH employs 80,000 people in over 3,700 locations, including 35 countries. This staffs is managed through four Divisions. Company is introducing a web-based global talent managemen t system replacing a paper-based system.There is a unique culture of performance and achievement throughout the CRH Group ensuring that, CRH has the capacity to deliver performance excellence despite of critical economic conditionsThe CRH management team are highly experienced and the development of talented successors is a priority for all managers.Regular form-only(prenominal) reviews of management development strategy is done by each relevant Division with guidance and support provided by the Group Human Resources Department.CRH managers come from three very different streams, comprisingInternally developed operating managers who have room to grow in an expanding organisation exceedingly qualified finance and development professionals business builders with vision and future potentialOwner-entrepreneurs who have joined with their companies and provide a vibrant entrepreneurial spirit.This brings frontwards a healthy mix and depth of skills and a wealth of experience at senior level with many senior leaders having managed through previous economic cycles. This gives them invaluable experience to deal with the current downturn enabling them to prepare for the inevitable upturn of the market.Performance management In CRHs high performance culture particularly during difficult economic times achieving results is difficult. But, CRH has adopt a strong performance management and appraisal process. Employees are given realistic goals and plans in place to achieve them. Performance is driven by appraisal, regular review meetings and self-assessment.Leadership development Management Development Programmes gives leadership training usually to middle or top level managers to aid them in upgrading their skills. These programmes have been updated in response to the changing economic climate. Staffs are encouraged to identify opportunities for business development and increased efficiency. Internal progression is used to motivate and reward staff.Succession plan ning CRH places a significant consideration on succession planning. So as to develop future generations of leaders from within the organisation and maintain quality employees at all levels. Staffs are prepared for future roles by involving them with challenging assignments, coaching and formal training.Employees are educated the fact that during difficult economic times they must work within tighter financial constraints to keep operations within budget.CRH hereafter and RecommendationThe process of maintaining superior performance and growth involves continuously investing for the future. The overall picture in 2009 is extremely challenging, having the severe impact of ongoing turmoil in financial markets across the world. There are a number of positives factors which will provide future opportunities for business, for example,Lower energy costs, concern rate reductionsInfrastructure stimulus packages in a number of countries, notably the USA.In this environment, efforts will mai nly focus on implementing cost-cutting measures, reducing expenditure and preparing the business for recovery in construction markets.Regional and product assortment cater for smooth outcome of the effects of changing economic conditions and to provide multiple opportunities for growth. Management has responded vigorously to extremely challenging market conditions. every aspects of business need to be analysed and cost reduction and cash generation measures need to be in place to deal with whatever trading circumstances may evolve as the time go on.