Operations Management Assignment

Operations Management Final Assignment

The significance of having principles, rules and tools in a dynamic environment in operations management can not be overstated. They are critical to building the competitiveness of businesses, providing structure and method for combating operation issues. They are clearly seen in the ‘Lean Business’ approach to operational improvement. This approach focuses on providing management and staff of small to medium sized companies with the principles, rules and tools to see and understand both the company’s issues and strengths and thus implement responses to address them. ‘Lean Business’(LB) approach highlights the importance of having procedures in the dynamic environment of operations management. For this

The LB rules implemented were effective as they saved in excess of €500k in labour costs, reduced waste physically by more than 10% but have identified far more costly hidden wastes and are still working on these, highlighting the benefits of the LB rules on people. Recently Lily o’ Brien’s have implemented a warehouse project. By using the rules of LB they reduced stock holding by 18% in packaging showing LB’s effect on the process of producing goods. This equates to a further €20,000 per annum if maintained. The firm has taken out over €100k in labour in this area alone. Overall it is clear that Lily O’ Brien’s has gained from the use the LB rules showing their importance to the operations in the environment it is

The tools of LB are applicable to all business in any industry making them crucial to operations management given how environments can change rapidly. The use of these basic LB tools allows the firm and its people the ability to develop their understanding of the production process, examine procedures and identify solutions. In addition, it subsequently promotes teamwork across the business. As the firm progresses through the 3 stages of LB the tools become more focused to the requirements of the firm such as the development of sales which begins at level two. By having introduced the basic tools to the firm initially this transition is made easier at each stage. In the absence of a business assessment system, the firm entices the risk of becoming uncompetitive. An example of the benefits of using tools is Largo Foods which had a labour costs reduction of 60 cents per kilo in the first quarter of 2008 to 48 cents in the fourth quarter of 2008. The annual labour savings were in the order of €800,000 as a result of using Lean and it’s tools. In a testimony the Executive Chairman in January and March 2009 said that had Largo not started using Lean business approach and its tools in 2006, they would not have survived