Operational Efficiency In Business Organizations: Strategies And Theories

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The following research is based on the determination of the operational efficiency of a business organization. The mentioned term can be defined as the ability of a business enterprise to deliver quality products or services to the customers in a sustainable and cost effective way and also ensuring that the products maintain their quality. Apart from this operational efficiency also ensures a perfect service and support for the products that are delivered to the customers. Operational efficiency encompasses a number of strategies and techniques that involves the maximum use of resources, production, distribution and efficient management of the inventory.

In case of any business management, two things are playing important role. The first thing is regarded as output that is the money, customer loyalty, market differentiation, innovation, speed etcetera. The second thing is considered as input that includes money, people and time. It is important to make a balance between the two. The process of maintaining the ratio in between the two is known as operational efficiency (Filatotchev and Nakajima 2014). It is important to measure the operational efficiency due to its role in the progress of business. This efficiency system can be improved by way of changing or developing the sides, input and output. It is important to develop the production cost or understand the requirement of time regarding a unit.

A suitable efficiency regarding the operational improvement can only be possible by way of keeping a relation between the people, process and tools. These are the main three parameters under the operational efficiency. It is to be stated that the people are the most important factor under the operational efficiency as they are quite inconsistent regarding their skills and requirement. The other two parameters can be changed by way of developing the value system or mapping, but it cannot be possible in case of the people. The problem regarding the people is that they are quite unpredictable. There are five metrics available to improve the scope of the operational efficiency (Billyard and Donohue 2016). These are as follows:

Operational efficiency can be developed by way of optimizing the equipment and production system and the object of the same should be produce quality products. It is important to track the quality regarding the three parameters and a continuous testing process should be done to improve the quality. If the weak points can be corrected, the operational efficiency can be done swiftly (Dudycz et al. 2015).

Theories

The ultimate object of the operational efficiency is to provide maximum production. The production power can be developed by way of improve the equipment availability. The maintenance related downtime can be reduced by way of following the predictive approach. It has been observed that many companies have faced the shut down process due to the failure of equipment repairmen. If the maintenance program in this case can be improved, the chances of possibilities can be increased too.

Three things are necessary regarding the development of operational efficiency that is availability, performance and quality. It is important to monitor all the necessary facts continuously and that will help the operators to take urgent decisions smoothly.

In case of the relationship management, a relationship should be maintained in between the business and the customers. A relationship may have been observed in between two different businesses (Giauque et al. 2013). The main objective of the relationship management is to find out the proper way to create partnership related to organization and the customers. the main  focus point in this regard is to regularize the financial industries. 

The relationship management has two parameters- customer relationship management and business relationship management. It has been stated by Francis Arthur Buttle that customer relationship can be developed by way of mutual maintenance for the intention of long-term relations.

The relationship regarding the business management can be developed by way of maintaining relationship between vendors, suppliers, and distributors. The relationship can be made through manage the dispute and review all the contractual agreements according to the expectation of the customers.

Operations Management involves a lot of different responsibilities. The primary area of focus is the management of the business operations efficiently and effectively. Modern Operations Management revolves around four main theories: Business process redesign (BPR), reconfigurable manufacturing system, six sigma and lean manufacturing. BPR is a business management strategy that focuses mainly on the designing and analyzing of the workflow and business process of a business organization (Hwang et al. 2015). Reconfigurable manufacturing systems are dedicated production systems that are built and designed in such a way that it helps the companies drastically to improve and manage the production system of the organization in a proper way. On the other hand six sigma is totally based on ensuring the quality of the products. Last but not the least lean manufacturing refers to the systematic method of eliminating the waste in the manufacturing process. The theory is based on the waste that is created through the overburdening or uneven workload.

Characteristics

The organizations can attain operational efficiency by implementing this theories in a planned and proper manner. Three different strategies that can be used to implement the operational strategies are;

Embrace Automation and outsourcing- Globalization has changed the whole world and in the modern days almost every of the tasks are automated. Organizations nowadays are implementing strategies to reduce the costs related to the manual labor and automate most of the task in the organization. Automation of the different tasks in an organization increases the organizational efficiency of the organization which in turn increases the productivity levels of the manufacturing unit. The organizational efficiency helps the organization to increase their profit margins. Automation of the organization helps it to serve the customers in a much efficient way as because customers do not have to face any glitches and they can also save ample time (Schildt and Perkmann 2013).

Outsourcing on the other hand is the second step that is done after the automation process. The information that is processed in the automation process is transferred to the outsourcing channel who handles the necessary specifications. Every single organization has a dedicated team of outsourcing the gathered information.

Setting the Right Expectations- It is the duty of the management of the company to set out the right standards through an effective communication process which is needed to prepare the different sales or marketing team to achieve the results and face any crisis situation. Setting out the right set of strategic expectations helps the organization to train the new employees according to the expectations of the particular organization. The management of an organization conducts regular meetings and discusses the various issues and the achievements of the company with the employees to make them motivated and perform their level best in the company. On the other hand the company also sets the right set of expectation for the client by highlighting them the process in which the organization works and develops a feeling of trust and social bonding with the customers.

The advancements in technology has been helpful for conducting business operations smoothly and efficiently. Social Media helps the business organization to;

Increasing the Brand Awareness- The most important task of social media is to help the company increase its brand awareness. The organizations have their dedicated presence in different social media pages which helps the users of social media to get an idea about the company and its products. Social media advertisements help the company to increase brand awareness towards their products and make their products one of the best in the market (Magdalena 2014).

Driving the traffic- Social media presence makes the people aware of the products and the services offered by the company and thus they are attracted towards them. This makes the company drive the attention of the customers towards them and helps them to attain considerable profit and competitive advantage in the market.

Generating new leads- The customers share their reviews as well as describe the possible changes that can be made to make a product better in the social pages of the companies (Hult and Sjölund 2017). The reviews helps the companies to improve their products, innovate new products according to the demands of the customers. The companies can also find new ideas from the social pages and address them accordingly. It also helps them to develop and optimize informative contents.

Improving the return on Investments- Social media presence increases the amount of revenue earned against investment.

Some of the main challenges that are faced during the management of the operations of a business organization are;

Complex Regulatory Reforms- Complex regulatory reforms are a real threat to the improvement of the organizational efficiency. The operational reforms and policies of the organization have a high demand for the firms who buys products from the market and have never experienced such a fixed and regulated infrastructure helps to manage the daily operations of the organization. The organizations must fix their strategy in such a way that it can easily handle the complex set of rules of the organization.

Limitations of the System- The main aim of the organization is to meet the demands of the customers. Therefore it is utmost necessary to stay updated about the recent developments and update their system accordingly (Brooks 2015). It is a very challenging task for the organizations to identify the exact time and detail about when a specific plan is to be implemented or when an issue is to be addressed. The organizations generally lacks in technological advancements which hampers their cause for meeting the requirements of the customers. Therefore the main task of the management is to implement and integrate new technologies in the workplace to make sure that they can meet the demands of the customers and create a competitive advantage in the market. Technological solution helps to increase the efficiency of the company as well as increase its productivity levels.

Restricted Budget- Restricted budget has been a problem for the industry especially for small and medium sized organizations. Lack of funds in the small and medium sector business creates serious challenges for such organizations to survive in the market. It is difficult for these firms to get a proper IT solution that makes their company vulnerable to external threats (Trainor et al. 2014).

In the present world, social media is playing an important role in the business management. Organizational purposes are very much depending on the social media initiatives. Social media helps to facilitate the flow of information that will strengthen the customer interaction and improve the collaboration. The operational efficiency of a business can be improved by way of using social media. Under the business management program, certain things are necessary that create impacts on the economy, social and environment. There are certain environmental implications created on the process of production. According to the life cycle assessment, a link up can be established in between the operational efficiency and environment implication. Environmental consideration is based on the different nature of the business. It is to be stated that the consumption input, production or the cultivation process of the business are very much affected by the environment and in this regard, social media provides a serious implication. It  can be stated that the news regarding the business process can be posted through the social media and if there is any negative effects remained, the same can be benchmarked. If there is any laxity regarding the estimation of environmental degradation or consideration, the consequence will be lead towards operational inefficiency.

The ultimate objective of business is to gain profits and the objectives of the operational efficiency is also based on the monetary inputs and outputs. Therefore, the economical implications are one of the most important thing in case of business management. It is to be understand the meaning of the economic consideration (Treem and Leonardi 2013). The term economic consideration can be denoted the process of facts or matters that taken into consideration during the formulation of judgment or when a decision is to be pending regarding the production, distribution and consumption of goods. These things are to be done within the territorial jurisdiction of certain locations. There is an accumulation process observed regarding the economic and environmental consideration. There is certain factors work for the environmental degradation that affects the operational efficiency a lot. Sometimes, the biotic factors are helping the process of environmental consideration. The economic and environmental consideration is inter-related to each other. Therefore, it can be stated that environmental degradation should be curbed to follow a growth in the economical section and social media can be a good option to increase the awareness. Awareness can be spread through various websites and that can lead to the operational efficiency.

References

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