Operations is the component within an organization that entails the responsibilities pertaining to the production of goods and services with goods being the physical resources which comprise of raw materials and sub assembly components such as electronic sub-components. On the other hand services are defined as the activities that a combined provision of time and location among other factors. In this case the operation that function within a business can be assessed in a far reaching perspective that provides a collective success or failure of organizational operations in the functions that have an impact on the capability to understand the notions the compete with other theories in the overall existence of the organization. In this case the ideal scenario of the organizational operations is to attain the matched supply and demand. This is with excess supply or excessive supply that may be wasteful and expensive in addition to the reduction of the means that exist in the form of lost opportunities with the possibility of dissatisfying the customer;
Overview of the strategic importance of operations management to a world class company
The main functions in the aspect of supply concerns the operations and chains of supply as well as marketing and sales they are identified in the aspect of demand. As the functions of operation deal with the production of products as well as service delivery there is a need for support and input in other areas. As such this is universally applied within the organization with three areas of basic functionality which includes financial, marketing as well as operations (Lummus 21-118). The business nature of the organization does not matter as all organizations all have these three basic organizational functions. The financial factor in strategic operations within an organization entail the responsibilities of financial resource security at prices that are favorable as well as the allocation of these resources throughout the organization in addition to budgeting, investment proposal analysis as well as the provision of operational funds. The marketing operations are concerned with the main functions with marketing being responsible for the assessment of the needs of the customer as well as the sale and promotion of the organization's products and services (Brown, Squire and Blackmon 23).
Furthermore, operations in concerned with the production of goods or the provision of services that are availed to an organization which can be placed into perspective in the analogy of an organization being a car with the operations factor being the engine. This implies that the engine is the core operation of the organization's business. As such organization operations management deals with the management of these core functions whereby systems and associated procedures are managed for the creation of products and provision of services. Supply and operational chains have an in strict linkage with no business organization having any form of existence if none of the chains are present (Rusjan 45-114). In this case we can define supply chain as the sequential factor within organizations that deals with facilities, functions and related activities that are included in the production and delivery of products or services. In this approach, the distinct model is reflected with this sequential process beginning with the supply of basic production requirements and extending to the final client or customer as seen in this organizational chart.
Source: Simple organizational product supply chain
Facilities can comprise of factories, storage facilities, processing centers, distribution locations and retail centers with functions and related activities involving forecasts, purchase, inventory management, management of information, quality assurance, scheduling, production processes delivery and services for the customer. Supply chains are indentified in the internal and external operations within an organization with the external components of the supply chain consisting of the provision of raw materials, components as well as other inputs into the organization (Brown, Squire and Blackmon 23).
On the other hand internal components within the supply chain comprise of the aspects of the functional operation itself, operations of components supply, undertaking work in products and services as well as moving the work to the next stage of production. Creation of goods and services deals with the conversion or transformation of inputs into output with the varied inputs being capital and labor. In addition to the information utilized in the creation of goods and services with the utilization of several processes of transformation such as storage, transportation and repair which are meant to ensure that the desired output outcomes are attained (Lummus 21-118).
At this point the organization would require undertaking certain measures at varied points within the transformation process which is feedback where after comparison would be initiated to compare with previous standards that were established in the determination of corrective action as a need for control.
General Electric’s Strategic Operations Management activities from manufacturing and product/service perspectives
General Electric has been identified as a company that has defied conventional wisdom concerning performance of a firm and changes within the corporate structure (Rusjan 45-114). This is because the organization appears as a conglomerate and yet there is an industry understanding of the unprofitability of conglomerates. Although it has been identified that such organizations have been known to actively utilize acquisitions and alliances to transform its organizational structure though this method of operation in regard to the organization's structure has been known to fail; The company has undergone internal transformation as it is known that an organization with this structure can only make changes in an incremental approach. This is not the case for General Electric that has attained success through radical changes in spite of the notion that major changes have a tendency to make an organization fail.
General Electric is profitable as well as dynamic which has allowed the company to outperform the industry that it thrives with domination over its competitors over the years of distinct operation. This approach has led it to measures that have shifted into major production markets whereby markets such as consumer-based, industrial-based and natural resource markets. In essence, this has supported various indicators while entering new markets of prosperity for instance media markets, financial services and information markets. Its operations has included redeveloping the markets while striving to become an international company as it carries its business operations into areas such as research, sourcing, production and sales operations. This has occurred on a global scale with drastic changes that have raised questions as to whether the company has challenged many truths about the changes in business (Brown, Squire and Blackmon 23). The company's strategic management operations are based on internal and external factors whereby its external strategy entails the conventional notion of acquisitions. This states that those who acquire tend to lose money in their purchase of companies as they are required to overpay for targets and then strive for the integration of these acquisitions within the businesses that exist in the company.
The company has a differentiated acquisition process that entails the purchase of several firms annually where after these firms are crucial in assisting the firm in the acquisition of modern technology while breaking into new markets on the international scene. With some of its notable acquisitions being NBC and RCA in addition so smaller acquisitions after these purchases the company proceeds to integrate at least a single company around the world on a weekly basis. It is at this point that we examine its acquisition strategy that comprises of a high form of organization that comprises of both precise assessments before acquisition. This process is applicable as as well as a detailed post acquisition which has allowed the company to move quickly over desired targets that are availed as it undertakes screening of potential acquisitions. In technical applications, it implies that the company acts quickly to integrate its desirable acquisitions into its operational systems and organizational culture as it sells off the components within these companies that are not of use to General Electric (Rusjan 45-114). The company typically undertakes main changes of its systems; organizational culture and technology for the company that it targets that often become integrated into the company which is followed by its senior management for acquisitions reporting to top level management of the organization. This process emanates from critical operational spectrum, after which senior staff and the company boards review the progress of the acquisition and regular performance (Brown, Squire and Blackmon 23).
General Electric’s global capability and evidence of competitive advantage in their product and services
Through the various organization operations of General Electric the company has been able to maintain global competiveness as conventional understanding states that such conglomerate companies such as General Electric bear several complications in their management. This concerns its profitability due to the disparity of cultures the cause an interference with the coordination of attempts related to its business activities that are operational in varied product markets. From an outside perspective General Electric bears an organizational structure of a conglomerate as the company has several operations in varied unrelated product markets such as financial services, aviation, medical products and consumer goods which lead one to question if General Electric is really a conglomerate (Brown, Squire and Blackmon 23). The company's active strategic planning allows the company to extend its competitive advantage in the industry which is identified in the company's active cycle of planning. Where after the company establishes meetings with its senior management at the beginning of the year which allows the company to engage in communication of its employees; This allows for refinement of the organization's objective plans with the strategic organizational plan comprising of high level objectives and detailed strategies for individualistic divisions and operational units. This occurs with managers being held accountable of the shaped plans as well as meeting the company's objectives with detailed information regarding the availed plans in channels of information.
A review of General Electric’s use of operational strategy to increase their overall effectiveness and competitiveness
General Electric's external and internal organizational strategies create power that is crucial in the market it operates with the inclusion of strengthened positions among its consumers and the power of bargaining with its suppliers. This however cannot be defined as market power in a traditional economic perspective as monopoly shields itself behind static entry barriers. However, General Electric has managed to build its large business operations within the guidelines of cost and quality advantage over its competition. This has allowed the company to operate much faster than its competitors so as to take advantage technologies that are emerging as well as associated markets (Rusjan 45-114).
The organizational strategy of General Electric creates an overturn in the final conventional operational wisdom which is a factor in the success of the company as seen its integrated cooperation that has allowed it and its associated businesses to lead the market industry (Brown, Squire and Blackmon 23). Over the years the company has initiated several smaller organizational wide programs that have created systems and cultures based on commonality that have eliminated any activities that did not gain the company a competitive advantage. As such it focused of building a global cost and quality system based on the internal activities that have been retained and made inclusive. It has further been observed that all such programs imitated bear a similarity in emphasizing activities related to customer value improvement with each program extending throughout the corporation which places demands on all business with the participation of all organizational employees. Furthermore, it has been identified that every program has main payoffs with senior management striving to show commitment in addition to the existence of substantial staff placements of the programs. This program occurs with strict objectives and direct implications to their careers in attaining these goals. As such every program comprises of suppliers of the company as well as distributors. In addition to internal departments with the establishment of a boundary that entails spanning knowledge management, the prospects of company operations are functionally aided through guided approaches.
Conclusion and recommendations
General Electric is the ninth biggest and second most profitable corporate organization in the world and this financial robustness has been achieved through the revitalization of induction and self confidence. The metrics applied in the adoption of measure that are based on the operational model of change accelerated processes are connected appropriately to multiple business departments in varied industries. General Electric has been observed as the first organization to systematically apply several concepts of management to the success of its ideals of movement and management that have been crucial in the successful management of its portfolio. In addition to the overall international global production operations were we can see the benefits of implementing strategic operations management which has a significant contribution to the success of an organization. This has been achieved through the utilization of availed resources for the effective production of products and services in a manner aimed at satisfying the customer and overall growth of the company (Lummus 21-118).
As such it is recommended that the approach applied is to foster creativity, innovation with the placement of energy for the improvement of procedures, products and associated services with the main benefits being an overall effective operation. This provides the organization with reduced costs in the production of products and service efficiency while increasing the revenue in the same way as raising customer satisfaction through the improvement of product and service quality (Lummus 21-118).
As such strategic operational management allows for the increased proactive actions as seen in an organization instead of mere reaction or response which is fundamental in shaping the future of the organization. This occurs while also allowing it to initiate and influence instead of simply responding to activities which leads to exerted control over the destiny of the organization (Rusjan 45-114). Furthermore, effective strategic operations management allows for reduction of the levels of investment that are required for the production of required formats and quantity of products and services through raising the effective operational capacity. In addition to the provision of the future basis for innovation through building of a solid operational base that entails skills and knowledge within the organization's business operations.
Lummus, R. APICS roles in the professionalism of operational management. Amsterdam: Elseiver.2007. Print.
Brown, S. Squire, B. Blackmon, K. Manufacturing strategy involvement in the alignment of world class manufacturing performance. New York: Thomson Reuters. 2007.Print.
Rusjan, B. Manufacturing strategic model in the decision making process. New York: Thomson Reuters. 2005. Print.