International Operations Management
Operations Management Applications
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| Operations Management Applications Organizations that engage in international business face much greater competition and far greater challenges than those operating within their national boundaries. Good management of international operations requires managers with good analytical skills and a good grasp of quantitative methods. Such methods can help operations managers in their decision-making and problem-solving. Two of the most important areas that operations managers are particularly involved in are forecasting and project management. These areas are discussed in the next two sections. Forecasting Forecasting is concerned with making predictions about what is going to happen in the future. Predicting the future is an important activity that operations managers frequently have to carryout, as it can help them make better decisions and control some of the uncertainty that the future holds. This is particularly the case when companies perform operations across national borders. ............................................................................. ............................................................................. Elsevier US Job code KIB Chapter: Ch11-H7983 6-12-2006 9:22 p.m. Page:370 Trimsize:7.25 in in Fonts used Sabon & Frutiger Margins:Top:36 pt Gutter:66 pt Font Size pt Text Width PC Depth:43 Lines 370 International Business Regardless of industry or whether the company is a manufacturer, a wholesaler, a retailer, or a service provider, effective demand forecasting helps organizations identify market opportunities, enhance channel relationships, increase customer satisfaction, reduce inventory investment, eliminate product obsolescence, improve distribution operations, schedule more effi- cient production, and anticipate future financial and capital requirements. 13 Forecasting is an integral part of the decision-making activities of operations management. The need for forecasting is increasing as management attempts to decrease the dependence on chance and becomes more scientific in dealing with its environment. The following are some of the areas affecting the management of operations in an organization in which forecasting plays an important role. Scheduling. Efficient use of resources requires the scheduling of production, transportation, cash, personnel, and soon. Forecasts of the level of demand for the product, material labor, financing, or service are an essential input to such scheduling. Acquiring resources. The lead time for acquiring raw materials, hiring personnel, or buying machinery and equipment can vary from a few days to several years. Forecasting is required to determine future resource requirements. Determining resource requirements. All organizations must determine what resources they want to have in the long-term. Such decisions depend on market opportunities, environmental factors and the internal development of financial, human, product and technological resources. These determinations require good forecasts and managers who can interpret the predictions and make appropriate decisions. 14 Forecasting is often confused with planning. Planning concerns what the world should look like, while forecasting is about what it will look like. Exhibit 11.5 provides a summary of these relationships. Planners can use forecasting methods to predict the outcomes for alternative plans. If the forecasted outcomes are not satisfactory, they can revise the plans and obtain new forecasts, and then repeat the process until the forecasted outcomes are satisfactory. They can then implement and monitor the actual outcomes to use in planning the next period. Although this process might seem obvious, in practice many organizations revise their forecasts and not their plans, believing that changing the forecasts will change behavior. 15 Forecasting can be used in operations management for both short-term and long-term decisions. For example, predicting the demand fora particular product over the next six months would be a short-term prediction, whereas predicting the rate of unemployment and how this could affect the demand for labor over the next five years would be a long-term prediction. The ............................................................................. ............................................................................. Elsevier US Job code KIB Chapter: Ch11-H7983 6-12-2006 9:22 p.m. Page:371 Trimsize:7.25 in in Fonts used Sabon & Frutiger Margins:Top:36 pt Gutter:66 pt Font Size pt Text Width PC Depth:43 Lines International Operations Management 371 Download 340.14 Kb. Share with your friends:
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