Operations Management

Operations management is an essential part of business in the 21st century but the origins of operations management can be traced back to the changes in the industries through from the 18th century especially during the industrial revolution and the development of the assembly line practice and the American system of manufacturing and scientific management. Together these ideas allowed for vast improvements in the production process. Some of the key features of these systems where the change in how things where produced from a skilled craftsmen to division of labour and the knowledge of those skilled workers being passed onto the equipment and systems. Operations management has come a long way since it first started but the goals remain the same in that it is to efficiently run a business with low costs and high output to in turn increase profit. It is used in every industry but is more evident within in goods production but as most of the worlds industrialised nations are predominantly service economies with most of the worlds industrialised countries having over 50% of there economic activity being services so I will use the hotel industry for example more specifically Cargill's Hotel.

Operations management is the area of business that deals with the production of goods and services and is responsible for making sure the businesses operations use as little resources as they need but is also effective in meeting customers demanding requirements especially within the very competitive hospitality industry. Basically it is mainly about managing the process of turn inputs like labour, rooms, materials and food into outputs of a service of people staying at the hotel and expecting to stay in quality and having different services available to them during there stay. The key characteristics of operations management is that the key to global competitiveness is to increase productivity although Cargill's is not directly competing in the global market it is defiantly competing in the local market trying to gain an competitive advantage against other hotels in the area and in wider New Zealand.

To understand how operations management can be an advantage for a hotel you must first understand what the main functions of a hotel are. There are many different types of hotels. They cater for different types of consumers which in this case are called ‘hotel guests'. Cargill's as well as every other hotel, however, have one common function, which is to provide quality accommodation. In the hotel context, the word ‘accommodation' means a place to stay, and especially a place in which to sleep. In addition to a room in which to sleep, furniture including a bed will be provided, as well washing facilities and toilet amenities. Some hotels though provide accommodation for long-staying guests sometimes called “permanent residents”, Cargill's does this in a smaller way by providing discounted accommodation for longer staying guest with extra benefits as well. But the majority of hotels provide accommodation for relatively short-staying residents, and a very large proportion of such people for Cargill's is tour groups. By tour groups we mean those who are traveling by bus with a group of other people whose whole holiday is planned and payed for in advance. However, more and more people are spending part of the year away from home on business especially higher level mangers. But people also go on holidays/vacations, or for other reasons - and many of them stay in hotels whilst they are away from home.

Many travelers require more from hotels than accommodation alone; they have other needs or wants to be provided for. We therefore see that the primary function of hotels is: “To provide accommodation for those away from home, and to supply such people with at least their basic needs”. Although all hotels have the same primary function, as said earlier, you should also note that different potential hotel customers can have greatly differing ideas as to what constitute their “basic needs”, and so their expectations from those hotels like Cargill's at which they stay will also differ considerably and many hotels go a good deal further than providing for just the “basic” needs of their customers. Situations can and do vary from area to area and hotels like any other for profit ventures, or businesses can survive only by catering for the demands of their particular customers. In most areas in New Zealand and globally there are many different types of hotels, catering for different types of customers. But there are some hotels which, because of their size or the quality of the services they offer, play roles of importance to the areas or countries in which they are located. Cargill's is not one of these but it does play an important role within the Dunedin area with many rugby teams including France and “Pop Stars” like Dane Rumble” choosing to stay at quality accommodation like Cargill's Hotel while not having to spend copious amounts of money as you would in some establishments.

Hotel management, or hotel operations management in its wider concept, implies organization of a current business control over four key functions of a hotel, Food production, Food and Beverage Service, Housekeeping, Front office services. Like in any other business, organization of current work is always brought through the decision-making process. First of all the organization of hotel operations is based on the ability to listen and solve conflict situations. Demand for professional hotel managing lead to appearance of consulting companies which are focused in the management of hotel operations. In conditions of stiff competition some hotel owners fail to take on operative management of the hotel on there own, for hotel operations management is too difficult to be within the capacity of one person in bigger hotels but within smaller hotels the operations management could be done by someone with other jobs like marketing or accounting.

Managing the hotel for the owner and customer's advantage, the company makes use of hotel system advantages to provide high values and service quality, to recruit and train staff, to make vital marketing progress. But still the accessibility of such consulting companies is partial by their scarcity. As the hospitality business continues to grow at an increasing rate, there is an ever increasing demand for capable people to staff available jobs in hotel management bubble. As a result, learning establishments for Hospitality and Tourism Management become very accepted with a certain faction of people, planning to build their career in this popular business. Hotel operations management is a broad field of study with the idea of preparing people with expertise, dedication and skills for management, marketing and operations spot in the expanding industry with the intention of providing food, a place to stay and tourism services to people away from there normal homes. It is worth writing that hotel operations management as a specific part of economic science and practice is to be improved as long as the hotel industry is on the rise.

Hotels and many other businesses have very similar strategic performance operations to help get a competitive advantage this includes the ability to provide the customer with high quality service and as with Cargill's this could be providing clean neat and tidy rooms that have the basic facilities like toilets beds that are also to a high standard, also the food will have to be to a high standard. At Cargill's they have a separate but connected restaurant that provides food and beverages to the guests but is also open to the public allowing them to be able to get a reach a wider market. The quality of customer service is also very important as being able to gain returning customers is very important especially with guests that are staying due to business reasons so providing a quality customer service will increase the chance of these people coming back to stay.

Operations management helps to achieve the goal of providing a high quality service because it allows Cargill's to effectively manage the running of these different operations within the business from the supply chain in the restaurant to the training in the customer service area. This give them also benefits within the business by there being fewer mistakes and reliable throughput all helping them gain an advantage over other hotels within the Dunedin area because they will be classed as a higher grade hotel due to them providing an enhanced service and less customer complaints.

Another performance objective for Cargill's could be the speed of the service ranging from the time it takes from ordering the meal to it arriving in front of you to how long it takes to have your bags taking off the bus and to arrive at your room. Cargill's “Bag Boy” job has a system in place to efficiently mange and perform the task that helps reduce the time taken for bags to arrive at guest rooms thus helping to reduce the stress and anger of the guest that they can have especially after long bus trips. The restaurant ordering service is of a high quality as they do have a system that works but is not as efficient as they write orders on note pads while some hotels have electronic devices to help make this process faster. This gives them an advantage by helping to overcome internal problems by maintaining dependability and reduces the need to manage transformed resources as they pass through the Hotel, therefore saving costs and it also means that the time between asking for the service and getting it is satisfactory and often enhances the value of the product.

One of the most important objective for a Hotel like Cargill's is to be dependable by ensuring all processes are constant and reliable as this is important to gain trust with the guest to increase the chance of repeat business. Cargill's strives to provide a dependable service from making sure the guest are secure and will receive what they need and ask for. Making sure they get the right food they ordered and having the right quality of room that the guest has asked for and it has everything it should. The benefits of increasing dependability through operations management is it allows Cargill's to provide a disruption free service with no time wasted or effort therefore saving time which in turn satisfies the customer providing an advantage over hotels that do not provide a dependable service.

Flexibility is the forth performance objective of a business and is about how the hotel can change its operations and how easy it can do that these changes could be the actual service it provide to the customer this could providing transport or different meals or other services also the mix of services they provide like cleaning facilities, Sky TV, internet, different size beds, mini bar and other furniture like cots and high chairs. Hotels at all time have a fixed capacity, Cargill's being a smaller size hotel has the capacity of 52 double rooms for guest who stay, they also offer other services. The restaurant has a capacity of 100 which is often used for weddings and groups meets, even being able to bring a car into the restaurant itself. The other service they provide is function rooms with three available the biggest has a capacity of 85 then 20 then 12 is the smallest, these rooms have the flexibility to provide equipment that the customer might need. Cargill's has good flexibility for a hotel of its size with a range of services available to the customer or guest and can cater for many of there needs. With all of these service being within the hotel complex the time it takes to set it up is small so they have the flexibility of time as well The benefits of operations management for this objective is that it speeds up response time and helps to maintain dependability also it gives them the ability to frequently offer new products and has a wide range of services and stay ahead of other hotels.

The cost objective is probably the most important objective of operations management as the lower the cost the lower the cost to the guest and the better the profit for Cargill's. Hotels can have high costs especially fixed cost with rent for the area and cleaning services being a large part of this. The variable costs they have range from temporary staff to alcohol for weddings and being able to manage these costs by having there rooms book as full as possible all year but like most hotels the down season during autumn and winter sees there booking fall right down so Cargill's provides deals on the services they provide and has arrangements with tour company's to help keep up there booking during the down season. The ability to be able to control these costs provides advantages to them by allowing them to provide high quality accommodation at a reasonable cost with rooms ranging from a single for $99 to $155 for a superior twin. The benefits of cost management is that it improves productivity for the hotel and links together the other objectives but most of all provides the guest with cheap accommodation that offers travelers premier hospitality and Hotel accommodation in Dunedin New Zealand.

By looking at each of these objectives Cargill's is able to see where in there business they are able to improve and become more efficient in as the main point about operations management is the ability to be constantly improving on there operations by becoming more efficient and within the hotel industry you have to improve as your competitors are also improving and to be able to have a competitive advantage against them you have to be quicker, more dependable, flexible, have higher quality and provide it all at a lower cost to keep or even gain more market share. Cargill's is constantly changing by adding more services and it has a strong advantage over its competitors that it uses to the best of its ability's.

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Nalyor, J. (1999) Management. Harlow, Pearson Education Limited

Voss, C.A. (1995) 'Operations management - from Taylor to Toyota - and Beyond?', British Journal of Management, Vol.6, Special Issue, S17-S29, December

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