Feature Article of Saturday, 8 July 2006
Columnist: Dzissah, John
Competing in the Global Market: Time For Ghana Industries To ..
...Adjust Their Operation Strategies
In most cases, manufacturing organizations are complex entities. Complex entities require effective coordination and integration of goals, objectives, systems, processes, employees, information, technology and equipment including interfaces with customers, suppliers and other stakeholders. The role of the organization’s management is to plan, carry out, monitor and initiate actions to maintain appropriate focus that will ensure long term viability of the organization.
Today’s global manufacturing environment is very chaotic and this calls for change in management style. Manufacturing business is usually managed through three major functions: Finance, Marketing and Operations Management. The role of Operation Management is planning and making decisions. Operation Management is responsible for planning, coordinating and controlling the resources needed to manufacture goods. Operation Management exerts considerable influence over the degree to which goals and objectives of manufacturing organizations are realized.
The key decisions Operation Management make includes:
o What resources are needed and in what quantity.
o When each resource is needed
o When materials and other resources are to be ordered
o Where the work is to be done
o How product or service is to be designed
o When corrective action is needed
Today, many manufacturing organizations are failing in Ghana because they have not implemented Operation Management mechanism that will enable them to compete effectively. The followings are some of the chief reasons why many industries are failing in Ghana:
o Failing to consider customer wants and needs
o Neglecting investments in capital, research, and human resources
o Failing to implement effective ethical principles
o Placing little emphasis on product or service design quality
o Failing to take advantage of strengths and opportunities and/or failing to recognize competitive threats.
o Failing to establish a good internal communications and cooperation among different functional areas.
o Engaging too much in political activities instead of planning to be competitive
o Operating under poor infrastructure such as high frequency of power failure, rules and regulations infested with corrupt practices, poor attitude toward work
Formulation of an effective strategy
To formulate an effective operation strategy, Operation Management must work with marketing to understand the competitive situation in the company’s market. They must determine what competitors are doing, or planning to do and critically examine other factors that could have either positive or negative effects. This calls for SWOT (Strength, Weakness, Opportunities, and Threats) analysis. Strength and Weakness have internal focus and typically evaluated by operation people while Opportunities and Threats have external focus and are evaluated by marketing people. In the formulation process, it is essential that emphasis is placed on characteristics that potential customers perceive as minimum standards of acceptability for a product to be considered for purchase.
In today’s global market, world-class manufacturing organizations are constantly looking for capabilities that will give them competitive edge. The main capabilities that offer organizations competitive are advantages are:
1. Cost: Competing based on cost means offering a product at a low price relative to the prices of competing product. To develop this competitive priority, the operations function must focus primarily on cutting cost in the system such of cost of labour, materials, and quality. Manufacturing organizations in Ghana who wish to compete based on cost must study their operation system carefully to eliminate all waste both visible and invisible.
2. Quality: To focus on quality as a competitive priority, a company must understand that they are focusing on the dimensions of quality that are considered important by their customers. Unfortunately in Ghana many organizations do not know their customers let alone know the dimensions use to measure the quality of their products. A company that plans to compete in quality needs to implement quality in every area of the organization. One of the first aspects that need to be addressed is product quality (High performance design) which involves making sure the product meets the requirement of the customer. The second aspect is the process quality which deals with designing a process to produce error free products. This includes focusing on equipment, workers, materials and every other aspect of the operation to make it works.
3. Time: Time or speed (responsiveness) is one of the most important competitive priorities today. Unfortunately time is our weakness in Ghana. Making time a competitive priority means competing on all time related issues such rapid design, rapid delivery and on time delivery to the customer or on to the market. When time is a competitive priority, the job of the operations function is to critically analyze the production system and combine or eliminate processes in order save time. In Ghana we should consider some level of technology to speed up processes, meet peak demands and eliminate unnecessary steps in the production process.
4. Flexibility: Due to globalization, manufacturing environment including customers’ needs and expectations are changing rapidly. Thus the ability to readily accommodate these changes can be a winning strategy. This is flexibility. To compete in this priority manufacturing organizations in Ghana should consider product and volume flexibility. Product flexibility is the ability to offer a wide variety of goods and customize them to the needs of the customers. By this the production system should be able to quickly add new products that may be important to customers or easily drop a product that is not doing well. Volume flexibility is the ability to rapidly increase or decrease the amount produced in order to accommodate changes in the demand.
It is difficult to implement these priorities all together; therefore there is the need to make trade off between them. The operation functions must place emphasis on those priorities that support the overall business strategy. It is also important to know that every business must achieve a basic level of each of the priorities even though its primary focus is only on some. For manufacturing organizations in Ghana to survive, they must focus on quality, time based competition, efficiency, international perspectives, and customer relationships. This is because they are competing in a very different environment than they were few years ago. In this ever changing global environment, operation strategy requires flexibility and responsiveness.
The writer, John Dzissah, is the President of Manufacturing Division of Ghana Quality Organization (GQO). GQO assists manufacturing and service industries in Ghana to use leading-edge tools in product and process design, deciding what resources are needed, arranging schedules, equipment, facilities, managing inventory, controlling quality, designing jobs to make products, and designing the work methods to make them more competitive.
John Dzissah can be contacted at firstname.lastname@example.org Views expressed by the author(s) do not necessarily reflect those of GhanaHomePage.