Operations management defined is the activities that relate to the creation of goods and services through the transformation of inputs to outputs. Operations management includes several different factors. Among these factors are strategy, design of goods, operations and productivity, project management, forecasting, managing quality, statistical process control, capacity planning, and location and layout strategies. All of the aforementioned factors are discussed in detail in the following pages related to Nike. It is important to note that other aspects of operations management exist. Those most relative to Nike and its business environment were focused on.
Low cost leadership is achieving maximum value as perceived by the customer. Response, or flexible response, is the set of values related to rapid, flexible, and reliable performance. Differentiation is to distinguish the offerings of the organization in any way that the customer perceives as adding value. Nike focuses on a differentiation strategy. Several other sport apparel companies offer less expensive product. However, by way of the reputation it has built and the perceived quality of its goods, Nike can charge a higher price and consumers are willing to pay it. For this to continue, it is imperative Nike remains committed to offering high quality goods.
Design of Goods
The design of goods is vital for Nike to succeed. Nike has long had a reputation of being innovative in the design of its apparel and equipment. Given its differentiation strategy, Nike must focus on this aspect of operations management. Consumers have come to expect a certain level of quality in the goods they purchase from Nike. To remain at the forefront of the sporting industry Nike must continue to meet these expectations. It must invest the appropriate amount of time and money to continue to meet and exceed the wants of customers. If Nike were to quit designing new products, it will fall behind competitors and will become more difficult to achieve market share in the sporting industry.
Operations and Productivity
Operations and productivity are extremely important to any company. For a company to succeed it must operate and produce goods in an efficient manner. Labor, capital, and management are three variables that affect productivity. Productivity can improve because the labor force is healthier or better educated. One of the most important aspects of increasing productivity by way of labor is training. From top to bottom, Nike consistently holds training and continuing education sessions for all employees. Improvements in labor productivity are becoming more expensive; however Nike utilizes this area as a means to further increase its status in the sports apparel industry. Capital is also an important variable when discussing productivity. For the laborers of Nike or any company to work at a high level they must have the resources necessary.
Management is the most important variable of productivity. Per the text, 52% of annual productivity increase can be attributed to management. Labor and capital represent the people and tools necessary to do the work. It is management’s responsibility to ensure these variables are used in the most effective and efficient manner possible. It is here where a company can greatly increase profits. As evidenced by the sustained success of Nike in the past years, its top management has continually allowed Nike to generate revenues and produce profits.
As mentioned earlier, Nike has become a global company. This has several benefits for Nike from an operations standpoint. Nike has benefited from...