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= Productivity and performance to increase the profit with HRM and Sustainability = In today’s business contexts, all businesses are goal-driven, and their goal is to gain more profit. But can they gain profit without proper management? Here important is the day-to-day operations and how to manage them towards operations management and decision making.



What is Operations Management?
It is the process of converting inputs into output by adding value to them. (Heizer, et al., 2020) described Operation management as a set of activities that produce value-added goods and services by converting inputs into output. Also (Hayes, 2021) explained OM is an efficient conversion of labor and material to goods and services gaining the highest profit while applying business and management strategies to it.

Further (Hayes, 2021) discussed, operations management been used resources such as staff, materials, equipment, and technology while operations managers work to develop and deliver goods as per clients’ interests. OM includes various strategic areas like factory or plant management, Project management, application of information system and further, Inventory handling, Quality assurance, quality control, and maintenance.

According to (Heizer, et al., 2020), Although it is a college, a company, volunteer works, or any other institute there are three main functional areas to produce goods and services.

There are,


 * 1) Marketing – to create a demand. This is necessary because this will help to generate income.
 * 2) Production / Operation – Manufacturing and delivering.
 * 3) Financial / Accounts – Manage money in and out.

The OM is basically something that requires resources, material, labor to operate. Towards OM, it is all about productivity and performance.

What is Productivity? And What are the challenges affecting Productivity?
Productivity is a ratio between Inputs and outputs. Here resources are the inputs while Goods and services are outputs. If the productivity ratio is high, that means there is more efficient work (Heizer, et al., 2020). In another way, the more efficient, the more productive goods and services. Inputs must be monitored and controlled to gain a high productivity rate.

From an economic point of view, Productivity is output per unit of input. Input as labor, capital, or any resources (Kenton, 2021).

According to (Heizer, et al., 2020) increase in productivity will depend on three factors. That is,


 * Labor.
 * Capital.
 * Management.

Proper handling of these three critical factors is the main reason to improve productivity.

Labor
(Heizer, et al., 2020) explained labor productivity can be improved with a healthier and educated workforce. Below three points will help to develop labor productivity,


 * Basic Education.
 * Good nourishes foods.
 * Supporting additional expenses like transport.

Further (Investopedia team, 2020) discussed labor productivity can improve using the following.


 * Improving physical resources like infrastructures.
 * Giving them good quality education or support them for education then improve skills.
 * Develop new technologies.

(Schaefer, 2014) described employees need to be admired, valued. Because when human needs are fulfilled, they can engage more in the work. More engagement means more profit to the company.

In Amazon, it has proven that they are misusing their labor force. If they are not, why they need to provide mental health facilities to their people?

Capital
From the productivity point of view, capital can be defined as the tools, equipment, employee facilities, new machines. Basically, humans always use tools for any work. Companies’ responsibility to provide tools for them to work faster while taking care of their basic needs.

(Heizer, et al., 2020) showed in the U.S. they increase capital investment every year at an annual rate of 1.5%. Further, they describe lowering the invested capital cause lowers productivity.

There is no argument about their attractive capital investments at Amazon.

Management
Management is mainly involved in managing labor and capital. They are responsible for the equal distribution of capital and the capital is effectively contributed to productivity (Heizer, et al., 2020).

Increasing productivity is not that easy. It is altogether with right decision making from the Management side and the employee motivation with providing requirements to them. Mainly, if there are more educated employees, modern technology and good capital investments give more productivity.

Management of Amazon is hierarchical. Yet, It is based on Bezos’s center pivot point.

Challenges towards productivity.
While Labor, Capital, and management involve in Productivity, there are few key challenges to be considered for production.


 * Increase of raw material price.
 * Resource scarcity.
 * Cost of labor increase.

Increase of raw material costs.
The world is changing so fast, Called VUCA (Volatile, Uncertain, Complex, and Ambiguous) world. Along with this, material price is increasing day by day. Together with the other operational expenses output is getting expensive which affects the customers.

Resource scarcity.
Resource scarcity can be defined as the High demand for resources that have limited supply. Scarcity is mainly based on natural resources such as Oil, Water, Metal or even Oxygen, etc.

(Pettinger, 2019) discussed three major cases for scarcity, such as High-demand, low supply, improper management.

High-Demand is due to,

 * Growing population.
 * High GDP.
 * Preferences.

Low Supply due to,


 * Natural disasters or some force majeure situations.
 * Quality issue of the source.

Cost of labor increase.
Cost of labor increase is mainly affecting company’s profitability. In reality, employees are expecting salary increments every year. But the question is, can the same company increase productivity or the product selling price to maintain their expected profit?

Usually, people are inherently lazy at work, so there should be some motivation factors to contribute to the company’s productivity, efficiently and effectively. An increase in Salary, Bonus, commissions would be the best options. But companies may look for ways to increase their profit while taking care of the team.

What are the Opportunities for Productivity?
In the 21st century, the world is moving towards more environmentally friendly materials. Say Go Green. According to (Bonini & Oppenheim, 2008) customers are worried about environmental issues like climate changes, new diseases, droughts. Go green is the best choice for resource scarcity especially for natural resources. Finding out the ways to recycle, re-use, and eco-friendly material.


 * Motivate or engage consumers with eco-friendly products.
 * Use of decomposable material.
 * Introduce bio-degradable material.
 * Introduce recyclable material or products.
 * Moving forward with E-commerce.

Further (Bonini & Oppenheim, 2008) discussed when it comes to the real-life situation 33% of the customers will go for green products, and based on U.S. customers, it is only 25%. Low supply, High cost, unawareness, no confidence in these green products are the reasons and the biggest challenges to Go Green. Using a better marketing strategy, a high production rate, and educating people will be the best solutions to resolve these issues.

Innovative is the Key.
Being innovative is another perspective to increase productivity and profitability. Such as,


 * Introduce less energy consumption products and processes.
 * Introduce products that use less material.
 * Introduce products and process require less labor.
 * Introduce and develop automated technology.
 * Use eco-friendly product development and processes.

This will bring a positive impact to the Triple bottom line because using less energy, less material will help to save the planet. If manufacturers can develop the concept, they can go for the zero-carbon emission required to the world.

Introducing automated technology will increase efficiency and productivity, which causes profitability. More profit means the company can develop their infrastructures and they can distribute the profit to employees which makes the peoples satisfied on the working environment.

Automation is not only related to machinery but also the people. Flatten the organizational structure makes people more confident in their decision makings and they have the responsibility to it.

This can be implemented on Amazon to increase productivity along with TBL.

However, companies can start using automated technology to maximize the output. Because humans cannot compete against machines for high-volume tasks. Machines need a substantial volume of data to be automated. Machines cannot face new problems, situations like humans. The human can face new situations (Goldbloom, 2016)

The profit comes together with HRM and Sustainability.
Creating an autonomous work environment with cut down the hierarchy level, helps employees to be mastered on what they do, and giving a purpose to employees will make them more responsible for their tasks. This could guide them to be self-driven personals (Turchetti, n.d.).

Support employees to be autonomous, flatten the vertical levels in organization structures leads to a corporate governance model and creates more leaders, not managers. Then becoming environmentally friendly with following Triple bottom line together with Corporate Social Responsibility makes the Sustainable system.

However, according to (Heizer, et al., 2020) Operations Managers are playing a significant role. Together with CSR and sustainability practices, this role becomes more complex together with their commitments to:


 * Stakeholders.
 * Produce durable, eco-friendly, safe, and quality products.
 * Engage employees in good practices with training and guiding them.

In this event, Human resource management will do an important role to engage employees effectively.

There are two main practice models for Human resource management called the soft model and the hard model. The soft model is basically aligned with the modern leadership approaches. Here employees feel they belong, they have opportunities to grow, they are awarded. This way employees will retain the company positively. But the hard model is different because it is more aligned with autocratic. Employees will work since there are clear work goals and duties (Clegg, et al., 2011). But the hard approach might make employees more stressed and unhappy.

However, the main objective of HRM is to help businesses to meet their business objectives (Clegg, et al., 2011). When it comes to people, that is where it can be applied.

Summary
In a summary, business needs to sustain with gaining profit along with people and planet. Application of proper leadership, business strategies will lead the business to reach financial goals keeping the employer motivated and retained at its best.

Category:Education Category:Article Category:Research