Business environment has changed over a period and continues to change day by day. Those operations that seemed efficient and very effective in the olden days have since become poor methods of productions (Peter, 2012). Both the internal and external environment is very dynamic and any business that wants to remain relevant in the business world has to take keen interest on the contemporary issues. Managers should be vigilant in studying the current trend and making future forecast to ensure that they remain relevant in their operations (Peter, 2012). Pharmaceutical firms are no exceptional in this problem. They, just like in the case of Smitheford Pharmaceuticals, face a number of problems. With difficulties in transporting their manufactured products, there are high chances in delays or failure to make timely delivery and if timely delivery is successful then it becomes highly expensive. This will definitely interfere with the profitability of the Smitheford. With diseases continuously undergoing mutation, drugs keep on losing their intended work, prompting the need to keep changing drugs every now and then. Advancement of production equipment has also posed serious challenges, as keeping up with the rate of technology advancement is very costly. According to Peter (2012), costs that are fixed increases as the technology keep advancing. A large company like that Smitheford pharmaceutical firms must be having a large and dynamic market. The employee base becomes even big and big resulting to management crisis. With a large firm, the process of decision-making takes a very longer time unlike the small one making it very difficult for timely problem solving (Peter, 2012). Increasing the Pharmaceutical firm to various geographical areas is a recommendable achievement as it results to the spread of risk that is very important to a success of any business (Peter, 2012). This however, comes with other managerial problems. Middle manager of any production operations has the responsibility to come up with a working method to guarantee that efficiency and effectiveness of the firm realized now and even in the future, to ensure that the firm maintains its competitive advantage in the market (Peter, 2012).
Quality management in the olden days meant the capability a given organization to offer customers with quality products that result to their satisfaction (Peter, 2012). This has not remained the same today, quality management requires an organization to go beyond producing quality goods and respond to all parties including taking concern of the environment. Smitheford must have failed to change with the changes of quality management, hence failed in implementing some of total management quality. According to Peter (2012), quality product in the contemporary business world means quality life, which is broader than just the quality of product. Smitheford Managers must therefore properly configure processes within quality management to meet the basic requirement of improved quality and reduced cost of the business (Peter, 2012). This will help the pharmaceutical firm manage the widening fixed cost that come with the advancement of technology. According to Peter (2012), to measure process quality, there are three principals that operation manager should take into consideration: the first one is effectiveness, the second being efficiency and finally adaptability. A product will be effective if it can meet the customer needs. An efficient product is able use the least cost to satisfy customer (Peter, 2012). Finally, the operation is adaptable when it can remain efficient and be effective even with dynamics that come with time. According to Peter (2012), for the three principles to become real in an organization, managers need to apply the principle of continuous improvement by doing forecasting activities and conducting surveys. Most organization that fails to do this like Smitheford is likely to face various challenges.
For the pharmaceutical firm to be efficient, effective, and adaptive in their operations, operation managers must be able to use the balanced perspective (Peter, 2012). The first perspective is financial perspective. The organization must be able to meet the most common but very important objective that is, does the business takes care of the stakeholders. The business must be able to maximize shareholders wealth. The second perspective is business internal perspective. . According to Peter (2012), business need to be sure, of what they should do to remain competitive and satisfy both customer and stakeholders. The third one is innovative perspective. The mostly considered thing in this perspective is, whether the business should continue to be innovative and create value. The fourth and final perspective is the customers’ perspective. The business should be concerned on how they treat their customers (Peter, 2012).
When managers have successfully looked for effective methods and efficiency methods of improving operations of Smitheford Pharmaceuticals firm, there is need to use both qualitative and quantitative methods to make recommendations for operation improvement (Peter, 2012). Since some of the methods gathered by management cannot be measured neither can they be translated to numerical figures, it will be important for operation manager to use Qualitative methods when recommending this kind of information. Peter (2012) believed that satisfaction, feeling, and some environment concerns cannot translate to numbers and therefore use of qualitative method will work. When dealing with things that can translate to numbers, the manager can use quantitative to give explanations (Peter, 2012). For example when determining the profitability level of the firm, with an aim of determining whether the business meets stakeholder’s interest, quantitative method is applicable.
Cost Benefit Analysis
When going through modernization method, the organization may have problem knowing which technology is cost effective (Boardman, 2010). The following calculation help explain the state of the two equipment options.
Illustrations Year 1 =( $620000/100000) + 16.31 =($110000/100000) +18.89
= $22.51 = $19.99
High technology Low technology
Centralized location Decentralized
Yr1 = 22.51- 16.31 19.95 – 18.89
= $6.2 =$1.06
High technology Low technology
Centralized location Decentralized
The above calculation shows a decreasing level of contribution for both the high technology and low technology. However, low technology decentralized has very low figures compared to those of high technology centralized with $0.49 per unit contribution against 2.76 of the high technology. It is advisable to improve both the high and low technology with more effort placed on the low technology (Boardman, 2010).
Reference
Boardman, N., (2010). Cost Benefit Analysis. Upper saddle river: prentice hall.
Peter, F., (2012). The Effective Guide: Getting Things Done The Right Way. New York: collins
