Integrating OM and Marketing Management

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Operations Management - Prof. Felipe Quintana

Section 2

Nayla Nohra

Building Relationships Between Operations management and Marketing.

Before being introduced to this course, I had in mind that the company cannot work if there isn't a marketing department. As I got know better about operations management and with the help of our professor that opened my eyes on the importance of OM, and how it should be linked to marketing.

In summary, Marketing is the creation of customer demand. Operations management is the supply and fulfillment of that demand.

we can say that these two are intimately connected in many firms.

Take Away

What can we learn ?

In order to deliver value to the customer and increasing their satisfaction, it is essential that the marketing department and operations department to coordinate and collaborate. When doing so they establish standardization of products that will allow better cost control and avoid any negative impact on customers. Thus, a full understanding of what each department does is vital and this can be done by improving the communication.

Relationships between the 2 areas are key to develop efficient operations.

-> Many time goals of each department are opposite, and they fight internally and the result and the bad feelings finally arrive to the customer with very bad consequences.

Readings

What are the main aspects they need to coordinate?

Campaigns and Promotions

Sales Forcast

New product development and time market

Fixing the Price/Cost

Operations Management

What is Operations Management?

Operations management is basically people management. It involves getting the most out of your company resources. Basically, it focuses on carefully managing the processes to produce and distribute products and services in the most efficient and effective way.

This process can involve the employees (doing more work that creates value), technology (maximum efficiency in manufacturing, for example), equipment (help employees do more work), and so on.

Why OM is important?

When implemented correctly, OM can lead to:

1. Better output: the operation management make sure that he optimizes and always improves the process. when doing so automatically, the output will be higher, the defect rate will decrease as well as the costs.
2. Competitive advantage: better output means better product or service. this will help the firm to differentiate itself from the competitors. Thus, gain new customers.
3. Higher profit: when the first 2 steps are achieved, the company will generate more profit.

Relationship?

Not all customers have the same needs. Since customers have access to the internet thus are updated about the newest trends. they are informed about everything that is happening. It is really hard to understand what the customer wants.

Here comes the role of Operations management, which plays an important role to understand customer needs and try to build lean and efficient processes to offer them the best products and services.

Basically it is the area of the company that transforms the idea into a satisfied customer.

All of that is possible with the help of the Marketing department.

Lets take the example of Amazon: Since they figured out the pain moments when buying groceries. Thus, they created Amazon Go a store where the most sophisticated technologies are implemented in order to reduce the pain moments.( for example: waiting the pay, queues...)

How to improve the relationship?

1. Team-building activities: understand more each other.
2. Trainings about each department tasks and how they should interact with each other.
3. Visiting the departments.
4. Open transparent two-way communication channel within the company: an internal blog where employees can share their ideas and feedbacks and suggestions.

Why these two departments should be integrated?

It is critical for the two departments to intract:

Fist of all, to build trust, which is a key asset. the departments should know well each other, relate and create credibility. When that is done communication is facilitated thus the delivery of information is accurate and thus will eliminate the miscommunication that can slow down production.

Plus, a good communication can help to avoid conflicts. For example in forecasting if there is no good communication between the marketing department and the operations this can lead to a surplus or shortage in the products.

to avoid extra cost, in urgent situations its really difficult to understand what this extra cost implies and how to allocate it. When there is transparency it is easier to establish the extra cost that the situation will create before it is produced thus knowing if this cost is viable or not.

How should the relationship between Marketing and Operations areas be built in a company?

Marketing

What is marketing ?

Marketing is about identifying and meeting human and social needs. Basically it is a focus on the customer but also on the company and its objectives.

For Example: When the Swedish company IKEA noticed that people wanted good furniture at substantially lower price, they created well-designed, low-priced furniture.

Why is Marketing important?

Companies of all kinds – from consumer product manufacturers (such as Nokia), to health care insurers (e.g. Bupa in the United Kingdom), from car manufacturers (e.g. BMW or Porsche in Germany) to banks (such as Société Générale in France), from non-profit organisations (Amnesty International, which was founded by a British lawyer) to industrial product manufacturers (e.g. Airbus – a French, German, English and Spanish conglomerate) – all have to use marketing in order to understand their core customers and grow their businesses.