Explain the concept of life-cycle in Operations Management.
Every organization has an objective or objectives and goals to achieve. These objectives and goals achieving can be possible only when management organizing the available recourses in a suitable structure with a plan. The whole process of achieving objectives like planning, organizing and implementation and correction process by means of feedback bring together by operation management. The physical resources like space, machinery, money and men who organize those physical will take major role in the operation management.
The objectives related to both performance and cost, decision making process related production or operation of the organization, strategic and operational and feedback control system will play important role in deciding life cycle of any organization. The various stages and their life span each stage life cycle of system is discussed in the next section.
2. Life cycle concept
Life cycle concept is applied in operational management for any production system which takes input and produces some out put by using some process. The production system may be mass production, batch production, Job shop production or unit manufacture or project. The different production system is applicable to process of production depends on the type of product we produce and the volume of the process we use to produce the goods. The whole process of operation form birth to death of a production system can be viewed as definite Life cycle.
The life cycle concept of any product is similar to any life cycle of a living being. The major stages in the life cycle concept are 1) Introduction or Birth 2) Growth 3) Maturity 4) Death. The similar Life cycle concept we can apply to any product in production system. The Typical product Life- cycle is represented in Figure A1-1. The concept also shows the product life influenced by the external environment and go through the various stages in its life cycle. Through out the cycle the whole process of operation management is applied on the production system to maintain to sustain longer. The in evitable situation due to the environmental influences like people taste, interest there is always new born of other production system. The same concept is shown in the Figure A1-1 Product A and Product B. product B emerged in the market when the Product enjoying the maturity stage of its life cycle.
The life span of each stage of a product may vary few months to years Example some products in the market as soon as they introduce, with in no time they reach growth stage. Now we will discuss about each stage of life cycle of product.
2.1 Birth (or Introduction stage)
This is the stage where a product will be introduced after initial decisions like selection, technology selection, location and layout design of production facility after study of various aspects of business unit in transpiration and raw material, manpower resources availability etc. This is the stage we call it as Birth stage of the product.
2.2 Growth stage
After introducing the product the next stage for any product is looking for growth. The growth is stage is very critical in the operation management. The key of success is lying in this stage. How we take this product to people or how people will have feel of necessity of the product depends on the efficient marketing strategies of the management. Some times the time taking to reach to growth stage will be faster because of the uniqueness of its usage when compare with its competitor products. The major efforts are required at this stage to push with all possible strategies in an ethical manner.
2.3 Maturity stage
Once the product is established, the product life cycle enter in to the maturity stage. At this stage organization takes feed back from various groups of users and improve the product usability with add on features and introduce different models with out change in basic application. This is the stage business will be exposed more to the external competitive market which initiate new comers with similar product where they will take off the market or share the market which causes the original product business organization will go for further improvement or for new product line. Sustainability of in this stage is depends on the factors like the management's views, how fast they recognize their product obsolesced and how fast new comers taking over the market.
2.4 Death stage.
As discussed above in maturity stage, in case of business management could not predict the impact of the new product growth and lack of taking necessary changes in the product design, the product life cycle enter into the dearth stage which leads to organization to merge with new companies or liquidation or sale.
3. Life-cycle costing
The cost of the product through out the product life-cycle referred as Life-cycle costing. The new concept of this Life-cycle costing is long term costing. The short term costing always lead us to in efficient decisions which put us in a wring track of product selection, design and production. The initial cost may be higher at growth stage, but if know that product sustain longer in the market in future, we should go ahead with considerable investment keeping the future market in mind. The decision policy through out the life cycle should be maintained in the operational management of such business opportunity.
As we discussed in the above section the any business organization will have their product life cycles. The operation management of the organization should always keep watching the new trends of people taste or requirement, the available latest technology and competitors new proposals so that necessary action can be taken in advance to decrease the to reach growth stage and increase the span of the maturity stage. The type of operational decisions and selection procedures all depends on the product one any organization plan to develop or introduce in the market.