The main variables of the internal environment of the organization

Kuznetsov. Fundamentals of management

Internal variables of the organization — human resources, equipment, inventory and technology — can be understood on the model of the process of production of goods and services.
Imagine a model of the process of production of goods and services in the form of a diagram: input — transformation — output.
Commenting on this model, it should be noted that the purpose of the organization of production is to ensure the communication between suppliers of goods or services and consumers. The solid lines in the diagram show the movement of goods and services. The dotted lines represent information. This information allows you to determine how well work is organized in the enterprise. The most important part of the model is transformation — the transformation of the original product in the end.

The main components of the production process in the discussed models is the human resources, equipment, inventory and technology.
Labour resources. Speaking about the professionalism of the Manager, you need to keep in mind two aspects. First — he should know what to do and how to most efficiently produce goods or services. The appropriate equipment of the workplace, methods of execution, and technique, providing analysis of results, — all this is necessary to ensure that the production process runs efficiently and at the appropriate level.
The second thing you need to know the Manager — how many employees, what professions they must raise. After the Manager is to match the amount of work and number of workers, he will be able to determine the quality and quantity of production. The calculations need to take into account the compliance of products with standards, performance standards and level of quality. To achieve the required quality level you can apply different reward schemes, awards, the creation of favorable conditions of work, etc. an Important element in ensuring productivity is the reliability of the staff. High turnover and absenteeism is talking about the low reliability of staff and, consequently, low productivity.
People are the Central factor in any management model. Managing people who have high entrepreneurial ability is high art, and the basis of all profit and loss completely depends on what the system is °fees and incentives.
Equipment. There are three important qualities of the equipment — Power, flexibility and reliability. Rated power— the one on which device is in its design. The real power is that the device actually works.
Equipment effectiveness is the ratio of actual power to nominal. The versatility of the equipment shows how easy it is to adapt the same equipment for performing any other work. Thus, the common equipment has a high adaptability, and equipment special purpose — low. Reliability indicates how long the equipment can operate in its original form. Increased downtime and costs for repairs will attest to the fact that the equipment has a low reliability. The development of mechanization, standardization of equipment, Assembly lines, computerization of equipment has a major impact on the nature of the duties and tasks, qualifications and content of work, including management in General.
Inventories are purchased or accumulated in order to ensure the production of goods and services. In our case we will focus only on what is purchased (in the above scheme passes through the inlet and then converted). There are three basic types of inventories. Raw materials inventory is the stock of materials accumulated before the production process. Stocks of the incomplete products accumulate during the production process, in fact it is unfinished products that are in production. Stocks of finished products
is finished goods not yet sold to the consumer.
One of the reasons why it is necessary to inventory — ensuring the continuity of the production process. The second reason is ensuring the independence of the production process from the market that is what mean when I talk about "contingency reserve." How much and what inventory should have an organization? To answer this question is quite difficult. A trader will want to have as many finished products as soon as possible to sell it. The financier prefers not to have any inventory, at least a little source material to reduce necrosis of the money. The manufacturer ideally needs to be equal to the number of all types of inventory in order not to suffer from the sluggishness of suppliers, to make independent from each other the individual stages of the production process and be able to fulfill the urgent orders of customers. You also need to take into account the cost of storage. Therefore, there are several approaches to inventory management.
Distinguish management system fixed quantity system fixed-time or "just in time". Each of them has its advantages and disadvantages.
Technology as an internal variable has a wide meaning and is defined as the means of conversion of raw materials — whether people, information or physical materials — in required products and services at its core, it provides a method that allows such a transformation. Technological processes are very diverse.
There are several approaches to the allocation of their types. The most famous of them is the classification of technology Joan Woodward and James Thompson.
The essence of classification Woodward is the allocation of the following three categories of technology production companies:
1. Single, small-scale or individual production, is made from only one or a small series of identical products. Often this product is manufactured for a specific customer according to his specifications, or a prototype.
2. Mass or large-scale production used in the manufacture of a large number of products that are identical or very similar. This type of production is characterized by mechanization, use of standard components and conveyor assemblies. Almost all consumer goods are made on the basis of mass production.
3. Continuous manufacturing uses automated equipment, which operates around the clock for the continuous production of the same characteristics of the product in large volumes.
Thompson, determining the "core technology" of the organization, as the process used to adapt or modify materials that you exchange with the environment, argues that the underlying technology determines structure.
However, he distinguishes three categories of technologies:
1 - multi-hop technology which is characterized by a series of interdependent tasks must be performed sequentially. Assembly line mass production are typical examples of this type of technology.
2 Intermediary technologies are characterised by meetings of groups of people, such as clients or customers who are or wish to be interdependent. For example, banking is an intermediary technology that connects investors and those who take loans in the Bank. Technology of tourist companies is also an example of mediating technology.
3. Intensive technology is characterized by the use of special techniques, skills or services in order to produce certain changes in the specific material going into production.
Categories proposed by Thompson, is not so much at odds with Woodward categories. Multilink technology equivalent to the technology of the mass and some form of continuous production. Mediation technologies occupy an intermediate place of individual technologies and the technologies of mass production. Their use when possible and effective, at least some standardization, but the output may not be completely standardized. Mediation technologies allow organizations to use multiple variations of the needs of the parties entering into a temporary relationship. Intensive technology is equivalent to individual technologies. Their goal is to achieve maximum flexibility of production.
The differences in terminology is attributable to the area of specialization of the authors. Woodward is mainly engaged in industrial enterprises. Thompson also interested in the broader scheme covering all types of organizations. As a result, industrial enterprises are best described by categories of Woodward and Thompson seem to be better suited for technologies related to other areas.
Along with this, based on the volume of production, the degree of standardization of products and the challenges facing managers, we can distinguish the following types of technology: a) continuous process b) production process special orders,) the design process.
a) Continuous process or mass production. If there is demand for a certain type of product and it's safe to say that this demand will not decrease in the future, the production process will be most productive and effective if it is specialized (not generic). This type of production process is called continuous, and typical, for example, Assembly plants. Characteristics of the continuous process are: 1) low variability products; 2) all products pass through the same set of production operations; 3) manufactured products are not intended to satisfy the interests of a particular user; 4) the equipment is low pereslezhinoy and can not be easily used for other tasks;
5) allowed low-skilled labor.
As the products are usually held operations in a certain order, the task Manager is to organize the smooth flow of products through the entire production cycle. Failure at any one stage can result in failure of the entire line. Thus, it is necessary to take measures to make individual processing steps are independent of each other, i.e. to balance the line.
b) the production Process of special orders or small-scale production, applicable when the market is relatively small or in the future may decrease or if you are a variety of products. This type of production process is characterized by the following properties: 1) not all units of production pass through each operation, there are differences in the technology of production of different products; 2) production is carried out according to individual orders; 3) the equipment has high perevalivaet of the and versatility, the technique can easily be adapted to solve a different problem; 4) a combination of unskilled and skilled labor.
The production process of special orders is focused on a certain customer. Usually in this process, no one involved in the approval of individual transactions as available in different products. This means that the planning of inventory, labor resources, individual procurements may not be considered in isolation from the orders of the consumer, which is the signal to run all production activities. However, some businesses that perform special orders don't work directly on a specific customer, and their manufacturing process has certain similarities with continuous. The flow of orders for various products projected enterprise.
The task of the Manager is given the consumer the quantity, quality and design of products is to find the optimum solution to shorten lead time, reduce production cost, providing a high degree of exploitation of the equipment and reducing the amount of WIP. In this case, the Manager should follow a few rules. The first rule is to organize the implementation of business units of several kinds of works. The second rule is to give priority to those works which are performed most quickly.
At the service station, for example, adhered to both rules.
Before the Manager if he is trying to reduce the time of execution of the order, raises another problem. One of the characteristics of the enterprises working under special orders, is that it is usually companies public profile and are not specific. Thus, they should prepare to execute the next order. Costs for training can be reduced if to break the work into groups and to increase the degree of perevalivaet equipment. In turn, the increase in lead time will not only cause inconvenience to the customer but will also lead to additional costs. The longer the duration of certain types of works, the more the costs of unfinished products. But the most difficult task of a Manager is making operational decisions during the execution of any orders, and to a greater extent the ability to anticipate possible changes in customer requirements, based on five consumer interests, referred to above. The Manager must be ready for these changes. Sometimes it can be much more profitable instead of the production process by special orders to organize a continuous process or to move on to the design process.
C) Design process. This process is most productive and efficient in case if the demand for the products is very small (let's say there is only one consumer), or the products are very complex or unique. Do not apply here specialization. The whole organization is usually focused on performing a single project, for its implementation are directed all production resources. Examples include building space ships, bridges, repair of large expensive equipment, rescue work.
The design process is somewhat similar with the production of special orders. The difference is in the volume and complexity of the work. The main component of the cost of such production are the costs of development, materials and labor. The most important task of a Manager is to minimize the execution time of all jobs overall, and that means reducing the time to perform certain operations, but that they are not ended prematurely. Is the harmonization of certain types of work is of major importance, it is necessary to ensure that they are implemented in exactly the appointed time.
It should be noted that it is not always possible to attribute a specific process to any of the three above mentioned types, so as usual there are mixed types of technological processes.
Technological innovations influence efficiency of production, the speed of its obsolescence, the efficiency of information processing, and what kind of new products and services consumers expect from the organization. Known, for example, cases where the small company has released a new integrated circuit that has been necessary to remove from production a large firm the whole product. It follows that the organization must be able to respond quickly to new developments and to innovate. This need for rapid response to technological innovation can be confirmed with a short list of recent innovations that have profoundly affected the organization and society is a computer, laser, microwave, semiconductor technology, robotics, genetic engineering.