Contents
1. Introduction
2. Background of the company
3. Operating problems
4. The project
5. Conclusions
6. Recommendations
7. Bibliography and References
Introduction
Finance is a branch of economics concerned with providing funds to individuals, businesses, and governments. Finance allows these entities to use credit instead of cash to purchase goods and invest in projects. For example, an individual can borrow money from a bank to buy a home. An industrial firm can raise money through investors to build a new factory. Governments can issue bonds to raise money for projects (2002). Finance plays an important role in the economy. As banks, credit unions, and other financial institutions provide credit, they help expand the economy by directing funds from savers to borrowers.
For example, a bank acquires large amounts of money from the deposits of individual savers. The bank does not let this money sit idle but instead provides loans to borrowers who might then build a house or expand a business. The savings of millions of people percolate through many financial institutions, spurring economic growth. A wide variety of financial institutions have different roles in finance and the economy. These includes institutions, such as banks, link lenders and borrowers. These institutions act as an intermediary among consumers, businesses, and governments by lending out deposits. Other institutions, such as stock exchanges, provide a market for existing securities, which include stocks and bonds. Stock exchanges encourage investment because they enable investors to sell their securities when the need arises (2002)
Many aspects of finance are studied individually. Corporate finance centers on how businesses can best raise and spend their funds. Public finance focuses on the financial role of federal, state, and local governments. Public Finance is the field of economics concerned with how governments raise money, how that money is spent, and the effects of these activities on the economy and on society (1936). The paper will discuss about operating or capital investment wherein a company’s operating problems will be considered. A project will then be made to solve these problems. The project not only provides answers to the problems but can foresee the financial problems that the company might face.
Background of the business
Dell Computer Corporation is a major manufacturer of personal computers, computer peripherals, and software. Among the leading producers of computers in the world, Dell sells its products directly to customers through the Internet and mail-order catalogs rather than through retail outlets. The company is based in Round Rock, Texas. At Dell Computers, customers are brought into the product planning and manufacturing processes, with all employees encouraged to have contact with customers. Through effective collaboration across boundaries, ideas can be shared about product designs and value propositions. The result is faster and more customer-focused product and service innovation. To produce the capacity for this, considerable attention must be placed on organizational structures, processes, skills and culture. Such elements that may need a radical overhaul in established companies (2002). Dell was founded in 1984 by Michael Dell. In 1983, during his freshman year at the University of Texas, he bought excess inventory of RAM chips and disk drives for IBM personal computers from local dealers. He resold the components through newspaper advertisements at prices far below retail cost. By 1984 his sales totaled about ,000 a month. In April 1984 Dell dropped out of school to launch his company (2003).
The new company soon began manufacturing its own IBM-compatible computers under the name PCs Limited. Because Dell sold computers directly to users through advertisements in magazines and catalogs, the company could price its machines lower than those sold through retail stores. Sales reached nearly million during the company’s first year, climbing to million the following year. By 1987 Dell was the leading mail-order computer company in the United States. That year it created a sales force to target large corporations and began adding international offices to capture the direct-mail market outside the United States (2003). While the company continued to grow rapidly; Dell experienced a series of setbacks that hurt profits. In 1990 the company began selling computers through retail stores, an effort it abandoned in 1994. In 1991 Dell launched a line of notebook computers, but quality problems and inadequate production planning forced the company to stop selling them for a year. In 1994 Dell launched a new line of notebook computers and expanded efforts to increase overseas sales. Dell also began focusing on the market for servers, which are computers used to run local area networks. By the late 1990s, Dell was firmly in place as the world’s number one direct seller of computers. More than 50 percent of the company’s computer sales transactions took place via its website, which generated worldwide sales in excess of million a day (Ford, Honeycutt & Simintiras 2003).
Operating problems
Operations management has its origins in the study of production or manufacturing management. These terms still very much apply to manufacturing organizations that will have distinct operational activities that convert say, beans and rich tomato sauce into cans of baked beans to be sold by a retailer. Thus, people can initially think of operations management as being part of a distinct function producing a product and service combination, just as people have marketing and accounting functions in many organizations. Every organization that offers goods or services has an operations activity. As far as the organization structure is concerned, some firms will have a discrete operations function. This might be called a manufacturing department, an operations system, or have no identifiable name at all. However, like marketing and accounting, it is a fundamental function of the firm with professionally trained operations or production managers responsible for conversion of resources into the required product and service combinations. In some organizations such managers will have different titles, a store manager for a retailer, administrative managers within a hospital or distribution managers in a logistics company (2002).
The operations of an organization are all of the activities directly related to accomplishing the main purpose of the organization, whether it be producing some product or providing some service. In either case the operations system will provide the conversion of certain inputs, such as materials and labor, into certain outputs, either products or services. Thus, the operations function can be distinguished from the other main functional areas of an organization, such as marketing, finance, personnel, and accounting, which are no less vital for the firm’s success but which are less directly related to the organization’s day-to-day pursuit of its main business. Of course, all main functional areas of an organization are intricately entwined; all interact with and provide support for the others, and the boundaries are not always clear between them (1998).
Operations management refers to performing the traditional managerial functions that includes planning, organizing, directing, and controlling on the organization’s operations. The goals of operations management must be supportive of the goals of the overall organization, but what specifically are the goals relevant to the operations function? Perhaps the most obvious goal is productivity. Productivity simply refers to the ratio of a firm’s outputs to its inputs. Typical inputs to an operations system would include capital, raw materials, labor, and money. Increasingly, information is also being thought of as a resource. Outputs would include the organization’s products and services. Of course, organizations produce many less obvious and sometimes undesirable outputs, such as pollution and traffic congestion. Generally, though, the operations manager is striving to maximize the system’s outputs relative to its inputs. In other words, the goal is to produce the most products and services for the least cost, to the extent that this goal doesn’t interfere with the other goals of the organization (1998).
There are different problems that hamper smooth flowing operations and make the company fail to reach its goals. One problem is an unproductive workforce. The workforce is the backbone of a business. They are the persons responsible for creating the products the company sells and they are the ones that offer services to clients. Workforce that is unproductive hampers the operation of the business. They cause business process to take some time. An unproductive workforce also causes financial problems to a company. They hamper business processes to be completed in an earlier time and they waste the expenditures the company makes for production. Another problem is the tough competitors of the company. The competitors can affect how the company operates. They can do things that will make the workflow disrupted.
The project
Projects have beginnings, middle periods, and endings. This may seem self evident, but it is not trivial if people are concerned with the management of projects, since where they are in the project life cycle will have a strong bearing on what they should be doing and what options are open to them. There are many different ways to view the project life cycle. One of the most common has the life cycle broken into four broad phases: project conception, planning, implementation, and termination. In the information sciences, one often-used approach cycle focuses on these six phases: needs recognition, requirements definition, system design, implementation, testing, and maintenance. Regardless of the specific approach to the life cycle, the main point to bear in mind is that projects are dynamic, continuously evolving organisms (2003).
The project will assist in providing solution to Dell’s workforce being unproductive. It will suggest different means to make the workforce productive and efficient. The project will cost the company a fair amount of expenses. The cost of the project will include the different expenses the company has to endure in the planning, implementing, controlling, and monitoring the project. If the company wants to improve its products and services it has to spend a reasonable amount. The company will have to budget its cost of operations with the cost of changes to make sure that the company will gain more and not spend more.
Conclusion
Every organization that offers goods or services has an operations activity. As far as the organization structure is concerned, some firms will have a discrete operations function. This might be called a manufacturing department, an operations system, or have no identifiable name at all. The goals of operations management must be supportive of the goals of the overall organization, but what specifically are the goals relevant to the operations function? Perhaps the most obvious goal is productivity. Productivity simply refers to the ratio of a firm’s outputs to its inputs. There are different problems that hamper smooth flowing operations and make companies fail to reach their goals. One problem is an unproductive workforce. To solve this problem a project will be made. The project will assist in providing solution to the company’s workforce being unproductive. It will suggest different means to make the workforce productive and efficient. The project will cost the company a fair amount of expenses but it can benefit the company for longer periods of time.
Recommendations
If the company wants to make sure that its operations will run smoothly and it will encounter lesser problems it has to make sure that the project will be successfully completed. The company also has to make sure that the project will be funded accordingly so that the effects will be beneficial. The company has to make sure that the project will be given outmost attention so that when problems are evident it can be dealt with and given proper action. The company must make sure that the project will be executed well so that its benefits will be evident. In doing the project the company must keep in mind that the project will solve the operational problems and not create more problems for the company.
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