Operations management

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Executive summary

Hydraflow is a company that manufactures aerospace components. Hydraflow is committed to helping customers satisfy their needs in innovative products. The company offers high-quality products at competitive prices. Customer satisfaction is what propels Hydraflow to continue expanding (Matrixwebs.com.). The company conducts enough market research to ensure that it gets the demands of the customers. The company has created a bond of satisfaction with its customers; they do collaborate and work well together (Matrixwebs.com.). The company has annual revenue of over $45M, and with an annual profit of over $1M, the company is a global brand. The company wants to expand its operations so that it can reach all the consumers globally. Achieving global recognition will be aided by taking advantage of supply chain management, supply and demand, operations strategy, forecasting, and strategic capacity.

Supply chain management

The supply chain is all about getting the right product in the right place at the right time and at the right quality. Supply chain management involves the transformation of raw materials into finished goods that will be appealing to the customer. Hydraflow takes caution in supply chain management because it is a significant part of the organization; careful handling leads to faster conversion of inputs into outputs. The way the supply chain is handled in the organization will determine the success of the product. Supply chain management ensures that the resources at the organization are carefully utilized to avoid wastage. According to Stevenson (2015) “the goal of supply chain management is to match supply to demand as effectively and efficiently as possible”. Management of hydraflow prioritizes on supply chain and that is why it keeps on growing.

Image result for supply chain process cycle

The supply chain process above shows how goods move from procurement to when they are supplied to consumers.

Supply and Demand

The supply chain cannot work effectively without supply and demand. The two components are very important, one cannot work without another. Without supply, the demand of customers will not be satisfied and without demand, the products produced will not be consumed. The supply chain process will fail drastically. Hydraflow has made a name for itself and that ensures that the demands of customers are met with the continuous supply of products. As the company continues to provide goods it must consider the geographical location of its customers, which will ensure that supply chain management factors in the issue dealing with the transportation of goods (Stevenson, 2015). Market research is also an important factor to be considered when dealing with supply and demand. The organization needs to understand what goods the customers consume on a daily basis.

Focusing on supply and demand ensures that customers are always satisfied because the company knows which products it will supply to its customers. Hydraflow continues to prosper because it has mastered the art of customer satisfaction by meeting their demands. The law of demand states that when prices are higher the customers will demand fewer goods. While the law of supply states that when prices are higher, sellers will supply more goods to the market. The two components interact to determine the actual market prices and the number of goods that will be consumed. According to Stevenson (2015) “Two components for each organization: a supply component and a demand component. the supply components start at the beginning of the chain and end with the internal operations of the organization. The demand component of the chain starts at the point where the organization’s output is delivered to its immediate customer and ends with the final customer in the chain. The demand chain is the sales and distribution portion of the value chain. The length of each component depends on where a particular organization is to the final customer, the shorter its demand component and the longer its supply component.”

Image result for supply and demand curves

The supply chain curve above shows the relationship between supply and demand. the quantity and the price of the goods supplied to consumers.

Operations strategy

An operations strategy is plan showing how an organization will allocate its resources to ensure that the resources are fully utilized. Operations strategy helps management reduce wastage of resources. Operations strategy is mostly driven by the strategies put in place by the organization. Operations strategy is a vital component of the organization as it keeps inventory system on check at all times (Stevenson, 2015). For operations strategy to work effectively, the keeping of records at the organization should be up to date. Operations strategy is responsible for ensuring that transparent activities are conducted by the company. Operations strategy ensures that only what the customer’s need is produced and that helps prevent the wastage of resources.

Operations strategy helps to monitor and control the cost of productivity. in controlling cost, it ensures that lees costs are spent on inputs of raw materials and maximization of outputs. Operations strategy also ensures that goods are transported to consumers at very low costs. Operational strategies are mostly the methods which are employed by the management of a company to meet the set objectives (Stevenson, 2015). Operational strategies also help to manage personnel and other basic operations of the company. The strategies help to ensure that customer satisfaction is achieved through the delivery of the right product at the right quality. Operational strategies help to link the short term and long term objectives of the company.

Image result for operations strategies flow process


Every organization needs a business forecast. Forecasting is simply the way of estimating what the future is going to be and the forecast is based on events that have already happened. Data from the past or the present, opinions trends and other known variables are used in forecasting. Forecasting helps in future planning by using effectively compared data to provide information on the number of raw materials that will be needed and the cost that will be needed during the production process (Stevenson, 2015). Forecasting helps in the effective decision-making process by the organization, decisions are made easy with the help of previous data and opinions from others.

Forecasting is very important because it helps take into account when to order inventory and when to hire more employees. Forecasting is very necessary because it helps the organization know the peak seasons and the low seasons so that they can completely take advantage of it. Forecasting also helps the organization know the right time to launch a product into the market. Effective forecasting ensures that the organization makes profits and knows if its strategies are effectively working (Stevenson, 2015). The most effective way of forecasting is by using historical data to determine what could happen in the future. Organizations always conduct both short term and long term forecasts. Short term forecasts are majorly for the introduction of the product into the market.

Image result for financial forecast graph

The graph above shows the sales forecast, made by hydraflow in the first year and the the expected sales in the second and third year respectively.

Strategic capacity

Capacity is the highest level that an operating unit can handle. Strategic capacity determines the number of services performed. Going over the strategic capacity will mean that the organization will incur more production costs leading to strained resources. Sometimes the customers may not be satisfied because there will higher prices on products due to increased costs of production. to ensure effective strategic capacity the organization needs to put in place policies that need to be adhered to. The policies include estimating future capacity requirements, evaluating existing capacity so as to identify gaps, conduct financial analysis identify alternatives that will help in meeting objectives and to implement selected alternatives.

In conclusion, it is necessary for an organization to have a properly working supply chain process. The supply chain will ensure that the demands of customers are met accordingly. Supply chain management ensures that the resources at the organization are carefully utilized to avoid wastage. The organization also needs to understand the laws of supply and demand and how they can effectively manipulate them to ensure customer satisfaction. Focusing on supply and demand ensures that customers are always satisfied because the company knows which products it will supply to its customers. The organization also needs to employ effective operations strategies, operations strategy is responsible for ensuring that transparent activities are conducted by the company. There is also the issue of forecasting which is mostly done by many organizations, forecasting helps in the effective decision-making process by the organization, decisions are made easy with the help of previous data and opinions from others.


Stevenson, W. J. (2015). Operations Management (12th ed.). New York, NY: McGraw-Hill Education.

Matrixwebs.com. (n.d.). Hydraflow – Engineered Aerospace and Defense Systems Components. Retrieved from https://hydraflow.com/

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