OPERATIONS - the activities and tasks that organizations use to produce goods and
services. Or is making or converting inputs into outputs. Operations is concerned with
managing inputs (resources) through transformation processes to deliver outputs
(service or products).
Inputs:
 direct labor,
 direct materials,
 other direct costs.
 Capital Item: technology, equipment, and land human capital (labor), intellectual
capital (knowledge), and social capital (reputation, brand equity, customer
loyalty, and so on).
Outputs:
 Goods - tangible
 Services - intangible
 Good and services
Management – is she process of planning, organizing, leading and controlling the
organizational resources to achieve the organizational goals.
Planning - is the function of management that involves setting objectives and
determining a course of action for achieving those objectives.
Organizing - is the function of management that involves developing an organizational
structure and allocating human resources to ensure the accomplishment of objectives.
Leading - is a management function that involves working with and through people to
accomplish organizational goals. It involves the social and informal sources of influence
that you use to inspire action taken by others through direction, inspiration and
motivation towards the attainment of organizational objectives.
Controlling - is the process of comparing the actual performance with the standards set
by the company to ensure that all the activities are happening according to the plan and
if any deviations are found, then corrective action needs to be taken
Operations management - defined as the management of the processes used in the
production of goods and services of and converting inputs/raw materials into
outputs/goods or services
Principal customer needs and wants
Principal function
Primary consideration
Manufacture
Goods of a given,
requested or
acceptable
specification
Other consideration
Cost i.e. purchase price
or cost of obtaining goods
Timing, i.e. delivery delay
from order or request to
receipt of goods
Cost, i.e. cost of
movement, Timing ,i.e.
Transport
Supply
Service
Movement of a given,
requested or
acceptable
specification
Goods of a given,
requested or
acceptable
specification
Treatment of a given,
requested or
acceptable
specification
(i) duration or time to
move
(ii) wait, or delay from
requesting to its
commencement
Cost, that is purchase
price or cost obtaining
goods
Timing, i.e. delivery delay
from order or request to
supply, to receipt of
goods
Cost, i.e. cost of
treatment
Timing, i.e.
(i) Duration or timing
required for treatment
(ii) wait, or delay from
requesting to its
commencement
Span of Operations Management
The operations manager is responsible for the management of the following areas needed in
production:
(1) demand forecasting;
(2) product design;
(3) capacity management;
(4) process selection;
(5) facility layout;
(6) inventory management;
(7) location;
(8) scheduling and
(9) quality management.
Tasks of the Operation Managers
1. The operations manager must understand what the overall objectives of the
operation are.
■ quality - required standard within the resources available.
■ speed - Speed objectives refer to the time it takes the operation to deliver what
is required of it
■ dependability - how reliable the organization must be in keeping its promises
to its customers.
■ flexibility - how quickly the operation can change to meet new demands
■ cost - refers to the level of finances consumed by the operation
2. The operations manager has to plan and control the operations function so that it
can meet the objectives set for it
3. The operations manager has to undertake responsibility for being involved in the
design of both the end service/product and the delivery processes.
a. the way in which the end product functions,
b. the organization of the transformation process,
c. the technology used and the design of the jobs involved.
4. The operation manager has to be improve the performance in the number one
areas.
5. Operations managers have to be able to explain their own plans to the other
functions. In addition, the operational implications of what the other functions are
trying to achieve need to be made clear. In essence, operations managers need
to communicate the capabilities of the operation which they control.
Trends in Operations management:
•
Global market place
•
Production/operations strategy
•
Total quality management
•
Flexibility
•
Time reduction
•
Technology
•
Work involvement
•
Re-engineering
•
Environmental issues
•
Corporate downsizing
•
Supply chain management
•
Lean production
1. Global Market Place : Globalization of business has compelled many manufacturing
to have operations in many countries where they have certain economic
advantage. This has resulted in a steep increase in the level of competition
among manufacturing throughout the world.
2. Production/Operations Strategy: More and more are recognizing the importance of
production/ operations strategy for the overall success of their business and the
necessity for relating it to their overall business strategy.
3. Total Quality Management (TQM) : TQM approach has been adopted by many to
achieve customer satisfaction by a never-ending quest for improving the quality
of goods and services.
4. Flexibility : The ability to adapt quickly to changes in volume of demand, in the product
mix demanded, and in product design or in delivery schedules, has become a
major competitive strategy and a competitive advantage to the rms. This is
sometimes called as agile manufacturing.
5. Time Reduction : Reduction of manufacturing cycle time and speed to market for a
new product provide competitive edge. When companies can provide products at
the same price and quality, quicker delivery (short lead times) provide one
competitive edge over the other.
6. Technology : Advances in technology have led to a vast array of new products, new
processes and new materials and components. Automation, computerization,
information and communication technologies have revolutionized the way
companies operate. Technological changes in products and processes can have
great impact on competitiveness and quality, if the advanced technology is
carefully integrated into the existing system.
7. Worker Involvement : The recent trend is to assign responsibility for decision making
and problem solving to the lower levels in the organization. This is known as
employee involvement and empowerment. Examples of worker involvement are
quality circles and use of work teams or quality improvement teams.
8. Re-engineering : This involves drastic measures or break-through improvements to
improve the performance of the company. It involves the concept of clean-slate
approach or starting from scratch in redesigning the business processes.
9. Environmental Issues : Today’s production managers are concerned more and more
with pollution control and waste disposal which are key issues in protection of
environment and social responsibility. There is increasing emphasis on reducing
waste, recycling waste, using less-toxic chemicals and using biodegradable
materials for packaging.
10.
Corporate Downsizing (or Right Sizing) : Downsizing or right sizing has been
forced on to shed their obesity. This has become necessary due to competition,
lowering productivity, need for improved pro t and for higher dividend payment to
shareholders.
11.
Supply-Chain Management : Management of supply-chain, from suppliers to
customers reduces the cost of transportation, warehousing and distribution
throughout the supply chain.
12. Lean Production: Production systems have become lean production systems
which use minimal amounts of resources to produce a high volume of high
quality goods with some variety. These systems use flexible manufacturing
systems and multi-skilled workforce to have advantages of both mass production
and job production (or craft production).