Operations management is a fundamental business function.
Businesses convert inputs from the environment into outputs (products/services).
Goal: Achieve profitability by managing the transformation process effectively and efficiently.
Importance of Effective and Efficient Operations Management
Efficiency: Doing the best with the least resources.
Reducing waste and mistakes.
Enhancing productivity with minimal resources.
Effectiveness: Meeting objectives, like enhancing quality and customer satisfaction.
Benefits:
Reducing costs and increasing revenue.
Lower investment needs and encouraging innovation.
Improving productivity and profitability.
Key Terms in Operations Management
Operations Function: Utilization of resources to create products/services.
Operations Managers: Individuals responsible for managing the operations function at various organizational levels.
Operations Management: Encompasses activities, decisions, and responsibilities tied to managing the operations process, including transforming inputs into outputs.
Differences Between Products and Services
Products: Tangible, can be kept in stock, quality is measurable.
Services: Intangible, perishable, quality is subjective.
Operations Management Strategies and Performance Objectives
Focus on customer needs and formulating strategies.
Key elements:
High quality
Lower costs
Shorter lead time
Greater adaptability
Lower variability
Higher level of service
Objectives designed to achieve these elements can improve competitive positioning.
Classification of Process Types
For Manufacturers
Project Processes: Unique, large-scale, long duration (e.g., stadium construction).
Jobbing Processes: Small scale, low volume, specific requirements (e.g., custom cakes).
Batch Processes: Production in batches or lots (e.g., limited range manufactured in lots).
Mass Production: Producing identical products in large quantities.
Continuous Processes: Continuous, uninterrupted production unless stopped for valid reasons.
For Service Providers
Professional Services: High client contact, few recipients at a time (e.g., doctors).
Service Shops: Intermediate client contact, standardized services (e.g., hotels).
Mass Services: Less client contact, many recipients at once (e.g., broadcasting).
Operations Design
Encompasses product/service design and process design.
Product Design Steps:
Idea generation
Concept screening
Preliminary design
Evaluation and improvement
Final design (prototype)
Components: Concept package, composition, and process.
Operations Process Design: Involves layout selection (e.g., fixed position, process, product, cellular types), and considering technology and job design.
Operations Planning and Control
Reconciling supply with demand in terms of volume, timing, and quality.
Key activities:
Loading of tasks
Sequencing of tasks
Scheduling of tasks
Capacity Planning: Adjusting capacity to meet demand.