UNIT 3A: Operations Management
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77 Terms
Operation Management
planning, organizing, and oversight of business practices that maximize efficiency and assure company processes are driving value
directing and controlling
It also involves _______________________________.
we need to monitor the day-to-day operations/activities of the business
Why does operation management involve controlling?
because aside from planning and organizing, we also need to supervise
Why does operation management involve directing?
Operation Management
involves preparing and supervising the practices that turns inputs (resources) into outputs (goods and services)
examples of resources (inputs)
information, labor (manpower), equipment (machines), raw materials, methods/processes, and money/capital
examples of outputs
products/goods, service
Operation Management
integral function of every function of every organization regardless of its size, industry, whether it is service or manufacturing, or whether it is for profit or not
Engine Room
operational management is compared to this because it is the one that propel; it has the power to let the ship go from one destination to another
Midfield Player
operation management can be compared to this because it is the center that connects all; company moves from level to success, the target of the company; mission and vision.
Productivity
OPERATIONS MANAGEMENT HELP ACHIEVE THE FOLLOWING:
it gives room for increased and maximum ________________
makes sure that all the resources (from raw materials to human resources) are utilized adequately during the production process
the only way to ensure this is through effective operation management
Competitive Management
OPERATIONS MANAGEMENT HELP ACHIEVE THE FOLLOWING:
makes it possible for your organization to stand out from the competition and gain new customers
your product should be distinct, unique, important, and profitable
Reduced Cost of Operations
OPERATIONS MANAGEMENT HELP ACHIEVE THE FOLLOWING:
result of productivity, production of quality products, and customer satisfaction are adequately maximized
leads to increased revenue and waste reduction
Quality of Product and Service
OPERATIONS MANAGEMENT HELP ACHIEVE THE FOLLOWING:
Proper operations management ensures that there are laid down processes, the products manufactured and services rendered are topnotch.
The unit examines the durability and reliability of every product before it is delivered to the consumers.
Guaranteed Customer’s Satisfaction
OPERATIONS MANAGEMENT HELP ACHIEVE THE FOLLOWING:
operations manager’s job Is to ensure that the product is of high quality, meets the consumers’ needs and that customers are treated well
Basis: High quality, Meet customer needs, and Treatment
Chief Operating Officer
senior executive tasked with overseeing the day-to-day administrative and operational functions of a business
Highest position
Operations Manager
person responsible for operations management in a company. An operations manager overseas product development, inventory, operations staffing, production, etc.
Cooperating with other departments
GENERAL RESPONSIBILITIES OF AN OPERATIONS MANAGER:
Operations are cross-departmental
Departments are interconnected. The operation manager needs to cooperate/coordinate to see how and what the department is offering
Product design
GENERAL RESPONSIBILITIES OF AN OPERATIONS MANAGER:
New ideas are created, old ideas are revived, and current ones are expanded to produce new products or offer new services
This is not just a NEW PRODUCT, aside from that, the old product should be revised to be retained in the market
Forecasting
GENERAL RESPONSIBILITIES OF AN OPERATIONS MANAGER:
to predict the consumer’s demand for the company’s products or services
done by relying on past and present data about the company’s products and services consumption
Delivery management
GENERAL RESPONSIBILITIES OF AN OPERATIONS MANAGER:
operations manager follows up with the consumers to confirm that the delivery was made on time and that the goods/services delivered are what the consumers ordered, and they met their functionality needs
Supply chain management
GENERAL RESPONSIBILITIES OF AN OPERATIONS MANAGER:
management of the production process of a product, from raw materials to finished products
includes everything from production, distribution, shipping, to the delivery of the products to control the production process, inventory management, sales, and sourcing of suppliers that will supply the finished product at reasonable prices
Process improvement and optimization
GENERAL RESPONSIBILITIES OF AN OPERATIONS MANAGER:
should analyze the operations process, figure out what they are doing right or wrong, check the results received from the current process, and look for ways to improve it
Product/Service Planning
Phase 1: Planning Operations Systems
Plan products or services to meet your customers’ needs by identifying the target market, competitors, and allies.
Carry out a market research to:
Identify the needs of the different groups of customers and how those needs can be met with certain products and services.
Identify how the new product or service should be best provided to your target markets.
Identify your key competitors and your potential allies or collaborators.
Suggest the best pricing terms for the product or service.
Suggest how best to promote products or services to the different groups of customers.
Also conduct a feasibility study on the prototype product
Capacity Planning
Phase 1: Planning Operations Systems
involves specifying how many products or how much service will be manufactured or delivered and how often
Hire an expert who knows all about developing product or service, to predict and forecast the demand on these products or service
Estimate the inputs needed to manufacture the product or deliver the service like:
type of materials to use
kind of expertise required
technologies needed
equipment
workforce
Facilities and Layout Planning
Phase 1: Planning Operations Systems
important because they facilitate the activities necessary for manufacturing a product or delivering a service to make it faster
this and their maintenance are one of the most expensive inputs needed.
Job Work and Design
Phase 1: Planning Operations Systems
entails making an arrangement in the workplace that helps employees overcome job dissatisfaction or alienation caused by mechanical and repetitive tasks
collaboration between employees and prevent alienation
ex: glass doors in workplace to monitor their people
Workflow Management
Phase 1: Planning Operations Systems
Workflow management involves
mapping out workflow within a given process
finding redundant tasks and remove it
automating the process (ex: in banks, atm machines are used for withdrawal and balance inquiry
identifying challenges and areas for improvement
Workflow diagram or map /operations management process maps
INPUT-> PROCESS-> OUTPUT->OUTCOMES
Production Planning
Phase 2: Planning, Operations, Inventory, and Quality Control
part in the operations system where the inputs get transformed into outputs (products/services).
Here are some things you should consider while planning this process:
Are there technologies available that could make the production process faster and easier?
Are there best practices that have been suggested by experts in the industry about that product or service?
What components are needed to manufacture the product or deliver that service?
What are the costs incurred in creating the product or service?
What is the estimated demand for the product or service within the next few months or one year?
Create a detailed map of the activities required to produce, assemble, and test the product or service before it is delivered to the consumers.
Scheduling
Phase 2: Planning, Operations, Inventory, and Quality Control
essential in ensuring that the operations system is highly effective
(VERY IMPORTANT) Coordinate the timing of activities to organize, monitor, and optimize the equipment, people, and production activities.
results in a productive operations system
Supply Chain Management
Phase 2: Planning, Operations, Inventory, and Quality Control
consists of a system of organizations,activities, people, resources, and information involved in getting a product or service to a customer from a supplier
Activities involved in the supply chain include product development,production, sourcing, logistics, and the information systems required to coordinate these activities
Supply chain management aims to achieve a competitive advantage in the market and maximize customer value
Inventory Management
Phase 2: Planning, Operations, Inventory, and Quality Control
part of supply chain management
oversees inventory items right from the manufacturers to where they are stored, down to where they are sold
includes raw materials, completed products or services, supplies, and works in progress. There should be a balance between the size of the inventory of items and the rate they are sold.
too many
Having _________________ items in inventory means that the organization has not recovered its costs from sales in time. It might also mean that the cost of storage is high.
insufficient
On the other hand, __________ inventory items means the organization cannot meet consumer demand, leading to a loss in revenue.
Service Design
Phase 2: Planning, Operations, Inventory, and Quality Control
act of planning and organizing every component of service, including people, infrastructure, communication, and other materials, to improve the quality of service and the interaction between the service provider and its customers
The organization must become good at attracting, satisfying, and retaining customers better than your competitors are
Implement a carefully designed customer service plan to achieve this.
Quality Control
Phase 2: Planning, Operations, Inventory, and Quality Control
part of quality management that ensures that all the quality requirements of a product/service are fulfilled
plays a significant role in operations management, especially making sure that improvement occurs continuously.
Recent quality advancements, like total quality management and benchmarking, have led to improvements in operations management as well.
Managing Productivity
Phase 3:
In operations management, productivity is the ratio of the output to the input of the operations system. The higher the ratio, the more productive the system and vice versa.
In manufacturing industries, one of the standard measures of productivity is output per hour.
The factors that drive productivity are usually job-related, resource-related, and environment-related
ex: survey, logbook, course plan, checkers
A.
Team up with customers by knowing what they use and buy
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
A.
Continual, rapid improvement to have a high quality product
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
A.
Unified Decision Making through MBO (Management by Objectives): Top, Middle, and First Level which are all included in the decision making
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
A.
Knowing the Competition
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
A.
Focus
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
A.
Organize resources
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
A.
Invest in H.R. by loving and training employees
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
A.
Simple “best’ equipment by using flexible equipment
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
A.
Minimize human error by guiding employees and keep them accountable
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
A.
Cut times by reducing the product path to the consumer by speeding up the process and delivery
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
A.
Cut setup by getting all the tools ready before production and get ready to support all processes
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
A.
Pull system by reducing waste by only producing on-demand product/improve work flow
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
A.
Total quality control
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
A.
Fix causes by controlling the root cause that will effect the product negatively
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
A.
Visibility Management by promoting the organization’s accomplishment
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
B.
Reality by focusing and resolving the problem
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
B.
Organization because the process is interconnected
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
B.
Fundamentals because 80% of success is from strict adherence to the fundamentals and discipline while 20% is from applying new techniques
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
B.
Accountability
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
B.
Variance because there should be varying process and a huge source of creativity
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
B.
Causality because problems are only effects of underlying process
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
B.
Managed Passion because it can drive the company to success
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
B.
Humility because manager should know their limitations and ask help when needed
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
B.
Success is achieved when you are decisive, strong, creative, and have a drive/passion
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
B.
Change is essential for new solutions, techniques, and technology; embrace change and incorporate it in the business
Whose principle is this?
A. Richard Schonberg
B. Randall Schaeffer
Business Process Management (BPM)
4 MAJOR THEORIES THAT CAN HELP MANAGE OPERATIONS:
involves the constant analysis, improvement, and automation of processes
Process: Vision —> Design —> Modeling —> Execution —> Monitoring —> Optimization.
Coca-Cola
ex of Business Process Management
Business Process Reengineering
4 MAJOR THEORIES THAT CAN HELP MANAGE OPERATIONS:
can help foster innovation within the organization and speed up improvements on whatever selected measure the company is working on
National Health Service (NHS)
example of Business Process Reengineering
Six Sigma
4 MAJOR THEORIES THAT CAN HELP MANAGE OPERATIONS:
data-driven approach used to improve processes
Define —> Measure —> Analyze —> Improve —> Control
Motorola and Mayo Clinic
example of Six Sigma
Supply Chain Management
4 MAJOR THEORIES THAT CAN HELP MANAGE OPERATIONS:
oversee every part of the product cycle
affects: production efficiency, costs, and profits
Mercy Health
example of Supply Chain Management
Lean and Agile Manufacturing
TRENDS IN OPERATION MANAGEMENT:
reduce inventory and waste and maximize the output of low cost but of high quality
includes techniques such as just-in-time (JIT) production, which involves producing only what is needed, when it is needed, and in the amount needed
approach helps to reduce inventory levels, minimize waste, and improve production efficiency
Toyota Production System
ex of Lean and Agile Manufacturing
Reconfigurable Manufacturing System
TRENDS IN OPERATION MANAGEMENT:
German multinational conglomerate, uses reconfigurable manufacturing systems to produce energy and transportation systems
designed to be highly flexible, allowing it to produce different products and product variations on the same production line.
Siemens
ex of Reconfigurable Manufacturing System
Cleveland Clinic
ex of Sustainability
Behavioral Operations Management
TRENDS IN OPERATION MANAGEMENT:
uses patient data and feedback where care delivery can be improved, & data analytics to identify patterns in patient behavior and preferences, which can help to inform care delivery decisions
Kaiser
example of Behavioral Operations Management