INTRODUCTION TO OPERATIONS MANAGEMENT AND PRODUCTIVITY

Definition and Nature of Operations Management

involves the administration of business practices to achieve the highest level of efficiency within an organization. It focuses on converting inputs into outputs effectively and efficiently

Key Functions of Operations Management

Product and Service Design • Process and Capacity Design • Supply Chain Management • Quality Management • Inventory and Logistics Control • Scheduling and Workforce Management • Maintenance and Continuous Improvement

Example: • In a Philippine hospital, OM ensures that patients receive care efficiently — from registration, diagnostics, to discharge — while minimizing waiting times and maximizing resource use.

The Role of Operations Manager

They oversees the entire production or service process.

Their duties include: Responsibility Description Example Planning Forecasting demand and resource allocation A restaurant plans ingredients for weekend sales Organizing Structuring processes and teams Assigning nurses to hospital wards Leading Motivating staff to improve performance Encouraging teams to follow 5S workplace discipline Controlling Monitoring performance and correcting deviations Analyzing service delivery time against KPIs

Productivity: Concept and Measurement

Productivity is a measure of how efficiently resources are used to produce output. It is calculated as: \text{Productivity} = \frac{\text{Output}}{\text{Input}}

Example: A BPO company in Manila measures productivity by the number of calls successfully resolved per agent per hour. Improving training and using AI-assisted chatbots can increase productivity while maintaining quality.

Types of Productivity: Labor

Output per labor hour.

Types of Productivity: Capital

Output per unit of capital.

Types of Productivity: Material

Productivity: Output per material cost.

Types of Productivity: Total Factor Productivity

Compares output to combined inputs.

Factors Affecting Productivity

Internal Factors External Factors Worker skills and motivation Economic environment Technology and innovation Government regulations Quality of raw materials Competition and globalization Plant layout and workflow Cultural and labor market conditions

Example: • A Philippine manufacturing firm may face productivity issues due to frequent power outages or outdated machinery.

Total Quality Management (TQM) Integration

Total Quality Management (TQM) is a philosophy of continuous improvement in all organizational processes, involving all employees and aiming for long-term customer satisfaction.

TQM Principles Related to Operations and Productivity

1. Customer Focus: All operations are driven by customer needs.
2. Continuous Improvement (Kaizen): Every process can be improved.
3. Employee Involvement: Workers participate in decision-making and problem-solving.
4. Process Approach: Focus on improving processes, not just outcomes.
5. Fact-Based Decision Making: Use data to analyze and improve productivity.
6. Integrated System: TQM links all departments into a unified quality system.

Example: • Toyota Philippines applies Kaizen and Just-in-Time systems to improve productivity while maintaining high quality. • The Medical City integrates patient feedback loops to refine hospital operations continuously.

Operations Strategy and TQM Synergy

Area Operations Management Focus TQM Integration Process Design Efficient workflow Design for quality and error-proofing Capacity Planning Optimal resource use Flexible capacity for continuous improvement Supply Chain Reliable suppliers Supplier partnerships based on quality Human Resources Skilled labor Employee empowerment and training Measurement Cost, speed, productivity Customer satisfaction and quality metrics