PHA617: Operations Management

• is the planning, organizing, and oversight of business practices that maximize efficiency and assure company processes are driving value.

Operations Management

• involves preparing and supervising the practices that turn resources (input), such as labor, equipment, and raw materials, into goods and services (output).

Operations Management

• Minimising operating expenses

• Achieving optimal capacity utilization

• Improving quality

• Increasing customer satisfaction

Chief operating officer

Senior executive tasked with overseeing the day-today administrative and operational functions of a business

Cooperating with other departments

RESPONSIBILITIES OF AN OPERATIONS MANAGER

• planning, manufacturing management, quality control, procurement

Product design and development

RESPONSIBILITIES OF AN OPERATIONS MANAGER

idea creation and product lifecycle management)

Forecasting

RESPONSIBILITIES OF AN OPERATIONS MANAGER

demand prediction

Delivery management

RESPONSIBILITIES OF AN OPERATIONS MANAGER

on-time delivery of customer orders (customer satisfaction)

Supply chain management

RESPONSIBILITIES OF AN OPERATIONS MANAGER

• (capacity planning/inventory management)

• raw material to finished goods flow management

Process improvement and optimization

RESPONSIBILITIES OF AN OPERATIONS MANAGER

• improve existing processes to aid in process efficiency

• (minimize errors and increase output)

Product/service planning

Plan products or services to meet your customers’ needs.

Product/service planning

• Carry out a market research to:

  • Identify your market and consumers, how to deliver your products to customers, identifying your competitors, how to price your product, how to promote your products.

Capacity planning

This involves specifying how many products or how much service will be manufactured or delivered and how often.

Capacity planning

At this point, you have to predict and forecast the demand for these outcomes (your products or service).

Capacity planning

When you are done planning, you should estimate the inputs needed to manufacture the product or deliver the service. This includes what type of materials to use, kind of expertise required, technologies needed, etc.

Facilities & Layout planning

Planning out layout and facilities is important because they facilitate the activities necessary for manufacturing a product or delivering a service. Also, facilities and their maintenance are one of the most expensive inputs you need.

Job & Work Design

Work design entails making an arrangement in the workplace that helps employees overcome job dissatisfaction or alienation caused by mechanical and repetitive tasks.

Job & Work Design

• If you have a work design in place, it boosts productivity. It also promotes job satisfaction among the employees.

Workflow Management

involves mapping out workflow within a given process, finding redundant tasks, automating the process, and identifying challenges and areas for improvement.

Workflow Management

Your workflow diagram or map should show the flow of activities through the system, including inputs, processes involved, outputs, and outcomes. (Process Maps)

Production planning

is the part in the operations system where the inputs get transformed into outputs (products/services).

Production planning

• Here are some things you should consider while planning this process:

  • Are there technologies/best practices available that could make the production process faster and easier?

  • What components are needed to manufacture the product or deliver that service?

  • What is the estimated demand for the product or service?

Scheduling

is essential in ensuring that the operations system is highly effective. You need to coordinate the timing of activities to organize, monitor, and optimize the equipment, people, and production activities.

Scheduling

With proper scheduling, you will have a productive operations system.

Supply chain management

consists of a system of organizations, activities, people, resources, and information involved in getting a product or service to a customer from a supplier.

Supply chain management

Activities involved in the supply chain include product development, production, sourcing, logistics, and the information systems required to

Supply chain management

aims to achieve a competitive advantage in the market and maximize customer value

Inventory management

• is a part of supply chain management.

Inventory management

oversees inventory items right from the manufacturers to where they are stored, down to where they are sold.

Inventory management

• Inventory 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. (Cost of warehouse storage)

Inventory management

On the other hand, insufficient inventory items means the organization cannot meet consumer demand, leading to a loss in revenue.

• Service Design

is the 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.

• Service Design

Your organization must become good at attracting, satisfying, and retaining customers better than your competitors.

Quality Control

is that part of quality management that ensures that all the quality requirements of a product/service are fulfilled. It plays a significant role in operations management, especially making sure that improvement occurs continuously.

Quality Control

Recent quality advancements, like total quality management and benchmarking, have led to improvements in operations management as well.

PHASE 3: MANAGING PRODUCTIVITY

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

PHASE 3: MANAGING PRODUCTIVITY

In manufacturing industries, one of the standard measures of productivity is output per hour.

PHASE 3: MANAGING PRODUCTIVITY

The factors that drive productivity are usually job-related, resource-related, and environment-related.

10 Principles of Operations Management by Randall Schaeffer

• Reality

• Organization

• Fundamentals

• Accountability.

• Variance

• Causality

• Managed passion

• Humility

• Success

• Change

Business Process Management

involves the constant analysis, improvement, and automation of processes

Design

• Designing a process helps to outline and define the process. 

• Here you identify the process, figure out where it begins, what it is made of, and where it ends.

Modeling

This is where you put the identified process down on paper. This makes it easier to analyze. If it is a simple process, you can use a workflow diagram. If it is not, you can opt for one of the many business process mapping techniques.

Analysis

Once your workflow diagram is ready, you can begin analysis. Check for steps within the process that do not add value, and look for a way to remove these steps. Also, figure out which steps can be automated using software.

Monitoring

It is impossible to improve a process if you do not know how well it is performing. You should be able to tell if the changes you made had a positive impact on the process or not. This requires close monitoring.

Improving or automating

Here you use the insights from analysis and monitoring to make necessary changes to the process. You can improve the process either by tweaking the process steps or automating certain steps using software.

Business Process Re-engineering

This approach requires you to take everything you have used before, throw it out, and start again from scratch. It helps to revamp your organization from the ground up.

Business Process Re-engineering

In most cases, business process reengineering is done with the help of technology.

Business Process Re-engineering

Business process reengineering can help foster innovation within the organization and speed up improvements on whatever selected measure you are working on. When starting from scratch, focus on the different ways you can add value to your customer.

Define

List out the issues with the process. Decide on the improvement goals and what tools and resources will be needed to achieve these goals.

Measure

Study the process and measure its performance. With the metrics in hand, you will have a better idea of how to improve the process.

Analysis

Figure out the root cause of the problem.

Improvement

Figure out potential solutions to the problems.

Control

Implement the solutions on a small scale and see how they perform before making the changes permanent

Supply Chain Management Flow

• is a relatively recent theory. It originated in 1982, but the term was not commonly used until the 1990s.

Supply Chain Management Flow

• It oversees every part of a product or service, from its creation to its sale. It involves the strategic process by which materials, information, resources, and finished goods flow from suppliers to business and consumers.

Supply Chain Management Flow

Keeping the supply chain healthy is essential because it affects production efficiency, costs, and profits.

Process design

This involves researching, forecasting, and developing a sound process.

Use of data

This involves using analytics for planning and adjustments of the operations. It is vital for decision- making.

Inventory analysis

involves using Pareto Analysis (also called ABC analysis) to manage and analyze inventory. This type of analysis divides inventory into three categories, namely A, B, and C. “A” contains items with the most value and tightest controls, while “C” has the least.

Forecasting and goal setting

This involves setting goals for operations and making predictions. Good forecasting combines the analysis of changing conditions with historical data.

Collaboration among departments

Good communication and collaboration make it easy for the operations management department to work with other departments, like finance, sales, human resources, marketing, etc.

Being green

Your operations should be ecologically friendly. It is now a legal necessity, especially in manufacturing processes.

Managing people

Despite the numerous technological advancements, people remain vital to operations. An operations manager should be able to manage his workers.

Labor Shortages

• not enough employee to do the activity at hand. 

Long Lead Times

Buyers — manufacturers or consumers — increasingly expect faster deliveries. But they suffer longer lead times.

Equipment Downtime

Around 82% of companies have encountered at least one unplanned downtime over the past three years — most companies have suffered two or more.

Inventory Management

poor demand forecasting; poor capacity planning

Space Shortages

As companies (warehouses, producers, distributors) handle more goods of different varieties, they inevitably run out of space.

Safety

You cannot run an unsafe business. Unfortunately, there are more fatal injuries in the warehousing industry than in others.