Operations Management

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OPERATIONS MANAGEMENT

OPERATIONS MANAGEMENT

Operations management

is the administration of business practices to create the highest degree of efficiency possible within an enterprise. It involves utilizing resources from people, materials, equipment, and technology.

Operations management

aims to keep critical quality standards while ensuring that day-to-day operations are efficient, cost-effective, and timely.

Operations management

It also aims to strategize how to effectively build structures for its operations, manipulate and utilize information technology networks to hasten work processes, and use proper inventory systems.

Role of Operations Management in a Business

Role of Operations Management in a Business

The responsibilities of operations management range from the following (Dhoul, 2022):

• Capacity planning

It involves evaluating the number of products or services a business can sell or distribute in a given time frame.

• Product design and service design

To ensure that customer requirements and expectations are met, new concepts are generated, and a service or product is developed. It also involves a product's cost-effectiveness and meeting customer requirements.

• Quality control

Quality management or assurance involves checking for potential problems or errors in services or products at every stage of the production process or during service operations.

• Process improvement and optimization

It involves evaluating the steps in a process, either completely rewriting it or rearranging the steps to work best.

• Supply chain management

It involves controlling the sourcing of supplies, the production process, inventory management, sales, and distribution at reasonable rates while managing the supply chain process. As a result, overhead costs are reduced, production is efficient, and products are delivered on time.

Location and Start-Up Needs

Location and Start-Up Needs

Facilities Management

is under the umbrella of operations management. It integrates people, places, and processes, as well as the handling and care of structures, buildings, equipment, and other physical necessities of a business so that the productivity of the operations will be above par.

As an enterprise grows, so will its assets.

Assets

Businesses, even start-ups, tend to acquire to aid them in delivering goods and services to their customers.

Assets

are properties owned by an enterprise regarded as having a value that can be used to support the production of goods and services.

Assets

These could be machines, equipment, tools, and structures. These facilities need periodic inspections and maintenance to prevent them from interrupting company operations, which entail expensive repairs.

Facilities management is segregated into two (2) categories:

Hard services

relate to any physical alterations and adjustments in the building or its structure.

Hard services

A common example of ____ _ is fire safety, which includes the installation of water sprinklers, fire alarm systems, fire extinguishers, closed-circuit television cameras, theft alarms, electrical and air conditioning systems, and other mechanical services.

Soft services

are responsible for making the workplace bearable and comfortable.

Soft Services

These include landscaping, event support, cleaning services, canteens and pantry, pest control, and others that uplift employee morale.

Facility Location

involves learning a geographic site for an enterprise’s operations.

Facility Location

An enterprise must consider several factors when selecting a location site for operations. Examples are proximity to customers and suppliers, labor costs, employee rates, transportation, etc.

Characteristics of tangible and intangible factors under facility location:

a. Tangible factors

include delivery or freight rates, production costs, local government tax cuts, and production costs.

b. Non-tangible factors

include the location’s security, quality of work, and culture.

The following are the things to consider when deciding where to set up the business (Wisdom IT Services, 2018):

A. Controllable factors

• Proximity to the market

Every business is expected to deliver its goods and services to its customers promptly. It can lead a business to situate itself close to its market.

• Supply of materials

The enterprise must acquire raw materials in the right qualities, quantities, and time to produce uninterrupted. This factor becomes very important if the materials are perishable and the cost of transportation is very high.

• Transportation facilities

Quick transport facilities ensure a timely supply of raw materials to the business and finished goods to the customers. The transport facility is a prerequisite for the location of the plant. It is composed of five (5) modes of transporting raw materials: via air, rail, water (seas and rivers), roads, and pipelines (water supply, gas supply, and fuel supply).

• Infrastructure available

Businesses dependent on energy, like steel mills, should be close to power stations for an uninterrupted power supply. Businesses that rely heavily on technology and internet support should be near communication companies.

• Labor wages and the laws that govern it

An enterprise should always be aware of its workers' rights and the tax laws where the business is located. Here in the Philippines, wages are often smaller in the provinces than in the cities due to the high cost of living. It is also true for taxes.

B. Non-controllable factors

• Government policies

These include the policies of the government and local bodies concerning labor laws, building codes, safety, taxes, social security, data privacy, and other factors that demand attention. Every enterprise should know these laws to avoid administrative and criminal liability.

• Climate and environmental conditions

The business must know its location's geology, climate, and environmental conditions. These factors can significantly affect the delivery of services and products to customers.

• Supporting industries

Businesses must have a good relationship with their suppliers. These suppliers can make or break an enterprise. Also, the proximity of the supplier is essential to ensure that the delivery of quality raw materials is done in a timely fashion, thus avoiding hassle on the part of the customer.

Workplace Layout

Workplace Layout

Workplace Layout

An office layout that was once a cubicle or a room enclosed by four walls has evolved into an open, airy space that makes collaborating easier and gives employees more visibility.

Workplace Layout

Office layout plans define the architecture of collaboration, cross-functional operations, and elements that focus on maximizing productivity, learning, and employee satisfaction.

Open Office Design

Workstations are arranged in various ways, some touching each other and others clustered in work zones of varying sizes.

Open Office Design

Managers and everyone in the office sit together, allowing for open discussion throughout the open area. Additionally, it may result in operational efficiencies. Workers' ability to communicate directly in open offices instead of relying on e-mail has been credited with significant reductions in e-mail traffic and significant increases in decision-making.

Cellular Office Design

The entire office space is divided into individual spaces or cubicles, so employees can each have private areas in this popular layout.

Cellular Office Design

It facilitates the systematization of office operations and provides a focused work environment. Individual spaces are made by using partitions, windows, doors, or studs in the ceiling.

Co-Working Office Design

_ plans are popular with workers without a designated workspace.

Co-Working Office Design

Desks can be assigned to workers based on their jobs. This arrangement may be ideal for encouraging staff members to interact socially.

Combination Office Design

It is a particularly adaptable office layout. A ___ ______ layout might be the best choice to incorporate open and mobile work options.

Combination Office Design

In contrast to the typical cellular layout, you can design individual cubicles that incorporate smaller spaces.

Combination Office Design

You can strategically position office furniture to divide spaces rather than installing windows or doors.

Manufacturing Layout

Manufacturing Layout

Manufacturing Layout

Manufacturing businesses, such as technopreneurial businesses like Apple, Samsung, Panasonic, Sony, etc., have a range of selections to choose from when designing their production layouts. This depends on the total size of the equipment, products, and employees they use.

Manufacturing Layout

Owners must be aware that they must set up their facilities in such a way that it would minimize the travel time of half-finished products between different departments.

A. Product or line layout

In this type of layout, only a single product type is created in an operating area. The product is expected to be standardized and produced in large quantities.

A. Product or line layout

Typically, raw materials are supplied at one end of the line and go from one operation to the next until they come out as a finished product. It is commonly used if there is a need to produce more product quantity.

B. Process or functional layout

This layout is helpful if there is a low production need. In this layout, machinery and equipment are positioned according to the nature or type of operations.

C. Fixed position layout

In this layout, the major component of a product remains in a fixed position or location. The raw materials, parts, accessories, machinery, and workers are brought to where the products are being built. The product remains fixed because it may be too heavy; the equipment will be permanently installed in a certain place or facility.

D. Combination type of layout

It is a layout that utilizes a combination or a mix of other layouts.

D. Combination type of layout

This type is possible if an item being made has different types and sizes. In such cases, machinery and equipment are positioned in a process layout. Still, the process grouping (a group of similar machines) is then arranged sequentially to produce various types and sizes of products.

Virtual Office

Start-up technopreneurs most commonly use _______ workplaces.

It considers an expansion in efficiency, a decrease in driving expenses and greater adaptability.

A ______________ has provided flexibility and mobility in business operations. It also made accessibility, sharing, backup, and recovery of data simpler.

It enhances collaboration, boosts productivity, but also aids in business continuity.

The steps to setting up a virtual office are as follows (Martin Liam, n.d):

• Step 1

Set up a phone system and office address

• Step 2

Acquire a domain name and e-mail address

• Step 3

Adopt the right tools and equipment

➢ Billing and Invoicing Solution

➢ File Sharing and Document Management System

➢ Backup and Recovery Solution

• Step 4

Set up collaboration and communication tools

➢ Instant Messaging Apps and Video Conferencing Software

➢ Social Media Pages

➢ Project Management Tools

• Step 5

Establish the organizational rules and regulations

The 5s

The 5s

Sakichi Toyoda

The 5s was an idea of Sakichi Toyoda

Kiichiro

Sakichi Toyoda's son

Taiichi Ohno

a Toyota engineer.

5S

became a methodology in all plants of Toyota worldwide after World War II.

Total Production System / TPS

5S was called the __.

The three (3) pioneers visited the United States to see how Ford Motor Company works. While observing its processes, they noticed that time was wasted since workers from the other line needed to wait for one step to be completed before they could work on their share of the production.

The three (3) addressed what they saw and ushered in the 5S methodology.

5S

In this method, each employee is important. It also tells them that their work is essential to the process and that what they do contributes to the business's success.

5S

To a layperson, this is simply a method of organizing and cleaning the workplace to get the best and most efficient results. However, __ is a system of organizing workspaces to perform work efficiently, effectively, and safely.

5S

This system focuses on putting everything where it belongs and keeping workplaces tidy, thus making it easier for workers to do their jobs and protecting them from possible injury.

Seiri

It means sorting in English.

Seiri

This principle tells the employee to organize the important tools and materials they need for their work and to discard the ones they do not need.

Seiton

It means to set in order in English.

Seiton

This principle tells the worker to arrange their tools and materials so that few movements will be needed to locate them when they need to use them.

Seiso

It means cleanliness or shine in English.

Seiso

It emphasizes that cleaning the workplace should be a daily habit.

Seiketsu

It means standardized in English.

Seiketsu

It teaches the employee their role in maintaining and following the first three (3) “Ss” of the 5S system.

Seiketsu

Part of standardizing is assigning employees regular tasks, schedules, and instructions to make the activities routines.

Shitsuke

It means “discipline” or “sustain” in English.

Shitsuke

It teaches the employee that the 5S method is an ongoing process and a continuing responsibility.

Business Model Canvas (Business Management Canvas)

Business Model Canvas (Business Management Canvas)

Business Model Canvas

According to an article published by Creately on their website last 2022, a , sometimes called a “Business Management Canvas,” is merely a plan that outlines a company's financial goals.

Business Model Canvas

It explains who your customer base is, how a business provides value to them, and the specifics of financing that go along with it.

Business Model Canvas

Additionally, the enables firms to define these parts on a single page.

Business Model Canvas

In its simplest form, a provides information about a company's target market, the market's needs, and the role the market offerings will play in satisfying those needs.

Businesses will think of ideas and research each aspect as they fill out a . They can place the data they collect in any relevant canvas area.

The business model canvas consists of nine (9) components, which are:

1. Customer Segment

These are the various groups of people or organizations that an enterprise aims to reach and serve.

Any business model is centered on its customers.

No business can last very long without (profitable) customers.

2. Customer Relationship

Relationships can be personal or automated, transactional or long-term, and the goal can be to get new customers, keep existing ones, or increase sales.

The overall customer experience is significantly influenced by the customer relationships you establish.

3. Channels

These are ways a company reaches out to specific customer groups.

________ are situated in BMC between Customer Segments and Value Propositions.

With this layout, businesses can tailor a particular value to a specific customer segment through the appropriate channel.

4. Revenue Streams

are crucial and should align with the business model's cost structure.

The profit or loss of the business is the difference between the cost and the revenue streams.

In a simple explanation, this is where a business can verify the business model's profitability.

5. Key Activities

A business must take these most crucial actions to run smoothly.

They are needed to reach markets, maintain customer relationships, create a value proposition, and generate revenue, just like key resources are.

6. Key Resources

are necessary for each business model. A company can reach markets, maintain relationships with customer segments, and generate revenue thanks to its resources.

Depending on the business model, distinct ____________ are needed.