MAYBE

OPERATIONS MANAGEMENT

it is the management of processes that transform inputs into goods and services that add value for the customer

OPERATIONS MANAGEMENT (OM)

it is the science and art of ensuring that goods and services are created and delivered successfully to costumers

1 FINANCE 2 OPERATION 3 STRATEGY 4 PRODUCT DESIGN 5 MAINTAINING QUALITY

WHAT ARE 5 FUNCTIONS OF OPERATIONS MANAGEMENT

THE GOAL OF OPERATIONS MANAGEMENT

it is to maximize efficiency while producing goods and services that effectively fulfill customer needs.

THE ROLE OF OPERATIONS MANAGEMENT IN THE ORGANIZATION

This means that it is a vital part of accomplishing the organization’s strategy and ensuring its long-term survival.

STRATEGIC VERSUS TACTICAL OPERATIONS DECISIONS

Operations decisions include decisions that are strategic in nature, meaning that they have long-term consequences and often involve a great deal of expense and resource commitments.

1 workforce scheduling, 2 establishing quality assurance procedures, 3 contracting with vendors, 4 managing inventory.

The following are some 4 tactical decisions:

A STUDY OF PROCESS

Operations management transforms inputs (labor, capital) into outputs (goods and services) that provide added value to customers.

OPERATIONS MANAGEMENT AND THE TRANSPORMATION PROCESS

Operations management transforms inputs (labor, capital, equipment, land, buildings, materials and information) into outputs (goods and services) that provide added value to customers.

SERVICE OPERATIONS

it is often encounter different opportunities and challenges than tangible goods, and thus require unique operational considerations.

SERVICE-GOODS CONTINUM

This simple line graph shows industries that are nearly 100% service-related at the top and industries that are nearly 100% product-related at the bottom. It is an illustration of how the service-product continuum is more of a spectrum than a black and white rule.

1 Intangibility

2 Inventory

3 Inseparability

4 Inconsistency

5 Involvement

WHAT IS the ‘5 I’s of Services’:

INTANGIBILITY

Services cannot be touched, shipped, handled, orlooked at. They

are an occurrence, not a tangible good.

INVENTORY

Services cannot be stored for later use. They occur, or they do not

occur.

INSEPARABILITY

Services cannot be pulled into different parts or separated (as many tangible goods can be—which makes operations management quite different for products).

INCONSISTENCY

Services tend to be unique. A teacher may teach you a topic, and another teacher may teach you the same topic in another course. Each teacher will deliver this topic somewhat differently. This is a good example of service inconsistency.

INVOLVEMENT

Consumers are often directly involved in the service delivery. A therapist is a good example of this. The consumer is the center of the service, and thus each instance of the service is unique based on the individual involved.

MANAGING SERVICE OPERATIONS

This definition offers a great deal of insight when applied to

the concept of operational management. Without a tangible good

to ship, handle and produce, operational managers are instead

focused on the execution of an activity to fill a consumer need.

This management of an instance is rather different than the

management of a product.

LOCATION

Choosing where to open a facility, how to lay out the

facility, what size is appropriate, and overall how efficiently

a given space can be used relative to the cost are key

considerations.

SCHEDULING

Just as a product manufacturing facility will know when

a product will be where, so too do service operators need to

know when a given service should start and what duration

of time is required to complete it.

QUALITY

As the ‘5 I’s of Services’ indicate, most services tend to

be completely unique. A hair dresser rarely gives the same

haircut twice and, even if they do, it would be cut to fit a

different individual.

OPERATION SYSTEM

It can seem overwhelming to read about the numerous activities involved in operations management. One wonders where they fit into an organization? How are they connected? This is where a systems view is very helpful.

SYSTEM

Simply put, a system is an organized collection of parts that are highly integrated to accomplish an overall goal. The system has various inputs, which go through certain processes to produce certain outputs, which together, accomplish the overall desired goal for the system.

1 INPUTS 2 PROCESSES 3 OUTPUTS 4 OUTCOMES 5 FEEDBACK

WHAT ARE 5 OPERATIONS SYSTEM

CAPACITY PLANNING

includes specifying how many of the outcomes (products or how much service) will be produced and how often. That includes predicting, or forecasting, the demand for those outcomes.

FACILITIES AND LAYOUT PLANNING

This is one of the most critical activities in operations management, not just because
they underlie and facilitate the activities to very effectively and efficiently produce products and services, but also because facilities and their maintenance are one of the most expensive, as well.

WORK FLOE MANAGEMENT

is creating and optimizing the paths for data in order to complete items in a given process. Workflow management includes
mapping out the workflow in an ideal state, finding redundant tasks, automating the process, and identifying bottlenecks or areas for improvement.

SUPPLY CHAIN MANAGEMENT

is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage.

INVENTORY MANAGEMENT

includes unprocessed materials, finished products, supplies and works-in-progress. Inventory management is a part of supply chain management that oversees the inventory items from manufacturers to storage to where they are sold.

SERVICE DESIGN

"is the activity of planning and organizing people, infrastructure, communication and material components of a service in order to improve its quality and the interaction between the service provider and its customers.

FORECASTING

is the process of making predictions of the future based on past and present data. This is most commonly by analysis of trends.

TOP-DOWN APPROACH

In this approach, forecast is done at the corporate level or the strategic level. It starts with a forecast of general economic conditions.

BOTTOM-UP APPROACH

In this approach, middle and lower-level employees project the business operations in the coming years. For instance, they do customer survey to know what customers want to buy.

1 FUTURE ORIENTED 2 IDENTIFICATION OF CRITICAL AREAS 3 REDUCES RISK 4 COORDINATION 5 EFFECTIVE MANAGEMENT 6 DEVELOPMENT MANAGEMENT

GIVE ATLEAST 6 BENEFITS OF FORECASTING

FUTURE ORIENTED

It enables managers to visualize and discount future to the present. It, thus,
improves the quality of planning.

IDENTIFICATION OF CRITICAL AREAS

Forecasting helps in identifying areas that need managerial attention. It saves the company from incurring losses because of bad planning or ill defined objectives.

REDUCES RISK

Though forecasting cannot eliminate risk, it reduces it substantially by estimating the direction in which environmental factors are moving

COORDINATION

Forecasting involves participation of organizational members of all departments at all levels. It helps in coordinating departmental plans of the organization at all levels.

EFFECTIVE MANAGEMENT

By identifying the critical areas of functioning, managers can formulate sound objectives and policies for their organizations.

DEVELOPMENT EXECUTIVES

Forecasting develops the mental, conceptual and analytical abilities of executives to do things in planned, systematic and scientific manner

QUANTITATIVE FORECASTING

It applies mathematical models to past and present information to predict future outcomes.

QUALITATIVE FORECASTING

It applies when data are not available or very little data are available. Managers use judgement, intuition, knowledge and skill to make effective forecasts.

ACCURATE

forecast method should be accurate in terms of predicting results. No method can, however, be 100 per cent accurate.

FLEXIBLE

It should change according to changing environmental conditions. Deviations in actual implementation become the basis of adopting another method of forecasting to make predictions.

PLANNING

it is a process of thinking about and organizing the activities needed to achieve a desired goal.

MISSION STATEMENT

it outlines how the business will turn its vision into reality and becomes the foundation for establishing specific goals and objectives

STRATEGIC PLAN

its translate the company mission into a set of long-term goals and short-term objectives.

TACTICAL PLAN

translate high-level strategic plans into specific plans for actions that need to be taken up and down the layers of an organization

OPERATIONAL PLANS

establish detailed standards that guide the implementation of tactical plans and establish the activities and budgets for each part of the organization.

SWOT ANALYSIS

One of the key planning tools managers have at their disposal is the situation analysis

EXTERNAL FACTORS

include opportunities and threats that are
outside of the organization.

INTERNAL FACTORS

include strengths and weaknesses within the organization currently. Examples of internal factors are financial resources, technical resources and capabilities, human resources, and product lines.