Fundamentals of operations management
Post on 17-Dec-2014
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Fundamentals of Operations Management
By: Raquel Graham
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There are 5 main elements that are involved in a business whether manufacturing or service:
Elements in Business
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What is Operations Management?
Operations Management is concerned with the design, management, and improvement of the systems that create the organisation's goods or services.
OM concerns itself with the processes involved in converting and transforming inputs into outputs in the form of goods or services that add value to the organisation.
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Basic components: inputs and resources (natural or material
resources, human resources, technological resources and entrepreneurial resources) which are purchased by the organisation
processes which involve the conversion or transformation of these resources into products or services (e.g. using project, batch or continuous processes)
output and then feedback to the organisation from its customers
Components of an Operating System
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Operating System
PROCESSES
CONTROLS
OUTPUTS
INPUTS
RESOURCES
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Why is it Important?
Too often, attention is paid to finance, technology and marketing, and not the actual functions of the business.
E.g. Marketing a new product and it does not meet quality expectations, poor supply to customers etc.
E.g. Finance is not paying suppliers or not receiving payments from customers on time
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Consider the human body – Marketing – Style of dress, personal hygiene Finance – Blood, oxygen Administration – taking care of health, exercising,
lifestyle mgmt Training – Education, work experience Operations – the entire process of keeping all organs
healthy, interacting day to day, moving around i.e. everything you do!
If you don’t take care of one element, the entire body can suffer
Another View of Operations
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Components in Operations Management
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Corporate1. Operations Strategy2. Make vs. Buy Decisions3. Location4. Production5. Processes and Facilities to be usedTactical 6. Workforce Management7. Inventory Management8. Quality Management9. Scheduling 10.Plant Maintenance
Decisions involved in Operations Management….
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Operations Management is a crucial function of both manufacturing and service organisations. Manufacturing companies produces tangible
products that can be listed as inventory Service organisations produce a non-physical
output and involves the customer in the production process
Most oganisations do both. There are few pure manufacturing or pure service organisations.
Manufacturing vs. Service Organisations
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Both types of organisations face similar operational problems: both must obtain suitable and sufficient
materials to be used in the production process both must determine suitable scheduling tasks both should be concerned with both the quality
of their end products and with their productivity levels
Manufacturing vs. Service Organisations
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COMPETITION!!
Every organisation attempts to be successful in the market place by obtaining an acceptable market share through competitive strategies.
The competitive advantage adopted by the management will be determined by the organisation's overall strategic plan and by its strategic objectives.
Success is dependent on the organisation adopting efficient and effective operations with respect to the manufacturing of their products or the provision of their services
What Drives Operations?
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Inventory Management Forecasting Administration Customer Relationship Management Supplier Relationship Management Facility Management
Some of the most commonly overlooked elements of Operations
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Operations management is often overlooked in favour of marketing and finance
There are many ways to improve the efficiency of a business by pay attention to how the business is run
The business structure should match closely the level of competition in the market place
Operational audits are just as important or more so than financial audits
It is all about the customer and the added value
Conclusions
Email: caerusintl@gmail.comCell #: 262 9379LinkedIn: Raquel Graham
Thank You!!!
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