Fundamentals of operations management

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: [email protected] #: 262 9379LinkedIn: Raquel Graham

Thank You!!!