Proper operations management makes sure that the products manufactured and services rendered are top-notch. The operations management unit examines the durability and reliability of every product before it is delivered to the consumers. This unit also ensures that there are laid-down processes that make sure that service-based companies deliver top-notch services to their clients.
With all these in place, customer satisfaction is guaranteed. It makes sure that all the resources from raw materials to human resources are utilized adequately during the production process. The outcome of this is increased productivity. Effective operations management gives you a competitive advantage over your competitors. If operations management is carried out successfully, you will have better outputs, which means your products and service will become better and more tailored for the market.
This makes it possible for your organization to stand out from the competition and gain new customers. The cost of producing products or rendering services will be significantly reduced when productivity, production of quality products, and customer satisfaction are adequately maximized. Reduced cost of operations, in turn, leads to increased revenue. It also leads to waste reduction. Only effective operations management can make this happen. Apart from these discussed above, operations management also helps boost technological advances within an organization, ensuring that there are correctly functioning processes and ensuring profitability.
By now, you already know how operations management can transform your organization. The next question is: if you want to implement operations management in your company, who should be in charge? Whose job is it to ensure that operations are effectively managed? There are two specific roles in operations management.
These two people ensure that operations within an organization are effectively carried out. The chief operating officer is one of the highest-ranking executive personnel in an organization. This person is responsible for the day-to-day operations of the company. The COO is often the second in command and reports to the chief executive officer. An operations manager oversees product development, inventory, operations staffing, production, etc.
The specific roles of an operations manager are usually dependent on the type of product or service the company produces. However, there are general responsibilities of an operations manager, notwithstanding the industry. They include:. First, you need to note that operations are cross-departmental. That means an operations manager must work with other departments. Also, an operations manager must work with the purchasing department to understand the cost, quality issues, availability of materials, sources of supply, etc.
Having this information helps the operations manager maximize resources for optimal productivity during the production process. This involves creating a product or service that the company can sell to a customer.
New ideas are created, old ideas are revived, and current ones are expanded to produce new products or offer new services. The operations manager must ensure that both new and existing products are designed and produced to suit the needs of the consumers. Forecasting is all about making accurate predictions of events that will happen in the future based on what happened in the past.
This prediction helps the company know the volume of products they have to produce to meet market demand. They make sure that goods and services are delivered to the consumer on time. If the consumer is unsatisfied with the product or service or the delivery, the operations manager gets the feedback and forwards the complaint to the relevant departments. Supply chain management is the management of the production process of a product, from raw materials to finished products.
This includes everything from production, distribution, shipping, to the delivery of the products. If this is done correctly, there will be reduced overhead costs, efficient production process, and timely delivery of products to the consumers. They should analyze the operations process, figure out what they are doing right or wrong, check the results received from the current process, and look for ways to improve it. For example, an operations manager should always be on the lookout for the best way to reduce the cost of production without tampering with the quality of the product.
For operations managers to effectively perform all the required duties, there are some skills they need to possess. These skills include:. An operations manager should be able to supervise different projects without getting distracted or overwhelmed by the numerous processes. They should be able to plan, execute, and monitor every project from inception to finish without losing focus.
Staying organized is key. If not, uncompleted tasks will pile up, the company will lose valuable time, and important documents may get lost. And this can hinder the success of the project. An operations manager is constantly interacting with people. Operations managers know how to communicate, listen, and relate with their colleagues, both on a personal and professional level. They should know how to carry out specific activities simultaneously and switch between activities without affecting production negatively.
Coordination also involves dealing with crises and interruptions, quickly proffering solutions, and efficiently going back to the normal routine functions to prevent delay or further disruption. An operations manager needs to stay informed of all technological improvements within the industry, especially since we are in the age of rapidly advancing technologies.
This is the only way they can design processes that are efficient and tech compliant. Many modern organizations depend on technology to carry out their operations, giving them a competitive advantage in the market. If the operations manager stays up to date with the latest tech innovations, they can use the innovations to improve internal processes.
For example, processes that used to be conducted manually can become efficient automated processes. It is needless to say that there are important decisions that must be made to ensure that operations are smoothly carried out from start to finish. There are two major kinds of operations decisions, namely strategic operations decisions and tactical operations decisions. Strategic operations decisions are decisions that are strategic in nature.
This means that they have long-term effects and consequences, and they usually require huge expenses and resource commitments. Unlike strategic decisions, tactical operations decisions have short- to medium-term effects on the organization. These decisions can be changed or revised more easily than strategic decisions, and they involve less commitment of resources. Tactical and strategic operations decisions make it possible for an organization to achieve a competitive advantage over its competitors, making it easier to attract and keep customers.
You should note that the role of an operations manager is centered around the operations systems of an organization. They must understand the nitty-gritty of operations systems to carry out their duties effectively. The idea that operations management covers the production and delivery of products and services from beginning to end can seem overwhelming.
There are many activities involved. The question is: how do these activities or functions stay connected? You are about to find out how. A system can be defined as an organized collection of integrated parts to accomplish a bigger goal. A system usually has several inputs that undergo certain processes and eventually become outputs, which together help to achieve the desired goal for that system. An operations system consists of the primary activities in operations management that are entirely and efficiently integrated to produce valuable goods and services to consumers.
Going through the operations system from start to finish requires you to go through different phases, one phase leading to another to ensure the overall success of the systems. You can go ahead to manufacture a prototype of the product and also conduct a feasibility study. This involves specifying how many products or how much service will be manufactured or delivered and how often.
At this point, you have to predict and forecast the demand for these outcomes your products or service. The market research you have done will be instrumental at this stage. To make things easier, you can hire an expert who knows all about developing that product or service. 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. 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. Work design entails making an arrangement in the workplace that helps employees overcome job dissatisfaction or alienation caused by mechanical and repetitive tasks.
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. Your workflow diagram or map should show the flow of activities through the system, including inputs, processes involved, outputs, and outcomes.
These maps are sometimes called operations management process maps. You should also create a detailed map of the activities required to produce, assemble, and test the product or service before it is delivered to the consumers. 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.
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.
Activities involved in the supply chain include product development, production, sourcing, logistics, and the information systems required to coordinate these activities. Supply chain management aims to achieve a competitive advantage in the market and maximize customer value.
It oversees inventory items right from the manufacturers to where they are stored, down to where they are sold. 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. Having too many items in inventory means that the organization has not recovered its costs from sales in time. It might also mean that the cost of storage is high.
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. Your organization must become good at attracting, satisfying, and retaining customers better than your competitors are if you do not want to lose customers to your competitors!
It would be best if you implemented a carefully designed customer service plan to achieve this. It plays a significant role in operations management, especially making sure that improvement occurs continuously. Recent quality advancements, like total quality management and benchmarking, have led to improvements in operations management as well.
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. The factors that drive productivity are usually job-related, resource-related, and environment-related.
For a detailed overview of the different methods to improve productivity, check out this handbook: Productivity Management: A Practical Handbook. These three phases of operations systems must be complete for operations management to be effective. The question now is: can the same operating system work for both products and services? The specification could be further enhanced by adding information about costs to develop and produce the product or service, including employees, facilities and management.
This information is often included in a business plan. This information is also sometimes referred to as the business strategy. All About Business Planning. 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. The previous market research will be very useful here. There are a variety of other tools that could be useful, as well.
A useful planning technique to ensure consideration of many possible influences is scenario planning, including to consider various external driving forces that could have a strong influence.
It also might be useful to hire an expert with knowledge about developing the particular product or service. The results of the planning should produce estimates of the needed inputs to produce the product or service, including types of expertise needed, amounts of certain kinds of materials, what technologies to use, etc.
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.
Fortunately, there is a variety of helpful articles about how to do this acclivity in operations management. The Business Dictionary defines work design as:. Workflow management includes mapping out the workflow in an ideal state, finding redundant tasks, automating the process, and identifying bottlenecks or areas for improvement. The map depicts the flow of activities through the system, including its input, processes, outputs and outcomes.
These are sometimes also referred to as operations management process maps. This technique is at the heart of the Business Process Re-Engineering approach. This is the processes part in the operations system where the inputs are transformed into the desired product or service.
Considerations include, for example:. This activity also includes developing a detailed map of the activities required to obtain, assemble, integrate and test the product or service before it is provided to customers. What Makes a Good Production Plan? Production Planning Production Planning. A critical activity in ensuring that the operations system is highly effective and efficient is coordinating scheduling the timing of activities to organize, monitor and optimize the equipment, people and production activities.
Scheduling has a major impact on the productivity of the system. Scheduling production processes Production Scheduling Approaches for Operations Management Scheduling in operations management.
Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities. Inventory 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.
There must be a very careful balance between the size of the inventory of items compared to the actual rate of their sales. Too many items in inventory means their costs are not recovered in a timely manner from their sales.
It also might mean high costs of storage. Insufficient numbers of items means the organization cannot meet the customer demand, resulting in lost revenue. What is Inventory Management?
In the past, an organization was expected to provide a product or service to the customer, and then that transaction was done -- the activity was done to the customer. The customer was more or less at the mercy of the organization. Today, that is changing dramatically. Customers have a much wider range of organizations, products and services to choose from, and they can access them instantly.
Customers can also access numerous sources of useful opinions or reviews about the product or service even before they buy them. Thus, it is more important than ever that organizations remain very good at attracting, satisfying and retaining customers.
That requires a carefully designed and implemented customer services plan. 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.
Service design may function as a way to inform changes to an existing service or create a new service entirely. Quality management, including quality control, is crucial to effective operations management, particularly continuous improvement. More recent advancements in quality, such as benchmarking and Total Quality Management, have resulted in advancements to operations management as well.
Quality Management. It can determine what you have, when you have it, and whether your funds and investments are sitting on shelves collecting dust, or working for you. Operations management oversees inventory systems, which determine how effectively your inventory is managed.
Your inventory control dictates how your inventory flows. It commands and directs whether or not an employee has products on hand or if customers are forced to wait on back-ordered items. Quality is more than simply having a good and dependable product that pleases customers.
It is larger than just assuring that your brand meets expectations. Quality can entail the overall excellence of all operations and policies of the company as a whole. Taking care of the organization, holistically, enables smoother workflow and fewer distractions.
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