OM research today almost exclusively focuses on the ‘exploitation’ side of business operations, such as improving efficiency, reliability and responsiveness.
The recent troubles Apple (AAPL) has had in China have demonstrated how operations can trip up even the most glittering corporate reputation. As more and more companies follow the Apple model, of building sophisticated global supply chains while keeping top management, marketing, and design in their home market, operations drives everything
The operations system of an organization is the part that produces the organization’s products. … [Organizations] have a conversion process, some resource inputs into that process, the outputs resulting from the conversion of the inputs, and information feedback about the activities in the operations system. Once goods and services are produced, they are converted into cash (sold) to acquire more resources to keep the conversion process alive.
LEVELS OF DECISION
▪ Strategic decisions are most important; they are long term, use many resources and are made by senior managers.
▪ Tactical decisions are less important; they are medium term, use fewer resources and are made by middle managers.
▪ Operational decisions are least important; they are short term, use few resources and are made by junior managers
Operations management is also an academic field of study that focuses on the effective planning, scheduling, use, and control of a manufacturing or service firm and their operations. The field is a synthesis of concepts derived from design engineering, industrial engineering, management information systems, quality management, production management, inventory management, accounting, and other functions.
At the operational level, operations management is concerned with lower-level (daily/weekly/monthly) planning and control. Operations managers and their subordinates must make decisions regarding scheduling (what should we process and when should we process it?), sequencing (in what order should we process the orders?), loading (what order to we put on what machine?), and work assignments (to whom do we assign individual machines or processes?).
For example, Six Sigma can be adopted as an initiative to guide improvement strategy and overall process management system. Six Sigma uses many individual tools that includes process mapping, cause-effect matrix, measurement system analysis, failure modes and effect analysis (FMEA), multi-vari study, design of experiments and control plans, that are linked in the DMAIC (define, measure, analyze, improve, control) framework to ensure proper integration.
Operations management involves the systematic direction and control of the processes that transform resources (inputs) into finished goods or services for customers or clients (outputs). This basic transformation model applies equally in manufacturing and service organisations and in both the private and not-for-profit sectors.
Operations Management begins with high-level business plans and strategies, over both the long and short term. These plans and strategies are based on careful and sound projection of demand for the product or service. Operating plans are derived from the long-term or short-term strategy and are translated into master schedules, which, in turn, form production and purchasing plans.
The field of Operations Management has a long history. Its roots have in part been attributed to Frederick W. Taylor's systematic approach to scientific management at the beginning of the twentieth century, along with its reknowned application by Henry Ford in assembly line management.
Operations management focuses on carefully managing the processes to produce and distribute products and services. Major, overall activities often include product creation, development, production and distribution. Related activities include managing purchases, inventory control, quality control, storage, logistics and evaluations of processes.
Operations Management is about getting things done effectively and efficiently in organizations.
Example of Operations Management Decisions -
A global sports shoe manufacturer has just decided to enter the market in a new country.
What decisions does the operations manager in charge have to make?
- 1 year before market launch?
- 6 months before launch?
- 1 month before and after launch?
Who does he or she have to work with and where and when will she have input?