BASIC CONCEPT OF OPERATIONS MANAGEMENT

OPERATIONS MANAGEMENT AN INTERODUCTION

Operations management refers to the administration of business practices to create the highest level of efficiency possible within an organization. It is concerned with converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organization.

Operations management is the management of that part of an organization that is responsible for producing goods and/or services.

However, in order to have a clear idea of Operations Management, one must have an idea of ‘Operating Systems’.

An Operating System is defined as a configuration of resources combined for the provision of goods or services.

Ø OBJECTIVES OF OPERATIONS MANAGEMENT:

§  CUSTOMER SERVICE: To provide agreed/adequate levels of customer service (and hence customer satisfaction) by providing goods or services with the right specification, at the right cost and at the right time.

§  RESOURCE UTILIZATION: To achieve adequate levels of resource utilization (or productivity) e.g., to achieve agreed levels of utilization of materials, machines and labour.

Ø SCOPE OF OPERATION MANAGEMENT:

Operations Management concern with the conversion of inputs into outputs, using physical resources, so as to provide the desired utilities to the customer while meeting the other organizational objectives of effectiveness,efficiency and adoptability. It distinguishes itself from other functions such as personnel, marketing, finance etc. by its primary concern for ‘conversion by using physical resources’. Following are the activities, which are listed under Scope Production and Operations Management functions:

1. Location of facilities.

2. Plant layouts and Material Handling.

3. Product Design.

4. Process Design.

5. Production and Planning Control.

6. Quality Control.

7. Materials Management.

8. Maintenance Management.

 

Ø PRODUCTION MANAGEMENT VS OPERATION MANAGEMENT

There are two points of distinction between production management and operations management. First, the term production management is more used for a system where tangible goods are produced. Whereas, operations management is more frequently used where various inputs are transformed into intangible services, viewed from

this perspective, operations management will cover such service organizations as banks, airlines, utilities, pollution control agencies, super bazaars, educational institutions, libraries, consultancy firms and police departments, in addition, of course, to manufacturing enterprises. The second distinction relates to the evolution of the subject. Operations management is the term that is used nowadays. Production management precedes operations management in the historical growth of the subject.

Ø CHARACTERISTIC OF MODREN OPERATION FUNCTION:

    The production management of today presents certain characteristics which make it look totally different from what it was during the past. Specifically, today’s production system is characterized by at least four features.

1.Manufacturing as Competitive Advantage.

2.Services Orientation.

3. Disappearance of Smokestacks.

4. Small has Become Beautiful.

 

Ø RECENT TRENDS IN PRODUCTION/OPERATIONS MANAGEMENT:

Recent trends in production/operations management relate to global competition and the impact it has on

manufacturing firms. Some of the recent trends are:

1. Global Market Place.

2. Production/Operations Strategy.

3. Total Quality Management (TQM).

4. Flexibility.

5. Time Reduction.

6. Technology.

7. Worker Involvement.

8. Re-engineering.

9. Environmental Issues.

10. Corporate Downsizing (or Right Sizing).

11. Supply-Chain Management.

12. Lean Production.