Operations Management
Operations management is the management of processes that transform inputs into goods and services that add value for the customer
The Goals of Operations Management
The goal of operations management is to maximize efficiency while producing goods and services that effectively fulfill customer needs.
Countless operating decisions must be made that have both long- and short-term impacts on the organization’s ability to produce goods and services that provide added value to customers. If the organization has made mostly good operating decisions in designing and executing its transformation system to meet the needs of customers, its prospects for long-term survival are greatly enhanced.
For example, if an organization makes furniture, some of the operations management decisions involve the following:
- purchasing wood and fabric,
- hiring and training workers,
- location and layout of the furniture factory,
- purchase cutting tools and other fabrication equipment.
If the organization makes good operations decisions, it will be able to produce affordable, functional, and attractive furniture that customers will purchase at a price that will earn profits for the company.
Role of Operation Management
There are many departments which are interrelated
- It department
- HR department
- Finance department
- Marketing department
- Production department
- Inventory Warehouse department
Convert Inputs b to output with Operation every department is dependent interlinked with other departments
Markeetting tactical operations decisions have short to medium term impact on the organization, often involve less commitment of resources, and can be changed more easily than strategic decisions. The following are some tactical decisions:
- workforce scheduling,
- establishing quality assurance procedures,
- contracting with vendors,
- managing inventory.
Strategic and tactical operations decisions determine how well the organization can accomplish its goals. They also provide opportunities for the organization to achieve unique competitive advantages that attract and keep customers.
For example, United Parcel Service (UPS), an international package delivery service, formed a partnership with its customer, Toshiba computers. Toshiba needs to provide a repair service to its laptop computer customers. The old approach of providing this service was cumbersome and time-consuming:
- UPS picked up the customer computers.
- UPS delivered the computers to Toshiba.
- Toshiba repaired the computers.
- UPS picked up the repaired computers and delivered them back to the customers.
Under this traditional approach, the total time to get a laptop computer repaired was two weeks—a long time for people to be without their laptop! Then they came up with an innovative idea for Toshiba to provide better service to its customers.
UPS hired, trained, and certified its own employees to repair Toshiba laptop computers. The new repair process is much more efficient:
- UPS picks up computers from Toshiba owners.
- UPS repairs the computers.
- UPS delivers the computers back to their owners.
The total time to get a computer to repair in 2 days customers think that Toshiba is doing a great job of repairing their computers, when in fact Toshiba never touches the computers! The result of this operations innovation is better service to Toshiba customers and a strong and profitable strategic partnership between UPS and its customer, Toshiba.
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