OVERVIEW OF OPERATIONS MANAGEMENT
Operations Management is the design, operation and improvement of the production systems that create the firms primary products and services” or “Operations Management deals with the design, planning, organizing, and controlling of resources, to provide goods and services so as to meet customer wants and organizational goals” Operations (or production) is the process and activities for transforming resources into finished services and goods for customers.
The operations function creates four kinds of utility – time utility, place utility; possess utility, and form utility – to meet customer needs.
Performing a service is different from manufacturing a good in several key ways: the raw material for service production includes the people who are seeking the service. In addition, most services are intangible, customized, and cannot be stored. Because of these characteristics, service providers generally focus on the customer service, often acknowledging the customer as part of the operations process. Operations planning for both goods and services involve the analysis of five key factors:
Capacity planning requires determining how much of a product a firm must be able to produce.
Location planning involves choosing among potential facility sites.
Layout planning entails designing an effective, efficient facility.
Quality planning ensures that products meet a firm‘s quality standards. Methods involve identifying specific production steps and methods for performing
Total quality management (TQM) includes any activity designed to get high quality products to the marketplace. Important TQM tools include statistical process control, quality/cost studies, getting closer to the customer, business process reengineering, IS 9000, and outsourcing. The concept behind supply chain management is that members of the supply chain – the stream of all activities and companies that create a product – can gain competitive advantage working together as a coordinated system of LESSONs. Managing the chain as a whole has yielded better service and lower prices, leading customers to prefer the products produced the supply chain, which, in turn, benefits all of its members.