OPERATIONS MANAGEMENT

Operations Management



Operations Management

Introduction

The operations management deals with flow of goods, purchasing, inventory, and distribution. It is majorly used in:• Reduction of costs, • Optimization of assortment, • Improving service levels and, consequently, the strengthening of market position, • Reducing the amount of funds frozen in stocks, • Increasing the turnover rate of funds • Optimize the use of working capital, etc.

Priorities and indicators for companies operating in different markets and with different groups of products may vary. Provide an overview of different methodologies in use for trading companies (Waters 1999, p. 1). MPS (space-scheduling)

Based on formation of the sales plan, broken down by periods (steps) planning based on this plan is drawn up restocking and / or schedule production. Suitable for flow control of the most important position nomenclature (classification according to ABC, the goods of A and, possibly, B), luxury goods or goods vehicle with a long arm (Saxena 1999, p. 8). When ordering policy "anonymous" needs based on the forecast demand in order politics "to order" requirement is based on existing orders. Works well when you use "just in time" and "lot for lot". 

MRP (materials requirements management)

Planning procurement of raw materials and components for production needs based on the volume-production schedule. FAS - (literally - the schedule of final assembly)

Optimal use for the procurement of goods, which are usually not stored in the form of stocks, and bought on the basis of a specific customer order. Works fine when using "just in time" and "lot for lot". Manual ordering system

Purchase of goods designated for this system the order is made only on the basis of the decision taken by the manager, such as an introduction to the range of new products. Probably, in these systems can be made, and such existing and fairly common, the method of inventory management as the maintenance deficit (Nersesian 2000, p. 261). 

Operations Strategy

Operations strategy involves all strategic decisions made by operations managers. Operations strategies differ from corporate strategies in a way that corporate and business strategies involve general aims of businesses while operations strategies involve processes which can help achieve these aims.

For example, the business strategy of Kellogg's is to become a leader in the market of breakfast cereals. The related operational strategy of Kellogg's is to use large-scale production in order to supply breakfast cereals (Kamauff 2009, p.3).

The basic operations strategies include cost, quality, speed, and flexibility

Cost

In order to operate effectively in today's competitive environment, a firm must be a low-cost producer. It is because competition on the basis of cost is fierce and failure rates are high.

Quality

Quality can be classified into product quality and process quality. The quality of products depends on the targeted market segment. Process quality is as critical as product quality because customers always prefer defect-free products. The purpose of process quality is to produce error-free products by employing various processes for instance Total Quality Management (TQM).

Speed of Delivery

Delivery time is the time elapsed between receiving an order and filling it. There are many firms which focus on fast delivery times in order to increase their customer ...