OPERATIONS MANAGEMENT

Operations management



Operations management

Introduction

Operations Management is one of the three functions leading any organisation and fully connected to the other functions of business. All organisations market, finance and produce, which is key for the area of operations or production management in an organisation. That is why we study how people organise for production and the way that goods and services generated. To achieve an efficient production function, the organisation must have a mission and a strategy. The mission of the organisation is defined as its purpose, which contributes to the society, as well. This purpose is cause for the existence of the organisation. A mission must be set in accordance with the opportunities and threats in the organisation's external environment and the strengths and weaknesses inherent in the organisation (Teece and Shuen 1997, pp. 509 - 533).

Discussion

Major Decision Areas in Operations Management

The development of an excellent strategy is not easy, but is less complex if the mission well defined. On the other hand, the strategy is the plan of action to which the company uses to achieve its objectives and mission (Sahin and Robinson , pp. 505 - 536). Operations management has the responsibility of five major decision areas which are process, capacity, inventory, work force and quality.

1.Process: This category measures the physical process or installation that is used to produce the product or service. The decisions include the equipment and technology, the process flow, the distribution of plant and all other aspects of the physical facilities or services. Many of these decisions are long-term processes and cannot be reversed easily, especially when it takes a strong investment of capital.

2.Capacity: Decisions on capacity are aimed at providing the right amount of capacity in the right place at the right time. The long-term capacity determined by the size of the physical facilities built. In the short term, sometimes you can increase capacity through subcontracts, additional shifts or leasing of space. However, the planning capacity determines not only the size of the facilities but also the appropriate numbers of people in the operations function and to adjust the staffing levels to meet the demand of the market and the desire to maintain a stable workforce.

3.Inventories: Decisions on operations inventories determine what to order, how much and when to apply. The inventory system control is used to deliver materials from purchase through inventories, product in the process and finished product. Inventory managers decide how much to spend on inventory, where to place materials and numerous decisions relating to such decisions. It is also their duty to manage the flow of materials within the company.

4.Workforce: The management of people is the most important decision area of operations, because nothing is done without the people. They make the product or provide the services. Decisions about workforce include selection, hiring, firing, training, supervision and compensation. These decisions are made by line managers of operations, often with the assistance or in partnership with the human resource management. Managing the workforce productively is a key task for ...