Is an operations management system that makes sure that the right parts and materials were available at the right time?

Firstly, what is Operations Management (OM)?

Operations management is the process that generally plans, controls and supervises manufacturing and production processes and service delivery. Operations management is important in a business organization because it helps effectively manage, control and supervise goods, services and people.

Operations management cuts across every sector and industry as it may concern. OM finds use in every business though some might not be obvious. In health sector, operations management ensure there is proper health delivery with the right instruments at the right time. It also helps people like nurses, doctors, surgeons, and other health officers deliver timely service. When something goes missing, a technical and savvy individual knows what is at fault.

For a production or manufacturing company to be successful, OM is major unit that must first stand. Take an oil and gas company for example, product has been discharged by ship to the reservoirs in order to be made available for a large amount of customers. OM sees to the effective delivery of the products and also plans and schedules what and how must be done. With OM, people achieve more and productivity is increased.

Operations management is widely used irrespective of the size of a company or what they do.

Key Benefits of Effective Operations Management

1. Product Quality

The first unit in a typical firm that checks durability and reliability in a product is the operations management. Operations management sees to quality of products or goods which would suit customers on and after delivery. When a product is of quality, it gives you an edge compared to your competitors.

2. Productivity

Productivity is defined as the ratio of input to output and it is the only way to verify employees input. Operations management ensures appropriate staffing of employees to resources so as to get maximum result. The only way to ensure productivity is through an effective operations management.

3. Customer Satisfaction

There is no feeling for a manager or an employee as a customer getting the utmost satisfaction ever. Operations management rightly ensures this coupled with quality product. Customers make organization thrive and they must be treated well in every way necessary and possible.

4. Reduced Operating Cost

Through productivity, quality products and customer satisfaction, cost incurred on products servicing is maximally reduced. This simultaneously leads to increased revenue. Only operations management can make this possible. In reducing operating cost, there is also waste reduction. Exact number/size of products is produced as requested via a proper operations management.

Why do Managers need an MBA in Operations Management?

As an operations manager, you get to interact with professionals in engineering, marketing, research, business and all. An MBA in operations management affords you the technical know-how by covering the fundamentals of various areas related to operations management. These areas include capacity planning, supply chain management, and inventory amongst many. An masters degree in operations management gives you a theoretical and practical application of OM. It also gives real experience of business handling and notes the trends in the industry. With an MBA in operations management, you are designed to take up problems and challenges pertaining to inventory, supply chain and logistics.

Apply now for any of the Exeed’s MBA specialisation and receive a 10% discount on tuition fees.

Operations management is a production management function that makes the production of manufactured goods more efficient through the optimization of business processes.  The main goals of operations management are profitability and total quality.

Every company has operations that ensure goods or services reach customers. Operations management is about managing every operation to make it as efficient as possible and support company goals. This business process focuses on frequent holistic process improvement activities to get better results including:

• Better quality products
• Faster delivery
• Enhanced workforce and equipment utilization
• Smaller inventories
• Reduced work-in-process (WIP)

This involves operations research that engages in process analysis, visualizes the current state of affairs with business analytics, and uses lean supply chain techniques to identify areas of improvement.

The Principles of Operations Management - According to Randall Schaeffer

According to Randall Schaeffer (CPIM) - Renowned manufacturing & operations management expert, there are ten operation management principles that must be followed to help manufacturers avoid common problems and thrive. The principles include:

Principle 1: Reality

Operations and management must focus on the larger problem as opposed to small techniques that are part of a problem. According to Schaeffer, there is no single tool that offers a universal solution.

Principle 2: Humility

Managers must understand and respect limitations, avoiding trial and error at all costs. Doing this saves time and money and has an overall positive outcome in the long term.

Principle 3: Organization

Since everything is interconnected in a production process, all elements must be predictable and consistent. Operational management can't be profitable without production planning and control that fosters predictability and consistency.

Principle 4: Accountability

Every person who manages operations must be accountable. Managers should have checks and balances to guarantee accountability.

Principle 5: Change

Change is welcome in operational issues. New solutions must be welcome for continuous operational improvements to be possible.  It is helpful to embrace modern change management methodologies including Agile, Six Sigma, Lean, and Kaizen.

IT operations management, the subset of manufacturing that manages production systems, is a critical business function.  Change management methodologies are very useful for making decisions on how to upgrade, replace, or augment existing production management systems.

Principle 6: Quality Control

Manufacturing operations must have quality controls in place. Without quality management, the quality of the end product/service can't be guaranteed. Total quality management is a holistic process and involves excellence in many areas including:

• Procurement
• Logistics
• Materials management
• Warehousing

It involves carefully monitoring the raw materials as they move through the entire logistics and supply chain and become finished goods.

Principle 7: Success

For success to be achievable in operations, the end customer must be happy with the end product/service they receive. They should also be willing to come back for more.

Principle 8: Know your competition

To optimize operations, it is important to study competitors, understand their practices, customers, products, and competitive advantage.

Principle 9: Causality

Operational problems have tell-tale signs before they occur. To streamline operations, managers must identify underlying problems and eliminate them.

If you already have an operations management system, like an enterprise planning system (ERP), manufacturing execution system (MES), or material requirements planning system (MRP) then you can set up standard metrics and reports that will help you to identify problems like bottlenecks and other inefficiencies.

Principle 10: Consumer Collaboration

Lastly, managers need to understand customers in-depth by collecting insights from them on how they can improve products/services.

Benefits of Effective Operations Management

The functions of operations management, when run in adherence with the 10 operations management principles, produce many benefits to the manufacturing organization including:

Increased Product/Service Quality

Goods/services produced after a meticulous process are bound to be of higher quality.

Increased Customer Satisfaction

Operations management includes processes like proper planning, stringent quality controls, and proper employee placement which all result in products/services that meet the needs of customers.

Increased Revenue

Companies that produce high-quality products/services that match the needs of customers are bound to get new customers and increase their revenue.

Ensures Compliance

A lack of compliance can attract serious problems like expensive lawsuits. Effective management tools and process controls ensure that operations managers have the right safeguards to avoid legal issues.

Competitive Advantage Through Software Systems

Today, manufacturing software is making it easier than ever to implement gold standard operations management principles into even the most complex enterprise manufacturing organizations.

For example, a production scheduling software that is used by many Fortune 100 manufacturers globally allows them to improve production efficiency by:

• Reducing changeovers
• Reducing planning/scheduling time
• Improving resource utilization
• Achieving on-time production of orders.

The name of this advanced planning and detailed scheduling software (APS) is Optessa and its patented Fast Optimization technology is being utilized by manufacturers like Nissan, Ford, and Honda to unlock millions of dollars in cost savings in their plants.

Is a production process in which the production run is short and the machines are changed frequently to make different products?

What specialized type of management converts human resources into goods and services?

What are the components of the operations function in an organization?

What is the focus of operations management?