PRODUCTION AND OPERATIONS MANAGEMENT

Production and Operations Management

Production and Operations Management

Introduction

Traditionally, the term 'management' referred the functions in the regards of planning, leading, coordinating and organizing any part or whole organization. Management basically focuses on the long term perspective as well short terms.

The term operations management refers to the planning, control, execution, and improvement of the processes that transform inputs into the products and services that the firm provides to its internal and external customers. At the most fundamental level, OM is about designing and consistently executing processes that get the work done in an efficient manner, quickly, and without errors. A vital characteristic of OM is helping companies improve their customer service levels and reduce cost over time. (Johnston, 2007)

Transformation processes are used in all public and private organizations to provide both manufactured products and services. In general, they create value by transforming the following:

Product form (as in manufacturing and education)

Location (as in transportation)

Time availability (as in inventory storage)

Exchange (as in retailing)

Physiological aspect (as in health care)

Information (as in telecommunications)

These transformation processes are not mutually exclusive within an organization. For example, a hospital may provide medical treatment (physiological aspect), ambulance service (changing location), and maintenance of medical supply inventory (time availability), insurance processing (exchange), and e-mail reminders of upcoming appointments (information). (Shafer, 1993)

Role of Operational Manager

There is a no of series of functions that are performed by an operational manager, but 4-core areas in a broad sense that must be properly performed by him i.e. managing staff, working with clients , project management, and performing as a resource He is the one who is responsible to improve operations efficiency and quality.

Operational Management (OM) in relation of Finance, Marketing and Human Recourses

Operational management is finely related to other functions of an organization particularly to marketing and finance. Human resources are also directly or indirectly relates to Human Resources management because all parts are interrelated to Operations that are being operated in an organization. (Ronen,2007)

In relations to Marketing

The value chain concept, introduced by Michael Porter (1985), highlights the critical role of the OM function in achieving the firm's goals. Porter classifies the firm's efforts into primary and support activities. OM, outbound logistics (distribution), marketing and sales, and service represent natural categories of primary activities.

Primary activities are as follows:

Inbound logistics includes activities associated with receiving, storing, and providing.

Operations activities are associated with transforming inputs into the final product or service form.

Outbound logistics includes activities that are associated with collecting, storing, and physically distributing the product to buyers.

Marketing and sales activities are associated with identifying, attracting, and providing a means for customers to buy, such as advertising, promotion

Service activities are associated with providing customer support to enhance or maintain the value of the firm's product or service.

In relation to Finance and HRM

OM does perform a vital role in context of Finance;

Asset and cost management are directly involved in or supported by the operational managers.

Support activities include procurement, technology development, human resource management, and firm infrastructure:

Procurement refers to function of purchasing both direct ...