An operation may be defined as the process of changing inputs into outputs thereby adding value to some entity. Right quality, right quantity, right time and right price are the four basic requirements of the customers and as such they determine the extent of customer satisfaction. And if these can be provided at a minimum cost, then the value of goods produced or services rendered increases. Show Operations management is concerned with managing the resources that directly produce the organisation service and products. The resources are generally consist of people, material, technology and information but may go wider than this. These resources are brought together by a series of processes so that they are utilized to deliver the primary service or product of the organization. Thus operation management is concerned with managing inputs (resources) through transformation processes to deliver outputs (service or products). The objectives of production management are “to produce goods and services of the right quality, in the right quantities, according to the time schedule and a minimum cost”. Objectives of production management may be amplified as under:
The role of operations management is to create some kind of value-added in form of goods and services by transforming a company’s inputs into output as finished goods and services. The activities in operations can be divided as input, transformation process and output. The company’s inputs include human resources such as workers and managers, information, technology IT and facilities and processes such as equipment’s, buildings or lands and materials. Then the operations system will convert the transformed resources from inputs into outputs that are goods and services which produced by company and after that will get feedback information about the activities in the operation system. Key Elements of Operations ManagementOperations management is the business function that responsible to planning, organizing, coordinating and controlling the resources needed to produce a company’s products and services. The operations function can be connected to other functional operations within organization such as marketing, finance, human resource and etc. so it can be described that all functional areas undertake operations activities because they all produce the services and goods. The operations manager is the person who supervised the production, make decision on operations processes and regarding to connecting into other functional areas. Thus, today every company realized that operations management is important and also agreed that is the main core function to organize their organization. the key elements of Operations Management are;
Relationship between Operations and Other FunctionsThe roles of operations management function and the decision was made by operations managers interact with other functional areas in business. This will explain the relationship between operations and other function clearly. As most businesses known, there are three main functional areas in organization: finance, marketing and operations as the main supporter in their business, yet other functions also supporting an organization as well. Although these functions scope in different activities, they must interact achieve the goal of the organization and drive the business moving forward too. Finance function will responsible to controlling of the funds and judging the need for capital investment such as equipment’s or relocation’s, collecting money and covering make decisions on make-or-buy in organization and also plant expansions. Finance function cannot work without understanding operations concepts and needed. On the other hand, operations managers cannot make the financial plans without understanding the key and method of evaluating of financial investment as well. It is essential that both functions must understand each other and work together. Marketing function will generates the demand for the company’s goods and services by understanding customers needed and find out the way to build and develop the new markets. Sale will not be happened if they do not understand what operations can produce or what due date can meet or cannot and what type of customization operations to deliver. Thus, the main needed of marketing and operations work closely together and both of them are important as marketing providing the forecast of demand which operations will produce the goods and services and sending to customers. Production and operations, the main responsible on operations function is to produce goods and services and deliver to customers on time. As mentioned previously, operations function will connect with any functional areas by the operations roles. Human resources will responsible on recruitment and labor relation and they must understand job requirement and worker skills when they hire people in any positions. The operations managers need to understand job market trends, labor cost when hiring or lay-off and the cost for training lead to efficiency on employees’ management. Information technology which co-ordinates with the computer-based information needed and enables information flow through the organization and allow operations management to operate effectively. Generally, operations management is heavily dependent on information technology such as the forecast of demands, schedule of worker, level of quality to achieved and supplier deliveries. Usually, this close relationship between operations management and information technology will work together for design information network. Accounting will consider the current performance measures, inventory management and labor standard in order to develop the cost data for organization. In turn, operations managers should communicate to accounting about billing information and the process improvement. To make decisions about the cost management is highly depend on accounting data that shown the relationship between two of them. Related Posts:
What is the goal of operations management?The goal of operations management is to help maximize efficiency within an organization, increase the organization's productivity, increase profits while reducing costs, and ensure the production and delivery of high-quality products or services that suit consumers' needs.
What is the most important in operation management?Overall, operations management will allow you to sell more products and reduce costs, leading to a revenue increase that enables the continuation of growth for the company. Waste Reduction - Waste reduction is one of the most important components of operations management.
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