Introduction To Operations Management Flashcard

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In present world, technology, especially computer – based information technologies are giving birth to new organizations (of future) and they continue to revolutionize how: ? Customers are served ? Employees communicate and network with one another and external stakeholders, such as customers, suppliers, competitors, and governmental agencies; ? Tasks are performed; ? Organizations are structured; ? Human resources are led and managed; ? Planning and control system operate; ? Individuals and organizations learn to innovate and adapt etc.. ,Technological change may have positive effects, including products of higher quality and services at lower costs but the leading organizations today are leaner and more agile than in the past, and they take advantage of technology whenever possible.

To maintain this competitive stance, these organizations rely on their operations functions to be dependable and efficient. Effective operations management is the key to business success that integrates other functional areas, which together enable an organization to excel in the market place.The successful integrated organization will meet global competition with quality outputs, outstanding customer service, and effective control of costs. II.

What is Operations Management? The term ‘Operation Management’ refers to the direction and control of the processes that transform inputs into finished goods and services. This function is essential to systems producing goods and services in both profit and nonprofit organizations. Operation management is part of a production system. A production system consists of inputs, outputs and information flows that connect with customers and the external environment.

Operation management as a set of decisions: Some decisions are strategic in nature; others are tactical. Strategic plans are developed farther into the future than tactical plans. Thus strategic decisions are less structured and have long-term consequences, whereas tactical decisions are more structured, routine, and repetitive and have short-term consequences. Decision making, both strategic and tactical, is an essential aspect of all management activity, including operations management.

These types of decisions are divided into five categories: I. Strategic choices II. Process III. Quality IV. Capacity, location and layoutV. Operating decisions Operation management as a function In large organizations, the operations (or production) department is usually responsible for the actual transformation of inputs into finished products or services.

Accounting collects, summarizes, and interprets financial information. Distribution deals with the movement, storage, and handling of inputs and outputs. Engineering develops product and service designs and production methods. Finance secures and invests the company’s capital assets.

Human resources (or personnel) hires and trains employees. Marketing generates demand for the company’s output.However, some organizations never need to perform certain functions. Other organizations may save money by contracting for a function, such as legal services or engineering, when they need it, rather than maintain an in-house department.

In small businesses, the owners might manage one or more functions, such as marketing or operations, themselves. III. Managing Change Change is inevitable and most of the project manager’s deal with more than the share of it on any project. Most of them tend to think of change in terms of problems or negative consequences.

Although it’s true that change can be bad, it can also be good.The four key factors for success when implementing change within an organisation are: • Pressure for change – demonstrated senior management commitment is essential • A clear, shared vision – you must take everyone with you. This is a shared agenda that benefits the whole organisation • Capacity for change – you need to provide the resources: time and finance • Action – and performance – “plan, do, check, act” – and keep communication channels open The Project manager’s need to deal with three different elements of change management: The first element of change management deals with the authority level of the project manager.You need to make sure that you have the authority to approve and deny changes that impact your project. The second element of change management involves setting up an environment that fosters good change management.

You need to communicate with the entire project team to set expectations on how changes on the project are to be handled. The third element of change management involves setting up a system that helps you determine that a change has been requested. This system also helps you decide if you should make the change and allows you to track the change regardless of whether it is approved or denied..

IV. Operations and strategyDeveloping a customer-driven operations strategy begins with market analysis, which categorizes the firm’s customers, identifies their needs, and assesses competitors strengths. This analysis accompanies an analysis of the external environment. Next, the firm formulates its corporate strategy, which constitutes the organization’s overall goals. Once the firm has determined which customers it wants to serve, it must develop its competitive priorities, or the capabilities and strengths that the firm must possess to meet customer demand.

Basically, operations strategy links long- and short-term operations decisions to corporate strategy.Continuous cross-functional interaction must occur in implementing operations strategy – or any other functional strategy. The long- range business plan represents the best thinking and analysis about what must be done to capture shares of global markets. Because of the soundness of their long-range planning process, world-class producers confidently invest in all areas of their business for the long haul: personnel training and education, market development, new product/ service development, factories and advanced high-tech production processes, and research and development.

These investments position them to exploit the opportunities in their business plans. In particular, world-class producers: ? Get new products/services to market fast. ? Are high-quality producers. They are known for the quality of their products/services; quality is emphasized from the top to the bottom of their organizations. ? Have high labor productivity and low production costs, matching or beating their competition.

? Put customers first.Are responsive to needs of customers, willing to customize products and expedite or change customer orders ? Carry little excess inventory. ? Think globally in general: market products globally and shop globally for supplies. ? Quickly adopt and develop new technologies and implement proven technologies. ? Are not resistant to strategic alliances and joint ventures to exploit global opportunities.

? Consider relevant social issues when setting strategies.

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