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Operation Management

 It involves planning, organizing and directing processes in order to attain higher profitability. Operations management was previously known as production management where the entire focus was on manufacturing. However, today operations management is a multidisciplinary area that works with finance and marketing. It ensures that the labor, material and other inputs are used efficiently. It is based on various disciplines and draws principles from general management.

Principles of Operations Management:

Dr Richard J Schonberger has developed 16 principles of which are as follows:

  1. Visibility Management: Promoting organizational achievement and let the external market learn about productivity, improvement in competency.
  2. Fix Cause: Paying attention to the root causes which hamper and obstruct the performance and affect cost.
  3. Total Quality Control (TQC): Using only best processes, procedures, materials and other inputs.
  4. Pull System: Improving the workflow and cutting down any wastage of material and time.
  5. Cut Set-up: Preparation for demand production and readiness in supporting various processes simultaneously.
  6. Cut Times: The path to clients must be reduced and sales should be made with the shorter channel so that the goods are delivered faster.
  7. Minimizing Human Error: The work equipment must be improved and the workers must be made accountable.
  8. Best and Simple Equipment: The organization must possess and retain simple instruments which can be flexibly used, at a minimum cost.
  9. Maintenance of Equipment: Instead of purchasing a new asset, the manager must improve the current asset.
  10. Investment in Human Resource: Providing cross-training, improving health and safety standards and rotating jobs. It focuses on recognition and rewards.
  11. Organize the Resource: Operations must be organized and programmed in such a way that they result in a minimum delay in delivery to customers.
  12. Focus: No variation must be allowed and the manager must always focus on customer demand.
  13. Know your Competitors: It focuses on identifying the competitors, their clients and what best practices are followed by them.
  14. Continuous and Quick Improvement: The organization must never stop improving its objectives, policies and procedures.
  15. Unified Purpose: The frontline workers must be involved in strategic discussions and ensure that they understand the work expected of them and communicate if they want some change.
  16. Teaming up with Customers: a close analysis must be done about their purchase behavior, usage and then organize the service and product categories accordingly.

Role of Operations Management:

Operations management performs the following four roles:
Direct: It is the overall nature and strategy of operations. It helps in translating the plans and purposes into reality.
Design: It comprises of designing the operations services, processes and products. It deals with determining the physical form shape and composition of operations and processes.
Deliver: After designing the process, the operations focus on the delivery of services and products.
Develop: The last role is to develop process performance. This is because any process manager or operations manager can not routinely deliver services and products in a similar manner. thus, they constantly develop the capabilities of their processes to enhance process performance.

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