Objectives Of Operations Management Management Essay

Today, in the competitive world of business in all most all the sectors, irrespective of the size of the organization, focusing on the business improvement has become the fundamental issue. Business improvement could be in any stage from the raw material phase to the final product stage, and in case of the service oriented organizations, the end point is the ultimate customer satisfaction. Commonly, in both the cases, the end point is the customer that has to be satisfied in all aspects like quality, standards, appearance, durability, and cost etc.,

Hence, to achieve the set goals by the organization and most importantly, sustaining the competition, different business improvement methods & procedures are available. In any business, it is of fundamental requirement to plan for the long term success, apart from careful analysis and implementation of strategies. It is the management’s responsibility to create/design and implement new goals. Eventually, in order to live long, change and commitment must be embedded into the process. Also, care must be taken to include particular goals, policies and procedures that are generated for the organization’s suitability and success.

Similar to marketing strategies, operations too has its core areas to be focused like: confusion, control and improvement. In most of the organizations, the confusion could be in the shop floor, like high inventories, repeated jobs, mixed and confused flow of products, lack of communication, etc., In order to overcome these basic problems, the need arises to gain control over the operations. Once the organization gains control over the operations, it is then time to go ahead with the plans of improvement procedures, that include various areas like quality, process, delivery and so on.

Operations Research is the key to answer most of the issues arising in the business and manufacturing environment which is widely being adapted globally in the present competition. Hence, in my analytical report, it can be clearly understood about the benefits, limitations and drawbacks of implementing Operations Research tools and techniques in different situations of any organization.

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2.0 Operations Management:

It is the process that has a combination of different resources used in the production or operation of the organization, and converts into a product/service that has a value to it, in an environment which is controlled by certain procedures of the organization. Hence, it is a very important wing of the organization that takes care of converting inputs into outputs with the expected standards of quality.

The group of activities that are responsible in the process of manufacturing is known as Production Management. Similarly, it is known as Operations Management, when dealt with the management of the services. It has been given lot of importance with regards to the country’s economic growth for the past few centuries, and is gaining more and more importance with the growing technological advancements.

2.1 Production Concept:

As clearly seen in the diagram of the production system, the concept can be defined as the conversion of various inputs into the expected outputs with the required quality standards. It is a process of different steps involved, converting from raw material phase to the final product stage focusing on the customer demand & expectations. Also, it can be seen that in every stage, there is a value added to the product.

Fig 1.1 Schematic Production System.(source : http://www.newagepublishers.com/samplechapter/001233.pdf)

Transformation Process:

Product Design

Process Planning

Production Control

Maintenance

Inputs

Men

Materials

Machines

Information

Capital

Outputs:

Products

Services

Continuous:

Inventory

Quality

Cost Environment Feedback Information

2.2 Production System:

As shown in the above diagram, the production system is an essential part of any organization, where different activities & resources are combined and converted under a controlled environment in order to add value according to the organization’s procedures & standards set by the management.

The following characteristics are a part of the production system:

It is an activity that is organized with set goals & standards.

It converts the various inputs into desired outputs (product/service).

It is very much a part of the organization.

It also has a procedure of feedback, in order to gain control over the process and improve the performance.

2.2.1 Classification of Production System:

The Production System can be divided into Continuous Production, Mass Production, Batch Production, and Job Shop Production.

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Production/Operations Volume

Continuous Production

Job Shop Production

Batch Production

Mass Production

Output/Product Variety

Fig.1.2. Classification of Production systems. (source: www.newagepublishers.com/samplechapter/)

Continuous Production:

As the name itself is self explanatory, the production system is carried out in a sequence. The facilities layout is such that the material flow follows a sequence of operations: usually with the help of conveyors.

Characteristics:

The continuous production is carried out in the following situations:

When there is no flexibility, and have devoted plant & machinery.

The process is automated for the material management.

The manufacturing process is carried out with a set of procedures/sequence.

Constituent materials cannot be readily branded with final product.

Planning & Scheduling is a day to day job.

Advantages:

The following advantages can be noticed in the Continuous Production system:

Product & process sequence is standardised.

Increased production rate with reduced cycle time.

Capacity utilised is maximum because of the line evaluation.

Less manpower, as most of the processes are automated.

Semi skilled employees can be used in the production line.

Due to high volume production, unit cost is low.

Limitations:

There are a few limitations that are noticed in this system:

Multiple products cannot be processed due to non-flexibility.

Investment is very high to set up assembly lines.

Product segregation is very low.

Mass Production:

It is the continuous process of manufacturing discrete parts or assemblies. As the name itself says, the production is carried out in high volumes. The machinery is generally arranged in a patterned layout along with product & process standardisation.

Characteristics:

It is usually carried out in the following situations:

Product standardisation and processes are sequenced.

Machinery is exclusively dedicated for high volume production.

Production has shorter cycle time.

Process inventory is low.

Assembly lines are precisely balanced.

Material flow, components & parts is continuous.

Ease of production planning & control.

Automated material handling.

Advantages:

The advantages of mass production system are as follows:

Higher production rate with reduced cycle time.

Capacity utilised is maximum because of the balanced assembly line.

No need of highly skilled workers.

Inventory process is low.

Low cost per unit in manufacturing.

Limitations:

Some of the limitations in this system of production are as follows:

Machinery breakdown is a common drawback, as it could stop the whole production line.

Major changes cannot be adapted to the assembly layout for new product designs.

Investment is very high in production facilities.

The slowest operation is the deciding factor of the cycle time.

Batch Production:

This type of production is defined, also by its name itself: the production is carried out in lots or batches and in different routing. Its unique feature is, produces limited number of products at a regular interval and are stocked for the sales.

Characteristics:

It is preferred under the following situations:

When shorter production runs is required.

Flexible plant & machinery when needed.

When the change for production of product in a batch is required.

Comparatively when less lead time and cost are needed to job order production.

Advantages:

The following are a few advantages in this type of system:

Utilisation of plant & machinery to its best.

Functional specialisation.

Lower cost per unit when compared to the job order production.

Lower investment in plant 7 machinery.

Flexibility to produce various products.

Operators have the job satisfaction.

Limitations:

The following are a few limitations observed in this system:

Long & irregular flows, hence difficult material handling.

Complexity in production planning & control.

Higher work in process when compared to continuous production.

Frequent changes means, higher set up costs.

Job shop production:

In this type of production system, the products are designed & produced according to the customers’ requirements within a stipulated time, quantity, and cost. Hence, the volume and variety of the products are low. The plant is equipped with general purpose machines in various departments, and as per the job requirements the product follows a particular sequence.

Characteristics:

The Job shop production is adapted during the following situations:

Low volume and many varieties of products.

Plant & machinery used is of general purpose.

Needs highly skilled workers to execute the unique job works.

Inventory is usually high with respect to material, tools, components etc.,

Needs detailed planning to process each products sequence of production.

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Advantages:

The following advantages can be observed in this type of the production system:

Due to general purpose plant & machinery, variety products can be processed.

Because of different processes, chance of employee skills enhancement is possible.

Potential use of workers.

Existence of new product ideas & creativity.

Limitations:

Frequent set up changes means high cost involved.

Higher inventory cost due to variety products processing.

Complex production planning.

Space requirement is large.

3.0 Production Management:

It can be defined as the process of controlling the activities of production with detailed planning and organizing. Usually, it is a combination of different resources that are needed in the production subsystem of any organization in order to add value to the product in a controlled environment.

3.1 Objectives:

The main aim is to produce goods or service of the expected quality and estimated quantity at the stipulated time and with proportional manufacturing cost.

Right Quality: The product’s quality usually depends on the customers demand and expectations, but necessarily need not be the best quality. The deciding factors are the cost of the product, technical specifications & requirements.

Right Quantity: There has to be a balance in produced inventory. At times the demand may exceed the production capacity or the vice versa, adding up to the blockage of inventory, or shortage of products in both the cases.

Right Time: Delivery time is the decisive factor for the production department’s efficiency. Hence, the production department needs to make the best use of the input resources in order to reach its objective.

Right Manufacturing Cost: The manufacturing cost of the proposed product is evaluated before the actual production. Hence, care should be taken to estimate the cost in order to lower the variation in the cost factor.

4.0 Operating system:

In general, the operating system takes certain inputs and gives the final product in terms of goods or service, ultimately keeping the customer requirements in view and satisfying by offering the right product.

4.1 Concept of Operations:

Operations can be defined as the process rendered to an organisation, technology, human resources, managerial functions that are all a part of the system. Operations of any organization can be classified into manufacturing operations and service operations. In case of manufacturing operations, the final output is a good: for example a car, tyres, food products etc., and in the latter case, it is a service and includes things like banking, hospitality, insurance etc.

4.2 Operations Management:

The managers of operations usually perform their duties based on few activities like planning, organising, and controlling the processes that affect the human behaviour using certain models.

Planning: The managers generally design a set of procedures, policies, and aims in order to achieve the organization’s goals. In this particular phase, the total focus is on the operations and strategies of the organization, along with product planning, facility designing. In simple words, it is a process of decision making by the managers on the existing and future activities.

Organizing: In this phase, the operations managers structure the roles, duties, and the information flow in the organization. The right people are given authority and responsibility to achieve the common goals of the organization.

Controlling: This phase is very straight forward as it does compare the performance of the employees and the outcome of the production, and evaluate whether the planned activities are being achieved as set by the managers.

Behaviour: On one side, it is the management and the other side is the staff, and when the management brings in some new procedures, concepts, or strategies, it is of vital importance that, how the staffs are going to respond to the change. It is their behaviour that is taken into account before proceeding with any important decision making.

Models: The managers need some base to make the necessary decisions regarding processes, and may face difficulties during this activity. Hence, the operations managers depend on models such as aggregate planning, break even analysis, linear programming, computer simulation, decision tree analysis and so on.

4.2.1 Objectives of Operations Management:

The main objectives of the Operations Management can be broadly classified in to resource utilisation and customer service.

Customer Service: It is the prime objective to provide the customer with a specific product that satisfies in terms of cost and timing. In other words, it may be defined as, providing the customer with the ‘right thing at a right price at the right time’. To achieve this objective, it also involves the functions such as manufacturing, transportation, supply chain, and service. In general, any organization would always put its best efforts to achieve the standards as mentioned above.

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Resource Utilisation: To achieve the customer satisfaction, an organization has to use their resources effectively and efficiently. Operations management’s focus is more on resource utilization to reduce their losses, under utilisation of waste in order to make the maximum benefits. The other functions that are also equally important are time utility, space, and activities in the process.

Operations management is primarily focused to achieve customer satisfaction and the resource utilisation equally. If one of the objectives is more focused, then the other is on the decline. Hence, both the objectives can not be maximised at the same time, so the managers need to balance between them. The managers must be cautious enough while dealing with the problems apart from keeping these two objectives in mind.

5.0 Scope of Production and Operations Management.

Production and Operations Management are usually concerned of transforming the inputs into outputs, comprising of resources and other organisational objectives such as effectiveness, efficiency and adoptability in the process of producing a product to the customer with best utility features. This is distinct from other activities such as personnel, marketing, finance, etc.

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From heizer and render.

In the present business world, every organisation is striving hard to be different from the other in many aspects; the most focused one is the quality & reliability. In other words, it is a process of gaining competitive edge over the other business entities. To achieve this competitive difference, the operations manager resort to certain strategies and decisions to improve the business and productivity of an organization.

We can understand more clearly from the ten decisions that need to be focused, and can be implemented in any organization according to the type and size of the business. The following are the ten core avenues of operations management, clearly explained by Heizer & Render:

Quality: Aim is to reach the quality standards that is commonly expected by any customer with the help of different strategies and methods.

Process and Capacity design: Planning and designing the infrastructure of an organization from technology requirements, human resource management, and to estimate the financial investments necessary.

Location selection: Any organization to be successful, its location is very important of an issue, which helps in reducing time for transportation of either raw material or the finished goods.

Layout design: It is also an important part of the planning, to ensure the factors effecting the requirements of the manufacturing processes like raw material, skilled workers, capacity required for production to meet the set target by the management and demanding market situations.

Human resources and job design: Employees in an organization play a very important role from different levels, departments, their experience/skills forming a strong team & healthy working environment in achieving the goals.

Supply Chain management: Establishing the relationship between the organization and the suppliers is also very much essential as other aspects of the management, apart from selecting the quality & necessary material along with competitive pricing & delivery terms and conditions.

Inventory: Management has to be focused on the needs of the customer apart from the manufacturing necessities such as production planning & employee management.

Scheduling: The management has to come up with good production planning which is suitable to the whole organization, as it works as a team.

Maintenance: Proper maintenance and reliability on machinery has to be ensured by the organization for effective production.

The ten decisions of operations management are implemented in any organization to achieve competitive advantage via differentiation over the other. As we go further in this report, we may see how these ten decisions help any organization to achieve their set goals by implementing different Operations Research tools and techniques integrated with Lean thinking.


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