Operations management

01.Production and Operations Management

Introduction

BBM (Hons) in Banking & Finance

Y2S

Assignment submitted by

KPSA Ramanayake
 Production and operations Management

1. Briefly explain the term "Operation Management''

• The Overall management of systems and processes including Planning, organizing, leading, and
controlling that relevant to creating goods or providing services called as Operation
Management. It includes how to manage the main functions of a business called as operation
management.

2. Identify the three main functional areas of business organizations and briefly describe how they
interrelate.

• There are 3 main functions of a business as operations, finance, and marketing.

• operations mean everything that need to create and deliver the products and services It includes
manufacturing, Purchasing inventory management and quality control.
• Finance deals with the financial health of the business. It includes managing the money coming
in and going out, securing, keeping records, and making financial plans.
• Marketing is about all the things about your target audience and create strategy to reach it. It
includes market research, advertising, sales, and public relations.
• Marketing is understanding a customer need and then operations figure out how to create this
product or service to address customer need and finance may ensure the business has enough
money to do it. so, these functions work together to achieve business goals.

3. Many organizations offer a combination of goods and Services to their customers. There are some
key differences between production of goods and services. What are the implications of these
difference relative to managing operations?

• Organizations offer both goods and services face a unique challenge due to the inherent
differences between production and delivery. Now let ‘see how these differences impact.
• managing operations.

- planning and scheduling - for goods production planning Can be based on forecasts. Service Operations
need to be more flexible to adapt to real time customer demands.

- Inventory and capacity - Inventory management is a key aspect of goods operations. Service Operations
need to manage staff capacity and skillsets to meet service demands.

- Performance measurement - For goods, quality control and production efficiency are key metrics.
Service Operations need to track Customer Satisfaction and Staff Performance.

4. Discuss the difference between the cost of inputs and the value or price of Outputs in Operations
management.
 • Cost of inputs. represents the total expenses incurred to produce a good or service. This
includes, raw materials, labor costs, Overhead expenses like rent, utilities, equipment
depreciation. and Other direct and indirect production costs
• Value or price of outputs
• Value refers to the customer's perception of the benefits they receive from a product or service.
• Price is the monetary amount a customer is willing pay for the good or service.
• The difference between the cost of inputs and the value of Outputs is Often referred to as the
gross margin or gross profit.
• A positive gross margin indicates the company is generating enough revenue from sales to cover
the cost of production and potentially earn a profit.
• A negative gross margin suggests the company is losing money on each unit sold requiring them
to re-evaluate Pricing or production efficiency.

- Operations management focuses on optimizing the processes that convert inputs into Outputs. By
minimizing costs. and maximizing value, companies can increase their gross margin and achieve
profitability.

5. Identify the three major types of production Facilities and describe each of them.

• There are three main types of production facilities categorized by their production process.
i. Job shops

ii. Batch manufacturing

iii. Respective manufacturing

• Job shops

- In this case Orders are based on customer requirement. after the order has done Products are
designed. these facilities specialized in low volume, high variety products and unique products based on
individual specification. so, these companies require multiskilled people.

• Batch manufacturing.

- This type focuses on producing items in batches, with each batch having different specipications. They
use mix of general purpose and specialized equipment. After the ore batch is completed, equipment may
setup for the next batch. It differs with What they want.

• Respective Manufacturing..

- These are specifically designed for a single production a product family with minimal variations. using
same model. In this method we can save cost through automation and streamlined processes.

6. Define the term 'value Added" in Operations Management

 • Value added refers to the additional worth created at each stage of production. This added
value can come from various Factors like labor, machines, creativity, technology, quality
management, cost management and Productivity management.

• By focusing on value addition, operations managers can identify and streamline processes
that don't contribute to the Rinal Products Worth for the customer. This helps to,

reduce waste and costs.

enhance efficiency.

Increase customer Satisfaction.

ultimately, generate higher profit.

7. Describe the Operations function and the nature of the Operations manager's job.

• functions of operations Management: -

- Planning and designing - this involve designing the production Process, laying out facilities and choosing
the most effective methods for creating the product or service. Operation managers Considers Factors
like Forecasting customer demand and resource allocation.

- Production and quality control: This function ensures smooth production and consistent quality.
Managers Oversee the Production Process manage inventory and implement quality control measures.

- Supply chain management - Operations managers work with suppliers to ensure a steady flow of
materials and resources needed for production.

• Logistics: - This involves efficiently managing the movement storage and delivery of goods.

Nature of the Operations Manager's Job: -

• Operation managers must oversee various departments and ensuring everything runs smoothy
to achieve organization's goals.
• Planning and Strategizing: - This involves formulating. strategies for Operational efficiency,
budgeting, and resource allocation. They play a role in long term planning and improve
processes.
• people management: - Managers often Supervise teams, which involves hiring and training staff,
as well as motivating and ensuring their wellbeing.
• Quality control: - They ensure the quality of the company's products or services meets standards
by setting goals, collaborating with quality control teams, and adjusting as needed.
• Reporting and Analysis - They must analyze data and generate reports to identify areas for
improvement and communicate progress to stakeholders.
8. Describe the responsibilities of the operations management.

• Planning and Design: This involves creating a roadmap for production, including process design,
facility layout, and choosing the most effective methods for creating the product or service. It
also encompasses forecasting customer demand and allocating resources efficiently.
• controlling: Operations managers oversee various aspect of production to ensure everything
runs according to plan. This includes. quality control, inventory management and cost control.
• Organizing: This involves structuring the production process, assigning tasks to team members,
and ensuring everyone has the resources they need to perform their jobs effectively.
• strafing: While staffing might fall under human resources in Some organizations, Operations
managers often play a role in identifying skill requirements for production roles and Participating
in the recruitment process.
• Directing: Operations managers are the leaders who guide and motivate their teams. They
provide clear instructions, delegate tasks, and ensure everyone is working towards common
goals. By effectively carrying out these responsibilities, operations management creates a well-
oiled machine that transforms resources into customer - satisfying goods and services.