Operations Management (UM06CBBA73)

UNIT 1: Fundamentals of Operations Management

Operations management is a critical area of business that focuses on the

efficient production and delivery of goods and services. Here are the
fundamental aspects of operations management:
Operations Management is a pivotal component within businesses, dedicated to the efficient
conversion of inputs into outputs. It includes meticulous planning, seamless organization, and
rigorous supervision of activities across production, manufacturing, or service delivery realms.
Its primary goals revolve around maximizing resource utilization, boosting productivity, and
guaranteeing the prompt delivery of top-notch products or services to clients.

1. Understanding Operations Management

• Definition: Operations management involves planning, organizing, and supervising
processes, and making necessary improvements for higher profitability.
• Objective: To enhance the efficiency and effectiveness of business operations.

2. Key Functions of Operations Management

• Product Design: Developing new products and refining existing ones to meet
customer needs.
• Process Design: Planning and optimizing production processes to improve efficiency.
• Capacity Planning: Determining the amount of production capacity needed to meet
demand.
• Inventory Management: Controlling stock levels to balance supply and demand
without incurring excess costs.
• Supply Chain Management: Managing the flow of goods and services from
suppliers to customers.
• Quality Management: Ensuring that products and services meet consistent standards
of quality.

3. Operations Strategy
• Competitive Priorities: Establishing priorities such as cost, quality, flexibility, and
delivery.
• Operations Decisions: Making strategic decisions in areas like facility location,
technology implementation, and workforce management.

4. Process and Technology

• Process Types: Understanding different types of processes such as job shops, batch
production, assembly lines, and continuous flow.
 • Technology in Operations: Implementing technologies like automation, robotics,
and information systems to streamline operations.

5. Lean and Six Sigma

• Lean Management: Techniques to minimize waste and maximize value, such as Just-
In-Time (JIT) and Kanban.
• Six Sigma: A data-driven approach to eliminate defects and improve process quality
through DMAIC (Define, Measure, Analyse, Improve, Control).

6. Project Management
• Project Planning: Initiating, planning, executing, and closing projects effectively.
• Tools and Techniques: Using tools like Gantt charts, PERT diagrams, and Critical
Path Method (CPM) for project management.

7. Performance Measurement
• Key Performance Indicators (KPIs): Metrics to measure operational performance,
such as throughput, cycle time, and utilization.
• Benchmarking: Comparing performance with industry standards or best practices.

8. Sustainability and Operations

• Sustainable Practices: Implementing environmentally friendly processes and
reducing waste.
• Corporate Social Responsibility (CSR): Ensuring operations align with ethical and
social responsibilities.

9. Global Operations
• Global Supply Chains: Managing operations across multiple countries and dealing
with issues like tariffs, regulations, and cultural differences.
• Outsourcing and Offshoring: Strategies for reducing costs and accessing global
talent.

Functions of Operations Management

Operations management is more than just resource management, though that’s part of the
larger picture. For a company to better its operations, they have to focus on each of the many
departments and how they function. An operations manager has to look at the various
departments in the company to ensure they’re working efficiently. When all parts work
together, the company thrives. In general, you can divide operations management into 10 key
functions.
1. Finance & Accounting

Accounting is all the financial transactions within a company. There needs to be policies and
procedures for things like expenses, data management and making financial reports. The latter
is one of the most important aspects of finance and accounting as it provides the data that shows
where there’s waste that can be removed and other ways to boost efficiencies to run the business
more effectively without spending more.

2. Supply Chain Management

Supply chain management is the process of controlling goods and services as they move from
raw materials to finished and delivered goods. The purpose is to streamline the channel to
increase value for customers and for the producing business to make a profit and gain a
competitive advantage in the marketplace. Operations managers want to manage this process
to fulfill their obligation to the company.

3. Production Management

Production is turning resources into goods and services. Therefore, production management is
about controlling the activities that are involved in making those products. This involves
planning, coordinating, monitoring, administrating and judging the quality of the inputs and
output of the production process. The operations manager is accountable for all the industrial
operations, such as the quality, expense and quantity of the production.

4. Inventory Management

Another aspect of operations management is inventory. Operations managers have to identify

which and how much stock they need to order for a product and when they need it. This
involves being able to track inventory from the point of purchase and through the
manufacturing cycle. An operations manager keeps track of trends in the business to ensure the
company has enough stock to fulfill its orders, but not too much that it takes up valuable
warehouse space. There also must be a way to alert operations when stocks are low and need
to be reordered.
5. Quality Management

Ensuring the quality of the product or service being produced in the company is also under the
purview of quality management. Quality management is about reviewing the tasks and
activities of production to make sure they’re meeting the quality expectations that have been
set. Therefore, operations managers come up with a quality policy and the creation and
implementation of quality planning and assurance. They’re also responsible for quality control
and quality improvements.

6. Business Forecasting

Operations managers are part of the planning of goods and services production by providing
predictive analytics that helps businesses save resources and reduce expenses. To do this they
use business forecasting, which is making informed guesses based on certain business metrics.
These include sales growth and predictions for the economy. The more accurate these business
forecasts, the better adjustments a business can make to optimize its strategies and change its
current operations to take advantage of what’s to come.

7. Strategic Planning

In fact, strategic planning is a big part of operations management. That’s because strategic
planning is how an organization’s leaders figure out what their vision for the future will be.
They use that vision to define the company’s goals and objectives. These goals and objectives
will be a lodestar that the company and its employees will follow through planning that
comes out of the strateg

8. Business Process Management

Business processes often called operational processes, are activities that are critical to a
company adding value and staying competitive in the market. These linked tasks end with a
service or product so they’re connected to almost everything an operations manager is
responsible for overseeing.
One of the main objectives of business process management is to achieve continuous
improvement, which consists in improving the efficiency of all the business processes that an
organization executes to operate and generate profit by making gradual changes over time.

9. Product Design

Product design is a very important part of operations management as operations managers are
all about achieving high consumer satisfaction. The design is crucial to attracting the customer
from the myriad choices they’re exposed to. Your product must have something that gives it a
competitive advantage.

10. Human Resource Management

Human resources are the recruiting, hiring, deploying and managing of a company’s employees
to allow an organization to have sufficient capacity to meet customer demand. While
historically, human resources and operations management have been separated, there’s an
administrative overlap, such as payroll and other admin issues. Operations explain and
moderate the effects of human resources activities. Beyond pay, there’s training,
communication and staffing.
Operating System:

Operating Systems (OS)

Definition: An operating system is system software that manages computer hardware and
software resources and provides common services for computer programs.

Key Functions of an Operating System:

1. Process Management: Handles the creation, scheduling, and termination of

processes. It ensures that each application gets the necessary resources to function.
2. Memory Management: Manages the system's primary memory, including the
allocation and deallocation of memory space as needed by applications.
3. File System Management: Controls how data is stored, retrieved, and organized on
storage devices. This includes managing files and directories.
4. Device Management: Manages device communication via their respective drivers. It
oversees the input/output operations of peripheral devices like printers and monitors.
5. User Interface: Provides a way for users to interact with the computer, often through
graphical interfaces (GUIs) or command-line interfaces (CLIs).
6. Security and Access Control: Protects system data and resources against
unauthorized access and ensures data privacy.

Examples of Popular Operating Systems:

• Windows: Developed by Microsoft, it is widely used in personal and professional
environments.
• macOS: Developed by Apple for Macintosh computers.
• Linux: An open-source OS known for its use in servers, desktops, and embedded
systems.
• Android: A mobile operating system developed by Google.
• iOS: Apple's mobile operating system for its devices like iPhone and iPad.
Role and Responsibility of Operations Managers in Modern
Business Environment
1. Strategic Planning:

• Aligning operations with the overall business strategy.

• Making decisions on resource allocation, capacity planning, and process
improvements.

2. Process Improvement:

• Continuously seeking ways to improve efficiency and productivity.

• Implementing methodologies like Lean, Six Sigma, and Total Quality Management
(TQM).

3. Resource Management:

• Managing human resources, equipment, and materials to optimize production.

• Ensuring that resources are used effectively and efficiently.

4. Supply Chain Coordination:

• Overseeing the entire supply chain from suppliers to customers.

• Ensuring smooth logistics and timely delivery of materials and products.

5. Quality Assurance:

• Implementing quality control measures to maintain high standards.

• Monitoring and analyzing quality metrics to identify and address issues.

6. Technology Integration:

• Leveraging technology to enhance operations (e.g., automation, ERP systems).

• Staying updated with the latest technological advancements and implementing
relevant tools.

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7. Risk Management:

• Identifying potential risks in the operations process.

• Developing and implementing risk mitigation strategies.

8. Customer Focus:

• Ensuring that customer needs and feedback are integrated into operations.
• Striving for continuous improvement in customer service and satisfaction.