Operations Management can be understood as an area of management which is concerned with the government of system, processes and functions that manufacture goods and renders services to the end user, to provide desired utilities to them while adhering to other objectives of the concern, i.e. efficiency, effectiveness, and productivity.
An operation may be defined as the process of changing inputs into outputs thereby adding value to some entity. Right quality, right quantity, right time and right price are the four basic requirements of the customers and as such they determine the extent of customer satisfaction. And if these can be provided at a minimum cost, then the value of goods produced or services rendered increases.
Operations management is concerned with managing the resources that directly produce the organization service and products. The resources are generally consist of people, material, technology and information but may go wider than this. These resources are brought together by a series of processes so that they are utilized to deliver the primary service or product of the organization. Thus operation management is concerned with managing inputs (resources) through transformation processes to deliver outputs (service or products). The objectives of production management are “to produce goods and services of the right quality, in the right quantities, according to the time schedule and a minimum cost”.
Objectives of production management may be amplified as under:
- Customer Service: The primary objective of operations management, is to utilize the resources of the organization, to create such products or services that satisfy the needs of the consumers, by providing “right thing at the right price, place and time”.
- Resource Utilization: To make the best possible use of the organisation’s resources to satisfy the wants of the consumers, is another important objective of the operations management.
- Producing the right kind of goods and services that satisfy customers’ needs (effectiveness objective).
- Maximizing output of goods and services with minimum resource inputs (efficiency objective).
- Ensuring that goods and services produced conform to pre-set quality specifications (quality objective).
- Minimizing throughput-time – the time that elapses in the conversion process- by reducing delays, waiting time and idle time (lead time objective).
- Maximizing utilization of manpower, machines, etc. (Capacity utilization objective).
- Minimizing cost of producing goods or rendering a service (Cost objective).
In operations management, the formation of goods or services encompasses conversion of inputs into outputs, wherein different inputs such as capital, labour, material, machinery and information are combined and used to create output, by using the conversion process. For this purpose, the organization measures different points in the process and then compares the same with the set standards, to ascertain whether corrective action is required or not.
The role of operations management is to create some kind of value-added in form of goods and services by transforming a company’s inputs into output as finished goods and services. The activities in operations can be divided as input, transformation process and output. The company’s inputs include human resources such as workers and managers, information, technology IT and facilities and processes such as equipment’s, buildings or lands and materials. Then the operations system will convert the transformed resources from inputs into outputs that are goods and services which produced by company and after that will get feedback information about the activities in the operation system.
Scope of Operations Management
- Location of Facilities
The most important decision with respect to the operations management is the selection of location, a huge investment is made by the firm in acquiring the building, arranging and installing plant and machinery. And if the location is not suitable, then all of this investment will be called as a sheer wastage of money, time, and efforts.
So, while choosing the location for the operations, company’s expansion plans, diversification plans, the supply of materials, weather conditions, transportation facility and everything else which is essential in this regard should be taken into consideration.
- Product Design
Product design is all about an in-depth analysis of the customer’s requirements and giving a proper shape to the idea, which thoroughly fulfils those requirements. It is a complete process of identification of needs of the consumers to the final creation of a product which involves designing and marketing, product development, and introduction of the product to the market.
- Process Design
It is the planning and decision making of the entire workflow for transforming the raw material into finished goods, It involves decisions regarding the choice of technology, process flow analysis, process selection, and so forth.
- Plant Layout
As the name signifies, plant layout is the grouping and arrangement of the personnel, machines, equipment, storage space, and other facilities, which are used in the production process, to economically produce the desired output, both qualitywise and quantitywise.
- Material Handling
Material Handling is all about holding and treatment of material within and outside the organisation. It is concerned with the movement of material from one godown to another, from godown to machine and from one process to another, along with the packing and storing of the product.
- Material Management
The part of management which deals with the procurement, use and control of the raw material, which is required during the process of production. Its aim is to acquire, transport and store the material in such a way to minimize the related cost. It tends to find out new sources of supply and develop a good relationship with the suppliers to ensure an ongoing supply of material.
- Quality Control
Quality Control is the systematic process of keeping an intended level of quality in the goods and services, in which the organization deals. It attempts to prevent defects and make corrective actions (if they find any defects during the quality control process), to ensure that the desired quality is maintained, at reasonable prices.
- Maintenance Management
Machinery, tools and equipment play a crucial role in the process of production. So, if they are not available at the time of need, due to any reason like downtime or breakage etc. then the entire process will suffer.
Hence, it is the responsibility of the operations manager to keep the plant in good condition, as well as keeping the machines and other equipment in the right state, so that the firm can use them in their optimal capacity.
