Operations Management: A Comprehensive Overview | Assignments Managerial Economics

THE PRODUCTION AND OPERATIONS FUNCTION

1. What is the definition of production?

The processes and methods used to transform tangible inputs (raw materials, semi-finished goods,

subassemblies) and intangible inputs (ideas, information, knowledge) into goods or services.

Resources are used in this process to create an output that is suitable for use or has exchange value.

2. What is the definition of Operations Management?

Operations management is the activity of managing the resources which are devoted to the creation

and delivery of services and products. It is one of the core functions of any business, although it may

not be called operations management in some industries.

Operations management is concerned with managing processes. And all processes have internal

customers and suppliers. But all management functions also have processes. Therefore, operations

management has relevance for all managers.

3. Why is operations management important in all types of organization?

Operations management uses the organization’s resources to create outputs that fulﬁl deﬁned market

requirements. This is the fundamental activity of any type of enterprise.

Operations management is increasingly important because today’s business environment requires new

thinking from operations managers.

4. The input – transformation – output process

All operations create and deliver services and products by changing inputs into outputs using an

‘input–transformation–output’ process. The table shows this general transformation process model.

Put simply, operations are processes that take in a set of input resources which are used to transform

something, or are transformed themselves, into outputs of services and products. And although all

operations conform to this general input–transformation–output model, they differ in the nature of

their specific inputs and outputs.

5. Inputs to the process

One set of inputs to any operation’s processes are transformed resources. These are the resources that

are treated, transformed or converted in the process. They are usually a mixture of the following:

● Materials – operations which process materials could do so to transform their physical properties

(shape or composition, for example). Most manufacturing operations are like this. Other operations

process materials to change their location (parcel delivery companies, for example). Some, like retail

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THE PRODUCTION AND OPERATIONS FUNCTION

What is the definition of production? The processes and methods used to transform tangible inputs (raw materials, semi-finished goods, subassemblies) and intangible inputs (ideas, information, knowledge) into goods or services. Resources are used in this process to create an output that is suitable for use or has exchange value.
What is the definition of Operations Management? Operations management is the activity of managing the resources which are devoted to the creation and delivery of services and products. It is one of the core functions of any business, although it may not be called operations management in some industries. Operations management is concerned with managing processes. And all processes have internal customers and suppliers. But all management functions also have processes. Therefore, operations management has relevance for all managers.
Why is operations management important in all types of organization? Operations management uses the organization’s resources to create outputs that fulfil defined market requirements. This is the fundamental activity of any type of enterprise. Operations management is increasingly important because today’s business environment requires new thinking from operations managers.
The input – transformation – output process All operations create and deliver services and products by changing inputs into outputs using an ‘input–transformation–output’ process. The table shows this general transformation process model. Put simply, operations are processes that take in a set of input resources which are used to transform something, or are transformed themselves, into outputs of services and products. And although all operations conform to this general input–transformation–output model, they differ in the nature of their specific inputs and outputs.
Inputs to the process One set of inputs to any operation’s processes are transformed resources. These are the resources that are treated, transformed or converted in the process. They are usually a mixture of the following: ● Materials – operations which process materials could do so to transform their physical properties (shape or composition, for example). Most manufacturing operations are like this. Other operations process materials to change their location (parcel delivery companies, for example). Some, like retail

operations, do so to change the possession of the materials. Finally, some operations store materials, such as warehouses. ● Information – operations which process information could do so to transform their informational properties (that is the purpose or form of the information); accountants do this. Some change the possession of the information, for example market research companies sell information. Some store the information, for example archives and libraries. Finally, some operations, such as telecommunication companies, change the location of the information. ● Customers – operations which process customers might change their physical properties in a similar way to materials processors: for example, hairdressers or cosmetic surgeons. Some store (or more politely accommodate) customers: hotels, for example. Airlines, mass rapid transport systems and bus companies transform the location of their customers, while hospitals transform their physiological state. Some are concerned with transforming their psychological state, for example most entertainment services such as music, theatre, television, radio and theme parks. But customers are not always simple ‘passive’ items to be processed. They can also play a more active part in many operations and processes. For example, they create the atmosphere in a restaurant; they provide the stimulating environment in learning groups in education; they provide information at check-in desks, and so on. When customers play this role, it is usually referred to as co-production (or co-creation for new services) because the customer plays a vital part in the provision of the product/service offering. The following table gives examples of operations with their dominant transformed resources.

Outputs from the process Products and services are different. Products are usually tangible things, whereas services are activities or processes. A car or a newspaper or a restaurant meal is a product, whereas a service is the activity of the customer using or consuming that product. Some services do not involve products. Consultancy advice or a haircut is a process (though some products may be supplied in support of the service, such as a report or a hair gel). Also, while most products can be stored, at least for a short time, service only happens when it is consumed or used. So accommodation in an hotel room, for example, will perish if it is not sold that night; a restaurant table will remain empty unless someone uses it that evening.
Value of Customers Customers may be an input to many operations, but they are also the reason for their existence. If there were no customers (whether business customers, users or consumers), there would be no operation. So it is critical that operations managers are aware of customer needs, both current and potential. This information will determine what the operation has to do and how it has to do it (the operation’s strategic performance objectives), which in turn defines the service/product offering to be designed, created and delivered.
Model of Operations Management The first is the idea that operation and the processes that make up both the operations and other business functions are transformation systems that take in inputs and use process resources to transform them into outputs. The second idea is that the resources both in an organization’s

 Keeps cool under pressure – operations managers often work in pressured situations. They need to be able to remain calm no matter what problems occur. The exact details of what operations managers do will, to some extent, depend on the way an organization defines the boundaries of the function. Yet there are some general classes of activities that apply to all types of operation irrespective of whether they are service, manufacturing, private or public sector, and no matter how the operations function is defined. We classify operations management activities under four headings: direct, design, deliver and develop.  Directing the overall nature and strategy of the operation. A general understanding of operations and processes and their strategic purpose and performance, together with an appreciation of how strategic purpose is translated into reality, is a prerequisite to the detailed design of operations and process  Designing the operation’s services, products and processes. Design is the activity of determining the physical form, shape and composition of operations and processes together with the services and products that they create  Planning and control process delivery. After being designed, the delivery of services and products from suppliers and through the total operation to customers must be planned and controlled  Developing process performance. Increasingly it is recognized that operations managers, or indeed any process managers, cannot simply routinely deliver services and products in the same way that they always have done. They have a responsibility to develop the capabilities of their processes to improve process performance

Operations managers and some responsibilities So operations managers are responsible for managing activities that are part of the production of goods and services. Their direct responsibilities include managing both the operations process, embracing design, planning, control, performance improvement, and operations strategy. Their indirect responsibilities include interacting with those managers in other functional areas within the organization whose roles have an impact on operations. Such areas include marketing, finance, accounting, personnel and engineering. Operations managers' responsibilities include:  Human resource management – the people employed by an organization either work directly to create a good or service or provide support to those who do. People and the way they are managed are a key resource of all organizations.  Asset management – an organization's buildings, facilities, equipment and stock are directly involved in or support the operations function.  Cost management – most of the costs of producing goods or services are directly related to the costs of acquiring resources, transforming them or delivering them to customers. For many organizations in the private sector, driving down costs through efficient operations management gives them a critical competitive edge. For organizations in the not-for-profit sector, the ability to manage costs is no less important. Decision making is a central role of all operations managers. Decisions need to be made in:  designing the operations system  managing the operations system  improving the operations system. The five main kinds of decision in each of these relate to:
1. the processes by which goods and services are produced
2. the quality of goods or services
3. the quantity of goods or services (the capacity of operations)
4. the stock of materials (inventory) needed to produce goods or services
5. the management of human resources.

Careers in Operations Management The concept of operations management has been around for a very long time; however, there is an increasing number of aspirants who today specialise in MBA in Operations Management due to the numerous opportunities available in the job market today. Contemporary operations are inclusive of strategic elements with behavioral and engineering concepts. Operations utilize management science, operations research tools and techniques for systematic decision-making and problem-solving thus interacting with other functional areas within the organization. Earlier Operations was recognized as a cost control exercise but the contemporary viewpoint for judging operations is changing from a narrowly defined operating objective of cost control to global performance measurements in areas such as product performance and variety, product quality, delivery time, customer service, and operational flexibility. By linking operations and operating strategies with the overall strategy of the organisation, be it engineering, financial, marketing or information system strategies better synergies are extracted. The widened scope of operations management has led to a rise in job opportunities for those looking for a break into this sector. Operations management is essential for all industries like banking, hospitals, e-commerce, suppliers, manufacturers, technology companies, and more. While the core aspects of the job remain the same, there are a few refined job roles that have been created based on the industry. Let's take a look at some of these job roles: Deputy Manager Manufacturing A deputy manager manufacturing is responsible for planning, managing, and executing manufacturing operations. They are also accountable for ensuring the execution of the manufacturing process is prioritized in accordance with the process workflow and schedule. Since deputy manufacturing managers are responsible for the production process, they are also required to inspect production equipment to prevent any malfunctions regularly. If they do identify any issues, they are required to report the operational or maintenance problems to avoid delays in production. Apart from the technical aspects of the job, they are also required to manage their teams by addressing concerns and complaints. Moreover, they also assist in interviewing, hiring, and training new employees, along with regular performance reviews, appraisals, and promotions. Associate Product Manager An associate product manager participates in the creation of new products and features right from ideation to launch. Their prime responsibility includes gathering product requirements and suggesting product enhancements to improve user experience. They are also required to be familiar with market research and competitor analysis to identify market needs accurately. They also need to monitor and report consumer reactions after a product is launched. To be successful in this job role, it's vital that an associate product manager communicate and collaborate with other teams to understand customer and market requirements. Moreover, it's also vital that they possess strong analytical and quantitative skills and can effectively use data and metrics to provide recommendations and make the right decisions.

Supplier Risk Manager is expected to conduct a supplier risk assessment for Operational risk, Information security risk and reputational risk for a supplier before on-boarding. Maintain supplier compliance in terms of local regulations and company policies/processes. Partner with stakeholders to identify opportunities within the Organization for new initiatives, support the sourcing team to execute special & simplification projects based on stakeholder requirements to meet Quality standards & timelines. Gather information on the market trends and current market price points, create information repository & share the latest insights with the management, use the market benchmarks of other large organizations in order to improve current price points Functional Consultant A functional consultant may be assigned responsibility for a specific functional vertical or client- specific tasks. Given the complexity, it requires the delivery of specific capability in Technology Consulting. A functional consultant needs to understand Business Requirements and Needs and accordingly support application design, develop functional/process documents, Build, test and deliver solutions. A functional consultant is responsible for Functional specification creation, functional Unit Testing, Test Data Creation & Test scripts creation and execution. A functional consultant has to adhere to defined processes and tools while performing day-to-day operations Analyst Operations Advisory Services Analyst Operations Advisory Services is expected to support in building and executing innovative solutions for delivery excellence at an optimized delivery cost. Business operations analysts are in charge of conducting extensive, accurate analyses of their organization's existing business operations. Their main duties include gathering data and developing solutions to meet business needs. They also analyze cross-departmental business processes for efficiency. There are various specificity roles that fall under the category of operations management, and all of them are integral to an organization's success. While there is pressure to get the job done right, there is also an immense opportunity for career growth. Operations management professionals can grow to hold the position of Chief of Operations with enough experience. There are various other professions available as well, like, Logistics Manager, Warehouse Manager, Asst. Management -Quality, Vendor Development, Category Manager, etc.

Operations Management: A Comprehensive Overview, Assignments of Managerial Economics

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THE PRODUCTION AND OPERATIONS FUNCTION