Introduction
In present world, technology, especially computer – based information technologies are giving birth to new organizations (of future) and they continue to revolutionize and the operations manager must formulate the objectives and roles based on technology:
- Customers are served;
- Employees communicate and network with one another and external stakeholders, such as customers, suppliers, competitors, and governmental agencies;
- Tasks are performed;
- Organizations are structured;
- Human resources are led and managed;
- Planning and control system operate;
- Individuals and organizations learn to innovate and adapt etc.., (Krajewski, 2003)
Technological change may have positive effects, including products of higher quality and services at lower costs but the leading organizations today are leaner and more agile than in the past, and they take advantage of technology whenever possible. To maintain this competitive stance, these organizations rely on their operations functions to be dependable and efficient. Effective operations management is the key to business success that integrates other functional areas, which together enable an organization to excel in the market place. The successful integrated organization will meet global competition with quality outputs, outstanding customer service, and effective control of costs.
What is Operations Management?
The term ‘Operation Management’ refers to the direction and control of the processes that transform inputs into finished goods and services. This function is essential to systems producing goods and services in both profit and nonprofit organizations.
Operation management is part of a production system. A production system consists of inputs, outputs and information flows that connect with customers and the external environment.
Operation management as a set of decisions
Some decisions are strategic in nature; others are tactical. Strategic plans are developed farther into the future than tactical plans. Thus strategic decisions are less structured and have long-term consequences, whereas tactical decisions are more structured, routine, and repetitive and have short-term consequences. Decision making, both strategic and tactical, is an essential aspect of all management activity, including operations management. These types of decisions are divided into five categories:
- Strategic choices.
- Process.
- Quality.
- Capacity, location and layout.
- Operating decisions (Grainger, 2001).
Managing Change
Change is inevitable and most of the project manager’s deal with more than the share of it on any project. Most of them tend to think of change in terms of problems or negative consequences. Although it’s true that change can be bad, it can also be good. The four key factors for success when implementing change within an organization are:
- Pressure for change – demonstrated senior management commitment is essential.
- A clear, shared vision – you must take everyone with you. This is a shared agenda that benefits the whole organization.
- Capacity for change – you need to provide the resources: time and finance.
- Action – and performance – “plan, do, check, act” – and keep communication channels open (Baca, 2005).
The Project manager’s need to deal with three different elements of change management: The first element of change management deals with the authority level of the project manager. You need to make sure that you have the authority to approve and deny changes that impact your project. The second element of change management involves setting up an environment that fosters good change management. You need to communicate with the entire project team to set expectations on how changes on the project are to be handled. The third element of change management involves setting up a system that helps you determine that a change has been requested. This system also helps you decide if you should make the change and allows you to track the change regardless of whether it is approved or denied.
Operations and strategy
The long- range business plan represents the best thinking and analysis about what must be done to capture shares of global markets. Because of the soundness of their long-range planning process, world-class producers confidently invest in all areas of their business for the long haul:
- personnel training and education, market development, new product/ service development, factories and advanced high-tech production processes, and research and development.
These investments position them to exploit the opportunities in their business plans. In particular, world-class producers:
- Get new products/services to market fast.
- Are high-quality producers. They are known for the quality of their products/services; quality is emphasized from the top to the bottom of their organizations.
- Have high labor productivity and low production costs, matching or beating their competition.
- Put customers first. Are responsive to needs of customers, willing to customize products and expedite or change customer orders
- Carry little excess inventory.
- Think globally in general: market products globally and shop globally for supplies.
- Quickly adopt and develop new technologies and implement proven technologies.
- Are not resistant to strategic alliances and joint ventures to exploit global opportunities.
- Consider relevant social issues when setting strategies. (Gaither, 2006)
Operations Performance Objectives
A company should be concerned to satisfy its customers’ requirements for fast and dependable services at reasonable price, as well as helping its own suppliers to improve services they offer. There are five basic performance objectives and they apply to all types of operation:
- Quality.
- Speed.
- Dependability.
- Flexibility.
- Cost.
Managing quality
World-class companies are committing tremendous resources to put in place total quality management (TQM) programs aimed at continuous quality improvement that includes:
- Top management commitment and involvement.
- Customer involvement.
- Design products for quality.
- Design production processes for quality.
- Control production processes for quality.
- Develop supplier partnerships.
- Customer service, distribution, and installation.
- Build teams of empowered workers.
- Benchmarking and continuous improvement (Baca, 2005).
Managing capacity
Capacity is the maximum rate of output for a facility. The facility can be a workstation or an entire organization. The operations manager must provide the capacity to meet current and future demand; otherwise, the organization will miss opportunities for growth and profits. Capacity plans are made at two levels. Long-term capacity plans, which deal with investments in new facilities and equipment. These plans cover at least two years into the future, but construction lead times alone can force much longer time horizons. Short-term capacity plans focus on work-force size, overtime budgets, inventories, and other types of decisions. Long-term capacity planning is crucial to an organization’s success because it often involves large investments in facilities and equipment and because such decisions are not easily reversed. (Krajewski, 2003)
Capacity can be stated in terms of either input or output measures. Output measures giving the number of products or services completed in a time period are useful when a firm provides standardized products or services. However, a statement of the number of customized products or services completed in a time period is meaningless, because the work content per unit varies. Demand for customized products and services must be translated into input measures, such as labor hours, machine hours, and material requirements. Capacity choices must be linked to other operations management decisions. The four steps in capacity planning are
- Estimate capacity requirements.
- Identify gaps.
- Develop alternatives.
- Evaluate the alternatives. (Bettley, 2006)
Managing process design
A process involves the use of an organization’s resources to provide something of value. No product can be made and no service provided without a process, and no process can exist without a product or a service. Process management is the selection of the inputs, operations, work flows, and methods that transform inputs into outputs. Process decisions must be made when:
- a new or substantially modified product or service is being offered.
- quality must be improved.
- competitive priorities have changed.
- demand for a product or service is changing.
- current performance is inadequate.
- competitors are gaining by using a new process or technology.
- The cost or availability of inputs has changed. (Grainger, 2001)
Once process planning has been completed, the fundamental structures and character of the operations function is set. This important activity determines in large measure the details of how products/services will be produced, and it positions production to be used by the business to capture world markets.
Major Factors affecting choice of Process designs are
- Nature of product/service demand: patterns of demand and price-volume relationships.
- Degree of vertical integration: forward and backward integration.
- Production flexibility: product and volume flexibility.
- Degree of automation.
- Product/service quality.
Types of Process designs include:
- Product focused.
- Process focused.
- Group technology/Cellular manufacturing. (Gaither, 2006)
References:
Baca, C. (2005). Project Managers spot light on Change Management: Auckland: Harbor Light Press.
Bettley, A. (2006). Operations Management – A Strategic Approach. Wellington: Davidworks Ltd.
Gaither, N. (2006). Operations Management: LA: Thomson.
Grainger, P. (2001). Managing Operations: London: Nichols.
Krajewski, J.L. (2003). Operations Management – Strategy and analysis. NY: Addison-Wesley.