Accounting for the non accountant - unit 4

1. Operations Management
Operations Management
Within every successful firm, the
correct structure must be in place
in order to ensure that the business
functions accordingly.
Operations management or ‘Ops
Management’ is a generic term for
managing the operations within a
manufacturing organisation. The
focus of operations management is
on how to achieve the performance
standards that will enable the firm
to succeed in highly-competitive
global markets.
4. Operations Management

2. The following elements are present in Operations Management.
1. Procurement
• A firm purchases many products and services from other suppliers. Procurement involves processing orders,
placing orders with suppliers, chasing up late deliveries. Technology has led to recent development in this area,
with a significant amount of procurement done over the internet. This is known as “e-commerce” or “e-
procurement”.
2. Production
• Production involves how the product or items are produced. The aim of production management should be to
produce items quicker, cheaper and to a higher quality. Flexibility in production methods, i.e. producing bespoke
customer specifications.
3. Logistics
• This focuses on transportation and warehousing. Items purchased from suppliers have to be delivered to the
buyers premises and stored. Completed items may have to be held in storage until delivered to a customer. The
aim of logistics management should be to achieve a cost-efficient and reliable way of transporting and storing
purchased and finished items.
4. Quality management
• The aim of quality management is to improve the quality of operations and production. This is measure by
increased customer satisfaction and reduced costs.
4.1 Elements present in Operations Management

3. Operational structures and process-based structures
There are different types of manufacturing process
• Jobbing processes, which deal with low-volume
and high-variety work. These jobs are essentially
small projects. In this instance, different jobs
share the same resources.
• Batch process is one in which products are made
several at a time, in discrete batches, but are
not made continuously.
• Project processes are production processes that
usually deal with discrete, customised orders.
This process is commonly implemented in the
construction industry.
• Mass process. – Evident from the word “Mass”,
this process involves producing large quantities.
A perfect example is car production, where large
quantities are produced but they allow for
differing features such as paint colour, interior
specification etc.
• Continuous process. - This is an extreme form of
production, whereby the volumes of output are
larger than in mass production, and the product
variety is less. Good examples are Bread
manufacture, or metals production.
4.2 Operational structures