Fundamentals of operations management


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BIDC Presentation by Raquel Graham

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  • Consider the ingredients of your breakfast this morning. Unless you live on a farm and produced them yourself, they passed through a number of different processing steps between the farmer and your table and were handled by several different organisations.
  • In order to obtain and then to hold a competitive edge or advantage over competitors, organisations must produce goods or services that are competitive in their respective markets.First, the marketing and sales department must draw up their specific strategies, then the operations management strategy can be drawn up to support both the organisation's overall strategic direction and that of the marketing/sales strategy.
  • Fundamentals of operations management

    1. 1. Fundamentals of Operations Management By: Raquel Graham
    2. 2. Elements in Business There are 5 main elements that are involved in a business whether manufacturing or service: 2
    3. 3. What is Operations Management? Operations Management is concerned with the design, management, and improvement of the systems that create the organisation's goods or services. OM concerns itself with the processes involved in converting and transforming inputs into outputs in the form of goods or services that add value to the organisation. 3
    4. 4. Components of an Operating System Basic components: inputs and resources (natural or material resources, human resources, technological resources and entrepreneurial resources) which are purchased by the organisation processes which involve the conversion or transformation of these resources into products or services (e.g. using project, batch or continuous processes) output and then feedback to the organisation from its customers 4
    6. 6. Why is it Important? Too often, attention is paid to finance, technology and marketing, and not the actual functions of the business. E.g. Marketing a new product and it does not meet quality expectations, poor supply to customers etc. E.g. Finance is not paying suppliers or not receiving payments from customers on time 6
    7. 7. Another View of Operations Consider the human body – Marketing – Style of dress, personal hygiene Finance – Blood, oxygen Administration – taking care of health, exercising, lifestyle mgmt Training – Education, work experience Operations – the entire process of keeping all organs healthy, interacting day to day, moving around i.e. everything you do! If you don’t take care of one element, the entire body can suffer 7
    8. 8. Components in Operations Management 8
    9. 9. Decisions involved in Operations Management…. Corporate 1. Operations Strategy 2. Make vs. Buy Decisions 3. Location 4. Production 5. Processes and Facilities to be used Tactical 1. Workforce Management 2. Inventory Management 3. Quality Management 4. Scheduling 5. Plant Maintenance 9
    10. 10. Manufacturing vs. Service Organisations Operations Management is a crucial function of both manufacturing and service organisations. Manufacturing companies produces tangible products that can be listed as inventory Service organisations produce a non-physical output and involves the customer in the production process Most oganisations do both. There are few pure manufacturing or pure service organisations. 10
    11. 11. Manufacturing vs. Service Organisations Both types of organisations face similar operational problems: both must obtain suitable and sufficient materials to be used in the production process both must determine suitable scheduling tasks both should be concerned with both the quality of their end products and with their productivity levels 11
    12. 12. What Drives Operations? COMPETITION!! Every organisation attempts to be successful in the market place by obtaining an acceptable market share through competitive strategies. The competitive advantage adopted by the management will be determined by the organisation's overall strategic plan and by its strategic objectives. Success is dependent on the organisation adopting efficient and effective operations with respect to the manufacturing of their products or the provision of their services 12
    13. 13. Some of the most commonly overlooked elements of Operations Inventory Management Forecasting Administration Customer Relationship Management Supplier Relationship Management Facility Management 13
    14. 14. Conclusions Operations management is often overlooked in favour of marketing and finance There are many ways to improve the efficiency of a business by pay attention to how the business is run The business structure should match closely the level of competition in the market place Operational audits are just as important or more so than financial audits It is all about the customer and the added value 14
    15. 15. Thank You!!! Email: Cell #: 262 9379 LinkedIn: Raquel Graham