Operations Management Concept - Essay Example

Strategy and Operations Table of Contents Introduction 3 Different Process Types 4 Job Order or Shop Process 4 Batch Processing 5 Repetitive Assembly line Process 5 Continuous Process 6 Project Process 6 Process Selection Flow Chart 7 Professional Services 7 Service Shop 8 Mass Services 8 Different Layouts 8 Importance of Layouts 9 The Need for Layout Design 9 Product Layout 9 Process Layout 10 Fixed Position Layout 11 Combination Layout 12 Contribution to strategic objectives 12 Performance Objectives 15 Conclusion 16 References 17 Introduction Operations management is a broad concept and it deals with several aspects. It is primarily a valuable component of management decision and strategy formulation as it encompasses products, designs, processes, supply chains and services. It deals with the overall procedure of conversion of the raw material to finished goods and services. The transformation process requires lot of people involvement and techniques that will provide the requirements of the clients (MIT Sloan School of Management, 2010). Operations management is an integral part of organisational strategic to operational and tactical level decision making. The operational level deals with production and control, inventory management, material handling, equipment maintenance policies and inspection and quality control. Tactical level deals with plant layout, structuring, equipment selections and replacement and project management. Strategic level deals with fixation of location and size of the manufacturing plants, and also deals with the structure of networking and services and developing technology supply chains (MIT Sloan School of Management, 2010). The operations function of any company moves in the direction on what the company’s business is all about. If the organization is into a manufacturing business, then it’s an operation that produces the products. If the organization is a service provider, then operations offers the services. Operations management involves managing various segments of operations (Krannert School of Management, 2010). The operational management provides the manager with the tools and techniques in performing the operational, tactical and strategic levels of operations in the organization that produces goods and services. Different Process Types Operations management is a vital part of business that deals with the production of goods and services and engages the accountability of certifying the business operations that are effective and efficient. It is the management of resources and the allocation of merchandise and services to consumers (Technology for Future, 2010). (Hsiang, n.d.). Job Order or Shop Process In the job shop process, the units that are generated are unique. It includes certain custom made products such as a custom home builder or a custom furniture maker (Caplan, n.d.). The job shop scheduling can be stated as an activity that is composed of a compilation of jobs which are to be processed on an assemblage of machines. (Innani, 2004). This process is popularly used in garages, service shops, furniture restorer, printers that produce tickets for the local social event and includes numerous precision engineers such as specialist tool makers (Slack & Et. Al., 2010). Batch Processing In this process identical units are produced in a group called as batches. The units in one batch may differ significantly with the other batch. Each batch is different from other as the designs are different (Caplan, n.d.). The parts are segmented into different cluster forms according to their processing requirement on the specific machine (Howes, n.d.). This process is used widely in production of breads, medicines, call centres, machine tools manufacturing, manufacturing most of the components parts that goes into mass production assembly like automobiles and for the production of certain gourmet frozen foods (Slack & Et. Al., 2010). Repetitive / Assembly line Process In this process similar items are produced in a sequence and it is done normally with the help of highly automated operation. These process systems have discrete units that moves through the processing stages (Caplan, n.d.). For easier sequential organisations of tools, machines, parts and workers, this process is applied in the manufacturing concern. This process is used mostly in airlines, fast food supply services, television factory, DVD production, automobiles plant and mostly in food processing units (Slack & Et. Al., 2010). Continuous Process In this process, the manufacturing facility produces a continuous flow of product during the operation hours of the facility. This type of process is generally found in the oil drilling operation (Caplan, n.d.). This process is applied in oil industry, steel industry, and security guard services, electricity utilities, steel making, paper making and petrochemical refineries (Slack & Et. Al., 2010). Project Process The project process is applied for customized products. Customisation is done in large scale under this process. The layout of the process is fixed in nature and it is highly complex and unique. This type of process is generally used for ship building, construction of roads, dentist services, and lawyer services. The construction companies, large fabrication operations especially in the manufacturing of turbo generators and in installation of computer systems (Slack & Et. Al., 2010). Process Selection Flow Chart (Hsiang, n.d.). Professional Services This process allows being in contact with the consumers at a larger degree. The service is highly customised and flexible to suit the consumers’ requirements. The flexibility allows rendering the services according to the changing requirements of the consumers. It emphasise more on people than equipments (Greasley, 2007). Management consultant, lawyers, doctors come under this head. For example OEE, a consultant that sells the packages that is designed to solve and tackle client problems (Slack & Et. Al., 2010). Service Shop The process is mixture of the front office and back office operations. For example, an equipment hire and sales organization has a wide range of products display in the front office channel while back office looks after the purchase and administration (Slack & Et. Al., 2010). Mass Services In this process the consumers are large in number and have to be served within the time frame. Mostly it is applicable in back offices. It is applied in airports, and rail services, super markets and telecommunication services (Greasley, 2007). Example related to this can be given as, the rail services provided by the Virgin Trains in the UK or SNCF in France serving numerous passengers on an immense infrastructure of railways (Slack & Et. Al., 2010). Different Layouts The manufacturing and service industry has several diversified activities that interact with each other. It becomes important to design a proper layout to get maximum advantage of the space of operations with fewer errors in the process of production (The University of Texas, n.d.). Importance of Layouts Layout designs require sustainable investment of funds for the layouts and efforts, thus it is very important for deciding the layout process. Layout decisions involves for long term commitment. For the long run process and designing layout it requires the creative and future prediction oriented mind. Layout designs have significant impact on cost and efficiency for short term operations (Production & Operation Management, n.d.). The Need for Layout Design Change in environmental or other legal requirements Change in volume of output or mix of products Changes in methods and equipments Morale problems Safety Hazards Change in the design of products and services Inefficient operations Product Layout A product layout is an arrangement based upon the sequence of operations that are performed during the manufacturing of goods and delivery of services. This layout is designed for standardised processing related operations in order to achieve rapid, smooth and high volume flow. This layout provides smooth flow line results. The total production time per unit is short. Through this layout the material handling is reduced. This will lessen the errors in handling the materials. The training required for this layout is short, simple and requires less expenditure as compared to other layouts. A breakdown in the machine might lead to stoppage of the line production. Alteration in the product design might require major modification in the layout (Syracuse University, n.d.). This type of layout is mostly found in automobile companies and in cafeterias. The manufacturing of cars is best suited for this process (Slack & Et. Al., 2010). (Roy, 2005). Process Layout The layout is designed for the purpose of handling varied processing requirements. This is used when it deals with low volume of production with high variety of production. (Berkeley Manufacturing Institute, n.d.). Space and capital are linked to WIP (work- in-progress) that occurs in large quantity in this layout (Syracuse University, n.d.). Milling, drilling and lathes are best suited in this process (Slack & Et. Al., 2010). Fixed Position Layout In this format of layout, the project or product remain stationary and the materials, workers and equipments move according to the requirement. Creating an aeroplane, building projects, the raw materials, resources, workers are moved to the location and the product or project is developed. (University of Wyoming, n.d.). In this layout process scheduling is possible to be achieved in minimum production time (Syracuse University, n.d.). This type of layout process is used in aircraft developing, ship building (Slack, & Et. Al, 2010). Combination Layout In recent times, it is hard to identify certain types of layout as mostly combined layouts are being implemented. Primarily product and process layout is been used (Roy, 2005). The changing environment and consumers demand has forced the manufacturing and service industry to adopt a customised or combination layout process that will produce and deliver exactly what the consumers expect. Air craft building with parts of it being manufactured in other places are done (Slack & Et. Al., 2010). Contribution to strategic objectives Operations management contributes to build strategies that will make best use of resources, maintain quality, on time production and delivery, manage supply chain management, proper management of raw materials, process of production and many more activities of the organization. It helps in re-engineering company’s process in terms of procurement, warehousing, manufacturing and supply chain. Procurement of raw materials is necessary and vital for the operations in transforming the raw materials to finished goods. The re-engineering provides the scope to evaluate the process of procurement with the intention that the cost can be minimised and on-time delivery is possible. The time is important as it might affect the production process. Warehousing is important as inventory management will reduce the ideal cost of materials and effective utilisation of inventory will optimise the production process with minimisation in the cost. The exact inventory requirement will reduce the risk of over or fewer inventories. Manufacturing process will be enhanced with the effective application of operations management concepts and techniques. This will contribute in determining the layout and process in manufacturing and providing services. In this way it can find out the optimum layout and process that can be applied to minimise the cost, increase the efficiency, affectivity in production, minimise errors while handling materials, reduce accidents while operation is carried out and use the space of flooring in efficient way to maximise the space application and develop space for appropriate movement of labours and personals in the manufacturing unit and service industry. Strategic and tactical supply chain decisions are made to bring efficiency at lowest possible cost through the application of operational management tools. These operational decisions are designed within the structure developed by the tactical and strategic processes that is formed with the help of operations management techniques. Quality control with minimum cost of wastage is necessary. The wastage of raw material is cost to the company and due to default or not standard merchandise will lead to increase in the operational costs. To maintain the quality and minimise the error or defaults in the production process or delivering service, operations management provides the process, tools and techniques. Minimising the wastage and controlling wastage will make effective use of raw material and help logistic management manage its inventory as per scheduled. Current domestic as well as global business faces unpredictable competitive pressures that requires for innovative and speedy solutions. To provide quick and innovative solutions to the rapid change of the business environment, operations management is required in framing the strategic and tactical decisions. The procurement of machineries and tools for production from domestic or international market needs to be decided according to different variables like plant layout, building design and many more variables. The design and layout is formed in a way with the intent that it can be adopted for the long run process. The re-engineering in the product might have effect in changing the process of production. This alteration is possible with the help of operations management. It helps in providing designs and processes for the re-engineered product to be efficiently manufactured without much difficulty in transformation process of raw material to finished goods. Due to the changing demands of the consumers there are possibilities of alteration in the products and services. For this purpose provisions are thought before and long term operations plan are developed to adopt the future changes. In banking sector as per the customer’s requirements and necessities, counters are added or reduced. This way the structure gets changed as per the changing requirements. But the formulation of changing the structure’s requirement and providing the service depend a lot upon the operations management. The decision regarding the counters layout and designing the floor spacing in providing maximum service and maximum utilisation of space with adequate space for movement of customers is necessary. Operations management helps in formulating such decisions that will generate maximum value for services. For the strategic perspective for long term operations, manager needs to take judgment about product advancement (the product to be manufactured), process and layout choice (how to do the production), site location (the suitable area for the production) and capacity (the requirement). For the tactical point for intermediate term operations manager need to decide on the significant concerns to economically develop labour and material contained by the limitation of the firms strategy and take decisions. For day to day operations, decisions related to rescheduling, sequencing, work assignment and other related issues can be resolved with the aid of operations management. For the long-term, short-term and everyday decisions operations management helps in contributing to the development of strategic decisions. Performance Objectives The major objective of the operations management towards the strategic decision is in achieving quality, speed, dependability, flexibility and along with minimum cost. Quality The allocation of the right resources for the achievement of the specification of the product or services with minimum errors is achievable but maintaining quality is also very important. The less level of errors generate better products or a service that satisfies the consumers. Speed Maintaining speed in production process is very important aspect, as it enables to prepare products or services to reach consumers on time and thus it plays a significant part in making them satisfied with the offered services. The inventory and consumers can be managed properly through the time management. Dependability The reliable resources will help in delivering the right products or services at the right time. The on-time delivery system with less errors and uncertainty will increase the performance level and satisfy consumers. Flexibility The flexibility level of resource allocation increases the production and service capacity and minimises the interruption during the production or service process. It helps in preparing and offering wide range of products and services at the right cost and also enables to manage any unpredictable situations. Cost The elimination of the wastage and proper management of inventory will increase the cost efficiency and help in increasing the margin. These factors will improve the possibility of increase in the market share. Conclusion Operations management is very important in developing strategies to control and manage the operational activities in producing goods and delivering services. It deals with improving the system, design and process that delivers the firm’s product and services. Management control and coordinating functions are important in productions and services. This can be properly controlled and managed with the help of operation management tools and techniques. This will increase the scope of improvement and coordination with proper control. The operation management helps in forecasting the inventory and manage them efficiently. It focuses in the continuous improvement or development of the production process that will help in building a modern production centre and minimise costs, wastage of materials and improve material handling, equipment handling, inventory managing and the overall process of operations activity. This strategy will lead to the long term benefit of the company. In general the importance of operations management for an organisation is embedded in all the activities of the company, thus it is considered as one of the major functions of the company that helps to achieve goals and objectives. There is absolutely no doubt that the operation management in an organisation is as important as marketing, finance and human resource in formulating strategic and tactical decisions. The information related to inputs, transformation and output are provided as feedback to the management. The information is verified, with the expectation level of managers and the differences are found out managers are responsible to take corrective strategic decisions to maintain control of the overall system. References Berkeley Manufacturing Institute, No Date. MAS: Job shop Machining. Basic Information. [Online] Available at: http://bmi.berkeley.edu/Me221/mas2/html/processes/jobshop/index.html [Accessed November 16, 2010]. Caplan, D., No Date. Management Accounting: Concepts and Techniques. Oregon State University. [Online] Available at: http://classes.bus.oregonstate.edu/spring-06/ba422/Management%20Accounting%20Chapter%202.htm [Accessed November 16, 2010]. Greasley, A., 2007. Operations Management. SAGE. Hsiang, Y., No Date. Product Lifecycle Management. Purdue University. [Online] Available at: http://www.purdue.edu/discoverypark/PLM/SME/PLM_Process_Selection.pdf [Accessed November 16, 2010]. Howes, T.D., No Date. Near Optimal Scheduling of Manufacturing Systems with Presence of Batch Machines and Setup Requirements. University of Connecticut. [Online] Available at: http://www.engr.uconn.edu/msl/paper/jihua-cirp97/cirp97.htm [Accessed November 16, 2010]. Innani, A. D., 2004. Applying Data Mining To Job-Shop Scheduling Using Regression Analysis. ETD. [Online] Available at: http://etd.ohiolink.edu/send-pdf.cgi/Innani%20Alok.pdf?ohiou1102696862 [Accessed November 16, 2010]. Krannert School of Management, 2010. Operations Management. Purdue University. [Online] Available at: http://www.krannert.purdue.edu/academics/operations/OM_home.asp [Accessed November 16, 2010]. MIT Sloan School of Management, 2010. What is Operations Management? Operations Management. [Online] Available at: http://mitsloan.mit.edu/omg/om-definition.php [Accessed November 16, 2010]. Production & Operation Management, No Date. Facilities Layout. Operations Management. [Online] Available at: http://free-books-online.org/management/production-and-operations-management/facilities-layouts-i/ [Accessed November 16, 2010]. Roy, R. N., 2005. A Modern Approach to Operations Management. Universitas Pendidikan Indonesia. [Online] Available at: http://tn.upi.edu/pdf/Modern_Approach_to_Operations.pdf [Accessed November 16, 2010]. Syracuse University, No Date. Facility Layouts. Types of Layout. [Online] Available at: http://lcs.syr.edu/faculty/moon/Mfe654_99/PDF/hand11.pdf [Accessed November 16, 2010]. Slack, N. & Et. Al., 2010. Operations Management. Prentice Hall. Technology for Future, 2010. An Over View of Operations Management. Home. [Online] Available at: http://techus.org/2010/08/an-overview-on-operations-management/ [Accessed November 16, 2010]. The University of Texas, No Date. Facility Layout. Layouts. [Online] Available at: http://www.me.utexas.edu/~jensen/ORMM/omie/design/unit/layout/layout.pdf [Accessed November 16, 2010]. University of Wyoming, No Date. Instruments to be used during COWEX-II. LASAL. [Online] Available at: http://www-das.uwyo.edu/~geerts/cowex/instruments.html [Accessed November 16, 2010]. Read More