Operations management plays an important role in many companies. The Bureau of Labor Statistics reports that more than 1.7 million operations and general managers worked in the United States in 2010. Operations managers made more than $110,000 on average in 2010. They must collaborate with other people in management to determine how operational planning can contribute to the organization’s long-term strategy. They plan the activities that contribute to the organization’s long-term strategy and ensure that all the departments are on the same page regarding the direction the organization is moving. For example, the operations management can plan for the logistics department’s goals and policies and the budgeting department, assuring that these departments are on the same page on where the company is headed.
Skills Needed for Operations Management and Its Role
Skills needed for operations management are achieving results, serving the customer, teamwork, technical and functional know-how, understanding the business, interpersonal and communication skills, leadership, and personal effectiveness. Operations management is responsible for all departments meeting their goals and are within budget. The operations manager will have to make corrections/modifications when certain goals are not reached or met in a manner incompatible with its mission statement/policy. Operations management is often looked to improve a department’s efficiency and focus and improve the relations between departments even if they run independently of one another.
Another part operations management play in their respective organizations is that of resource management. In this role, the operations management must assess the organization’s resources and make sure that they are being used in the most efficient manner possible, to increase the organization’s profitability. This aligns with the organization’s long-term goals by providing additional resources for strategic planning.
Objectives of Operations Management
Operations management has certain objectives to meet: 1) Performance objectives and 2) Cost objectives. Performance objectives for operations management are to a) increase the efficiency and effectiveness of the production department such that it fully utilizes the input resources to attain the organizational goal, b) provide quality goods and services such that customers are satisfied, c) increase flexibility for the customer by producing a combination of outputs, d) to utilize capacity fully such that the goal is reached effectively and efficiently.
Key Elements of Operations Management
The key elements of operations management are product selection and design, process selection and planning, facilities location, facilities layout and materials handling (plant), capacity planning, production planning and control, inventory control, quality assurance, and control, work-study, and job design, maintenance and replacement, cost reduction and cost control.
- Product selection and design: these need to be the right kind so that the company’s operation is not rendered ineffective and non-competitive. Choose the product and services after evaluating the alternatives that conform to the organization’s goals.
- Process selection and planning: selecting the right process for the products that have been chosen. These must include a choice of technology, equipment, machines, mechanization, and automation.
- Facilities location: where the plant is located is an important decision that cannot be changed without great cost to the company itself once taken.
- Facilities layout and materials handling: this should be optimized to facilitate material flow. It should reduce material handling, eliminate delays, etc.
- Capacity Planning: capacity decisions have a direct influence on production performance and whether production meets demand. Short-term capacity planning will include decisions on overtime work, shift adjustments, sub-contracting, etc.
- Production Planning and Control (PPC): this is the system to specify the production procedure to obtain the desired output within the allotted time, adhering to a certain standard of quality.
- Inventory Control: determine the optimum inventory levels in terms of raw material, components, parts, finished goods, supplies, etc. needed to ensure they are available when needed with minimum capital lock-up.
- Quality Assurance and Control: Goods and services produced by the organization must adhere to a certain quality at a minimum cost.
- Time and Motion Study: deals with improving the productivity of existing jobs and maximizing productivity when designing new jobs.
- Maintenance and Replacement: there should be an optimal maintenance policy in place, which ensures that producing goods will require minimum maintenance and repair.
- Cost Reduction and Cost Control: there should be a minimum cost of production.
Summary
Operations management plays an important role in many companies. They plan the activities that contribute to the organization’s long-term strategy and ensure that all the departments are on the same page regarding the direction the organization is moving.
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