Operations management

Operations Management

Overview

• Operations management is the administration of business practices designed to establish the highest level of efficiency in a business.
• It involves turning the materials and labour into goods and services as efficiently as possible to maximise profits.

Essential Elements

• Production Planning: Formulating a production schedule, selecting the most efficient production methods, and ensuring the product quality.
• Inventory Management: Balancing costs of inventory with the benefits of inventory, keeping track of a firm’s stocked goods.
• Quality Control: Ensuring that a business’ products or services meet set standards. Might include implementing quality management system such as Total Quality Management or Six Sigma.
• Procurement and Supply Chain Management: Acquiring raw materials and other necessary items for the business from different suppliers while maintaining healthy relationships.

Operational Strategies

• Lean Production: Maximising customer value while minimising waste, striving to create more value with fewer resources.
• Just in time production (JIT): System that aligns raw-material orders from suppliers directly with production schedules. Reduces storage and product spoilage costs.
• Mass Customisation: Method of producing customized products with the same efficiency as mass production.

Impact of Operations Management

• Affects the efficiency and productivity of a business.
• Successful operations management leads to a smooth production process, optimal resource use, and strong supplier relationships.
• Also impacts the quality of a product or service, influencing the business’ reputation and position in the marketplace.

Always remember, effective operations management can give a business a competitive advantage, enhance profitability and contribute to growth in market share. Efficient and productive operational processes satisfy customer needs and encourage repeat business.