Operation management

• Operations management (OM) is the administration of business practices to create the highest level of efficiency possible within an organization
• OM is concerned with converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organization
• There are three schools of thought in OM: Classical, Behavioral, and Modeling
• Classical management emphasizes economic efficiency as the overall production effectiveness of the organization (Scientific management)
• Management is seen as a continuous process of planning, organizing, and controlling (Process management)
• Behavioral management emphasizes human relationships and recognizes that the subordinate-supervisor relationship directly affects productivity
• Behavioral science explores how human behavior is affected by leadership, motivation, communication, interpersonal relationships, and attitude change
• Modeling as management emphasizes decision-making, system management, and mathematical modeling
• Production management involves planning, organizing, and controlling activities
• Planning includes establishing a course of action, guiding future decision-making, product planning, facility planning, and designing the conversion process
• Organizing includes establishing a structure of tasks (organization structure) and authority to achieve the operations goals
• Controlling ensures that actual performance is in accordance with planned performance by developing standards and communication networks
• Scope of production management includes activities related to designing or formulating the production system and analyzing and controlling production operations
• Activities related to production system designing involve production engineering, including the design of tools and drawings, equipment development and installation, plant layouts, and materials handling systems
• Activities related to analysis and control of production include production planning and production control to ensure that production plans are properly guided and controlled
• Interfaces with other functional areas in the organization include Marketing, Finance, Design, Human Resource, and Information Systems
• Production management interfaces with Marketing to understand customer needs and develop new markets and product potential
• Production management interfaces with Finance for capital equipment, cost-control policies, and price-volume decisions
• Production management interfaces with Design for tight integration between design and production functions, especially in industries with high clock-speed
• Production management interfaces with Human Resource for good people management and continuous improvement approaches
• Production management interfaces with Information Systems to provide, analyze, and coordinate information needs of production
• Automation is the self-controlling operation of machinery that reduces or dispenses with human communication or control when used in normal conditions
• Advantages of automation include replacing human operators in tedious tasks, tasks in dangerous environments, tasks beyond human capabilities, and economy improvement
• Disadvantages of automation include technology limits, unpredictable costs, and high initial costs involved in automation