LO1.2

• Operations management


  The planning, organizing, and controlling of the production or delivery of goods and services
• Role of operations management


  • Responsible for the smooth and efficient running of all business operations
  • Essential to achieving the strategic objectives of the organization
  • Can help organizations meet customer needs, improve efficiency, and reduce costs
• Operations management strategy


  The high-level plan that guides the activities of the operations management function to achieve the overall strategic goals of the company
• Levels of strategy in organisations


  • Corporate level strategy
  • Business level strategy
  • Functional level strategy
• Stages in developing an operations management function strategy


  1. Define the corporate objectives

  2. Define operations objectives required to meet corporate objectives

  3. Identify strategies that can be implemented to ensure achievement of operations objectives

  4. Evaluate strategy options to select the most appropriate strategy

  5. Implement, evaluate and improve strategy

  
• Performance objectives of operations management


  • Quality
  • Speed
  • Dependability
  • Flexibility
  • Cost
• Quality


  Ensuring products/services meet customer expectations and comply with standards
• The Hayes and Wheelwright four-stage model of operations management (1984) explains how operations can move from being a barrier to strategic success to becoming an innovator and creator of opportunity
• Stages of the Hayes and Wheelwright model


  • Internally neutral
  • Externally neutral
  • Internally supportive
  • Externally supportive
• Continuous improvement


  • Incorporated into the operations management function to become more efficient and effective over time
  • Without continuous improvement, the strategy may become outdated and no longer effective
• Performance objectives of operations management


  • Quality
  • Speed
  • Dependability
  • Flexibility
  • Cost
• Quality


  Ensuring that the products or services produced meet the expectations of customers and comply with all relevant standards
• Strategies to improve quality


  • Total quality management
  • Six Sigma
  • Quality control systems
• Speed


  Ability to deliver products or services quickly to meet customer expectations and remain competitive
• Strategies to improve speed


  • Just-in-time (JIT) production
  • Lean manufacturing
  • Process improvement
• Dependability (reliability)


  Ability to consistently deliver products or services on time, every time
• Strategies to improve dependability


  • Process control
  • Preventive maintenance
  • Contingency planning
• Flexibility


  Ability to adapt to changing customer needs and market conditions
• Strategies to improve flexibility


  • Modular design
  • Flexible manufacturing systems
  • Just-in-time inventory
• Cost


  Keeping costs as low as possible without sacrificing quality or customer service
• Strategies to reduce costs


  • Value engineering
  • Cost control
  • Cost reduction
• Product/service lifecycle stage


  Influence on performance objectives

  
• Introduction stage


  • Main objectives: speed, flexibility, quality
  • Cost is also key
• Growth stage


  • Main objective: increasing market share
  • Speed, quality, dependability, and cost are important
• Maturity stage


  • Dependability is critical to retain customers
• Decline stage


  • Cost is an important objective to offset declining sales
• Top-down operations strategy


  Focuses on the overall objectives of the organization and how the operations function can support those objectives
• Bottom-up operations strategy


  Starts with the operations function itself and works up to the company's overall strategy
• Order qualifying objectives


  Necessary for the business to survive and operate, such as safety, compliance, and quality
• Order winning objectives


  Give the business a competitive advantage, such as speed, flexibility, and customization
• Modular design


  Designing products or systems in a way that allows for easy assembly, disassembly, and reconfiguration by breaking them down into smaller, interchangeable components or modules.
• Flexible manufacturing systems (FMS)


  A type of production system that uses computer-controlled machines, robots, and material handling systems to efficiently produce a wide variety of products in small to medium volumes with minimal downtime.
• Just-in-time (JIT) inventory


  An inventory management strategy that aims to minimize inventory levels by only ordering and receiving materials and components as they are needed in the production process, helping to reduce inventory holding costs, improve cash flow, and increase responsiveness to changes in demand.
• Agile manufacturing


  A philosophy or approach to manufacturing that emphasizes flexibility, responsiveness, and collaboration, often involving the use of modular design, flexible manufacturing systems, and just-in-time inventory management to enable rapid response to changing customer needs and market conditions.