Operations Management

• Operations Management


  Planning, organizing, and oversight of business practices that maximize efficiency & assure company processes are driving value
• Operations Management


  • Involves preparing & supervising the practices that turn resources (input), such as labor, equipment, and raw materials, into goods & services (output)
  • Effective operations management in a business drives profitability, achieves long-term success, and wins competitive advantage
  • Involves information management e.g., human resource, equipment technology, and other resources needed to produce goods & services
  • Involves getting the most out of the company's resources
  • An integral function of every organization regardless of its size and industry, whether service or manufacturing, profit or non-profit
• Chief Operating Officer (COO)


  A senior executive tasked with overeeing the day-to-day administrative & operational functions of a business
• Chief Operating Officer (COO)


  • Leads the team of operations
  • Has 2 roles: 1) Chief, and 2) Operations Manager
• Chief


  Highest-ranking official, works closely with the CEO, ensures that every part of the company runs smoothly
• Operations Manager


  Oversees product development, inventory, operations, staffing, productions
• General Responsibilities of an Operations Manager

  • Cooperating with other departments
  • Product Design
  • Forecasting
  • Delivery Management
  • Supply Chain Management
  • Process Improvement & Optimization
• Systems Perspective


  • Operations System consists of primary activities in OpMan that are entirely and efficiently integrated to produce valuable goods & services to consumers
• Phases of the Operational System

  • Planning Operations Systems
  • Planning Operations, Inventory, and Quality Control
  • Managing Productivity
• Examples of Managing Business Operations

  • Health Care
  • Manufacturing Industries
  • Food Industries
  • Retail Industries
  • Transportation Sector
• 16 Principles of Operations Management by Dr. Richard Schonberger
• Continuous improvement


  • Occurs continuously
  • Recent quality advancement like total quality management (TQM) and benchmarking have led to improvements in operations management
• Productivity


  The ratio of the output to the input of the operation system
• The higher the ratio, the more productive the system and vice versa
• In manufacturing industries, one of the standard measures of productivity is output per hour
• Factors that drive productivity

  • Job related
  • Resource related
  • Environment related
• Dr. Richard Schonberger is a renowned researcher of American manufacturing and author of the book "World Class Manufacturing the next Decade"
• 16 customer focused principles of operations management by Dr. Richard Schonberger

  • Team up with customers
  • Continual, rapid improvement
  • Unified purpose
  • Know the competition
  • Focus
  • Organize resources
  • Invest in HR
  • Maintain equipment
  • Simple "best equipment"
  • Minimize human error
  • Cut times
  • Cut setup
  • Pull system
  • Total quality control
  • Fix causes
  • Visibility management
• Randall Schaeffer is a manufacturing and operations management professional and regular speaker at conferences organized by the American production and inventory control society
• 10 principles of operations management by Randall Schaeffer


  • Reality
  • Organization
  • Fundamentals
  • Accountability
  • Variance
  • Causality
  • Managed Passion
  • Humility
  • Success
  • Change
• Business Process Management (BPM)


  Involves the constant analysis, improvement, and automation of processes
• Business Process Management (BPM) life cycle

  1. Design

  2. Modelling

  3. Execution (Analysis)

  4. Monitoring

  5. Optimizing

  6. Vision
• Coca Cola's implementation of BPM

  • Automated bottling, refilling of bottles, reduced manual error, improved order fulfillment time, increased supply chain visibility
• Business Process Reengineering


  A very radical approach to designing core processes, requires taking everything used before and throwing it out to start again from scratch
• National Health Service in UK's implementation of Business Process Reengineering

  • Improved quality of care and reduced cost by redesigning clinical processes such as patient assessment and referral
• Six Sigma


  A data driven approach based on the six sigma measures which focuses on minimizing defect rates, with the main idea being that only 3.4 deficiencies should be found in a million outputs
• Six Sigma DMAIC method

  1. Define

  2. Measure

  3. Analyze

  4. Improve

  5. Control
• Mayo Clinic's use of Six Sigma


  • Improved patient outcomes and experiences, reduced medical errors, improved patient safety, enhanced patient satisfaction
• Supply Chain Management


  Oversees every part of a product or service from its creation to its sale, involves the strategic processes by which materials, information, resources and finished goods flow from suppliers to business and consumers
• Mercy Health's use of Supply Chain Management

  • Improved efficiency of operations, ensured patients receive highest quality of care, optimized supply chain processes, reduced waste, improved patient safety
• Operations Management Strategies


  • Process Design
  • Use of Data
  • Inventory Analysis
• Operations management


  • Utilizes resources from staff, materials, equipment, and technology
  • Acquires, develops, and delivers goods to clients based on client needs and the company's abilities
  • Approaches the acquisition of materials and the use of labor in a timely, cost-effective manner to deliver customer expectations
  • Monitors inventory levels to ensure excessive quantities are on hand
  • Studies the use of raw materials and ensures minimal waste occurs
  • Ensures products are delivered within the agreed time commitment
  • Takes the feedback received and distributes the relevant information to each department to use in process improvement
  • Concerned with controlling the production process and business operations in the most efficient manner possible
• Operations management involves utilizing resources from staff, materials, equipment, and technology
• Operations managers acquire, develop, and deliver goods to clients based on client needs and the company's abilities
• Operations management approaches the acquisition of materials and the use of labor in a timely, cost-effective manner to deliver customer expectations
• Inventory levels are monitored to ensure excessive quantities are on hand
• Operations management entails studying the use of raw materials and ensuring minimal waste occurs
• It also includes ensuring products are delivered within the agreed time commitment
• Operations management takes the feedback received and distributes the relevant information to each department to use in process improvement
• Operations management is concerned with controlling the production process and business operations in the most efficient manner possible