What Is Operations Management
NORTH TECHNICAL UNIVERSITY
FICA-ING.INDUSTRIAL
STUDENT: HUGO GODOY
WHAT IS OPERATIONS MANAGEMENT
We can define Administration or Operations Management as the area of Business
Administration dedicated to both the research and the execution of all those actions aimed at
generating the greatest added value through planning, organization, direction and control in
the production of both goods and services, all aimed at increasing quality, productivity,
improving customer satisfaction, and reducing costs. At a strategic level, the objective of
Operations Management is to participate in the search for a sustainable competitive
advantage for the company.
Operations Management is responsible for the production of the organizations' goods or
services. Operations Managers make decisions that relate to the operations function and the
transformation systems that are used. Thus, Operations Management is the study of decision
making in the operations function.
Why study Operations Management
Operations Management is one of the three main functions of any organization and is entirely
related to the other business functions. All organizations market, finance and produce, for
which it is key to know how the operations/production area of the organizations works. That is
why we study how people organize themselves to produce , and the way in which goods and
services are generated . On the other hand we study Operations Management because it is an
expensive portion of an organization.
The Seven Zeros and the elimination of Waste
Operations Management has a fundamental role in trying to fulfill the following
responsibilities.
Zero papers
Zero waits/delays
Zero breakdowns
Zero failures
Zero accidents
Zero pollution
HISTORY OF OPERATIONS MANAGEMENT
The conception of this stage is indicated around the 1950s and it differs from the previous
stages in that production is not only based on the manufacture of tangible goods, but also on
the generation of intangible products called services. It is convenient, then, to call the
management of goods and services an operations function, where it should be closely related
to the marketing and finance functions. The appearance of computers and automation arises,
allowing for the speed of operations in companies. In Japan, Tahichi Ohno studies the
improvement of productivity through the Toyota production system whose main essence is the
use of time invested between suppliers, organization and customers through the just-in-time
philosophy. Although this system existed 30 years before, it was not until the first oil crisis in
1973 that it gained importance for the West.
ORIGIN (SPT): http://es.wikipedia.org/wiki/Sistema_de_producci%C3%B3n_Toyota
The Toyota Production System, as a work philosophy, has its origins in the textile industry and
in particular in the creation of an automatic loom (around 1900 by Sakichi Toyoda ) whose
objective is to improve the lives of operators by freeing them from tasks. repetitive. Based on
this invention and subsequent innovations and patents the Toyoda family founded a textile
company (Okawa Menpu) in Nagoya that later became Toyota Motor Company . It is in this
textile era when the concepts of Jidoka (translated by some authors as "Automation") and
Poka-yoke (fail-safe) were born, along with later concepts such as Just-in-Time (Just in Time)
and Muda ( Waste) come in the middle of the century what has been called the Toyota
Production System.
WHAT OPERATIONS MANAGERS DO
Operations Managers are responsible for the production of goods or services of organizations.
Operations Managers make decisions that relate to the operations function and the
transformation systems that are used.
The operations manager must face ten strategic decisions, which are:
Design of goods and services.
Quality management.
Process strategy.
Location strategies.
Organization strategies.
Human Resources.
Supply management.
Inventory management.
Programming.
Maintenance.
The operations manager has responsibility for five important decision areas:
• Process.
Decisions in this category determine the physical process or facility that is used to produce the
product or service. Decisions include the type of equipment and technology, process flow,
plant layout as well as all other aspects of the physical or service facilities. Many of these
process decisions are long-term and cannot be easily reversed, particularly when a large
capital investment is required. Therefore, it is important that the physical process is designed
in relation to the company's long-term strategic posture.
Ability.
Capacity decisions are directed at providing the right amount of capacity, in the right place, at
the right time. Long-term capacity is determined by the size of the physical facilities that are
built. In the short term, capacity can sometimes be increased through subcontracting,
additional shifts or leasing space. However, capacity planning determines not only the size of
the facility but also the appropriate number of people in the operations function. Staffing
levels are adjusted to meet the needs of market demand and the desire to maintain a stable
workforce. In the short term, available capacity must be assigned to specific tasks and
operations positions by scheduling people, equipment, and facilities.
• Inventories.
Inventory decisions in operations determine what to order, how much to order, and when to
order it. Inventory control systems are used to manage materials from their purchase, through
raw material, product in process and finished product inventories. Inventory managers decide
how much to spend on inventory, where to place materials, and numerous other decisions
related to the above. They manage the flow of materials within the company.
• Work force.
People management is the most important decision area in operations, because nothing is
done without the people who make the product or provide the service. Workforce decisions
include selection, hiring, firing, training, supervision, and compensation. These decisions are
made by line operations managers, often with the assistance or jointly of human resources
management. Managing the workforce in a productive and humane manner is a key task for
the operations function today.
• Quality.
The operations function is almost always responsible for the quality of the goods and services
produced. Quality is an important operations responsibility that requires the full support of the
organization. Quality decisions must ensure that quality is maintained in the product at all
stages of operations: standards must be established, equipment designed, people trained, and
the product or service inspected to obtain a quality result.
SOURCE: The North American Roger Schroeder ( Professor at the University of Minnesota)
operations management has responsibility for five important decision areas: process, capacity,
inventory , workforce and quality.
Careful attention to these five areas of decision making is key to managing successful
operations.
APPLICATION OF OPERATIONS MANAGEMENT
Product and service design
Quality management
Process design and capacity planning
Location of facilities
Supply management
Inventory, material requirements planning
Maintenance
CONCLUSION:
Managing production, whether of physical goods or services, entails a commitment to both the
company and its workers, clients and consumers, and society as a whole. A company must
achieve optimal performance to meet the profitability objectives of its owners and investors,
but also to preserve jobs and even increase them, ensure that workers have a high degree of
motivation and quality of work life, generate products with high added value for its consumers
thanks to a fair price and a high level of quality, and fruitful, long-term relationships with its
suppliers.
BIBLIOGRAPHY:
Principles of Operations Management – Render and Heizer – Prentice Hall – 1996
http://www.Production and Operations Administration – Bufa and Sarin – Limusa
2000.com
Operations and Production Management – Noori – McGraw Hill – 1997
http://html.rincondelvago.com/administracion-y-diseno-de-puestos.html
http://www.mitecnologico.com/Main/LaHistoriaAdministracionDeOperaciones
