Business Management Fundamentals Quiz

Operational Management

• Operational management is the process of producing goods and services and delivering them to customers, which is directly tied to corporate profitability.

Key Components

• Quality Control: helps to protect and expand the customer base, generating revenue.
• Production Efficiency: makes resources go as far as possible, generating as much revenue as possible without compromising quality.
• Inventory Management: manages products in and out to avoid underestimating or overestimating demand, which can reduce profit.
• Logistics: manages the flow of products, storing, and tracking transportation needs to enhance corporate profitability.

Methods and Techniques

• Operational management involves planning, organizing, and supervising processes to make the business run more smoothly and efficiently.
• It involves making necessary improvements for higher profitability.

History of Operations Management

• Previously called Production Management, it started with the division of production in ancient times.
• Henry Ford introduced the assembly line production, and Frederick Taylor developed a scientific approach for operations management.
• Post-Industrial Revolution, machinery increased factory capacity and output.
• Post-World War II, technological developments created new possibilities for managers to improve operations.

Modern Day Operations Management

• Quality Management System is popular in today's operations management.
• ISO and Six Sigma Systems aim to increase the efficiency of business processes.
• Operations management is a multidisciplinary functional area that incorporates general management, factory, and equipment maintenance management.

Role of Operations Management

• Operations management is responsible for ensuring that materials and labor are used in the most effective and efficient way.
• It requires being familiar with a wide range of disciplines, including marketing, product and service design, and planning, coordinating, and controlling processes.
• Operations management is the lifeblood of a competitive organization, and its primary function is to guide the system by decision making.

Benefits of Operations Management

• Profitability Management: questions existing processes and comes up with new ideas to increase sales.
• Competitive Advantage: better understanding of operating environment and adapting to changing conditions.
• Manufacturing Edge: improves the way goods are produced.
• Operational management techniques can give small business owners the chance to decrease costs, increase customer satisfaction, and boost revenue.
• Designing processes can improve businesses' bottom line.
• Project management simplifies the task of managing projects and ensures timely completion of individual components.
• Continuous improvement involves identifying benchmarks and allowing employees to take ownership of their improvements.