Operations Management Quiz

Introduction to Operation Management

• Operations management involves defining the role of operations within an organization, listing responsibilities/skills for an operations manager, and illustrating the historical development of this field.
• The different stages of the transformation process can be outlined using the Input/Output Transformation Model.
• Identification of the four key process variation sources can be done
• The steps involved in conducting a process efficiency audit need examination.

Defining the Role of Operations Management

• Operations Management is the management of processes that transform inputs into value-added goods and services, to maximize efficiency and fulfill customer needs.
• Production and operations management involve decisions typically made at three stages.
• Production Planning involves decisions about where, when, and how production will occur, including securing site locations and resources.
• Production Control focuses on quality and cost control, scheduling, and running a factory or service facility daily.
• Improving Production and Operations centers on developing more efficient methods for producing goods or services.

Overview of Operations Management

• Every organization has an operations function, whether it is formally recognized or not
• Most organizations aim to produce goods and/or services, which requires procuring resources, converting into outputs, and distributing.
• The term "operations" includes all activities to create and deliver an organization's goods/services to customers.
• Operation Management focuses on the design, management, and improvement of systems that create an organization's goods or services.
• Most financial and human resources are invested in activities related to product creation or service delivery
• Operations are crucial for organizational success
• In large organizations, operations is a functional area where people manage operational processes
• Operations is important because of its role in determining how well an organization satisfies its consumers.
• Understanding operations management principles is important for all because they provide a systematic approach to organizational processes.

Strategic Importance of Operations Management

• Operations is one of the three strategic functions, making it vital for achieving strategy and long-term survival.
• Marketing and Finance are the other two important areas
• Companies making jerseys need marketing to find customers, finance to manage expenses, and operations for customized jerseys.
• Strong operations skills enable companies to provide attractive, durable, affordable, and promptly delivered products.

Reason and Benefit of Learning About Operations Management

• Many career-related reasons exist for learning about operations management due to its impact across all aspects of the business.
• Operations and sales are the two line functions, with all other functions(accounting, finance, marketing, IT, etc.) providing support.
• Finance and operations staff cooperate via information and expertise sharing in activities like budgeting, investment analysis, and funding.
• Budgets need preparation for planning financial requirements
• Budgets often require adjustments and performance evaluations.
• Investment proposals need assessments requiring input from both operations and finance.
• Funding operations requires assessing the necessary funding, and amount and timing of the funding can be critical.

Key Responsibilities of an Operations Manager

• Operations managers oversee activities related to goods and services production
• Direct Responsibilities for example; managing operations, overseeing process design, planning, control, performance improvement, and developing operations strategy and forecasting demand

Skills for Successful Operations Management

• Indirect responsibilities include interacting with functional area managers like marketing, finance, accounting, personnel, and engineering
• Operations managers need diverse skills for effectiveness in various situations like soft skills and technical skills
• Soft skills crucial for operations management include communication, motivation, analytical, negotiation, organizational, and problem-solving skills.

Historical Development of Operation Management

• Production systems have existed since ancient times, and modern factories originated in the Industrial Revolution.
• Operations management has evolved dramatically over time, with three major phases: craft manufacturing, mass production, and the modern period.

The Industrial Revolution

• The Industrial Revolution began in the 1770s in England before spreading to Europe and the United States in the 19th century
• Before that point, goods were produced in small shops by craftsmen and apprentices
• Early manufacturing used craft production, where skilled workers used flexible tools to make goods to order.
• Craft production had shortcomings like slow and high production costs
• Innovations in the 18th century changed production by replacing human power with machines
• The development of standard gauging systems reduced the need for custom goods and factories grew, created jobs in numberous rural areas
• Despite the changes, management theory had not progressed much.

Scientific Management

• The scientific management era introduced significant factory changes led by Frederick Winslow Taylor.
• Taylor is often referred to as the father of scientific management.
• Taylor advocated for a “science of management” based on observation, analysis, and economic incentives.
• Studying work methods, Taylor sought the best method for each job, and believed that management should plan, train, foster cooperation, and separate management work from other activities
• Model T in the 20th century had success in auto industry so Ford adopted Taylor's principles, also creating moving assembly line
• Ford helped popularize mass production for standardized goods using specialized equipment and low-skilled workers.

The Modern Period

• Mass production was effective for high volumes of products in predictable markets, but markets became fragmented during the 1970s.
• Product life cycles shortened and consumers had far greater choice
• Japanese techniques like TQM, JIT, KIZEN, Six Sigma, Five why? and involving employees
• Mass production remains, but there is no dominant operations management approach
• The tabs below outline the different approaches for managing operations in today’s modern business world.

Flexible Specialization

• Flexible specialization allows companies to focus on specific value-adding processes and collaborate within networks to produce products
• This method requires well-developed networks, effective collaboration, and long-term relationships.
• It is best suited for smaller organizations.

Lean Production

• The lean production approach came from the Toyota Production System
• Focus is on eliminating waste from a production and driving inventory levels down to expose inefficiencies, reduce costs, and shorten lead times.

Mass Communication

• Mass customization aims to combine high volume with the ability to adapt products to customer requirements
• Mass customization has become increasingly feasible with automated processes.

Agile Manufacturing

• Agile manufacturing focuses on enabling an organization to switch frequently from one market-driven objective to the next.
• Agile manufacturing became feasible on a large scale with enabling technology.

Process Management

• Operations management involves process management
• A process consists of one or more actions that transform inputs into outputs and all management is process management.
• Businesses are composed of upper-management, operational and supporting processes

The Input/Output Transformation Model

• Operations management transforms inputs into outputs that provide value to customers
• Feedback is another component of the transfomation model
• Feedback is used for control adjusting inputs, feedback is essential for operation managers and can come from internal and external sources
• Internal sources include: testing, evaluation and continuously improving goods and services
• Exernal Sources include: those who supply products/services to end-customers, or feedback from the customers themselves

Managing a Process to meet Demand

• Capacity of a process must ensure that output matches demand
• Excess is wasteful, little capacity means lost revenue
• Having right capacity means having accurate demand, the ability to interpret and a a process in place capable of meeting the expected demand
• Process variation and demand variability make it difficult to match process output and demand, managers must be able to deal with variation
• Variations can be disruptive, interfere with optimal functioning, examples include additional cost/delay/shortages, poor quality service and inefficient work.

Sources of Process Variations

• Variety of goods or services relates to the need to fulfil service requirements
• Structural Variation in Demand relates to trends and seasonal variations, which are predictable and important for capacity planning
• Random Variation relates to natural variability present in all services/products
• Assignable Variation relates to defective inputs, eliminated with the implementation of corrective action.

Process Efficiency Audits

• The goal of process management is to drive improvements to increase business performance and profitability
• Efficiency audits involves identifying areas for improvement and generally entails the following steps
• Establishing Owners of the process
• Identifying end users and customers for outputs
• Identifying necessary inputs (data, materials, knowledge, people)
• Ensuring input quality
• Determining necessary internal and external ressources
• Breaking down tasks/steps
• Continuously analyzing options to imrpove
• Establishing performance for improvements

Role of Decision Making in Operation Management

• The manager is to make all key decisions, and also a number of decisions that affect the entire organization.
• Resources needed, what amounts of each ressource is needed
• When is each ressource needed/ When should work be shceduled.
• Where well will the work be done
• How will the product/serivce to be designed and other questions
• Who will do the work?

Strategic and Tactical Operations Decisions

• Strategic/Tactical decisions determine how well the organization can accomplish its goals, and attract customers.
• Operation decisions include decisions that are strategic in nature and have long-term consequences
• Strategic op include facility location, technologies used, how equipment/labour organized and how much long-term customer demand the organization will provide
• Tactitcal operations decisions impact the organization and can e changed more than staretgic ones.
• Decisions include workforce scheduling, quality assurance, contracting with vendors, inventory

The use of Models as a Decision-Making Tool

• A model can be defined as a simplified representation of something
• Models are classified as:

1. Physical look like their real life counter parts and have visual corresepondance with reality
2. Schematic: More abstarct than real life, have degree of visual correpesondance, simple to construct and change
3. Mathematical: Are the most abstract, dont look like real life, important for computers+calculators.

Type of Operation Management Decisions

• Operations decisions have impacts on orgs ability to produce goods and services that will add value for the consumers.
• Better op decsions will lead to better long term success.
• Nine decisions are:

1. INvantory: How much- inventory needs understanding to carry
2. Caapacity: How much- determines org capacity to produce stuff
3. Quality- numerous decisions to achieve it for long term benefits
4. Sheduiling- strive to provide the right mix of labour
5. process- organizing the equipment and labour
6. Technology- benefits to an operations enviornment
7. Locations- factors that determine where
8. Layout and flow
9. Suply chain Manage

Quality Management

• General Overview
• Quality Management ensures products and services are consistent.
• Operations Managers are concerned with the quality of output, and standards may be achieved via quality control, assurance and Total Quality Management
• There are several approaches to quality managements
• TQM helps improve by perfecting production, stresses department coordiantion like design,sales, and servies for them
• Quality provides a competitive advanatge and is important for contious improvement

Quality Costs

• Total quality costs are minimised when orgs reduce defects.
• Four types of costs- Preventation, appraisal, internal and external failure costs.

Elements of TQM

• Elements involves both technical and people
• There are 7 elements that TQM can contain; customer focus, improvement, employee power, quality tools, product design, process managent and better supplies.

Quality Awards and Standards

• Accessable by organizations to help improve quality processes to support TQM/
• Awards and rewards for ISO and Malcom Baldridge

Supply Chain Management

• Supply chain is the business function that organizes all activieites, from materials and department.
• Addresses the movement of godo through the supply the manufacture, and other distributors.

The Bullwhip Effect

• Supply chain management to minimse the bullwhip effect.
• If there is distrotion of info, it leads to poor decisions
• Order batching, pricing, and rationing is cuase of the effect.

Counteract the Effect

• To imporve the responsiveness. actions have been takena s
• Have Info avaliable to members
• Elimate batching order by driving down costs
• Use better prices
• DIscourage Gaming

Managing lean Production

• The key points in managing.

Key points Module

• Lean production is on the reduction of MUDA(wastes), and MURA/MURI whithin an organization.

Lean Emphasis

• "Zero concept" such a zero machine changeovers/production stock and all other types of waste.
• Deming's Plan-Do-Check-Act is there for improvement and as a system for scheduling and inentory control,. Keeping track of all cards used.

Test your knowledge of operations management concepts. Questions cover process variations, quality control, and customer satisfaction. Explore elements influencing operational success.