Quality Management and Operations Strategy

Learning Objectives

• Define operations management as a set of activities transforming inputs into outputs to create goods and services.
• Identify ten strategic decisions crucial for effective operations management.
• Explore career opportunities within the field of operations management.
• Understand the distinction between goods (tangible products) and services (intangible offerings).
• Differentiate between production (the act of creating goods) and productivity (the measure of efficiency in production).
• Learn to compute single-factor and multifactor productivity metrics.
• Recognize critical variables necessary for enhancing productivity within an organization.

Operations Management Overview

• Operations management (OM) encompasses activities that add value by converting inputs into products or services.
• Essential functions in an organization include:
  • Marketing: Generates demand for goods and services.
  • Production/Operations: Responsible for creating the actual products.
  • Finance/Accounting: Tracks financial performance, pays bills, and collects revenue.

Supply Chain

• Supply chain refers to a global network of organizations and activities supplying goods and services.
• Collaboration within the supply chain is essential for achieving customer satisfaction, efficiency, and competitive edge.

Importance of Studying Operations Management

• OM is one of the three critical functions in any organization, crucial for understanding how to organize for productive enterprise.
• Knowledge of goods and services production processes enhances organizational effectiveness.
• Operations managers play a vital role in the organization, often managing costly and complex components of the business.

Roles of Operations Managers

• Operations managers engage in basic management functions such as:
  • Planning
  • Organizing
  • Staffing
  • Leading
  • Controlling

Ten Strategic Decisions of Operations Management

• Design of Goods and Services: Establishes operations requirements impacting cost, quality, sustainability, and human resources.
• Managing Quality: Focuses on understanding customer quality expectations and developing policies to ensure quality standards are met.
• Process and Capacity Design: Determines production methods and involves commitments to specific technologies and resources.
• Location Strategy: Involves strategic decisions regarding proximity to customers, suppliers, and workforce while considering costs and infrastructure.
• Layout Strategy: Aims to efficiently align capacity, personnel, technology, and inventory for optimal material flow.
• Human Resources and Job Design: Involves recruiting and retaining talent while integrating them into the operational system.
• Supply Chain Management: Integrates supply chain strategies with the company’s objectives, determining purchasing decisions.
• Inventory Management: Involves making informed decisions about ordering and holding inventory to balance supply with customer needs.
• Scheduling: Focuses on creating and implementing schedules that optimize resource utilization while satisfying customer demands.
• Maintenance: Ensures facility reliability and stability to meet production requirements through effective maintenance strategies.

Career Opportunities in Operations Management

• Careers in OM can include roles related to:
  • Introduction of new technologies and methods.
  • Improvements in facility location and space utilization.
  • Definition and execution of operational strategies.
  • Enhancement of response times to customer inquiries.
  • Development of teams and personnel for improved service delivery.
  • Management of quality and inventory levels.
  • Overall enhancement of productivity across operations.

Test your knowledge on various strategic decisions related to managing quality, process, capacity, location, layout, human resources, supply-chain, inventory, scheduling, and maintenance. Explore topics such as design of goods and services that define operations requirements and determine cost, quality, and sustainability.