UNDERSTANDING OPERATIONS MANAGEMENT By Frederick Ossai Onyenweosa

Operations Management is defined as the design operation and the improvement of systems that create and delivers the firm’s primary products and services. Like marketing and finance, operations management is a functional field of business with clear line management responsibilities. This point is important because operations management is frequently confused with operations research and management science and industrial engineering. Thus, while operations managers use the decision making tools of operations research and management science; operations management distinct management roles, distinguishes it from these other disciplines.

Operations management entails the administration of business practices to maximize efficiency within an organization. It involves planning, organizing and overseeing the organization’s processes to balance the revenue and cost and to achieve the highest possible operating profit. The aim is to convert inputs such as material, labour, and technology into outputs in an efficient manner.

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The Field of Operations Management ?

The objective of this article is to help you understand that operations management entails designing and operating processes that are quick, accurate and inexpensive. Whether ?you ?are ?a marketing, accounting, or operations specialist, effectively servicing your customers requires knowledge of the topics in this article. Servicing a customer well invariable means in a timely fashion with exceptional quality, and at the lowest cost possible. With the aids of this article, you will become knowledgeable of the concepts and tools that are now being employed by companies around the world as they craft efficient and effective operations. Through this article, you will understand how smart management can achieve high levels of value. ?The contribution and value–adding role of operations management is at the heart of most organization. To successfully manage operations within a business concerns two distinct but complimentary aspects which, in turn comprise two dimensions.

I). Content- ?The tasks and responsibility of operation manager involves the internal day-to-day or operational role. The external or strategic role concerns meeting the competitive drivers within a company’s markets for which operations is responsible.

ii). Style- How the people management task is handled by the operations manager. The internal role implies managing the people in the operations unit and also the operations and other functions within the organization . The external role implies managing the people who interface outside the organization at both the supplier and customer end of the supply chain.

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Origins of the name “ Operations Management”

According to Terry Hill term “production management” was predominantly used in the past with the early emergence of manufacturing sector. Indeed in many companies this tittle is still appropriate in use. With the increasing competition in the manufacturing industry, many businesses have adopted the use of operations management which has been, over the years, a bridge towards a business success as well as the economic growth of a nation. It involves absolute control of the use of resources and other raw materials and turning them into more valuable products. Businesses have, ever since benefited from the use of the developments associated with the concept which has consequently, seen great economic growth rates in many countries. The idea of operations management began in the eighteenth century as manufacturing management. An economics, Adam Smith realized that specialization of labour could be very beneficial to any organizations economy. He therefore came up with the idea of breaking up jobs into sub units where only workers specialized in a certain field would take up the task not only to ensure efficient delivery of the task but also to further increases their skills (Kumar and Suresh,2009,p.284). Early in the twentieth century, Frederick Taylor enforced this law which then resulted to the development of scientific management. Not until in the early nineties, many developments were made based on the traditions of operation.

In 1776, Adam Smith developed the theory of specialization of labour in the manufacturing industry (Kumar and Suresh 2009 p. 284). This was followed by development of cost accounting in 1799 by Eli Whitney among other scientists. Later in 1832, Charles Babbage developed division of labour and assigning tasks depending on employees’ skills as well as the necessity of time management (Kumar and Suresh 2009 p. 284).

In 1970, W. Skinner and J. Orlicky developed the incorporations of all operations in an organization into a unified strategy with common policies. Managers worldwide developed techniques for efficient manufacturing operations. From then, other scientist started studying sociology especially on human behavior in workplace while mathematical as well as computer scientists developed more advanced techniques for data analysis.

With these new developments, the name operations management came into being which put a lot of emphasis on expansion of the manufacturing sector. Emphasis was put on production in the management practices rather than the usual analyzing duties (Johnston 1998, p.1).

Operations As Service

The emerging model in industry in industry is that every organization is in the service business. Operations as a service is an attempt to improve the efficiency and bottle line of organizations around the world.? We must understand that manufacturing operations, as well as every other part of the organization, are also in the service business even if the customer is an internal one. In manufacturing, such services can be divided into core and value-added services that are provided to internal and external customers of the organization.

The Core Services: The core services customers want are products that are made correctly, customized to their needs, are delivered on time and the prices are competitive. These are commonly summarized as the classic performance objectives of the operations function: quality, flexibility, speed and price (cost of production).

Value-added Services: These are services that simply make the external customer’s life easier or, in the case of internal customers, help them to better carry out their particular functions. Value-added services can be classified into four broad categories: information, problem-solving, sales support and field support.

i). Information: This is the ability to furnish critical data on product performance, process parameters, and cost to internal groups and to external customers, who then use the data to improve their own operations or products.

ii). Problem Solving: This entails the ability to help both internal and external groups solve problems, especially in quality.

iii). Sales Support: This is the ability to enhance sales and marketing efforts by demonstrating the technology, equipment, or production systems the company is trying to sell. Sometimes sales are enhanced by the factory showing off its work force’s skills.

iv). Field Support: This implies the ability to replace defective parts quickly (for example, Caterpillar promises to make repair parts available anywhere in the world within 48 hours) or replenish stocks quickly to avoid downtime or stock-outs.

It’s very vital to know that value-added services provided to external customers yield two benefits. First differentiate the organization from the competition. Indeed, in many cases it is easier to copy a firm’s product than it is to create the value-added service infrastructure to support it. Second, these services build relationship that bind customers to the organization in a positive way. ??

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References

Kumar S. Suresh N. (2009)

Production and Operations Management

New Age International Publishers

Second Edition

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Chase , Aquilano and Jacobs

Operations Management for Competitive Advantage.

Ninth Edition

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Dixon Ogbechi Bolajoko N.

The Fundamentals of Business Policy And Strategy

Faculty of Management Sciences, University of Lagos

Second Edition 2015 (Revised) ???