Introduction to Operations Management |
Operations management is critical to every kind of business. Let us take examples of two very different business types one being a credit or loan issuer and another being a business that make benches and chairs. Let’s take the first example of the loan issuer. Critical inputs to the production or operations of the business are money, knowledgeable and empowered staff, The whole operating environment will consist of design and segmentation of available loans depending on the borrower's earning potential, planning and controlling what comes in and what goes out and at what time. Constantly evaluating if the business if making money, whether or not the process is efficient for both the customers and the loan issuer? While all this is going on, the business has to constantly devise strategies on how to keep the business solvent and how to deal with people who are not willing to pay back. The output of the operating environment is goods are services that are consumed by customers (hopefully very attractive consumer products and services). This is how the business will make its money and possible attain its strategic objectives. Now let us take a look at the bench makers, input to this process are knowledgeable/skilled employees, money and raw materials. The production process involves designing and making high quality products, testing and making sure that the quality of products meet both required standards. Constantly evaluating if the production process is efficient, is the business making enough from the production process to make the whole operation worth a while? Again the final outcome of the whole process is a consumer product (may be consumed by other businesses too). The sale of such products enables the business to make money stay solvent, profitable and possibly attain its strategic objectives. As you can see from the examples above there are issues that has to be address either with the study or the practice of operations management, such as:
Why do we need effective operations management?Effective operations management is critical because it allows businesses to run efficient production processes, thus cut down costs, increase revenue and customer loyalty by increasing customer satisfaction, and in some cases may even serve as the basis for future innovations. In larger companies, operations responsibilities may be shares across different sections or divisions of the organization, but for smaller businesses the same people will be forced to juggle the tasks. |
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