The Operations Management And its Role in Business Processes
The business houses especially the manufacturing organizations have various processes where they transform the raw materials into a produced good or service. The operations management is that function of the companies which is concerned with the processes involved to change the inputs in the products which can be used or consumed by the customers. There are numerous activities which are interrelated to manufacture a product and the process associated with it is called as the production system. It encompasses all the procedures which are required to produce a product from it's beginning until the ens. If we extend the same concept and include the production and delivery of the services, then the whole process is called as the operations manager.
The operations management also take care of the fact that the processes should produce high-quality products and services in the given resources. This is an essential field of study in the MBA degree because the students learn here how can they make the processes fruitful for their organization and gain high profitability. In operations management, the students learn how to plan efficiently, schedule, and control the operations of an organization. Here various concepts have been derived from the different field such as the design engineering, quality management, inventory management, accounting, MIS, and production management and many more.
The production system is an important aspect whioch should be considered by the operations management. It comprises of a set of procedures and variables which are required in the production of a product or service. It is highly essential that the production system and the processes encompassing it should have a high productivity so that the desired outcome can be achieved. IF you want to understand the fundamental process of productivity and its modern concepts then you can read them in the article “The Modern Dynamic Concept of Productivity and Factors Affecting it.” It will help you in learning about different products which directly or indirectly affect the productivity of the operations.
Decision making in operations management
There is a lot of decision making required at different levels of operation management processes, and various people take them at different hierarchical levels. The decision making can be divided into three main categories which are described as below:
1. The decisions made by higher management
The operations management is the department which is responsible for the decisions about the development of the product. The operations managers also take an important decision about the process and layout. Here they have to specify the location as well as the capacity of the production and storage. Which product should be made and how would it be manufactured are crucial decisions which are the long-term decision of the firm and are taken by the higher management.
2. The decisions are taken by middle-level managers
In the middle management level, the managers have to decide how many workers will be required to run a specific process smoothly and efficiently. They also have to think about the levels of inventory they can manage well along with the time of the delivery of the materials and its use. The decisions about the volume and the capacity and how to produce the given amount of products in given time. They can also appoint the workers to work overtime if they have to get the output at a particular time and they can also take the decisions of subcontracting the period if the produced goods have exceeded than the market demands.
3. Decisions of managers at the operational level
The managers who control the processes also have to take various decisions on day to day basis, and they are usually regarding the scheduling the processes, the sequencing of the methods for maximum effectiveness and high-quality production, and about the work assignments to be given to different people. The use of specific machines and choosing the right person to operate that machine or software is also the decision which the managers have to take at the operational level. The sequence of the processes is highly essential, and it is necessary to keep them in the right place one after another.
The roles of operations management
The operations management is an essential part of any organizations processes, and it has an active role to play in bringing effectiveness in the production as well as other related procedures. But the role of operations manager does not end with the looking at the process only they also have to understand various aspects of different trends in the local and global markets, the demand of their product or service and the availability of the resources so that the production can be done smoothly. The operations managers also manage the acquisition of the raw material and the effective use of labour and their skills at the right time. They also have to take care that whatever process they select for the production should be cost-effective for the company as well. The role of operations management in the different business process are discussed as below:
- Inventory management
The inventory management is the process by which the companies manage their stock and the inventory. This is a subprocess of supply chain management, and it deals with the aspects of foreseeing the and ordering of the inventory, the decisions related to the storage of the stock, and it also controls the production process in such a way that the product should be made according to its demand in the market. The operations managers have to decide in advance that what type of inventory they need to acquire so that the production process can be run smoothly.
- Logistics and the supply chain management
We can define the supply chain management as the network which the company requires to have with its suppliers and distributors. The supply management is the process which deals with the operations of turning the inputs and raw materials into the products and services and then providing it to the customer. That means the supply chain encompasses all the processes from the very beginning of product manufacturing that is acquiring the raw materials till the delivery of the finished goods to the customers. The logistics business process of a company are those processes which are related to the production and distribution of the goods within the organization. When this process also includes other stakeholders such as suppliers, other manufacturers from where the company buys some parts of its products, the distributors and the retailers who help to supply the product to the customers.
- The process of delivery
The delivery system is also a significant facet of operations management and as the name is suggesting it deals with the distribution of the products to the customers. Here the operations managers have to make sure that the product should be delivered to the customers within the stipulated period. They also have to take care that the delivered goods should be adequately functional and should meet the expectations of the customers. Receiving feedback from the customers and recording the relevant information if there is any problem in the functions of the product is also done by them so that they can control the quality of the product or service for the next batch of production.