An Overview on Operations Management

The operations management of any organization				than one competitive dimension. The rise of the global
involves the design, operation, and improvement of the				economy and the trend towards globalization has
systems that create and deliver the primary products				placed emphasis on the issues associated with
and services of the organization. From an				logistics, quality, productivity and customer satisfaction
organizational point of view, operations management				which operations management made them integral in
may be defined as the management of the direct				production sector.
resources that are required to produce and deliver
organizational goods and services. Operations				Advances in technology in recent years also have had
management is an area of business that is concerned				a significant impact on the operations management
with the production of goods and services, and				function. Information technology (IT) now allows us to
involves the responsibility of ensuring that business				collect detail customer data so that we customize
operations are efficient and effective. It is also the				products to meet the needs of individual customers..
management of resources and the distribution of
goods and services to customers. However, people				Operations management provides a systematic way
tend to misunderstand operations management with				of looking at organizational processes. OM uses
the subject of operations research.				analytical thinking to deal with real world problems. It
				sharpens our understanding of the world around us,
During 1940s, scientists of				whether we are talking about how to compete with
established reputation accepted the challenge of				competitors or how many lines to add the bank
attempting to understand a host of common				teller’s window.
processes in military operations. Their team effort was
called operations research and the focus of their				OM presents interesting career opportunities which can
attention was the science of military systems. Hence				be in direct supervision of operations or in staff
the world war 11 with its complex problems of logistic				positions OM specialties such as quality assurance.
control and weapon systems design, provided the
impetus for the development of interdisciplinary,				However, the reality is not always the same.
mathematically oriented field of operations				Technology has raised the performance bar in both
research.(OR).				manufacturing and services sector by allowing firms to
				compete on several dimensions (low cost, quality,
Operations Research, or simply				speed of delivery, customization etc) simultaneously.
OR is an interdisciplinary science which deploys				For example, firms using technology such as Dell
scientific methods like mathematical modeling, statistics,				Computer can produce and quickly deliver individually
and algorithms to decision making in complex				customized products at a very competitive price.
real-world problems which are concerned with
coordination and execution of the operations within an				Automation is a result of technology advance that
organization. The nature of organization is essentially				relate to the automatic operation of a production
immaterial. The eventual intention behind using this				process. Some major developments in manufacturing
science is to elicit a best possible solution to a problem				automation include machining centers, numerically
scientifically, which improves or optimizes the				controlled machines, industrial robotics, computer aided
performance of the organization. Hence, Operations				design and manufacturing systems, flexible
Research brings together practitioner in diverse fields				manufacturing systems, computer integrated
such as mathematics, psychology, and economics etc.				manufacturing and islands of automation.
Specialists in these fields customarily formed a team
to structure and analyze a problem in quantitative				Advances in technology, including improved automated
terms so that a mathematically optimum solution can				equipment, voice recognition systems, high speed data
be obtained. OR today provides many of the				transmission lines like broadband, and faster and more
sophisticated quantitative tools in operations				powerful computers also have had a significant impact
management (OM).				on services. Contributing to the growing trends in
				services is the fact that large amounts of data are
Operations research also closely				readily accessible and can be transmitted
relates to industrial engineering which takes more of an				inexpensively over long distances. Increase in self
engineering point of view, and industrial engineers				service, decrease on the importance of the location
typically consider OR techniques to be a major part of				and the shift from time dependant to non-time
their toolset.				dependant transactions and the increase in
				disintermediation are the results of technological
Some of the primary tools used				advances in the services sector. Technology also has
by operations researchers are statistics, optimization,				created the concepts of global and green village for
and simulation. Because of the computational nature of				the betterment of the humankind as a reply to its
these fields OR also has ties to computer science, and				negative impacts such as mechanized human
operations researchers regularly use custom-written or				elements in a factory layout for instance.
off-the-shelf software. Operations research is				Under circumstances, the author envisages the future
distinguished by its ability to look at and improve an				role of the OM function as follows;
entire system, rather than concentrating only on				In the new world of e-business,
specific elements (though this is often done as well).				competition takes on a new intensity and a variety of
An operations researcher faced with a new problem				flavors. The unique dynamics of the international online
is expected to determine which techniques are most				marketplace often requires organizations to pursue
appropriate given the nature of the system, the goals				multiple, simultaneous, and seemingly contradictory
for improvement, and constraints on time and				strategies. To identify what is both possible and
computing power. For this and other reasons, the				advantageous, organizations must learn to think
human element of OR is vital. Like any other tools, OR				smarter and act faster - more so than the toughest
techniques cannot solve problems by themselves.				competitors they can possibly imagine. This means
				moving beyond market leadership to another level -
A few examples of applications in which operations				one that enables an enterprise to "leapfrog" the
research is currently used include designing layout of a				competition.
factory for efficient flow of materials, constructing a
telecommunications network at low cost while still				International e-business success
guaranteeing quality service if particular connections				starts with world-class supply chain management and
become very busy or get damaged, road traffic				an enabling infrastructure that is a critical component of
management and 'one way' street allocations,				today's global enterprise not to be overlooked.
determining the routes of school buses so that as few				E-business is obviously the future, and the
buses are needed as possible, designing the layout of				Business-to-Business (B2B) component is taking the
a computer chip to reduce manufacturing time				lead in defining what success will look like in this future.
(therefore reducing cost), managing the flow of raw				Additionally, in this emerging world of business,
materials and products in a supply chain based on				adaptation to constant change will prove an important
uncertain demand for the finished products, efficient				ingredient for success. The future role of operations
messaging and customer response tactics, roboticizing				management should taker the above factors into
or automating human-driven operations processes,				serious consideration if any firm seeks to secure and
globalizing operations processes in order to take				sustain in competitive edge.
advantage of cheaper materials, labor, or other
productivity inputs, managing freight transportation and				Future opportunities are hard to
delivery systems, network data traffic: these are				estimate, and many change programs are therefore
known as queuing models or queuing systems, sports				built on limited information. Case decisions are often
events and their television coverage, blending of raw				made on the basis of previous internal successes and
materials in oil refineries, etc, etc.				failures rather than a fact-based market review.
				Companies often set targets for change without
				having the full picture of the current environment, which
There was a lack of emphasis on operations				means that either the outcome of the change is not
management in the post war ii years, for many				considered optimal or the costs of the change are
reasons.				deemed too high to generate a net benefit.
				Too many Business Process Re-engineering projects
(1) Following World War II, the United States was the				have been launched with great expectations and end
obvious world leader in manufacturing. US dominance				with disappointing results.
was the result of several factors including the virtually
total destruction of most of the production capabilities				Strategy should be based on a
of the other leading industrialized nations of the world.				concrete understanding of market capabilities,
				practices and processes, to allow specific operational
(2) Under foregoing conditions, the lack of foreign				targets to be clearly articulated and demonstrated. A
competition till for some years resulted in lack of				framework needs to be put in place to accurately
emphasis on operations management since most of				describe current and future operational performance, in
the countries were not so serious about global market				order to increase confidence and credibility in the
infiltration, with the collapse of technological power had				change and improvement process.
before the war.
				Operations management as a
(3) With the demand significantly exceeding capacity				field deals with the production of goods and services
during the post war period, emphasis was placed on				that we come in everyday contact in domestic life.
output, and the operations function typically related to				Without effective management of operations, a
situations only when they occurred. Corporate				modern industrialized society can not exist. Operations
managers during this period usually told operations				are the engine that creates wealth for the enterprise
managers to focus only on controlling production costs,				and underpins the global economy.
rather than focusing on other aspects related to
operations management.				Operations managers however
				have important responsibilities in the service sector as
It is also important to notice the resurgence of interest				well (80% is in the service sector in USA) such as in
in OM today, mainly on the reasons as follows;				hotels, banks airlines retail stores etc. In each of these
				organizations, operations mangers are responsible for
The ever increasing standard of living in society is a				providing the supply of services much like their
one of major factors that inspires resurgence of				counterparts in manufacturing product the supply of
interest in operations management today. Operations				goods.
management enables to increase productivity and
better quality goods and service delivery. High				Managing the transformation process in an efficient
productivity is the result of increased efficiency in				and effective manner is the tasks of the operations
operations, which in turn translates into lower cost				manager in any type of organization. Wealth is created
goods and services. Thus higher productivity provides				in the global economy through excellent operations
consumers with more discretionary income, which				management. Wealth creation occurs when the value
cintr9butes to their higher standard of living. The				of outputs in goods and services exceeds the cost of
increased use of automation and robotics also				the inputs used. It is reflected in the standard of living of
improves the quality of goods.				the people and is a function of constantly increasing
Most companies today are taking up the challenge to				productivity.
producer environmentally friendly products with
environmentally friendly processes all of which falls				Raising productivity of operations, the ratio of output to
under the purview of operations management.				input, is therefore the primary basis for creating wealth.
				A company can not prosper in ling run unless they
Operations management is continuously changing to				have higher productivity than their domestic and foreign
meet the new and exciting challenges of today’s				competitors. The tasks of the future operations
business world. This ever changing world is				manager can not be withdrawn from wealth creation.
characterized by increasing global competition and				The future operations manager must be more
advances in technology. To survive and prosper in				sensitive and challengeable than today in creating
such a global market, companies must excel in more				wealth by improving productivity.

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An Overview on Operations Management