Operations Management
Operations
management consists of all the activities that managers engage
in to create products (goods, services, and ideas). Operations
are as relevant to service organizations as to manufacturing
firms. In fact, production is defined to include the conversion
of resources into either goods or services.
A
technology is the knowledge and process the firm uses to convert
input resources into output goods or services. Conversion
processes vary in terms of their major input (focus), the degree
to which inputs are changed (magnitude), and the number of
technologies employed in the conversion.
Operations
management often begins with the research and product
development effort. The results of R&D may be entirely new
products or extensions and refinements of existing products. The
limited life cycle of every product spurs companies to invest
continuously in R&D.
Operations
planning is planning for production. First, design planning is
undertaken to address questions related to the product line,
required production capacity, the technology to be used, the
design of production facilities, and human resources. Next,
operational planning focuses on the use of productionfacilities and resources. The steps in this periodic planning are (1)
selecting the appropriate planning horizon, (2) estimating
market demand, (3) comparing demand and capacity, and (4)
adjusting output to demand.
The
major areas of operations control are purchasing, inventory
control, scheduling, and quality control Purchasing involves
both selecting suppliers and planning purchases. Inventory
control is the management of stocks of raw materials, work in
process, and finished goods to minimize the total inventory
cost. Scheduling ensures that materials are at the right place
at the right time&-for use within the facility or
for shipment to customers. Quality control ensures that products meet
their design specifications.
Automation,
the total or near&-total use of machines to do work, is
rapidly changing the way work is done in both factories and
offices. A growing number of industries are using programmable
machines called robots to perform tasks that are tedious or
hazardous to human beings. The flexible manufacturing system
combines robotics and computer&-aided manufacturing to
produce smaller batches of products more efficiently than the
traditional assembly line.
In
recent years, the productivity growth rate in
this country has fallen behind the rates of productivity
growth in some of the other industrialized nations. Several
factors have been cited as possible causes for this trend and
managers have begun to explore techniques for overcoming it.
