Operations management is an area of management concerned with designing and controlling the process of production and redesigning business operations in the production of goods or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as few resources as needed and effective in terms of meeting customer requirements.
It is concerned with managing an entire production system which is the process that converts inputs (in the forms of raw materials, labor, and energy) into outputs (in the form of goods and/or services), as an asset or delivers a product or services. Operations produce products, manage quality, and create service. Operation management covers sectors like banking systems, hospitals, and companies, working with suppliers, and customers, and using technology. Operations are one of the major functions in an organization along with supply chains, marketing, finance, and human resources. The operations function requires management of both t strategic and day-to-day production of goods and services.
In managing manufacturing or service operations several types of decisions are made including operations strategy, product design, process design, quality management, capacity, facilities planning, production planning, and inventory control. Each of these requires an ability to analyze the current situation and find better solutions to improve the effectiveness and efficiency of manufacturing or service operations.
With the coming of the Internet, in 1994 Amazon devised a service system of online retailing and distribution. With this innovative system customers were able to search for products they might like to buy, enter the order for the product, pay online, and track delivery of the product to their location, all in two days. This required not only very large computer operations, but dispersed warehouses, and an efficient transportation system. Service to customers including a high merchandise assortment, return services of purchases, and fast delivery is at the forefront of this business. [ 31 ] It is the customer being in the system during the production and delivery of the service that distinguishes o, not all services from manufacturing.
Recent trends in the field revolve around concepts such as:
- Business Process Re-engineering (launched by Michael Hammer in 1993: a business management strategy focusing on the analysis and design of workflows and business processes within an organization. BPR seeks to help companies radically restructure their organizations by focusing on the ground-up design of their business processes.
- Lean systems are a systemic method for the elimination of waste (” Muda “) within a manufacturing or service process. Lean also takes into account waste created through overburden (” Muri “) and waste created through unevenness in workloads (” Mura “). The term lean manufacturing was coined in the book The Machine that Changed the World. Subsequently, lean services have been widely applied.
- Six Sigma (an approach to quality developed at Motorola between 1985-1987): Six Sigma refers to control limits placed at six (6) standard deviations from the mean of a normal distribution, this became very famous after Jack Welch of General Electric launched a company-wide initiative in 1995 to adopt this set of methods to all manufacturing, service and administrative processes. More recently, Six Sigma has included DMAIC (for improving processes) and DFSS (for designing new products and new processes)
- Reconfigurable Manufacturing Systems: a production system designed at the outset for rapid change in its structure, as well as its hardware and software components, in order to market changes or intrinsic system change. quickly adjust its production capacity and functionality within a part family in response to sudden.
- Project Production Management: the application of the analytical tools and techniques developed for operations management, as described in Factory Physics to the activities within major capital projects such as those encountered in oil & gas and civil infrastructure delivery.
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