OPERATIONS MANAGEMENT

OPERATIONS MANAGEMENT
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TABLE OF CONTENTS
1. INTRODUCTION………………………………………………………….…………….…...3
1.1 OPERATIONS MANAGEMENT……………… ………………………………….3
1.2AREASOF CONCERN IN OPERATIONS MANAGEMENT …………….……..5
2. OPERATIONS MANAGENT IN MANUFACTURING AND SERVICE INDUSTRIES …………………………….……………………………….………………………………..........4
2.1 QUALITY CONTROL……………………………………………………….………4
2.2 INNOVATION……………………………………………………………….……....6
2.3 SUPPLY CHAIN MANAGEMENT………………………………………………...6
2.4 CAPACITY MANAGEMENT……………………………………………………….8
2.5 PERFORMANCE MEASUREMENT………………………………………...……9
3 HOW SERVICE INDUSTRIES CAN BENEFIT FROM MANUFACTURING APPROACHES AND SYSTEMS …………………………………………………………...10
3.1 AUTOMATION…………………………………………………………………….10
3.2 MASS PRODUCTION…………………………………………………………....10
4 CONCLUSION……………………….………………………………………………………11
5 REFERENCES………………………………………………………………………….......13
1.INTRODUCTION
1.1. OPERATIONS MANAGEMENT
Operations management is central to the functioning of an organization and encompasses all the activities carried out within the organization that enables it to accomplish its goals. Slack et al. (1998) sees operations management as involving the totality of events that take place in an organization with the aim of producing goods or services. Slack et al. further assert that operations management entails the design and management of the processes by which goods and services are produced in order to fulfill the requirements of the organizations customers (1998). These processes consist of the procedures followed by organizations in obtaining and developing resources needed in delivering their products to the customers in the most efficient and cost effective way. Resources may be in the form of people, raw materials, energy, or infrastructure.
1.2. AREAS OF CONCERN IN OPERATIONS MANAGEMENT
Key issues in operations management involve planning, organization and control. Planning involves actions that are undertaken with the aim of formulating procedures and guiding future management policies. The operations manager in this context is engaged in outlining the goals of the organizations operational function and formulating structures that will guide the achievement of these goals. Organization requires the allocation of responsibilities and the determination of information channels in within the operations department while control involves making sure that the organizational goals in terms of performance are met according to projected outputs. Operations managers are also concerned with the effects of their management policies on the behavior of the employees and the effects of employees’ behavior on management activities.
2. OPERATIONS MANAGENT IN MANUFACTURING AND SERVICE INDUSTRIES
The fact that operations management involves the processes engaged in the conversion of inputs into outputs means that it applies to both manufacturing and service industries. Manufacturing involves the transformation of inputs comprising raw materials, labor, and capital into finished commodities. The service industry transforms the same inputs into intangible outputs. Slack et al. observe that for service and manufacturing industries, the operations function works to ensure that goods and services are produced within budget constraints, delivered to markets according to plan and possess the required level of quality (2008).
2.1. QUALITY CONTROL
Quality control is one aspect of operations management that has different approaches in manufacturing and service industries. Lean production is an approach used by manufacturing organizations in product improvement and quality assurance. According to Slack et al., the concept of lean production arose from the need for western firms to increase their quality standards in the face of competition. Lean production is achieved through involvement of staff in management, exploiting the opportunities presented by quality circles and allocating multiple tasks to employees. Advantages of lean production in manufacturing include increased product range, lower manufacturing expenses and improved product quality.
Despite the advantages presented by lean production to the manufacturing industry, this approach is not particularly useful in the service sector. Quality of service is measured using qualitative methods while quantitative methods are used to measure the quality of physical commodities (Hollins and Shinkins, 2006). Delivering quality service demands particular attention to the development of the employees’ social skills since service delivery mostly involves interpersonal contact between the customer and the provider (Thompson, 1993). While operations managers are faced with the need to improve quality while cutting costs and increasing efficiency, the operations function in the service industry with respect to quality assurance encounters more difficulty than that in the manufacturing industry due to the labor intensive nature of the service industry (De Menezes, 2012). However, operations managers in service industries have devised measures to achieve that goal. These measures include employee motivation, automation of services, and innovation, such as online banking and online flight booking.
2.2. INNOVATION
Innovation refers to the formation of new procedures in the organization with the aim of generating efficiency in the production process coupled with decrease in production costs and improved product quality (Slack et al., 2008). Innovation forms a key aspect in the operation function of both manufacturing and service industries. Innovation in the manufacturing industry may result in a new car model, for instance, which has a lower fuel consumption rate due to improved engine design. An example of innovation in the manufacturing industry is the new V6 engine developed by Mercedes Benz that promises 24 percent less fuel consumption than its predecessor.
Innovation in the service sector can include the introduction of new approaches to customer service, such as contact centers offering 24-hour customer support which are in use today. Service companies also innovate by offering bonuses and perks to regular customers in order to retain them and attract others into habitually using the service. Other innovations that have been made by the service industry include reward programs for regular users and discount packages that entice customers into subscribing to the service. An example in point is American Airlines. The company offers access to lounge facilities referred to as the Admirals Club to regular flyers who have acquired membership as an incentive to maintain those customers.
The company also offers a reward program under the name AAdvantage where customers have the opportunity to earn points in the form of miles by flying with the airline. AAdvantage provides an incentive to the customers to fly regularly with the Airline and accumulate miles which can be redeemed later to pay for flights. Some types of innovation take the same form in both manufacturing and service organizations. One such type of innovation may be upgrading the communication network within an organization through the improvement of transmission infrastructure from copper wires to optic fiber cables.
2.3 SUPPLY CHAIN MANAGEMENT
Supply chain management entails proper organization ...