Fundamentals of Operations

Management
By: Raquel Graham
 Elements in Business
There are 5 main elements that are involved in a business
whether manufacturing or service:

2
What is Operations Management?

Operations Management is concerned with the design,

management, and improvement of the systems that create the
organisation's goods or services.

OM concerns itself with the processes involved in converting

and transforming inputs into outputs in the form of goods or
services that add value to the organisation.

3
Components of an Operating System

Basic components:
 inputs and resources (natural or material resources, human
resources, technological resources and entrepreneurial
resources) which are purchased by the organisation
 processes which involve the conversion or transformation of
these resources into products or services (e.g. using project,
batch or continuous processes)
 output and then feedback to the organisation from its
customers

4
 Operating System

CONTROLS

INPUTS PROCESSES OUTPUTS

RESOURCES
5
Why is it Important?

Too often, attention is paid to

finance, technology and
marketing, and not the actual
functions of the business.

E.g. Marketing a new product and

it does not meet quality
expectations, poor supply to
customers etc.

E.g. Finance is not paying

suppliers or not receiving
payments from customers on time
6
 Another View of Operations
Consider the human body –
 Marketing – Style of dress, personal hygiene
 Finance – Blood, oxygen
 Administration – taking care of health, exercising, lifestyle
mgmt
 Training – Education, work experience
 Operations – the entire process of keeping all organs healthy,
interacting day to day, moving around i.e. everything you do!

If you don’t take care of one element, the entire body can suffer
7
Components in Operations Management

8
 Decisions involved in Operations
Management….
Corporate
1. Operations Strategy
2. Make vs. Buy Decisions
3. Location
4. Production
5. Processes and Facilities to be used
Tactical
1. Workforce Management
2. Inventory Management
3. Quality Management
4. Scheduling
5. Plant Maintenance
9
 Manufacturing vs. Service
Organisations

Operations Management is a crucial function of both

manufacturing and service organisations.
 Manufacturing companies produces tangible products
that can be listed as inventory
 Service organisations produce a non-physical output and
involves the customer in the production process
 Most oganisations do both. There are few pure
manufacturing or pure service organisations.

10
 Manufacturing vs. Service
Organisations

Both types of organisations face similar operational

problems:
 both must obtain suitable and sufficient materials to be
used in the production process
 both must determine suitable scheduling tasks
 both should be concerned with both the quality of their
end products and with their productivity levels

11
 What Drives Operations?
COMPETITION!!

 Every organisation attempts to be successful in the market

place by obtaining an acceptable market share through
competitive strategies.
 The competitive advantage adopted by the management will
be determined by the organisation's overall strategic plan and
by its strategic objectives.
 Success is dependent on the organisation adopting efficient
and effective operations with respect to the manufacturing of
their products or the provision of their services
12
 Some of the most commonly
overlooked elements of Operations

 Inventory Management
 Forecasting
 Administration
 Customer Relationship Management
 Supplier Relationship Management
 Facility Management

13
 Conclusions

 Operations management is often overlooked in favour of

marketing and finance
 There are many ways to improve the efficiency of a
business by pay attention to how the business is run
 The business structure should match closely the level of
competition in the market place
 Operational audits are just as important or more so than
financial audits
 It is all about the customer and the added value

14
 Thank You!!!

Email: caerusintl@gmail.com
Cell #: 262 9379
LinkedIn: Raquel Graham