Scope of Operations Management
Operations management is a very basic management concept. It focuses on the management relationship as a means of achieving better results for all members of the organization. Basically all the functions of management are evolved from production management. Operations management show flexibility and responsiveness to take care of varying customer demands, their timings, risk of product development efforts, and costs involved. The operation function involves a wide range of activities from plant location to the packing of products to be distributed by the marketing department of the enterprise. Some of the areas covered under the umbrella of operations management are:
1. Manufacturing process selection
Manufacturing process selection is concerned with processes that convert the inputs into outputs. Production manager must have sound knowledge of manufacturing methods and their properties so that he can select appropriate method of manufacturing. Operations management also deals with plant capacity planning and cost benefit analysis of production system.
i. Process selection
ii. Capacity planning
iii. Cost benefit analysis
2. Selection of Location and Layout
Location of facilities for operations is a long-term capacity decision which involves a long term commitment about the geographically static factors that affect a business organization. It is an important strategic level decision-making for an organization. Plant should be located at such a place that production and distribution costs are minimum. Plant layout refers to the physical arrangement of facilities. It is the configuration of departments, work centers and equipment in the conversion process. The overall objective of the plant layout is to design a physical arrangement that meets the required output quality and quantity most economically. A good plant layout facilitates the flow of materials at the desired speed, plant layout deals with the arrangement of machines.
According to James Moore, “Plant layout is a plan of an optimum arrangement of facilities including personnel, operating equipment, storage space, material handling equipment’s and all other supporting services along with the design of best structure to contain all these facilities”.
3. Production Planning and Control
Production planning and control can be defined as the process of planning the production in advance, setting the exact route of each item, fixing the starting and finishing dates for each item, to give production orders to shops and to follow up the progress of products according to orders. The production manager directs the activities of his department with a view to executing the production plans, policies and decisions.
4. Physical Environment
Physical environment involves following aspects:
i. Lighting
ii. Noise and vibration
iii. Humidity
iv. Fresh air and sanitation
5. Material Handling
Material Handling refers to the ‘moving of materials from the store room to the machine and from one machine to the next during the process of manufacture’. It is also defined as the ‘art and science of moving, packing and storing of products in any form’. It is a specialized activity for a modern manufacturing concern, with 50 to 75% of the cost of production.
6. Maintenance Management
The operations management department has to be ready for any types of problems that may arise during the production process. Hence, the operation management department must prepare a maintenance plan so that there should not be any break down of machines, and for the smooth flow of process.
7. Product and Process Design
Product design deals with conversion of ideas into reality. Every business organization have to design, develop and introduce new products as a survival and growth strategy. Developing the new products and launching them in the market is the biggest challenge faced by the organizations. Process design is a macroscopic decision-making of an overall process route for converting the raw material into finished goods. These decisions encompass the selection of a process, choice of technology, process flow analysis and layout of the facilities.
8. Plant Facilities
Plant facilities are the ancillary arrangements which contribute indirectly to the production function. The production facilities include machinery, power house, tool room, store keeping etc. Employee facilities include canteen, parking area, toilets etc.
9. Inventory Control
It deals with the control over raw materials, work-in-progress, finished products etc. the management of these items is closely related to production function, is included in the production management. The store keeping is an important aspect of inventory control.
10. Quality Control
Quality Control (QC) may be defined as ‘a system that is used to maintain a desired level of quality in a product or service’. It is a systematic control of various factors that affect the quality of the product. Quality control aims at prevention of defects at the source, relies on effective feed back system and corrective action procedure. Quality control can also be defined as ‘that industrial management technique by means of which product of uniform acceptable quality is manufactured’. It is the entire collection of activities which ensures that the operation will produce the optimum quality products at minimum cost.
11. Productivity Management
The operations management department must aim to deliver high productivity of conversion process. The department must employ work study, method study, and time study techniques to increase productivity.
12. Lean Management
The operations management department must aim to adopt newer innovations in the field. By adopting proper waste reduction tools, the department must try to make the process leaner and leaner.
13. Safety Management
The operations management department must aim to ensure maximum safety to workmen. It needs to employ safety officer and needs to lay down proper safety policy.
14. Interrelations with other functions
The operations management department must fix up the production targets and ensure delivery dates to keep the production costs at minimum. The department seeks information from marketing department, availability of materials from materials department, and judging the capacity of plant to devise production plan.
15. Employee Benefit
The operations management department must device policy for incentive scheme for workmen. It must ensure that all safety measures are available on the shop floor.