Learning Objectives

At the end of the chapter, the student is expected to:

1. Define and explain the contribution of production to a society’s well-being
Operations Management and 2. Define and explain the functions of operations management as it relates to
production management system
Total Quality Management 3. Identify and explain the basic responsibilities of individuals engaged in
production and operations management
4. Understand and relate the operations management decisions in the acquisition,
production and distribution of goods or services.
The Production and Operations Function

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What is production? What is Operations Management?

 The processes and methods used to transform  Operations management is the activity of managing
tangible inputs (raw materials, semi-finished goods, the resources which are devoted to the creation and
subassemblies) and intangible inputs (ideas, delivery of services and products. It is one of the core
information, knowledge) into goods or services. functions of any business, although it may not be
Resources are used in this process to create an output called operations management in some industries.
that is suitable for use or has exchange value.

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Why is operations management

What is Operations Management? important in all types of organization?
 Operations management is concerned with managing  Operations management uses the organization’s
processes. And all processes have internal customers resources to create outputs that fulfil defined market
and suppliers. But all management functions also requirements. This is the fundamental activity of any
have processes. Therefore, operations management type of enterprise.
has relevance for all managers.  Operations management is increasingly important
because today’s business environment requires new
thinking from operations managers.

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 examples of operations with their
input–transformation–output process dominant transformed resources

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model of operations management What do operations managers do?

 Enjoys getting things done – operations management is about
doing things. It takes energy and/or commitment to finishing
tasks. It means hitting deadlines and not letting down customers,
whether they are internal or external.
 Understands customer needs – operations management is about
adding value for customers. This means fully understanding what
‘value’ means for customers. It means putting yourself in the
customer’s place: knowing what it is like to be the customer and
knowing how to ensure that your services or products make the
customer’s life better.

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What do operations managers do? (cont’d) What do operations managers do? (cont’d)
 Communicates and motivates – operations management is about  Committed to innovation – operations management is always
directing resources to produce services or products in an efficient seeking to do things better. This means creating new ways of
and effective manner. This means articulating what is required and doing things, being creative, imaginative, and (sometimes)
persuading people to do it. Interpersonal skills are vital. unconventional.
Operations managers must be ‘people-people’.  Knows their contribution – operations management may be the
 Learns all the time – e very time an operations manager initiates central function in any organization, but it is not the only one. It
an action (of any kind) there is an opportunity to learn from the is important that operations managers know how they can
result. Operations management is about learning, because contribute to the effective working of other functions.
without learning there can be no improvement, and improvement
is an imperative for all operations.

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 Operations managers and some
What do operations managers do? (cont’d) responsibilities
 Capable of analysis – operations management is about making  responsible for managing activities that are part of the
decisions. Each decision needs to be evaluated (sometimes with production of goods and services.
very little time). This involves looking at both the quantitative and
the qualitative aspects of the decision. Operations managers do  managing both the operations process, embracing design,
not necessarily have to be mathematical geniuses, but they should planning, control, performance improvement, and
not be afraid of numbers! operations strategy.
 Keeps cool under pressure – operations managers often work in  interacting with those managers in other functional areas
pressured situations. They need to be able to remain calm no within the organization whose roles have an impact on
matter what problems occur. operations. Such areas include marketing, finance,
accounting, personnel and engineering.

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Decision making is a central role of all

Operations managers' responsibilities operations managers
 Human resource management  designing the operations system
 Asset management  managing the operations system
 Cost management  improving the operations system

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The five main kinds of decision Careers in Operations Management

 processes by which goods and services are produced  Deputy Manager in Manufacturing
 the quality of goods or services  Associate Product Manager
 the quantity of goods or services  Operations Manager
 the stock of materials (inventory) needed to produce  Supply Chain Functional Analyst
goods or services  Sourcing Specialist
 the management of human resources  Supplier Risk Manager
 Functional Consultant
 Analyst Operations Advisory Services

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 Supply Chain Functional Analyst Analyst Operations Advisory Services

 The primary duty of a supply chain functional  Analyst Operations Advisory Services is
analyst is to deliver projects in the supply chain expected to support in building and executing
division by focusing on planning, fulfillment, innovative solutions for delivery excellence at
manufacturing, sourcing, & procurement an optimized delivery cost

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Sourcing Specialist Associate Product Manager

 Its task is to develop both short- and long-term  An associate product manager participates in
sourcing plans by benchmarking all suppliers, the creation of new products and features right
contracts, and services associated with from ideation to launch
delivering services

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Deputy Manager in Manufacturing Operations Manager

 A deputy manager manufacturing is responsible for  An operations manager is liable for identifying
planning, managing, and executing manufacturing operational inputs, processes, outputs, and
operations. They are also accountable for ensuring feedback.
the execution of the manufacturing process is
prioritized in accordance with the process workflow  they are also accountable for enhancing the
and schedule. effectiveness and productivity of the HR, IT,
and finance departments and implement
reforms to each department if required

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 Supplier Risk Manager Functional Consultant

 Supplier Risk Manager is expected to conduct a  A functional consultant may be assigned

supplier risk assessment for Operational risk, responsibility for a specific functional vertical
Information security risk and reputational risk or client-specific tasks
for a supplier before on-boarding

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