What is Operations Management?
It’s like cooking a meal for the family
Happy day, amazing people!!!
Cooking is a daily chore, where raw food items are converted into finished meal. Likewise, operations are also daily chore in business world, where raw materials are converted into finished products/services.
Operations Manager takes care of the activities involved in converting the raw materials into finished goods.
Operations not only includes producing goods and services for external customers but also includes a functional area or department producing goods and services for other functional areas or departments.
Example: Finance department preparing payroll for the employees of all the departments.
International Operations Management
The dynamics of business operations has been changed.
The world has now become a “global village”, where doing business in abroad have become much easier than ever.
Businesses can now
- Source their raw material from foreign countries (globalization of production)
- Move their production to other countries (globalization of production)
- Sell their products/services to other countries (globalization of markets)
One of the most important things is that managing international operations must be adaptable to the new era of globalization and ever-changing economy.
Example:
Let’s say there is a clothes manufacturing company called “Fashionista Apparel”. Earlier they used to get yarns from suppliers and make their own fabrics for their clothes.
But due to globalization, Fashionista Apparel can now
- buy good quality fabrics from overseas at a cheaper rate
- or they can move their production unit to another country where the labor cost would be cheap
- or even sell their clothes to other countries where the demand is high
Fashionista Apparel can choose any one or combinations of the above-mentioned operations for its international operations.
Let’s just say, the company has chosen to buy fabrics from other country to reduce the burden on them.
Operations Manager
Operations Manager in domestic business must manage the activities that involves converting the fabric into clothes for external customers.
When it comes to Operations Manager in international business, they must manage the activities specific to international operations. For example: If company chooses to move its production unit to another country due to low labor cost, then Operations Manager must take care of activities involved in supplying the fabric to production unit, producing and collecting the clothes from the unit for external customer.
Role of Operations Manager differ from industry to industry and from firm to firm.
Operations Management
Operation management means planning, organizing, leading and controlling. But it also involves two main areas. They are forecasting and project management.
Forecasting
Forecasting means prediction of future with past and present data. Forecasting helps Operations Manager in decision-making and controlling uncertainty.
Forecasting helps in
- Scheduling resources and manpower for operation (E.g., X no. of cloths must be manufactured in Y days and X no. of human resources are required for doing this particular task)
- Acquiring resources for production (E.g., X yards of fabrics are required for manufacturing clothes)
- Determining resources requirement for future use (E.g., Yarns are not required to make fabrics because the company has decided to buy fabrics directly from suppliers to make clothes)
Project management
Project management means completing the task on time and within the budget. For which planning, scheduling and controlling of project activities are required.
There are two techniques for project management
- Project Evaluation and Review Technique (PERT) – Time estimates are probabilistic
- Critical Path Method (CPM) – Time estimates are deterministic
Operations Manager uses a combination of best features from both these techniques (PERT/CPM technique). These techniques use network diagram.
In the network diagram, activities are the ones which consumes time and resources, events are the ones which occur at one point and does not consume time and resources.
Bonus Brownie:
Operations Manager must be effective and efficient.
Effective – doing the right thing (turning the yarns into clothes)
Efficient – doing the thing right using the minimum resources (buying the fabric to make clothes)
We hope you guys have understood about operations and operations management.
Ok then, before signing off
Love what you do, do what you love…. Bye
From,
Simply grasp