Understanding operations management

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A management function is an imperative which anyone thrust in a position of responsibility to manage resources and people should understand. In this instalment, I will try to explore the basic framework for understanding operations management and its organisational and managerial context.

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It begins with a brief history of the changing nature of operations in a manufacturing context, but emphasises that the operations function is significant in all types of organisation, whether they produce goods or provide services, and whether they are in the private, public or voluntary sectors.

Operations management

Consider the ingredients of your breakfast this morning. Unless you live on a farm and produced them yourself, they passed through a number of different processing steps between the farmer and your table and were handled by several organisations. Similarly, your morning newspaper was created and delivered to you through the interactions of a number of different organisations or departments

Every day, you use a multitude of physical objects and a variety of services. Most of the physical objects have been manufactured and most of the services have been provided by people in organisations. Just as fish are said to be unaware of the water that surrounds them, most of us give little thought to the organisational processes that produce these goods and services for our use. In short, the study of operations deals with how the goods and services that you buy and consume every day are produced.

Operations managers

Every organisation has an operations function, whether or not it is called ‘operations’. The goal or purpose of most organisations involves the production of goods and/or services. To do this, they have to procure resources, convert them into outputs and distribute them to their intended users. The term operations embraces all the activities required to create and deliver an organisation’s goods or services to its customers or clients.

Within large and complex organisations operations is usually a major functional area, with people specifically designated to take responsibility for managing all or part of the organisation’s operations processes. It is an important functional area because it plays a crucial role in determining how well an organisation satisfies its customers.

In the case of private-sector companies, the mission of the operations function is usually expressed in terms of profits, growth and competitiveness; in public and voluntary organisations, it is often expressed in terms of providing value for money.

Operations management is concerned with the design, management, and improvement of the systems that create the organisation’s goods or services. The majority of most organisations’ financial and human resources are invested in the activities involved in making products or delivering services. Operations management is therefore critical to organisational success.

Principles of operations management

An understanding of the principles of operations management is important for all managers, because they provide a systematic way of looking at an organisation’s processes.

The need to manage manufacturing and service operations efficiently and effectively has led to a considerable increase in interest in operations management in recent years. However, the concept of operations is not new.

While it is quite easy to identify the main output of a brewery as beer, and of a publisher as books or newspapers, it is a bit trickier to understand the main output of, say, a hotel, insurance company or any such industry. Operations management deals with producing not only physical goods, but also satisfied customers.

The role of the operations manager

Some people (especially those professionally involved in operations management!) argue that operations management involves everything an organisation does. In this sense, every manager is an operations manager, since all managers are responsible for contributing to the activities required to create and deliver an organisation’s goods or services. However, others argue that this definition is too wide, and that the operations function is about producing the right amount of a good or service, at the right time, of the right quality and at the right cost to meet customer requirements.

Debunking stereotypes

A stereotypical example of an operations manager would be a plant manager in charge of a factory, such as an automobile assembly plant. But other managers who work in the factory — quality managers, production and inventory control managers, and line supervisors — can also be considered to be working in operations management. In service industries, managers in hotels, restaurants, banks and stores are operations managers. In the not-for-profit sector, the manager of a nursing home or day centre for older people is an operations manager, as is the manager of a local government, tax-collection office and the manager of a charity shop staffed entirely by volunteers.

Operations managers are responsible for managing activities that are part of the production of goods and services. Their direct responsibilities include managing the operations process, embracing design, planning, control, performance improvement, and operations strategy. Their indirect responsibilities include interacting with those managers in other functional areas within the organisation whose roles have an impact on operations. Such areas include marketing, finance, accounting, personnel and engineering.

Training in operations management involves immersing participants in the intricacies of all that constitutes management. It involves exposing the trainee to the matrix of operations management in terms of decision-making and one’s role in the whole continuum of production and or value addition.

Mandeya is an executive coach, trainer in human capital development and corporate education, a certified leadership and professional development practitioner and founder of the Leadership Institute for Research and Development (LiRD). — robert@lird.co.zw, info@lird.co.zw or +263 772 466 925.

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