Operations Management

Operations Management

In today's business environment, operations management is essential for the ultimate survival of businesses as they contend with fierce competition, ever-changing technology, and implementation of e-commerce in our global economy. Managers must recognize the significance of the shift in the balance of power to the consumers because of the globalization of business and markets and e-commerce. They must strive to reach higher levels of productivity in every aspect of their organization from creating higher quality products, to delivering better customer service, to achieving shorter delivery times, and reducing labor and material costs. As businesses strive to endure and maximize profits, achieving operational excellence through operations management can have a significant impact on the cost of products and the services performed within a business entity.

Operations management is prevalent in every form of business whether it is a production, retail, or service organization. As individuals perform their duties and job functions, those tasks become part of an operation. Those tasks can include such processes as producing a product, selling merchandise to a customer, or performing a service. "Operations management (OM) is defined as the design, operation, and improvement of the systems that create and deliver the firm's primary products and services" (Chase-Jacobs-Aquilano, 2005). OM is the conversion process that transforms inputs such as raw materials, labor, or customers into outputs in the form of finished goods or services. As part of this conversion process operations must make strategic decisions in the areas of strategic long-range planning, tactical planning, and short-range operational planning and control, which will affect the company's ultimate effectiveness in meeting the needs of the customer. Operations management's function is to focus on adding value through the transformational process where inputs are converted to desired outputs. The transformation process can include such systems as Total Quality Control (TQC), Total Quality Management (TQM), Just-In-Time (JIT), Self-direct work teams, or kanban. The contribution of value-adding functions should result in reduced costs, increases productivity, improved quality, and enhanced working conditions for employees.

In business, managers are faced with moral and ethical decisions daily. Decisions have to be made that are optimal for the operations and performance of the organization. Business organizations must not only satisfy consumers' expectations, but also meet performance goals, and maintain a profit. This can make operations management decisions challenging and difficult in many different aspects. OM involves the evaluation and enhancement of processes that are typically performed by individuals, therefore changing a process could directly affect employees. It may sometimes mean increasing production costs to adhere to safety standards. At times, the risk of decreasing quality could be impacted by changing processes, thus making decisions for change difficult.

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