Week 9 Questions - Operations Management

1. Define the term operations management.

Operations Management (OM) is the management of systems or processes that convert or transform resources into goods and services. It is responsible for managing the core processes used to manufacture foods and produce services. Operations management transforms inputs into outputs and ensures that the processes are efficient and effective.

Example of an IT's Operations Management
http://www.symphonysv.com/images/services/it-operations-management.jpg

2. Explain operations management’s role in business.

Example of an airline business:
· Forecasting – Being able to plan and predict what is going to happen in the future. How many seats on a flight, weather and landing conditions, etc.

· Capacity Planning – Ensuring that the systems put in place are able to handle the demand being placed on them, ie. Are the systems large enough? Being able to plan for growth and decline in the markets to maintain profits

· Scheduling – When it will be done. When to schedule flights, how many flights and staff are needed, when to schedule maintenance, etc.

· Managing Inventory – Managing the essential items that are needed in order for the business to run. Food and beverage, first aid, pillow, blankets, life jackets, etc.

· Assuring quality – Ensuring everything is of the highest standard and in relation to the organisations goals.

· Motivating and training employees – Ensuring all employees receive the required training to perform their role effectively. This is the role of the operations manager. Needed for dealing with frustrated customer.

· Locating Facilities – Knowing where everything is located in the organisation. Knowing which cities to offer services

3. Describe the correlation between operations management and information technology.

Managers are able to use information technology to influence operations management decisions including productivity, costs, flexibility, quality and customer satisfaction. Operations management influences the degree to which an organisations goals and objectives are realised.

- What resources are needed and in what amounts
- When will each resource be needed? When should work be scheduled? When should materials and other supplies be ordered?
- Where will the work be performed?
- How will the product or service be designed? How will the work be done?
- Who will perform the work?

4. Explain supply chain management and its role in a business.

http://www.industryforum.co.uk/images/supply_chain.gif

A supply chain is anyone who is involved, directly or indirectly, in the production of a product. Supply chain management (SCM) involves the management of information flows along the supply chain to maximise the effectiveness and profitability of the supply chain.

An efficient and effective supply chain management can enable an organisation to:
- Decrease the power of its buyers
- Increase its own supplier power
- Increase switching costs to reduce the threat of substitute products and services
- Create entry barriers thereby reducing the threat of new entrants
- Increase efficiencies while seeking a competitive advantage through cost leadership

5. List and describe the five components of a typical supply chain.

· Plan – This is the strategic component of the supply chain management. A business needs to have a plan in place to best manage their resources to help meet the customer demands for products and services. The most important part of planning is developing metrics to monitor the supply chain so that it is efficient, cost effective and delivers high quality and value to customers.
· Source – This involves companies choosing reliable suppliers that will deliver the goods and services for making their products. They need to develop a set of pricing, delivery and payment processes and create metrics for monitoring and improving their relationships.

· Make – This where the companies manufacture their products. This involves having a strong set of metrics for measuring quality levels, production outputs and worker productivity.

· Deliver – This process is known as logistics. It is the set of processes that plans for and controls the efficient and effective transportation and storage of supplies from suppliers to customers.

· Return – This is the most problematic stage of the supply chain process. Businesses need to have a system in place to receive defective and excess products and services and support customers who have problems with their products.

For more information on the 5 components of the supply chain:

http://www.associatedcontent.com/article/540671/five_components_to_supply_chain_management.html

6. Define the relationship between information technology and the supply chain.

The primary role of supply chain management in creating the integration of tight process and information linkages between functions within a firm, such as marketing, sales, finance, manufacturing and distribution and between firms, which allows the smooth and synchronised flow of information and product between customers, suppliers and transportations providers across the supply chain. Supply chain management relies on information technology to make accurate decisions for without it a business would be over forecasting leading to a loss in profits.

For more information on Operations Management:

http://managementhelp.org/ops_mgnt/ops_mgnt.htm