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Operations Management- An overview
Operations Management is defined as “…systematic approach to addressing issues in the transformation process that coverts inputs into useful, revenue-generating outputs (Mahadevan, 2010).” Keeping in view this definition of operations management we understand that operations management helps in the conversion of certain inputs into output, with a few processes. Shim & Siegel (1999) also corroborate with this definition and elaborate that both operation and production management are decision making activities that allow the organization to achieve outputs according to certain schedule, specification, etc. at a manageable cost. Thus operation management helps to create value within an organization by transforming inputs into outputs.
The input-output process
As mentioned before, operations management involve the management of inputs into outputs, which in turn adds certain value; thus it can be termed as a value creation process. The inputs and outputs, however, can vary from industry to industry. Shim & Siegel (1999) with the figure below give a basic idea of what .
Over the last few decades the applications of operations management have evolved; R. Kleindorfer et. al (2005) discusses how the philosophies of 1960s & 1970s namely: total quality management (TQM), just-in-time operations (JITs) and time based competition, were refined and became of the backbone of the Japanese economy post World War II. This evolution has changed the role of operations management: from being considered just another support function to an integral part of the value creation process. Good operation management is now a key function to the success of a business. Ignoring it would be tantamount to leading the organization to a certain failure. The steady evolution to the practices of operations management gave way to the birth of business process reengineering (BPR) (Hammer, 1990). Business process reengineering changed the way an organization looked at its operations. Hammer (1990) cites the example of how Ford reduced the number of employees in its accounts payable department from a few hundred to just a handful. It managed to achieve this seemingly herculean feat by critically assessing the accounts payable process; by cutting down on certain procedures, reworking a few of them and adding time saving new measures, Ford managed to reengineer the way it handled accounts payables and in turn managed to rework the task and evolve it to a state where the company could cut down on the number of people it needed to complete that specific job and drastically reduce the time taken for that specific job as well. We see that with the continuous evolution of operation management a company can improve itself as a whole by changing the way it handles operational activities and at the same time improve upon its ability to create value….
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