MB0044-Production and Operations Management

Unit-2 Operations Management

Program

: MBA

Semester

: II

Subject Code

: MB0044

Subject Name

: Production and Operations Management

Unit number

:2

Unit Title

: Operations Management

Lecture Number

:2

Lecture Title

: Operations Management

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MB0044-Production and Operations Management

Unit-2 Operations Management

Production & Operations Management

Objectives:
After studying this unit, you should be able to:
Describe operations management
Outline the different strategies used in operations
management
Explain strategic decision making
Explain implementation of operations
List the types of benchmarking
Explain the steps involved in benchmarking

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MB0044-Production and Operations Management

Unit-2 Operations Management

Lecture Outline

Introduction

Operations Management and Strategy

Links between Factors

Operations Strategy

Strategic Management Process

Strategic Decision Making

Core Processes

Implementation of Operations

Benchmarking

Steps in Benchmarking

Summary

Check Your Learning

Activity
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MB0044-Production and Operations Management

Unit-2 Operations Management

Introduction
Operations management is the systematic design, direction, and control
of the processes that transform inputs into services and products for the
customers.
It starts with the suppliers and ends with the customers. It covers the
entire value chain.
Operations management encompasses all management activities using
resources such as:

Plants
People
Parts
Processes
Planning and Control

In this session, you will learn about the various functions involved in
operation management and their significance.
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Unit-2 Operations Management

Operations Management and Strategy

Operations provide the deliverables by utilising the resources and producing
the same. All equipment, facilities, technology, information, human resources,
and finance should be tuned to make operations most efficient to derive the
maximum advantage and be competitive. Operations function should,
therefore, be guided by strategies which are consistent with the organisation
strategy.
Formulation of a strategy depends on the following:
Assessment of strengths
Understanding of the weaknesses
Nature of external environment
Resilience of the internal environment

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MB0044-Production and Operations Management

Unit-2 Operations Management

Links between Factors

Operations strategy is formulated to
leverage the advantages, absorb the
consequences of the variable nature of
various functions, and provide a
dependable implementation
programme.
Effective and timely communication is a
vital factor to involve and coordinate
people at various stages and monitor
the progress.

The figure depicts the links between

the factors of operations management.
Links between factors of Operation
management
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Unit-2 Operations Management

Operations Strategy
Quality

Operations
Strategy
Flexibility

Time

Phases of Operation Strategy

Quality is the driving factor for any organisation

Time aspect considers that deliveries are made on time to meet the
customers expectations
Flexibility enables a firm to meet the changing demands of the
customers
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Unit-2 Operations Management

Strategic Management Process

Strategy formulation is influenced by the situational forces and the core practices
like value addition, customer focus, total quality, and concern for environment.The
objective of an operations strategy is to achieve the long-term goals established
by the business strategy. The operations strategy would consider the following
constraints:

Subcontracting or including additional machinery

Improving productivity using different methods
Revamping assembly lines
Motivating the employees
Promoting existing employees or hiring new ones
Identifying and developing new suppliers
Looking for opportunities to reduce costs as scaling up provides scope
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Unit-2 Operations Management

Strategic Decision Making

Analysis
Data
Gathering

Predicting
Outcomes
Strategic
Decision
Making

Decisions commit the organisation and its members to activities which have
financial repercussions and affect the functioning of other departments or
divisions. Therefore, decisions are taken after lots of deliberations which
involve the steps:
Data gathering
Analysis
Predicting outcomes.
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Unit-2 Operations Management

Core Processes
Core processes of an organisation are determined by the core competencies.
The four main core processes are:

Customer
relationship

New
product/Service
development

Supplier
relationship

Order fulfilment

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Unit-2 Operations Management

Implementation of Operations
Implementation is the process of executing the planned operations.
Implementation of operations involves planning and controlling functions.

Planning

Controlling
Function

Estimating

Dispatching

Routing

Expediting

Scheduling

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Unit-2 Operations Management

Benchmarking
The types of benchmarking considered by various firms are:

Functional
Benchmarking

Process
Benchmarking

Financial
Benchmarking

Benchmarking
Performance
Benchmarking

Strategic
Benchmarking

Product
Benchmarking
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Unit-2 Operations Management

Steps in Benchmarking

The steps which are necessary for conducting a benchmarking operation

are:

Planning

Analysis

Integration

Action

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Unit-2 Operations Management

Summary

Operation management is the systematic design, direction, and control of

the processes that transform inputs into services and products for the
customers.

Operations strategy includes Quality, Time, and Flexibility.

Decisions commit the organisation and its members to activities which

have

financial

repercussions

and

affect

the

functioning

of

other

departments or divisions.

Implementation of operations involves planning and controlling functions.

Benchmarking is a process of comparison with a superior performer

anywhere in the world to improve quality.

The steps which are necessary for conducting a benchmarking operation

are Planning, Analysis, Integration and Action.

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Unit-2 Operations Management

Check Your Learning

1. What is operations management?
Ans: Operations management is the systematic design, direction, and
control of the processes that transform inputs into services and
products for the customers.
2. What are the resources used for management activities in operation
management?
Ans: The resources used for management activities are:
a. Plants
b. People
c. Parts
d. Processes
e. Planning and control
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Activity
Assume that you own a textile company in India. Your company has a
competitor which produces textiles which are in high demand. In such a
situation which process would you follow to improve the quality of the
textiles produced in your company so that the demand increases?

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