In-Depth Guide to Operations Management (OM)

Operations Management (OM)

The administration of business practices to create the highest level of efficiency possible within an organization. It is concerned with converting materials and labor into goods and services as efficiently as possible to maximize profit.

Discover Core Functions

Core Functions of Operations Management

Planning

Forecasting demand, setting production goals, and determining the resources (labor, materials, capacity) required to meet those goals.

Organizing

Structuring the workflow, designing jobs, arranging facility layouts, and establishing the entire production process and supply chain network.

Directing

Leading and motivating the workforce, managing projects, and overseeing daily operational activities to ensure smooth execution.

Controlling

Monitoring performance against standards, ensuring quality, managing costs, and implementing corrective actions to keep processes on track.

The 10 Strategic OM Decisions

1. Design of Goods & Services: Defines what is offered to customers and drives subsequent operations decisions.

2. Managing Quality: Establishes policies and procedures to identify and achieve the desired level of quality.

3. Process & Capacity Strategy: Determines how a product or service is produced and commits management to specific technology and resources.

4. Location Strategy: Decides the best location for facilities, considering factors like cost, proximity to markets, and labor availability.

5. Layout Strategy: Involves arranging facilities, equipment, and people to optimize the flow of information, materials, and personnel.

6. Human Resources & Job Design: Focuses on recruiting, motivating, and retaining personnel with the necessary talent and skills.

7. Supply Chain Management: Decides how to integrate the supply chain into the firm's strategy, including sourcing and logistics.

8. Inventory Management: Manages ordering and holding inventory to balance investment, customer service, and costs.

9. Scheduling: Determines and implements intermediate and short-term schedules that effectively utilize personnel and facilities.

10. Maintenance: Decides how to maintain reliable processes and systems to ensure production continuity and quality.

The Transformation Process Model

Inputs

Labor
Capital
Materials
Information

Transformation Process

(Conversion of Inputs to Outputs)

Outputs

Goods (Tangible)
Services (Intangible)

Feedback Loop

Information from outputs is used to control and improve the inputs and transformation process, ensuring continuous improvement and efficiency.

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Operation Researches

Saturday, June 7, 2025